Document:

Moody National REIT II, Inc. S-11 

Exhibit 10.1

 

ADVISORY AGREEMENT

 

among

 

MOODY
NATIONAL REIT II, Inc.,

 

MOODY
NATIONAL OPERATING PARTNERSHIP II, LP,

 

AND

 

Moody
national Advisor II, LLC

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	1.	Definitions	1
	 	 	 
	2.	Appointment	7
	 	 	 
	3.	Duties Of The Advisor	7
	 	 	 
	4.	Authority Of Advisor	9
	 	 	 
	5.	Bank Accounts	9
	 	 	 
	6.	Records; Access	10
	 	 	 
	7.	Limitations On Activities	10
	 	 	 
	8.	Relationship With Director	10
	 	 	 
	9.	Fees	10
	 	 	 
	10.	Expenses	12
	 	 	 
	11.	Other Services	13
	 	 	 
	12.	Reimbursement To The Advisor	14
	 	 	 
	13.	Relationship Of The Parties	14
	 	 	 
	14.	Other Activities Of The Advisor	14
	 	 	 
	15.	Term Of Agreement	15
	 	 	 
	16.	Termination By The Parties	15
	 	 	 
	17.	Assignment To An Affiliate	15
	 	 	 
	18.	Payments To And Duties Of Advisor Upon Termination	15
	 	 	 
	19.	Indemnification By The Company And The Operating Partnership	16
	 	 	 
	20.	Indemnification By Advisor	17
	 	 	 
	21.	Non-Solicitation	17
	 	 	 
	22.	Notices	17
	 	 	 
	23.	Modification	18
	 	 	 
	24.	Severability	18

 

    	 

    	 

    

 

	25.	Construction	18
	 	 	 
	26.	Entire Agreement	18
	 	 	 
	27.	Indulgences, Not Waivers	18
	 	 	 
	28.	Gender	18
	 	 	 
	29.	Titles Not To Affect Interpretation	18
	 	 	 
	30.	Execution In Counterparts	18

 

    	 

    	 

    

 

ADVISORY AGREEMENT

 

 THIS ADVISORY
AGREEMENT, dated as of the 12th day of January, 2015 (this “Agreement”), is entered into by and among
Moody National REIT II, Inc., a Maryland corporation (the “Company”), Moody National Operating Partnership
II, LP, a Delaware limited partnership (the “Operating Partnership”) and Moody National Advisor II, LLC, a
Delaware limited liability company (the “Advisor,” and collectively with the Company and the Operating
Partnership, the “Parties”). Capitalized terms used herein shall have the meanings ascribed to
them in Section 1 below. 

 

W I T N E S S E T H

 

WHEREAS, the Company intends
to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;

 

WHEREAS, the Company is
the general partner of the Operating Partnership and intends to conduct all of its business and make all Investments through the
Operating Partnership;

 

WHEREAS, the Company and
the Operating Partnership desire to avail themselves of the experience, sources of information, advice, assistance and certain
facilities of the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of,
and subject to the supervision, of the Board, all as provided herein; and

 

WHEREAS, the Advisor is
willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter
set forth.

 

NOW, THEREFORE, in consideration
of the foregoing and of the mutual covenants and agreements contained herein, the Parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.         DEFINITIONS.
As used in this Agreement, the following terms have the definitions hereinafter indicated:

 

Acquisition Expenses.
Any and all expenses, exclusive of Acquisition Fees and Financing Coordination Fees, incurred by the Company, the Operating Partnership,
the Advisor, or any of their Affiliates in connection with the selection, evaluation, acquisition,
origination, making or development of any Investments, whether or not acquired or originated, including, without limitation, legal
fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, title insurance premiums, and the costs of performing due diligence.

 

Acquisition Fees.
Any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees
or commissions paid by or to any Affiliate of the Company, the Operating Partnership or the Advisor) in connection with making
or investing in any Investment or the purchase, development or construction of any Real Estate Asset, including real estate commissions,
selection fees, development fees, construction fees, nonrecurring management fees, loan fees, points or any other fees of a similar
nature. Excluded shall be development fees and construction fees paid to any Person not Affiliated with the Sponsor in connection
with the actual development and construction of a project.

