Document:

Moody National REIT II, Inc. POS AM

 

 

EXHIBIT 10.13

 

Loan No. 10096884

GUARANTY AGREEMENT

THIS GUARANTY
AGREEMENT (this “Guaranty”) is made as of October 15, 2015, by BRETT C. MOODY, an individual having
an address at 6363 Woodway, Suite 110, Houston, Texas 77057 (“Moody Guarantor”), and MOODY NATIONAL REIT
II, INC., a Maryland corporation, having an address at 6363 Woodway, Suite 110, Houston, Texas 77057 (“REIT Guarantor”;
together with Moody Guarantor hereinafter referred to, individually and collectively, as the context may require, as “Guarantor”)
in favor of KeyBank National Association,
a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211, (together with its
successors and assigns, “Lender”).

RECITALS

The following recitals
are a material part of this Guaranty:

A.Lender is
making a loan in the principal sum of $16,575,000.00 (the “Loan”) to MOODY NATIONAL LANCASTER-AUSTIN HOLDING,
LLC, a Delaware limited liability company, (“Borrower”), on or about the date of this Guaranty. Guarantor
has a significant financial interest in Lender’s making of the Loan to Borrower, and will realize significant financial benefit
from the Loan. The Loan is evidenced by a Loan Agreement of even date herewith between Borrower and Lender (the “Loan
Agreement”) and a Promissory Note (the “Note”) of even date herewith in the principal amount of the
Loan from Borrower to Lender and is secured in part by one or more deeds of trust/mortgages/deeds to secure debt (the “Security
Instrument”) encumbering Borrower’s interest in certain property which is commonly known as Residence Inn - Austin
(the real estate, together with all improvements thereon and personal property associated therewith, is hereinafter collectively
called the “Property”). The Loan Agreement, Note, Security Instrument, and all other documents and instruments
existing now or after the date hereof that evidence, secure or otherwise relate to the Loan, including this Guaranty, any assignments
of leases and rents, other assignments, security agreements, financing statements, other guaranties, indemnity agreements (including
environmental indemnity agreements), letters of credit, or escrow/holdback or similar agreements or arrangements, together with
all amendments, modifications, substitutions or replacements thereof, are sometimes herein collectively referred to as the “Loan
Documents” or individually as a “Loan Document.” The Loan Documents are hereby incorporated by this
reference as if fully set forth in this Guaranty.

B.Lender has
required that Guarantor guaranty to Lender the payment of the Liabilities (as such term is defined in Section 2.1 hereof).

C.Lender is
unwilling to make the Loan to Borrower absent this Guaranty.

AGREEMENT

In consideration
of Lender’s agreement to make the Loan to Borrower and other good and valuable consideration, the receipt and legal sufficiency
of which is hereby acknowledged, Guarantor hereby states and agrees as follows:

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1.             Request to Make Loan. Guarantor hereby requests that Lender make the Loan to Borrower and that Lender extend credit
and give financial accommodations to Borrower, as Borrower may desire and as Lender may grant, from time to time, whether to the
Borrower alone or to the Borrower and others, and specifically to make the Loan described in the Loan Documents.

2.             Guaranty of Liabilities.

2.1             
Guarantor hereby absolutely and unconditionally guarantees full and punctual payment and performance when due of the following
(collectively, the “Liabilities”):

(a)               
all amounts that shall become due and owing to Lender at any time by virtue of or arising out of any of the acts, omissions,
circumstances or conditions included in any of the Nonrecourse Carve-Outs (as hereinafter defined), including all renewals or extensions
of any amount owing or obligation under the Nonrecourse Carve-Outs, all liability under the Nonrecourse Carve-Outs whether
arising under the original Loan or any extension, modification, future advance, increase, amendment or modification thereof, interest
due on amounts owing under the Nonrecourse Carve-Outs at the Default Rate specified in the Note, all expenses, including attorneys’
fees, incurred by Lender in connection with the enforcement of any of Lender’s rights under this Guaranty and all Administration
and Enforcement Expenses (as hereinafter defined), to the extent the same arise out of or are incurred by Lender in respect of
the Nonrecourse Carve-Outs (the foregoing are sometimes hereinafter collectively referred to as the “Nonrecourse Carve-Out
Liabilities”). As used herein, the term “Nonrecourse Carve Outs” means any loss, damage, cost, expense
or liability incurred by Lender (including attorneys’ fees and expenses and other collection and litigation expenses) arising
out of or in connection with any of the following:

(i)                
fraud or material willful misrepresentation by Borrower, Master Tenant, Principal or Guarantor (or any of their respective
Affiliates are controlled by Borrower, Master Tenant, Principal and/or Guarantor) or any agent, employee or other person with
actual or apparent authority to make statements or representations on behalf of Borrower, Master Tenant, Principal, or Guarantor
(or any of their respective Affiliates which are controlled by Borrower, Master Tenant, Principal and/or Guarantor) in connection
with the Loan (“apparent authority” meaning such authority as the principal knowingly or negligently permits the agent
to assume, or which he holds the agent out as possessing);

(ii)              
the gross negligence or willful misconduct of Borrower, Principal, Master Tenant or Guarantor (or
any of their respective Affiliates which are controlled by Borrower, Master Tenant, Principal and/or Guarantor),
agent, or employee of the foregoing;

(iii)            
material physical waste of the Property;

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(iv)            
the removal or disposal of any portion of the Property during the continuation of an Event of Default without the replacement
of same, to the extent the same is material to the operation of the Property;

(v)              
the misapplication, misappropriation, or conversion by Borrower (or any of its Affiliates which are controlled by Borrower,
Master Tenant, Principal and/or Guarantor), Principal, Master Tenant or Guarantor of (A) any Insurance Proceeds paid by reason
of any loss, damage or destruction to the Property, (B) any Awards received in connection with a Condemnation of all or a portion
of the Property, (C) any Rents or other Property income or collateral proceeds, or (D) any Rents paid more than one month in advance
(including, but not limited to, security deposits);

(vi)            
during the continuation of an Event of Default, the failure to either apply rents or other Property income, whether collected
before or after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand,
to deliver such rents or other Property income to Lender;

(vii)          
failure to maintain insurance or to pay taxes and assessments (unless Lender is escrowing funds therefor and fails to make
such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable
to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments) to the extent
that the revenue from the Property is sufficient to pay such amounts as well as other costs of servicing the Debt and of operating
the Property;

(viii)        
failure to pay charges for labor or materials or other charges or judgments that can create Liens on any portion of the
Property, to the extent that the revenue from the Property is sufficient to pay such amounts as well as other costs of servicing
the Debt and of operating the Property (and other than any election by Lender not to make funds held in any applicable Reserve
Fund available therefor, so long as no Event of Default then exists and Borrower has otherwise complied with the applicable terms
of the Loan Documents related to such disbursement);

(ix)            
any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered
to Lender upon a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied
in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise
to such foreclosure or action in lieu thereof;

(x)              
any failure by Borrower to comply with any of the representations, warranties or covenants set forth in Sections 4.1.37
or 5.1.19 of the Loan Agreement;

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(xi)            
Borrower and/or Master Tenant fails to permit on-site inspections of the Property, fails to maintain its status as a Special
Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30 of the Loan Agreement
or fails to appoint a new property manager upon the request of Lender as permitted under the Loan Agreement, each as required by,
and in accordance with, the terms and provisions of the Loan Agreement or the Security Instrument;