 

 

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Advisor.
Moody National Advisor II, LLC, a Delaware limited liability company, any successor advisor to the Company, the Operating Partnership
or any Person to which Moody National Advisor II, LLC or any successor advisor subcontracts substantially all of its functions.
Notwithstanding the foregoing, a Person hired or retained by Moody National Advisor II, LLC to perform hotel management and
related services for the Company or the Operating Partnership that is not hired or retained to perform substantially all of the
functions of Moody National Advisor II, LLC with respect to the Company or the Operating Partnership
as a whole shall not be deemed to be an Advisor.

 

Affiliate or Affiliated.
With respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent
(10%) or more of the outstanding voting securities of such other Person; (ii) any Person ten percent (10%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any
Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer,
director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive
officer, director, trustee or general partner of such other Person.

 

Articles of Incorporation.
The Articles of Incorporation of the Company, as amended from time to time.

 

Asset Management
Fee. The term “Asset Management Fee” shall mean the fee payable to the Advisor pursuant to Section 9(d).

 

Average Invested
Assets. For a specified period, the average of the aggregate book value of the assets of the Company invested, directly
or indirectly, in Investments before deducting depreciation, bad debts or other non-cash reserves, computed by taking the average
of such values at the end of each month during such period.

 

Board. The
board of directors of the Company, as of any particular time.

 

Bylaws. The
bylaws of the Company, as the same are in effect from time to time.

 

Cause. With
respect to the termination of this Agreement, fraud, criminal conduct, misconduct or negligent breach of fiduciary duty by the
Advisor, or a material breach of this Agreement by the Advisor.

 

Code. Internal
Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall
mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted
by any applicable regulations as in effect from time to time.

 

Company.
The term “Company” shall have the meaning set forth in the preamble of this Agreement.

 

 C  ompetitive
Brokerage Commission  .
The term “Competitive Brokerage Commission” means a real
estate or brokerage commission for the
purchase or sale of
a Property,
Loan or Permitted Investment that is
reasonable,
customary,
and competitive
in light of the size, type, and location of the Property, Loan or Permitted Investment.  

 

Contract Sales Price.
The total consideration received by the Company for the sale of an Investment.

 

Dealer Manager.
Moody Securities, LLC, or such other Person or entity selected by the Board to act as the dealer manager for the Offering. Moody
Securities, LLC is a member of the Financial Industry Regulatory Authority.

 

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Dealer Manager Fee.
3.0% of Gross Proceeds from the sale of Shares in the Primary Offering, payable to the Dealer Manager for serving as the dealer
manager of such Offering.

 

Director.
A member of the Board.

 

Disposition Fees.
The term “Dispositions Fees” shall mean the fees payable to the Advisor pursuant to Section 9(c).

 

Distributions.
Any distributions of money or other property by the Company to owners of Shares, including distributions that may constitute a
return of capital for federal income tax purposes.

 

Effective
Date.  The commencement date of the Initial Public Offering.

 

Excess Amount.
The term “Excess Amount” shall have the meaning set forth in Section 12.

 

Expense Year.
The term “Expense Year” shall have the meaning set forth in Section 12.

 

 Financing Coordination
Fees  . The term “Financing Coordination Fees” shall mean the fees payable to the Advisor pursuant to
Section 9(e). 

 

GAAP. Generally
accepted accounting principles as in effect in the United States of America from time to time.

 

Good Reason.
With respect to the termination of this Agreement, (i) any failure to obtain a satisfactory agreement from any successor to the
Company or the Operating Partnership to assume and agree to perform the Company’s or the Operating Partnership’s obligations
under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the Company or the Operating Partnership.

 

Gross Proceeds.
The aggregate purchase price of all Shares sold for the account of the Company through all Offerings, without deduction for Sales
Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses.
For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Sales Commissions are paid to the
Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount
of the offering price per Share pursuant to the Prospectus for such Offering without reduction.

 

Indemnitee.
The terms “Indemnitee and “Indemnitees” shall have the meaning set forth in Section 19 herein.

 

Independent Director.
The term “Independent Director” shall have the meaning set forth in the Articles of Incorporation.

 

Initial
Public Offering. The initial public offering of Shares registered pursuant to the Registration Statement.