(xii)          
Borrower and/or Master Tenant’s failure to comply with Section 2.7 of the Loan Agreement, the Cash Management Agreement
and/or the Clearing Account Agreement relating to the establishment of a Clearing Account, a Cash Management Account,
and/or the institution of cash management generally;

(xiii)        
any amendment, modification or termination of the Master Lease without Lender’s consent;

(xiv)        
any amendment or modification of the Franchise Agreement without Lender’s consent (to the extent such consent is required
under the Loan Documents);

(xv)          
the termination, surrender or cancellation of the Franchise Agreement by Master Tenant without Lender’s prior written
consent or the termination or cancellation of the Franchise Agreement by Franchisor (as a result of the action or omission of Borrower
or Master Tenant) prior to the expiration date of the Franchise Agreement unless such termination or cancellation is solely the
result of Master Tenant’s failure to pay the franchise fees and other charges due under the Franchise Agreement and such
failure to pay is solely the result of revenue from the Property being insufficient to pay such amounts as well as other costs
of servicing the Debt and of operating the Property provided that the foregoing shall not apply to the extent that (A) Borrower
would otherwise be liable under this subsection (xvi) and (B) during the continuance of a Cash Sweep Period, Lender has not made
funds available to Borrower to pay the charges described above; and/or

(xvi)        
failure to provide the Evidence of Insurance in accordance with Section 10.28 of the Loan Agreement.

(b)              
(i) all payments due under the Note, including the repayment of all additional advances of any kind that may be made by
Lender to Borrower, whether at stated maturity, by acceleration or otherwise, (ii) any and all renewals or extensions of any such
item of indebtedness or obligation or any part thereof; (iii) all obligations and indebtedness of any kind or nature arising under
any of the Loan Documents; (iv) any future advances that may be made by Lender related to the Loan or the Property, whether made
to protect the security or otherwise, and whether or not evidenced by additional promissory notes or other evidences of indebtedness;
(v) all interest due on all of the same; (vi) all expenses, including attorney’s fees, incurred by Lender in connection
with the enforcement of Lender’s rights under this Guaranty and all Administration and Enforcement Expenses. PROVIDED HOWEVER,
notwithstanding anything herein to the contrary, Lender shall not demand payment or commence any action to enforce Guarantor’s
liability under this Section 2.1(b) (but in no event shall this provision apply to, or limit, restrict, or prohibit any demand
by Lender or action to enforce Guarantor’s liability under Section 2.1(a) hereof, notwithstanding that obligations under
said Section 2.1(a) may be included in obligations under this Section 2.1(b)) unless and until

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(A) Borrower
fails to obtain Lender’s prior written consent to any voluntary Transfer as required by the Loan Agreement or the Security
Instrument, which Transfer results in (x) the transfer of the Property, (y)  a change in control of Borrower and/or Master
Tenant, and/or (z) a transfer of a fifty percent (50%) or greater direct or indirect interest in Borrower or Master Tenant; (B)
Borrower fails to obtain Lender’s prior written consent to any Indebtedness or voluntary Lien encumbering the Property;
(C) Borrower and/or Master Tenant shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower
and/or Master Tenant fails to maintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant
set forth in Section 4.1.30 of the Loan Agreement as required by, and in accordance with, the terms and provisions of the Loan
Agreement or the Security Instrument, and such failure is cited as a factor in the substantive consolidation of Borrower and/or
Master Tenant with any other person; (E) Borrower, Master Tenant or any Principal admits, in writing or in any legal proceeding,
its insolvency or inability to pay its debts as they become due; (F) Borrower fails to make the first full monthly payment of
principal and interest on or before the first Payment Date; (G) Borrower and/or Master Tenant files (other than at Lender’s
request), consents to, or acquiesces in a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy
Code or any other Federal or State bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower,
Master Tenant or any Principal under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower,
Master Tenant or Guarantor or any Principal colludes with, or otherwise assists any party in connection with such filing, or solicits
or causes to be solicited petitioning creditors for any involuntary petition against Borrower, Master Tenant or such Principal
from any party; or (H) there is substantive consolidation of Borrower, Master Tenant or any Restricted Party with any other Person
in connection with any federal or state bankruptcy proceeding involving Guarantor or any of Affiliate of Guarantor and one of
the factors cited as the bases therefor is a breach by Borrower or Master Tenant of any representation, warranty or covenant contained
in Section 4.1.30 of the Loan Agreement.

(c)               
Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b),
1111(b) or any otherprovision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral
shall continue to secure all of the Debt. 

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2.2             
Upon the request of Lender, Guarantor shall immediately pay or perform the Liabilities when they or any of them become due
or are to be paid or performed under the term of any of the Loan Documents. Any amounts received by Lender from any sources other
than Guarantor and applied by Lender towards the payment of the Liabilities shall be applied in such order of application as Lender
may from time to time elect. All Liabilities shall conclusively be presumed to have been created, extended, contracted, or incurred
by Lender in reliance upon this Guaranty and all dealings between Borrower and Lender shall likewise be presumed to be in reliance
upon this Guaranty. Payments by Guarantor to Lender pursuant to this Guaranty shall be applied against payment of the Liabilities
and any other reimbursement obligations of Guarantor pursuant to this Guaranty (including, without limitation, Section 2.1 hereof)
in such manner and in such amounts and at such time or times and in such order and priority as Lender may see fit to the payment
or reduction of the foregoing obligations of Guarantor as Lender may elect.

2.3             
For the purpose of this Guaranty, “Administration and Enforcement Expenses” shall mean all fees and expenses
incurred at any time or from time to time by Lender, including legal (whether for the purpose of advice, negotiation, documentation,
defense, enforcement or otherwise), accounting, financial advisory, auditing, rating agency, appraisal, valuation, title or title
insurance, engineering, environmental, collection agency, or other expert or consulting or similar services, in connection with:  (a)
the origination of the Loan (provided, however, that so long as Borrower shall have paid the fees and expenses relating to origination
of the Loan as of the Closing Date, interest shall not accrue thereon), including the negotiation and preparation of the Loan Documents
and any amendments or modifications of the Loan or the Loan Documents, whether or not consummated; (b) the administration, servicing
or enforcement of the Loan or the Loan Documents, including any request for interpretation or modification of the Loan Documents
or any matter related to the Loan or the servicing thereof (which shall include the consideration of any requests for consents,
waivers, modifications, approvals, lease reviews or similar matters and any proposed transfer of the Property or any interest therein),
(c) any litigation, contest, dispute, suit, arbitration, mediation, proceeding or action (whether instituted by or against Lender,
including actions brought by or on behalf of Borrower or Borrower’s bankruptcy estate or any indemnitor or guarantor of the
Loan or any other person) in any way relating to the Loan or the Loan Documents including in connection with any bankruptcy, reorganization,
insolvency, or receivership proceeding; (d) any attempt to enforce any rights of Lender against Borrower or any other person that
may be obligated to Lender by virtue of any Loan Document or otherwise whether or not litigation is commenced in pursuance of such
rights; and (e) protection, enforcement against, or liquidation of the Property or any other collateral for the Loan, including
any attempt to inspect, verify, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Loan, the
Property or any other collateral for the Loan. Provided no Event of Default has occurred, fees and expenses related solely to origination
and administration of the Loan shall be limited to reasonable fees and expenses, but charges of rating agencies, governmental entities
or other third parties that are outside of the control of Lender shall not be subject to the reasonableness standard.