 

Investments.
Any investments by the Company or the Operating Partnership in Real Estate Assets and Securities and Debt-Related Investments.

 

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Joint Ventures.
The joint venture or partnership arrangements (other than with the Operating Partnership) in which the Company or any of its subsidiaries
is a co-venturer or general partner which are established to acquire Real Properties.

 

Listing.
The listing of the Shares on a national securities exchange or the receipt by the Company’s Stockholders of securities that
are listed on a national securities exchange in exchange for the Company’s common stock. Upon such Listing, the Shares shall
be deemed Listed.

 

Loans. Any
indebtedness or obligations in respect of borrowed money or evidenced by bonds, notes, debentures, deeds of trust, letters of credit
or similar instruments, including mortgages and mezzanine loans.

 

Minimum Offering
Amount. The Company receives and accepts a minimum offering amount of $2,000,000 (including Shares purchased by the Company’s
sponsor, its affiliates and the Company’s officers and directors) in Gross Proceeds pursuant to the Initial Public Offering.

 

NASAA REIT Guidelines.
The Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association
as in effect on the Effective Date, as may be modified from time to time.

 

Net Income.
For any period, the Company’s total revenues applicable to such period, less the total expenses applicable to such period
other than additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the
sale of the Company’s assets.

 

Offering.
The public offering of Shares pursuant to a Prospectus.

 

Operating Partnership.
The term “Operating Partnership” shall have the meaning set forth in the preamble of this Agreement.

 

Operating Partnership
Agreement. The Limited Partnership Agreement of Moody National Operating Partnership II, LP.

 

OP Limited Partnership
Interests. Limited partnership interests in the Operating Partnership.

 

Organization and
Offering Expenses. Organization and Offering Expenses means all expenses incurred by or on behalf of the Company in connection
with and in preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether
incurred before or after the date of this Agreement, which may include but are not limited to, total underwriting and brokerage
discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to
the underwriter or any reimbursement of expenses of the underwriter by the Company; expenses for printing, engraving and mailing;
salaries of employees while engaged in sales activity; telephone and other telecommunications costs; all advertising and marketing
expenses (including the costs related to investor and broker-dealer sales meetings); charges of transfer agents, registrars, trustees,
escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under Federal and State laws,
including taxes and fees, accountants’ and attorneys’ fees.

 

Person. An
individual, corporation, partnership, trust, joint venture, limited liability company or other entity.

 

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Primary Offering.
The portion of an Offering other than the Shares offered pursuant to the Company’s distribution reinvestment plan.

 

Property
Manager. An Affiliated entity that has been retained to perform and carry out property-management services at one or more
of the Real Estate Assets.

 

Prospectus.
A “Prospectus” under Section 2(10) of the Securities Act of 1933, as amended (the “Securities Act”),
including a preliminary Prospectus, an offering circular as described in Rule 253 of the General Rules and Regulations under the
Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering
and selling securities to the public.

 

Real Estate Assets.
Any investments by the Company or the Operating Partnership in unimproved and improved Real Property (including, without limitation,
fee or leasehold interests, options and leases) either directly or through a Joint Venture.

 

Real Property.
Real property owned from time to time by the Company or the Operating Partnership, either directly or through joint venture arrangements
or other partnerships which consists of (i) land only, (ii) land, including the buildings located thereon, (iii) buildings only
or (iv) such investments the Board and the Advisor mutually designate as Real Property to the extent such investments could be
classified as Real Property.

 

 Registration
Statement  . Registration Statement shall mean the Company’s registration statement on Form S-11 (Registration
Number 333-198305), as amended from time to time, in connection with the Initial Public
Offering. 

 

REIT. A “real
estate investment trust” under Sections 856 through 860 of the Code or as may be amended.