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3.             Additional Advances, Renewals, Extensions and Releases. Guarantor hereby agrees and consents that, without notice
to or further consent by Guarantor, Lender may make additional advances with respect to the Loan or the Property, and the obligations
of Borrower or any other party in connection with the Loan may be renewed, extended, modified, accelerated or released by Lender
as Lender may deem advisable, and any collateral the Lender may hold or in which the Lender may have an interest may be exchanged,
sold, released or surrendered by it, as it may deem advisable, without impairing or affecting the obligations of Guarantor hereunder
in any way whatsoever.

4.             Waivers.

4.1             
Guarantor hereby waives each of the following: (a) any and all notice of the acceptance of this Guaranty or of the creation,
renewal or accrual of any Liabilities or the Debt, present or future (including any additional advances made by Lender under the
Loan Documents); (b) the reliance of Lender upon this Guaranty; (c) notice of the existence or creation of any Loan Document or
of any of the Liabilities or the Debt; (d) protest, presentment, demand for payment, notice of default or nonpayment, notice
of dishonor to or upon Guarantor, Borrower or any other party liable for any of the Liabilities or the Debt; (e) any and all other
notices or formalities to which Guarantor may otherwise be entitled, including notice of Lender’s granting the Borrower any
indulgences or extensions of time on the payment of any Liabilities or the Debt; and (f) promptness in making any claim or
demand hereunder.

4.2             
No delay or failure on the part of Lender in the exercise of any right or remedy against either Borrower or Guarantor shall
operate as a waiver thereof, and no single or partial exercise by Lender of any right or remedy herein shall preclude other or
further exercise thereof or of any other right or remedy whether contained herein or in the Note or any of the other Loan Documents.
No action of Lender permitted hereunder shall in any way impair or affect this Guaranty.

4.3             
Guarantor acknowledges and agrees that Guarantor shall be and remain absolutely and unconditionally liable for the full
amount of all Liabilities notwithstanding any of the following, and Guarantor waives any defense or counterclaims, other than compulsory
counterclaims, to which Guarantor may be entitled, based upon any of the following, in any proceeding (without prejudice to assert
the same in a separate cause of action at a later time):

(a)               
Any or all of the Liabilities being or hereafter becoming invalid or otherwise unenforceable for any reason whatsoever or
being or hereafter becoming released or discharged, in whole or in part, whether pursuant to a proceeding under any bankruptcy
or insolvency laws or otherwise; or

(b)              
Lender failing or delaying to properly perfect or continue the perfection of any security interest or lien on any property
which secures any of the Liabilities, or to protect the property covered by such security interest or enforce its rights respecting
such property or security interest; or

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(c)               
Lender failing to give notice of any disposition of any property serving as collateral for any Liabilities or failing to
dispose of such collateral in a commercially reasonable manner; or

(d)              
Any other circumstance that might otherwise constitute a defense other than payment in full of the Liabilities.

5.             Guaranty of Payment. Guarantor agrees that Guarantor’s liability hereunder is primary, absolute and unconditional
without regard to the liability of any other party. This Guaranty shall be construed as an absolute, irrevocable and unconditional
guaranty of payment and performance (and not a guaranty of collection), without regard to the validity, regularity or enforceability
of any of the Liabilities.

6.             Guaranty Effective Regardless of Collateral. This Guaranty is made and shall continue as to any and all Liabilities
without regard to any liens or security interests in any collateral, the validity, effectiveness or enforceability of such liens
or security interests, or the existence or validity of any other guaranties or rights of Lender against any other obligors. Any
and all such collateral, security, guaranties and rights against other obligors, if any, may from time to time without notice to
or consent of Guarantor, be granted, sold, released, surrendered, exchanged, settled, compromised, waived, subordinated or modified,
with or without consideration, on such terms or conditions as may be acceptable to Lender, without in any manner affecting or impairing
the liabilities of Guarantor. Without limiting the generality of the foregoing, it is acknowledged that Guarantor’s liability
hereunder shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any
release of record of the Security Instrument.

7.             Additional Credit. Credit or financial accommodation may be granted or continued from time to time by Lender to Borrower
regardless of Borrower’s financial or other condition at the time of any such grant or continuation, without notice to or
the consent of Guarantor and without affecting Guarantor’s obligations hereunder. Lender shall have no obligation to disclose
or discuss with Guarantor its assessment of the financial condition of Borrower.

8.             Rescission of Payments. If at any time payment of any of the Liabilities or any part thereof is rescinded or must
otherwise be restored or returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower or under any other circumstances
whatsoever, this Guaranty shall, upon such rescission, restoration or return, continue to be effective or shall (if previously
terminated) be reinstated, as the case may be, as if such payment had not been made.

9.             Additional
Waivers. So long as any portion of the Liabilities or Debt remains unpaid and undefeased or any claim for Liabilities remains
pending or any portion of the Liabilities or Debt (or any security therefor) that has been paid to Lender remains pending, or,
for up to a one hundred eighty (180) day period after the payment or defeasance in full of the Loan (and so long as no claim for
Liabilities remains pending), remains subject to invalidation, reversal or avoidance as a preference, fraudulent transfer or for
any other reason whatsoever (whether under bankruptcy or non-bankruptcy law) to being set aside or required to be repaid to Borrower
as a debtor in possession or to any trustee in bankruptcy, Guarantor irrevocably waives (a) any rights which it may acquire against
Borrower by way of subrogation under this Guaranty or by virtue of any payment made hereunder (whether contractual, under the
Bankruptcy Code or similar state or federal statute, under common law, or otherwise), (b) all contractual, common law, statutory
or other rights of reimbursement, contribution, exoneration or indemnity (or any similar right) from or against Borrower that
may have arisen in connection with this Guaranty, (c) any right to participate in any way in the Loan Documents or in the right,
title and interest in any collateral securing the payment of Borrower’s obligations to Lender, and (d) all rights, remedies
and claims relating to any of the foregoing at any time prior to such time as the Debt has been paid or defeased in full and no
claim in respect of the Liabilities remains pending. If any amount is paid to Guarantor on account of subrogation rights or otherwise
at any time prior to such time as the Debt has been paid or defeased in full and no claim in respect of the Liabilities remains
pending, such amount shall be held in trust for Lender’s benefit and shall forthwith be paid to Lender to be applied to
the Debt (or, if the Debt has been paid of defeased in full but there is a pending claim in respect of the Liabilities, held as
cash collateral in respect thereof), whether matured or unmatured, in such order as Lender shall determine.

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10.           Independent Obligations. The obligations of Guarantor are independent of the obligations of Borrower, and a separate
action or actions for payment, damages or performance may be brought and prosecuted against Guarantor, whether or not an action
is brought against Borrower or the security for Borrower’s obligations, and whether or not Borrower is joined in any such
action or actions. Guarantor expressly waives any requirement that Lender institute suit against Borrower or any other persons,
or exercise or exhaust its remedies or rights against Borrower or against any other person, other guarantor, or other collateral
securing all or any part of the Liabilities, prior to enforcing any rights Lender has under this Guaranty or otherwise. Lender
may pursue all or any such remedies at one or more different times without in any way impairing its rights or remedies hereunder.
Guarantor hereby further waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement
hereof. If there shall be more than one guarantor with respect to any of the Liabilities, then the obligations of each such guarantor
shall be joint and several.

11.           Subordination
of Indebtedness of Borrower to Guarantor. Any indebtedness of Borrower to Guarantor now or hereafter existing (including,
but not limited to, any rights to subrogation or reimbursement Guarantor may have as a result of any payment by Guarantor under
this Guaranty, collectively “Guarantor Claims”) is hereby subordinated to the prior payment in full of the
Liabilities. Guarantor agrees that following the occurrence and during the continuance of an Event of Default, until such time
as the Debt has been paid or defeased in full and no claim in respect of the Liabilities remains pending, Guarantor will not seek,
accept or retain for Guarantor’s own account, any payment (whether for principal, interest, or otherwise) from Borrower
for or on account of such subordinated debt. Following the occurrence and during the continuance of an Event of Default, any payments
to Guarantor on account of such subordinated debt shall be collected and received by Guarantor in trust for Lender and shall be
paid over to Lender on account of the Liabilities or Debt, as Lender determines in its discretion, without impairing or releasing
the obligations of Guarantor hereunder. Guarantor hereby unconditionally and irrevocably agrees that (a) Guarantor will not at
any time while the Liabilities remain unpaid, assert against Borrower (or Borrower’s estate in the event that Borrower becomes
the subject of any case or proceeding under any federal or state bankruptcy or insolvency laws) any right or claim to indemnification,
reimbursement, contribution or payment for or with respect to any and all amounts Guarantor may pay or be obligated to pay Lender,
including the Liabilities, and any and all obligations which Guarantor may perform, satisfy or discharge, under or with respect
to the Guaranty, and (b) Guarantor subordinates to the Debt all such rights and claims to indemnification, reimbursement, contribution
or payment that Guarantor may have now or at any time against Borrower (or Borrower’s estate in the event that Borrower
becomes the subject of any case or proceeding under any federal or state bankruptcy or insolvency laws).

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12.           Claims in Bankruptcy. Guarantor shall file all claims against Borrower in any bankruptcy or other proceeding in which
the filing of claims is required by law upon any indebtedness of Borrower to Guarantor in respect of any rights of subrogation
or reimbursement. In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency
proceedings involving Guarantor as debtor, Lender shall have the right to prove its claim in any such proceeding so as to establish
its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would
otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such dividends and payments to Lender. Guarantor hereby irrevocably
appoints Lender its attorney-in-fact, which appointment is coupled with an interest, to file any such claim that Guarantor may
fail to file, in the name of Guarantor or, in Lender’s discretion, to assign the claim and to cause proof of claim to be
filed in the name of Lender’s nominee. In all such cases, whether in administration, bankruptcy or otherwise, the person
or persons authorized to pay such claim shall pay to Lender the full amount thereof and, to the full extent necessary for that
purpose, Guarantor hereby assigns to Lender all of Guarantor’s rights to any such payments or distributions to which Guarantor
would otherwise be entitled.

13.           Guarantor’s Representations and Warranties. Each Guarantor represents, warrants and covenants to and with Lender
that, with respect to itself only,:

13.1         
There is no action or proceeding pending or, to the knowledge of Guarantor, threatened against Guarantor before any court
or administrative agency which could reasonably be expected to result in any material adverse change in the business or financial
condition or operations of Guarantor, Borrower, Master Tenant and/or the Property which could reasonably be expected, either individually
or in the aggregate, to have a material adverse effect on Guarantor’s ability to perform its obligations hereunder or under
the Environmental Indemnity Agreement executed by Guarantor for the benefit of Lender in connection with the Loan (the “Environmental
Indemnity Agreement”);

13.2         
Guarantor has filed all Federal and state income tax returns which Guarantor has been required to file, and has paid all
taxes as shown on said returns and on all assessments received by Guarantor to the extent that such taxes have become due;

13.3         
Neither the execution nor delivery of this Guaranty nor fulfillment of nor compliance with the terms and provisions hereof
will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any property or assets of Guarantor under any agreement or instrument to which
Guarantor is now a party or by which Guarantor may be bound;

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13.4         
This Guaranty is a valid and legally binding agreement of Guarantor and is enforceable against Guarantor in accordance with
its terms;

13.5         
Guarantor has either (i) examined the Loan Documents or (ii) has had an opportunity to examine the Loan Documents and has
waived the right to examine them;

13.6         
Guarantor has the full power, authority, and legal right to execute and deliver this Guaranty. If Guarantor is not an individual,
(i) Guarantor is duly organized, validly existing and in good standing under the laws of the state of its formation, and (ii) the
execution, delivery and performance of this Guaranty by Guarantor has been duly and validly authorized and the person(s) signing
this Guaranty on Guarantor’s behalf has been validly authorized and directed to sign this Guaranty; and

13.7         
So long as the Loan and any of the obligations set forth in the Loan Documents remain outstanding, Guarantor collectively
shall maintain (i) a minimum Net Worth of not less than $25,000,000.00 and (ii) Liquidity of no less than $2,000,000.00. For the
purposes hereof, Guarantor’s Net Worth and Liquidity shall be determined by Lender in its reasonable discretion, at any time
and from time to time, and Guarantor’s net worth shall exclude any equity attributable to the Property.

As
used herein:

“Net
Worth” shall mean, as of a given date, (i) the fair market value of a Guarantor’s total assets as of such date
(and for the avoidance of doubt and notwithstanding anything to the contrary contained herein, the calculation of Net Worth shall
exclude any equity attributable to the Property) less (ii) such Guarantor’s total liabilities as of such date, determined
in accordance with generally accepted accounting principles, consistently applied.

“Liquidity”
shall mean (a) unencumbered Cash and Cash Equivalents of Guarantor and (b) marketable securities of Guarantor, each valued in
accordance with GAAP (or other principles acceptable to Lender).

“Cash
and Cash Equivalents” shall mean all unrestricted or unencumbered (A) cash and (B) any of the following: (x) marketable
direct obligations issued or unconditionally guaranteed by the United States Government or issued by an agency thereof and backed
by the full faith and credit of the United States; (y) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public instrumentality thereof which, at the time of acquisition,
has one of the two highest ratings obtainable from any two (2) of Standard & Poor’s Corporation, Moody’s Investors
Service, Inc. or Fitch Investors (or, if at any time no two of the foregoing shall be rating such obligations, then from such
other nationally recognized rating services as may be acceptable to Lender) and is not listed for possible down-grade in any publication
of any of the foregoing rating services; (z) domestic certificates of deposit or domestic time deposits or repurchase agreements
issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $1,000,000,000.00, which commercial bank has a rating of at least
either AA or such comparable rating from Standard & Poor’s Corporation or Moody’s Investors Service, Inc., respectively;
(aa) any funds deposited or invested by Guarantor in accounts maintained with Lender and which are not held in escrow for, or
pledged as security for, any obligations of Guarantor, Borrower and/or any of their affiliates; (bb) money market funds having
assets under management in excess of $2,000,000,000.00 and/or (cc) any unrestricted stock, shares, certificates, bonds, debentures,
notes or other instrument which constitutes a “security” under the Security Act of 1933 (other than Guarantor, Borrower
and/or any of their affiliates) which are freely tradable on any nationally recognized securities exchange and are not otherwise
encumbered by Guarantor.