 

Sale or Sales.
Any transaction or series of transactions whereby: (i) the Company or the Operating Partnership directly or indirectly (except
as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Real
Property or portion thereof, including the lease of any Real Property consisting of a building only, and including any event with
respect to any Real Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (ii) the Company
or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants,
transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Corporation or the Operating
Partnership in any Joint Venture in which it is a co-venturer or partner; (iii) any Joint Venture directly or indirectly (except
as described in other subsections of this definition) in which the Company or the Operating Partnership as a co-venturer or partner
sells, grants, transfers, conveys, or relinquishes its ownership of any Real Property or portion thereof, including any event with
respect to any Real Property which gives rise to insurance claims or condemnation awards; or (iv) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes
its interest in any Securities and Debt-Related Investment or portion thereof (including with respect to any Loan, all payments
thereunder or in satisfaction thereof other than regularly scheduled interest payments) and any event which gives rise to a significant
amount of insurance proceeds or similar awards; or (v) the Company or the Operating Partnership directly or indirectly (except
as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other
asset not previously described in this definition or any portion thereof, but not including any transaction or series of transactions
specified in clauses (i) through (v) above in which the proceeds of such transaction or series of transactions are reinvested by
the Company in one or more assets within 180 days thereafter.

 

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Sales Commission.
7.0% of Gross Proceeds from the sale of Shares in the Primary Offering payable to the Dealer Manager and reallowable to Soliciting
Dealers with respect to Shares sold by them.

 

Securities and Debt-Related
Investments. Any investments by the Company or the Operating Partnership in (i) real estate securities such as common stocks,
preferred stocks and options to acquire stock in REITs and other real estate companies and (ii) debt-related investments such as
(a) mortgage, mezzanine, bridge and other loans and (b) debt and derivative securities related to real estate assets including
mortgage-backed securities, collateralized debt obligations, debt securities issued by real estate companies and credit default
swaps.

 

Shares. The
shares of the Company’s common stock, par value $0.01 per share.

 

Soliciting Dealers.
Broker-dealers who are members of the Financial Industry Regulatory Authority, Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed participating broker or other agreements with the Dealer Manager to sell Shares.

 

Special OP Limited
Partnership Interests. Special OP Limited Partnership Interests means the separate series of limited partnership interests
to be issued in accordance with Section 9(g).

 

Sponsor.
Any Person which (i) is directly or indirectly instrumental in organizing, wholly or in part, the Company, (ii) will control, manage
or participate in the management of the Company, and any Affiliate of any such Person, (iii) takes the initiative, directly or
indirectly, in founding or organizing the Company, either alone or in conjunction with one or more other Persons, (iv) receives
a material participation in the Company in connection with the founding or organizing of the business of the Company, in consideration
of services or property, or both services and property, (v) has a substantial number of relationships and contacts with the Company,
(vi) possesses significant rights to control the Company’s Investments, (vii) receives fees for providing services to the
Company which are paid on a basis that is not customary in the industry, or (viii) provides goods or services to the Company on
a basis which was not negotiated at arm’s-length with the Company. “Sponsor” does not include wholly independent
third parties such as attorneys, accountants and underwriters whose only compensation is for professional services.

 

Stockholders.
The registered holders of the Shares.

 

Termination Date.
The date of termination of this Agreement.

 

Termination Event.
The termination or nonrenewal of this Agreement (i) in connection with a merger, sale of assets or transaction involving the Company
pursuant to which a majority of the Directors then in office are replaced or removed, (ii) by the Advisor for Good Reason or (iii)
by the Company and the Operating Partnership other than for Cause.

 

Total
Operating Expenses. All costs and expenses paid or incurred by the Company, as determined under GAAP, that are in any
way related to the operation of the Company or its business, including asset management fees and other fees paid to Advisors,
but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting,
underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and taxes incurred in
connection with the issuance, distribution, transfer, registration and Listing, (ii) interest payments, (iii) taxes, (iv)
non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees paid in compliance with
the NASAA REIT Guidelines; (vi) Acquisition Fees and Acquisition Expenses, (vii) real estate commissions on the Sale of Real
Property, and (viii) other fees and expenses connected with the acquisition, disposition, management and ownership of real
estate interests, mortgages or other property (including the costs of foreclosure, insurance premiums, legal services,
maintenance, repair, and improvement of property). The definition of “Total Operating Expenses” set forth above
is intended to encompass only those expenses which are required to be treated as Total Operating Expenses under the NASAA
REIT Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the Company which is not
part of Total Operating Expenses under the NASAA REIT Guidelines shall not be treated as part of Total Operating Expenses for
purposes hereof.