 

    	 	11	 

    	 

    

 

14.           Notice of Litigation. Guarantor shall promptly give Lender notice of all litigation or proceedings before any court
or Governmental Authority affecting Guarantor or its property, except litigation or proceedings which, if adversely determined,
could not reasonably be expected to have a material adverse effect on the financial condition or operations of Guarantor or its
ability to perform any of its obligations hereunder.

15.           Access to Records. Guarantor shall give Lender and its representatives access to, and permit Lender and such representatives
to examine, copy or make extracts from, any and all books, records and documents in the possession of Guarantor relating to the
performance of Guarantor’s obligations hereunder and under any of the Loan Documents, upon reasonable notice and all at such
times during normal business hours and as often as Lender may reasonably request. If Guarantor is not an individual, Guarantor
shall continuously maintain its existence and, except with Lender’s prior written consent shall not dissolve or permit its
dissolution.

16.           Assignment by Lender. In connection with any sale, assignment or transfer of the Loan, Lender may sell, assign or
transfer this Guaranty and all or any of its rights, privileges, interests and remedies hereunder to any other person or entity
whatsoever without notice to or consent by Guarantor, and in such event the assignee shall be entitled to the benefits of this
Guaranty and to exercise all rights, interests and remedies as fully as Lender.

17.           Termination. This Guaranty shall terminate only when the Debt has been paid or defeased in full and all Liabilities
have been paid in full, including all interest thereon, late charges and other charges and fees included within the Liabilities
and the Debt. When the conditions described above have been fully met, Lender will, upon request, furnish to Guarantor a written
cancellation of this Guaranty.

18.           Notices. All notices, consents, approvals and requests required or permitted hereunder shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United States mail, postage prepaid,
return receipt requested or (b) expedited prepaid delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, or (c) by telecopier (with answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section):

    	 	12	 

    	 

    

  

	 	If to Lender:	KeyBank National Association

11501 Outlook, Suite 300

Overland Park, Kansas 66211

Facsimile No.: 877-379-1625

Attention: Loan Servicing
	 	 	 
	 	with a copy to:	Katten Muchin Rosenman LLP

550 South Tryon Street, Suite 2900

Charlotte, North Carolina 28202

Attention: Daniel S. Huffenus, Esq.

Facsimile No.: (704) 444-2050
	 	 	 
	 	If to Guarantor:	Moody National REIT II, Inc.

6363 Woodway, Suite 110

Houston, Texas 77057

Attention: Brett C. Moody

Facsimile No.: (713) 997-7505
	 	 	 
	 	 	Brett C. Moody

6363 Woodway, Suite 110

Houston, Texas 77057

Facsimile No.: (713) 997-7505

  

A notice shall be
deemed to have been given: in the case of hand delivery, at the time of delivery; in the case of registered or certified mail,
when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery, upon the first
attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation
of successful transmission after advice by telephone to recipient that a telecopy notice is forthcoming.

19.           Waiver
of Jury Trial. TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY AGREES NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY GUARANTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH RIGHT TO TRIAL BY JURY WOULD
OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY GUARANTOR.

    	 	13	 

    	 

    

 

20.           Miscellaneous.
This Guaranty shall be a continuing guaranty. This Guaranty shall bind the heirs, successors and assigns of Guarantor (except
that Guarantor may not assign his, her, or its liabilities under this Guaranty without the prior written consent of Lender, which
consent Lender may in its discretion withhold), and shall inure to the benefit of Lender, its successors, transferees and assigns.
Each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law. Neither
this Guaranty nor any of the terms hereof, including the provisions of this Section, may be terminated, amended, supplemented,
waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination,
amendment, supplement, waiver or modification is sought, and the parties hereby: (a) expressly agree that it shall not be reasonable
for any of them to rely on any alleged, non-written amendment to this Guaranty; (b) irrevocably waive any and all right to enforce
any alleged, non-written amendment to this Guaranty; and (c) expressly agree that it shall be beyond the scope of authority
(apparent or otherwise) for any of their respective agents to agree to any non-written modification of this Guaranty. This Guaranty
may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together
shall constitute a single Guaranty. The failure of any party hereto to execute this Guaranty, or any counterpart hereof, shall
not relieve the other signatories from their obligations hereunder. As used in this Guaranty, (i) the terms “include,”
“including” and similar terms shall be construed as if followed by the phrase “without being limited to,”
(ii) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include
the plural number, and vice versa, (iii) all captions to the Sections hereof are used for convenience and reference only and in
no way define, limit or describe the scope or intent of, or in any way affect, this Guaranty, (iv) no inference in favor of, or
against, Lender or Guarantor shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document,
(v) the term “Borrower” shall mean individually and collectively, jointly and severally, each Borrower (if more than
one) and shall include the successors (including any subsequent owner or owners of the Property in fee simple or any part thereof
or any fee simple interest therein and Borrower in its capacity as debtor-in-possession after the commencement of any bankruptcy
proceeding), assigns, heirs, personal representatives, executors and administrators of Borrower, (vi) the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or,” (vii) the words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Guaranty refer to this Guaranty
as a whole and not to any particular provision or section of this Guaranty, and (viii) an Event of Default shall “continue”
or be “continuing” until such Event of Default has been waived in writing by Lender. Wherever Lender’s judgment,
consent, approval or discretion is required under this Guaranty or Lender shall have an option, election, or right of determination
or any other power to decide any matter relating to the terms of this Guaranty, including any right to determine that something
is satisfactory or not (“Decision Power”), such Decision Power shall be exercised in the sole and absolute
discretion of Lender except as may be otherwise expressly and specifically provided herein. Such Decision Power and each other
power granted to Lender upon this Guaranty or any other Loan Document may be exercised by Lender or by any authorized agent of
Lender (including any servicer or attorney-in-fact), and Guarantor hereby expressly agrees to recognize the exercise of such Decision
Power by such authorized agent. If any provision of this Guaranty is held invalid or unenforceable by final and unappealable judgment
of the court having jurisdiction over the matter and persons, such provisions shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision, its application in other circumstances, or the
remaining provisions of this Guaranty. Any capitalized terms used in this Guaranty and not otherwise defined herein shall have
the meaning set forth in the Loan Agreement.

    	 	14	 

    	 

    

21.          Applicable Law; Jurisdiction and Venue. This Guaranty shall be governed by and construed in accordance with the laws
of jurisdiction in which the real property collateral for the Loan is located (“Governing State”). Guarantor
hereby consents to personal jurisdiction in the Governing State. Venue of any action brought to enforce this Guaranty or any other
Loan Document or any action relating to the Loan or the relationships created by or under the Loan Documents (“Action”)
shall, at the election of Lender, be in (and if any Action is originally brought in another venue, the Action shall at the election
of Lender be transferred to) a state or federal court of appropriate jurisdiction located in the Governing State. Guarantor hereby
consents and submits to the personal jurisdiction of the Governing State and of federal courts located in the Governing State in
connection with any Action and hereby waives any and all personal rights under the laws of any other state to object to jurisdiction
within such State for purposes of any Action. Guarantor hereby waives and agrees not to assert, as a defense to any Action or a
motion to transfer venue of any Action, (a) any claim that it is not subject to such jurisdiction, (b) any claim that any Action
may not be brought against it or is not maintainable in those courts or that this Guaranty may not be enforced in or by those courts,
or that it is exempt or immune from execution, (c) that the Action is brought in an inconvenient forum, or (d) that the venue for
the Action is in any way improper.

22.          OFAC. Guarantor hereby represents, warrants and covenants that Guarantor is not (and will not be) a person with whom
Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of
the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated
and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and,
to the best of Guarantor’s knowledge, is not and shall not engage in any dealings or transactions or otherwise be associated
with such persons. In addition, Guarantor hereby covenants to provide Lender with any additional information that Lender reasonably
deems necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar
activities.

23.          Local Law Provisions. In the event of any inconsistencies between the terms and conditions of this Section and any
other terms and conditions of this Guaranty, the terms and conditions of this Section shall be binding.

Moody
Guarantor hereby represents and warrants that Moody Guarantor is a resident of the State of Texas and that Moody Guarantor’s
primary domicile is in the State of Texas, which is a State that is a community property jurisdiction. In connection with the
foregoing, Moody Guarantor’s spouse has executed and delivered to Lender a spousal consent with respect to this Guaranty
(the “Spousal Consent”), which Spousal Consent is attached hereto as Exhibit A. In the event that Moody Guarantor
enters into a new marriage, at any time when Moody Guarantor is a resident (and/or has a primary domicile) in a community property
jurisdiction, Moody Guarantor shall cause such spouse to execute and deliver to Lender a replacement Spousal Consent within ten
(10) days after the occurrence of any such marriage. Moody Guarantor’s failure to comply with any of the foregoing shall,
at Lender’s option, constitute an “Event of Default” hereunder and under the Loan Agreement.

    	 	15	 

    	 

    

 

24.             
Release of Moody Guarantor. Provided that no Event of Default shall then exist, Moody Guarantor shall be deemed released
as guarantor hereunder and as indemnitor under the Environmental Indemnity upon REIT Guarantor delivering to Lender evidence reasonably
acceptable to Lender that REIT Guarantor has achieved a Net Worth of not less than $25,000,000.00 and Liquidity of not less than
$2,000,000.00 (the “Moody Guarantor Release Event”). Upon the occurrence of the Moody Guarantor Release Event,
Moody Guarantor shall be deemed released automatically from all liability under this Guaranty and the Environmental Indemnity first
accruing after such release and all references to “Guarantor” in this Guaranty and the other Loan Documents shall be
solely a reference to REIT Guarantor, and Moody Guarantor shall have no further obligations hereunder or under the other Loan Documents.

 

[NO FURTHER TEXT ON THIS PAGE]

    	 	16	 

    	 

    

IN WITNESS WHEREOF,
Guarantor has executed or caused this Guaranty to be executed as of the day and year first above written.

	 	GUARANTOR:
	 	 
	 	MOODY NATIONAL REIT II, INC.,
    a Maryland corporation
	 	 
	 	By: 	/s/ Brett C. Moody
	 	 	Brett C. Moody
Chief Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	/s/ Brett C. Moody
	 	BRETT C. MOODY

 

 

    	 		 

    	 

    

Exhibit A

 

Spousal Consent

 

(attached hereto)

 

 

 

 

 

 

 

 

 

 

 

    	 		 

    	 

    

CONSENT
OF SPOUSE OF BRETT C. MOODY

The undersigned spouse of Brett C. Moody
hereby consents to the execution of the foregoing Guaranty by her husband and agrees to be bound thereby to the extent of her interest
in any assets or property of Brett C. Moody and further agrees that their community assets shall be bound thereby. This consent
shall not be construed as an agreement by the undersigned spouse that such spouse’s separate property is subject to the claims
of Lender arising out of enforcement of this Guaranty.

 

	 	/s/ Amy Moody
	 	Amy Moody, an Individual
	 	 

 

 

 

 

19Moody National REIT II, Inc. POS AM

 

 

EXHIBIT 10.14

Loan No. 10096884

 

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL
INDEMNITY AGREEMENT (this “Agreement”) is made as of October 15, 2015, by MOODY NATIONAL LANCASTER-AUSTIN
HOLDING, LLC, a Delaware limited liability company, having an address at 6363 Woodway, Suite 110, Houston, Texas 77057 (“Borrower”)
and BRETT C. MOODY, an individual having an address at 6363 Woodway, Suite 110, Houston, Texas 77057 (“Moody Guarantor”),
and MOODY NATIONAL REIT II, INC., a Maryland corporation, having an address at 6363 Woodway, Suite 110, Houston, Texas 77057
(“REIT Guarantor”; together with Moody Guarantor hereinafter referred to, individually and collectively, as
the context may require, as “Guarantor”; Borrower and Guarantor hereinafter referred to, individually and collectively,
as the context may require, as “Indemnitor”), in favor of KEYBANK NATIONAL ASSOCIATION, a national banking
association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (together with its successors and assigns,
“Indemnitee”) and the other Indemnified Parties (as defined in the Loan Agreement).

RECITALS:

The following recitals
are a material part of this Agreement.

A.

Borrower is the owner
of the Property.

B.

Indemnitee is prepared
to make a loan (the “Loan”) to Borrower in the principal amount of $ 16,575,000.00 pursuant to a Loan Agreement
of even date herewith between Indemnitee and Borrower (the “Loan Agreement”), which Loan shall be evidenced
by that certain Promissory Note of even date herewith given by Borrower in favor of Indemnitee (the “Note”)
and secured by, among other things one or more mortgages/deeds of trust/deeds to secure debt, dated as of the date hereof, given
by Borrower to Indemnitee and encumbering the Property (the “Security Instrument”). Capitalized terms not otherwise
defined herein shall have the meaning set forth in the Loan Agreement.

C.

Indemnitee is unwilling
to make the Loan unless Indemnitor agrees to provide the indemnification, representations, warranties, covenants and other matters
described in this Agreement for the benefit of the Indemnified Parties.

D.

Indemnitor is entering
into this Agreement to induce Indemnitee to make the Loan.

AGREEMENT:

NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby agrees for
the benefit of the Indemnified Parties as follows:

 

    	 	1	 

    	 

    

 

1.

Indemnification.
Indemnitor covenants and agrees, at its sole cost and expense, to protect, defend, indemnify, release and hold the Indemnified
Parties harmless from and against any and all Losses (defined below) imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way attributable to any one or more of the following: (a) any
presence of any Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of
Hazardous Substances in, on, above, under or from the Property; (c) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Substances at any
time located in, under, on or above the Property; (d) any activity by Indemnitor, any Person affiliated with Indemnitor, and
any tenant or other user of the Property in connection with any actual or proposed Remediation of any Hazardous Substances at any
time located in, under, on or above the Property, whether or not such Remediation is voluntary or pursuant to court or administrative
order, including any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or violations
of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon,
including any failure by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property to comply
with any order of any Governmental Authority in connection with any Environmental Laws; (f) the imposition, recording or filing
or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (g) any administrative
processes or proceedings or judicial proceedings in any way connected with the environmental condition of the Property; (h) in
each case, to the extent arising from the presence of Hazardous Substances or the violation of any Environmental Law, any past,
present or threatened injury to, destruction of or loss of natural resources in any way connected with the Property, including
costs to investigate and assess such injury, destruction or loss; (i) any acts of Indemnitor, any Person affiliated with Indemnitor,
and any tenant or other user of the Property in arranging for disposal or treatment, or arranging with a transporter for transport
for disposal or treatment, of Hazardous Substances at any facility or incineration vessel containing such or similar Hazardous
Substances; (j) any acts of Indemnitor, any Person affiliated with any Indemnitor, and any tenant or other user of the Property
in accepting any Hazardous Substances for transport to disposal or treatment facilities, incineration vessels or sites from which
there is a Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; and
(k) in each case, to the extent relating to Hazardous Substances or violation of any Environmental Law, any misrepresentation
or inaccuracy in any representation or warranty relating to the environmental condition of the Property or material breach or failure
to perform any covenants or other obligations relating to the environmental condition of the Property pursuant to this Agreement,
the Loan Agreement or the Security Instrument.