 

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2%/25% Guidelines.
The term “2%/25% Guidelines” shall have the meaning set forth in Section 12.

 

2.         APPOINTMENT.
The Company and the Operating Partnership hereby appoint the Advisor to serve as their advisor on the terms and conditions set
forth in this Agreement, and the Advisor hereby accepts such appointment.

 

3.         DUTIES OF THE
ADVISOR. The Advisor undertakes to use its best efforts to present to the Company and the Operating Partnership potential
investment opportunities and to provide a continuing and suitable investment program consistent with the investment objectives
and policies of the Company as determined and adopted by the Directors, and as amended from time to time with the approval of the
Stockholders. In performance of this undertaking, subject to the supervision of the Directors and consistent with the provisions
of the Articles of Incorporation and Bylaws of the Company and the Operating Partnership Agreement, the Advisor shall, either directly
or by engaging an Affiliate:

 

(a)          assist
in the development of the Initial Public Offering and any subsequent Offering approved by the Board, including the determination
of the specific terms of the securities to be offered by the Company, preparation of all offering and related documents, and obtaining
all required regulatory approvals of such documents

 

(b)         serve as the Company’s
and the Operating Partnership’s investment and financial advisor;

 

(c)         provide the daily
management for the Company and the Operating Partnership and perform and supervise the various administrative functions reasonably
necessary for the management of the Company and the Operating Partnership;

 

(d)         investigate, select,
and, on behalf of the Company and the Operating Partnership, engage and conduct business with such Persons as the Advisor deems
necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, correspondents,
lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians,
agents for collection, insurers, insurance agents, banks, builders, developers, property owners, real estate management companies,
real estate operating companies, securities investment advisors, mortgagors, and any and all agents for any of the foregoing, including
Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance
of any of the foregoing services, including, but not limited to, entering into contracts in the name of the Company and the Operating
Partnership with any of the foregoing;

 

(e)         consult
with the officers and Directors of the Company and assist the Directors in the formulation and implementation of the
Company’s financial policies, and, as necessary, furnish the Directors with advice and recommendations with respect to
the making of investments consistent with the investment objectives and policies of the Company and in connection with any
borrowings proposed to be undertaken by the Company or the Operating Partnership;

 

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(f)         subject to the provisions
of Section 4 hereof, (i) participate in formulating an investment strategy and asset allocation framework, (ii) locate, analyze
and select potential Investments, (iii) structure and negotiate the terms and conditions of transactions pursuant to which acquisitions
and dispositions of Investments will be made; (iv) research, identify, review and recommend acquisitions and dispositions of Investments
to the Board and make investments on behalf of the Company and the Operating Partnership in compliance with the investment objectives
and policies of the Company; (v) arrange for financing and refinancing and make other changes in the asset or capital structure
of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with, Investments; (vi) enter into leases and service
contracts for Real Estate Assets and, to the extent necessary, perform all other operational functions for the maintenance and
administration of such Real Estate Assets; (vii) actively oversee and manage Investments for purposes of meeting the Company’s
investment objectives; (vii) select Joint Venture partners, structure corresponding agreements and oversee and monitor these relationships;
(viii) oversee the performance of the Property Manager or third-party property managers who perform services for the Company or
the Operating Partnership; (ix) oversee Affiliated and non-Affiliated Persons with whom the Advisor contracts to perform certain
of the services required to be performed under this Agreement; (x) manage accounting and other record-keeping functions for the
Company and the Operating Partnership; and (xi) recommend various liquidity events to the Board when appropriate;

 

(g)         upon request, provide
the Directors with periodic reports regarding prospective investments;

 

(h)         make investments in,
and dispositions of, Investments within the discretionary limits and authority as granted by the Board;

 

(i)         negotiate on behalf
of the Company and the Operating Partnership with banks or lenders for Loans to be made to the Company and the Operating Partnership,
and negotiate on behalf of the Company and the Operating Partnership with investment banking firms and broker-dealers or negotiate
private sales of Shares or obtain Loans for the Company and the Operating Partnership, but in no event in such a way so that the
Advisor shall be acting as broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties
incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company or the Operating Partnership;

 