2.

Duty to Defend
and Attorneys and Other Fees and Expenses. Upon written request by any Indemnified Party, Indemnitor shall defend same
(if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by
the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole and absolute discretion, engage
their own attorneys and other professionals to defend or assist them, and, at the option of such Indemnified Parties, their attorneys
shall control the resolution of any claim or proceeding, providing that no compromise or settlement shall be entered without Indemnitor’s
consent, which consent shall not be unreasonably withheld. Upon demand, Indemnitor shall pay or, in the sole and absolute discretion
of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in connection therewith.

 

    	 	2	 

    	 

    

 

3.

Definitions.
Capitalized terms used herein and not specifically defined herein shall have the respective meanings ascribed to such terms in
the Loan Agreement. As used in this Agreement, the following terms shall have the following meanings:

The term “Legal
Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

The term “Losses”
means any losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including strict liabilities),
obligations, debts, diminutions in value (but only to the extent of any deficiency in respect of the Debt), fines, penalties, charges,
costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential
damages, litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation
costs (including costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances
whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative
proceedings, actions, claims, suits, judgments or awards.

4.

Unimpaired Liability.
The liability of Indemnitor under this Agreement shall in no way be limited or impaired by, and Indemnitor hereby consents to and
agrees to be bound by, any amendment or modification of the provisions of the Note, the Loan Agreement, the Security Instrument
or any other Loan Document to or with Indemnitee by Indemnitor or any Person who succeeds Indemnitor or any Person as owner of
the Property. In addition, the liability of Indemnitor under this Agreement shall in no way be limited or impaired by (i) any
extensions of time for performance required by the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents,
(ii) any sale or transfer of all or part of the Property, (iii) except as provided herein, any exculpatory provision
in the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents limiting Indemnitee’s recourse
to the Property or to any other security for the Note, or limiting Indemnitee’s rights to a deficiency judgment against Indemnitor,
(iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitor under the Note, the Loan Agreement,
the Security Instrument or any of the other Loan Documents or herein, (v) the release of Indemnitor or any other Person from
performance or observance of any of the agreements, covenants, terms or conditions contained in any of the other Loan Documents
by operation of law, Indemnitee’s voluntary act, or otherwise, (vi) the release or substitution in whole or in part
of any security for the Loan, or (vii) Indemnitee’s failure to record the Security Instrument or file any UCC financing
statements (or Indemnitee’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure
any security interest or lien given as security for the Loan; and, in any such case, whether with or without notice to Indemnitor
and with or without consideration.

 

    	 	3	 

    	 

    

 

5.

Enforcement.
The Indemnified Parties may enforce the obligations of Indemnitor without first resorting to or exhausting any security or collateral
or without first having recourse to the Note, the Loan Agreement, the Security Instrument, or any other Loan Documents or any of
the Property, through foreclosure proceedings or otherwise, provided, however, that nothing herein shall inhibit or prevent Indemnitee
from suing on the Note, foreclosing, or exercising any power of sale under, the Security Instrument, or exercising any other rights
and remedies thereunder. This Agreement is not collateral or security for the Debt, unless Indemnitee expressly elects in writing
to make this Agreement additional collateral or security for the Debt, which Indemnitee is entitled to do in its discretion. It
is not necessary for an Event of Default to have occurred for the Indemnified Parties to exercise their rights pursuant to this
Agreement. Notwithstanding any provision of the Loan Agreement, the obligations pursuant to this Agreement are exceptions to any
non-recourse or exculpation provision of the Loan Agreement; Indemnitor is fully and personally liable for such obligations, and
such liability is not limited to the original or amortized principal balance of the Loan or the value of the Property.

6.

Survival.
The obligations and liabilities of Indemnitor under this Agreement shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure
of the Security Instrument. Notwithstanding the provisions of this Agreement to the contrary, the liabilities and obligations of
Indemnitor hereunder shall not apply to the extent that Indemnitor can prove that such liabilities and obligations arose solely
from Hazardous Substances that: (a) were not present on or a threat to the Property prior to the date that Indemnitee or its
nominee acquired title to the Property, whether by foreclosure, exercise of power of sale or otherwise (or, if the Property is
transferred to an assuming Transferee in accordance with the provisions of the Loan Agreement, were not present on or a threat
to the Property prior to the date on which such Transferee acquired title to the Property) and (b) were not the result of
any act or negligence of Indemnitor or any of Indemnitor’s affiliates, agents or contractors.

7.

Interest.
Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if
not paid within thirty (30) days of such demand therefor, shall bear interest at the lesser of (a) the Default Rate or (b) the
maximum interest rate which Indemnitor may by law pay or the Indemnified Parties may charge and collect, from the date payment
was due, provided that the foregoing shall be subject to the provisions of Section 10 of the Note.

8.

Waivers.
(a) Indemnitor hereby waives (i) any right or claim of right to cause a marshaling of Indemnitor’s assets or to cause
Indemnitee or other Indemnified Parties to proceed against any of the security for the Loan before proceeding under this Agreement
against Indemnitor; (ii) and relinquishes all rights and remedies accorded by applicable law to indemnitors or guarantors,
except any rights of subrogation, reimbursement, contribution or indemnity (collectively, “Cross-Indemnity Rights”)
which Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of
any such Cross-Indemnity Rights nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement
or attempted enforcement of such Cross-Indemnity Rights including any claim that such Cross-Indemnity Rights were abrogated by
any acts of Indemnitee or other Indemnified Parties; (iii) the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand of payment, protest or notice
of nonpayment or failure to perform or observe, or other proof, or notice or demand; and (vi) all homestead exemption rights
against the obligations hereunder and the benefits of any statutes of limitations or repose. Notwithstanding anything to the contrary
contained herein, Indemnitor hereby agrees to postpone the exercise of any Cross-Indemnity Rights with respect to any collateral
securing the Loan until the Loan shall have been paid in full.

 

    	 	4	 

    	 

    

 

(a)

Indemnitor hereby
waives, to the fullest extent permitted by law, the right to trial by jury in any action, proceeding or counterclaim, whether in
contract, tort or otherwise, relating to this agreement or the other loan documents or any acts or omissions of any Indemnified
Parties in connection therewith.

9.

Subrogation.
Indemnitor shall take any and all reasonable actions, including institution of Legal Action against third parties, necessary or
appropriate to obtain reimbursement, payment or compensation from such Person responsible for the presence of any Hazardous Substances
at, in, on, under or near the Property or otherwise obligated by law to bear the cost. The Indemnified Parties shall be and hereby
are subrogated to all of Indemnitor’s rights now or hereafter in such claims.

10.