(j)         obtain reports (which
may, but are not required to, be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of Investments
or contemplated investments of the Company and the Operating Partnership;

 

(k)         from time to time,
or at any time reasonably requested by the Directors, make reports to the Directors of its performance of services to the Company
and the Operating Partnership under this Agreement, including reports with respect to potential conflicts of interest involving
the Advisor or any of its affiliates;

 

(l)         provide the Company
and the Operating Partnership with all necessary cash management services;

 

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(m)         do all things necessary
to assure its ability to render the services described in this Agreement;

 

(n)         deliver to, or maintain
on behalf of, the Company copies of all appraisals obtained in connection with the investments in any Real Estate Assets as may
be required to be obtained by the Board;

 

(o)         notify the Board of
all proposed material transactions before they are completed; and

 

(p)         effect any private
placement of OP Limited Partnership Interests, tenancy-in-common or other interests in Investments as may be approved by the Board.

 

Notwithstanding the foregoing,
the Advisor may delegate any of the foregoing duties to any Person so long as the Advisor or any Affiliate remains responsible
for the performance of the duties set forth in this Section 3.

 

4.         AUTHORITY OF ADVISOR.

 

(a)         Pursuant to the terms
of this Agreement (including the restrictions included in this Section 4 and in Section 7), and subject to the continuing and exclusive
authority of the Board over the management of the Company, the Board hereby delegates to the Advisor the authority to perform the
services described in Section 3.

 

(b)         Notwithstanding the
foregoing, any investment in Investments, including any financing of such Investment will require the prior approval of the Board.
The Advisor will deliver to the Board all documents and other information required by the Board or any committee of the Board,
as the case may be, to evaluate a proposed Investment (and any financing related to such proposed investment).

 

(c)         If a transaction requires
approval by the Independent Directors, the Advisor will deliver to the Independent Directors all documents and other information
required by them to properly evaluate the proposed transaction.

 

(d)         The prior approval
of a majority of the Independent Directors not otherwise interested in the transaction and a majority of the Directors not otherwise
interested in the transaction will be required for each transaction to which the Advisor or its Affiliates is a party.

 

(e)         The Board may, at
any time upon the giving of written notice to the Advisor, modify or revoke the authority set forth in this Section 4; provided,
however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed the Company or the Operating Partnership prior to the date of receipt by the Advisor
of such notification.

 

5.         BANK ACCOUNTS.
The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or the Operating
Partnership or in the name of the Company and the Operating Partnership and may collect and deposit into any such account or accounts,
and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership, under such terms
and conditions as the Directors may approve, provided that no funds shall be commingled with the funds of the Advisor; and the
Advisor shall from time to time render appropriate accountings of such collections and payments to the Directors and to the auditors
of the Company.

 

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6.         RECORDS; ACCESS.
The Advisor shall maintain appropriate records of all its activities hereunder and make such records available for inspection by
the Directors and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business
hours. The Advisor shall at all reasonable times have access to the books and records of the Company and the Operating Partnership.

 

7.         LIMITATIONS ON
ACTIVITIES. Anything else in this Agreement to the contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the ability of the Company to qualify or continue to
qualify as a REIT under the Code unless the Board has determined that the Company will not seek or maintain REIT qualification,
(b) subject the Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law, rule, regulation
or statement of policy of any governmental body or agency having jurisdiction over the Company or its Shares, or otherwise not
be permitted by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered by the Board, in
which case the Advisor shall notify promptly the Board of the Advisor’s judgment of the potential impact of such action and
shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the
Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given. Notwithstanding
the foregoing, the Advisor, its directors, officers, employees and members, and partners, directors, officers, members and stockholders
of the Advisor’s Affiliates shall not be liable to the Company or to the Directors or Stockholders for any act or omission
by the Advisor, its directors, officers, employees, or members, and partners, directors, officers, members or stockholders of the
Advisor’s Affiliates taken or omitted to be taken in the performance of their duties under this Agreement except as provided
in Section 19 of this Agreement.