Indemnitor’s
Representations and Warranties. Indemnitor represents and warrants that:

(a)

if Indemnitor
is a corporation, a limited liability company, a statutory trust or partnership, it has the full corporate/ limited liability company/
partnership/ trust power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement by Indemnitor has been duly and validly authorized; and all requisite corporate/ limited
liability company/ partnership/ trust action has been taken by Indemnitor to make this Agreement valid and binding upon Indemnitor,
enforceable in accordance with its terms;

(b)

if Indemnitor
is a corporation, a limited liability company, a statutory trust or partnership, its execution of, and compliance with, this Agreement
will not result in the breach of any term or provision of the charter, by-laws, partnership, operating or trust agreement, or other
governing instrument of Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default
under, or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument
to which Indemnitor or the Property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree
to which Indemnitor or the Property is subject;

(c)

to the best of
Indemnitor’s knowledge, there is no action, suit, proceeding or investigation pending or threatened against it which, either
in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition,
properties or assets of Indemnitor, or in any material impairment of the right or ability of Indemnitor to carry on its business
substantially as now conducted, or in any material liability on the part of Indemnitor, or which would draw into question the validity
of this Agreement or of any action taken or to be taken in connection with the obligations of Indemnitor contemplated herein, or
which would be likely to impair materially the ability of Indemnitor to perform under the terms of this Agreement;

 

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(d)

it does not believe,
nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(e)

to the best of
Indemnitor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any governmental
authority or other person, and no approval, authorization or consent of any other party is required in connection with this Agreement;
and

(f)

this Agreement
constitutes a valid, legal and binding obligation of Indemnitor, enforceable against it in accordance with the terms hereof.

11.

No Waiver.
No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of
any such privilege, power or right.

12.

Notice of Legal
Actions. Each party hereto shall, within ten (10) business days of receipt thereof, give written notice to the other party
hereto of (i) any notice, advice or other communication received in writing from any Governmental Authority or any source
whatsoever with respect to Hazardous Substances on, from or affecting the Property, and (ii) any Legal Action brought against
such party or related to the Property, with respect to which Indemnitor could reasonably be expected to have liability under this
Agreement. Such notice shall comply with the provisions of Section 14 hereof.

13.

Examination of
Books and Records. At reasonable times and upon reasonable notice, the Indemnified Parties and their accountants shall
have the right to examine the records, books, management and other papers of Indemnitor pertaining to its financial condition or
the income, expenses and operation of the Property, at the Property or at the office regularly maintained by Indemnitor where the
books and records are located. The Indemnified Parties and their accountants shall have the right to make copies and extracts from
the foregoing records and other papers.

14.

Notices.
All notices or other written communications hereunder shall be made in accordance with (a) Section 10.6 of the Loan Agreement
in the case of Lender and Borrower, and (b) the respective Guaranty Agreement executed by Indemnitor in the case of any Indemnitor.

15.

Counterparts.
This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original.
This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all
of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart
hereof, shall not relieve the other signatories from their obligations hereunder.

16.

No Oral Change.
This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Indemnitor or any Indemnified Party, but only by an agreement in writing signed
by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

 

    	 	6	 

    	 

    

 

17.

Headings, Etc.
The headings and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions hereof.

18.

Number and Gender/Successors
and Assigns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural as the identity of the Person referred to may require. Without limiting the effect of specific references in any provision
of this Agreement, the term “Indemnitor” shall be deemed to refer to each and every Person comprising an Indemnitor
from time to time, as the sense of a particular provision may require, and to include the heirs, executors, administrators, legal
representatives, successors and assigns of such Person, all of whom shall be bound by the provisions of this Agreement, provided
that no obligation of Indemnitor may be assigned except with the written consent of Indemnitee. Each reference herein to Indemnitee
shall be deemed to include its successors and assigns. This Agreement shall inure to the benefit of the Indemnified Parties and
their respective successors and assigns forever.

19.

Release of Liability.
Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party
not so released.

20.

Rights Cumulative.
The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Indemnitee has under the
Note, the Security Instrument, the Loan Agreement or the other Loan Documents or would otherwise have at law or in equity.

21.

Inapplicable
Provisions. If any term, condition or covenant of this Agreement shall be held to be invalid, illegal or unenforceable
in any respect, this Agreement shall be construed without such provision.

22.

Governing Law.
The governing law and related provisions set forth in Section 10.3 of the Loan Agreement (including, any authorized agent provisions
thereof) are hereby incorporated by reference as if fully set forth herein (with Indemnitor substituted in all places where Borrower
appears thereunder) and shall be deemed fully applicable to Indemnitor hereunder. Indemnitor hereby certifies that it has received
and reviewed the Loan Agreement (including, Section 10.3 thereof).

23.

Miscellaneous.
(a) Wherever pursuant to this Agreement (i) Indemnitee exercises any right given to it to approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnitee, or (iii) any other decision or determination is to be made by Indemnitee,
the decision of Indemnitee to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory
and all other decisions and determinations made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee and shall
be final and conclusive, except as may be otherwise expressly and specifically provided herein.

(b)

Wherever pursuant
to this Agreement it is provided that Indemnitor pay any costs and expenses, such costs and expenses shall include legal fees
and disbursements of Indemnitee, whether retained firms, the reimbursements for the expenses of the in-house staff or otherwise. 

(c)

If Indemnitor
consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint
and several.

 

    	 	7	 

    	 

    

 

(d)

The following
rules of construction shall be applicable for all purposes of this Agreement and all documents or instruments supplemental hereto,
unless the context otherwise clearly requires:

(i)

The terms “include,”
“including” and similar terms shall be construed as if followed by the phrase “without being limited to”;

(ii)

The term “or”
has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;

(iii)

The words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement
as a whole and not to any particular provision or section of this Agreement;

(iv)

An Event of Default
shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender; and

(v)

No inference in
favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document.

24.

State Specific
Provisions. In the event of any inconsistencies between the other terms and conditions of this Agreement and this Section,
the terms and conditions of this Section shall control and be binding.

None

25.

Release of Moody
Guarantor. Provided that no Event of Default shall then exist, Moody Guarantor shall be deemed released as Indemnitor hereunder
and as guarantor under the Guaranty upon REIT Guarantor delivering to Lender evidence reasonably acceptable to Lender that REIT
Guarantor has achieved a Net Worth of not less than $25,000,000.00 and Liquidity of not less than $2,000,000.00 (the “Moody
Guarantor Release Event”). Upon the occurrence of the Moody Guarantor Release Event, Moody Guarantor shall be deemed
released automatically from all liability under this Agreement and the Guaranty first accruing after such release and all references
to “Indemnitor” in this Agreement and the other Loan Documents shall be solely a reference to REIT Guarantor, and Moody
Guarantor shall have no further obligations hereunder or under the other Loan Documents. As used in this Section 25, “Net
Worth” and Liquidity” shall have the meaning ascribed to such terms in the Guaranty.

[NO FURTHER TEXT ON THIS PAGE]

 

    	 	8	 

    	 

    

 

IN WITNESS WHEREOF,
this Agreement has been executed by Indemnitor as of the day and year first above written.

	 	INDEMNITOR:
	 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN
	 	HOLDING, LLC, a Delaware limited liability company
	 	 
	 	By: 	/s/ Brett C. Moody
	 	 	Brett C. Moody
President

 

	 	 
	 	MOODY NATIONAL REIT II, INC.,
	 	a Maryland corporation
	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett C. Moody
Chief Executive Officer

 

 

	 	/s/ Brett C. Moody
	 	BRETT C. MOODY

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