 

8.         RELATIONSHIP WITH
DIRECTORS. Subject to Section 7 of this Agreement and to restrictions advisable with respect to the qualification of the Company
as a REIT, directors, officers and employees of the Advisor or an Affiliate of the Advisor or any corporate parents of an Affiliate,
may serve as a Director and as officers of the Company, except that no director, officer or employee of the Advisor or its Affiliates
who also is a Director or officer of the Company shall receive any compensation from the Company for serving as a Director or officer
other than reasonable reimbursement for travel and related expenses incurred in attending meetings of the Directors and no such
Director shall be deemed an Independent Director for purposes of satisfying the Director independence requirement set forth in
the Articles of Incorporation.

 

9.         FEES.

 

(a)         Acquisition
Fees. The Advisor shall receive an Acquisition Fee payable by the Company as compensation for services rendered in
connection with the investigation, selection and acquisition (by purchase, investment, exchange, sourcing or origination) of
Investments. The total Acquisition Fees payable to the Advisor or its Affiliates shall equal 1.5% of (i) the cost of all
Investments, including Acquisition Expenses and any debt attributed to such Investments and excluding Acquisition Fees and
Financing Coordination Fees, or (ii) the amount funded by the Company to acquire or originate a Loan, including Acquisition
Expenses related to such Investments and any debt used to fund the acquisition or origination of a Loan and excluding
Acquisition Fees and Financing Coordination Fees. With respect to the acquisition of Real Estate Assets through a Joint
Venture, the Acquisition Fee payable by the Company to the Advisor shall equal 1.5% of the Company’s allocable cost of
such Real Estate Assets, including Acquisition Expenses and any debt attributed to such Investments and excluding Acquisition
Fees and Financing Coordination Fees. Once the proceeds from the Primary Offering have been fully invested, the aggregate
amount of Acquisition Fees and Financing Coordination Fees shall not exceed 1.9% of the Contract Sales Price and the amount
advanced for a Loan or other Investment for all the assets acquired. The Advisor shall submit an invoice to the Company
following the closing or closings of each Investment, accompanied by a computation of the Acquisition Fee. The Acquisition
Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company.

 

    	10

    	 

    

 

(b)         Limitation on
Total Acquisition Fees, Financing Coordination Fees and Acquisition Expenses. Pursuant to the NASAA REIT Guidelines, the
total of all Acquisition Fees, Acquisition Expenses and Financing Coordination Fees shall not exceed 6.0% of the “contract
purchase price,” as defined in the Articles of Incorporation, of all Investments acquired.

 

 (c)         Disposition
Fees. If the Advisor provides a substantial amount of services, as determined by the Independent Directors
in connection with a Sale, the Company shall pay a Disposition Fee to the Advisor equal to the lesser of (i)(a) where
a brokerage commission is also payable to a third party, one-half of the aggregate brokerage commission paid,
including brokerage commissions payable to third parties, or (b) where no brokerage commission is payable to any third party,
the Competitive Brokerage Commission or (ii) 3.0% of the Contract Sales Price. With respect to a Property held in a Joint
Venture, the Disposition Fee will be equal to the percentage of the “contract purchase price” reflecting the
Company’s economic interest in the Joint Venture. Any Disposition Fee payable under this Section 9(c) may be paid in
addition to real estate commissions paid to non-Affiliates, provided that the total real estate commissions (including such
Disposition Fee) paid to all Persons by the Company for each Investment shall not exceed 6.0% of the Contract Sales
Price. 

 

 (d)         Asset
Management Fee. The Advisor shall receive the Asset Management Fee as compensation for services rendered pursuant to Section
3 of this Agreement in connection with the management of the Company’s assets. The Asset Management Fee shall be calculated
monthly and consists of a monthly fee of one-twelfth of 1.0% of the aggregate cost (before non-cash reserves and depreciation)
of all Investments the Company owns, including Acquisition Fees, Acquisition Expenses and any debt attributable to such Investments.
With the exception of any portion of the Asset Management Fee related to the disposition of Investments, which shall be payable
at the time of such disposition, the Asset Management Fee shall be payable on the first of each month. 

 

(e)         Financing Coordination
Fees. The Advisor shall receive a Financing Coordination Fee as compensation for services rendered in connection with the
coordination of debt financing obtained by the Company. The total Financing Coordination Fee payable to the Advisor or its Affiliates
shall equal (i) 1.0% of the amount available under any loan or line of credit originated or assumed, directly or indirectly, in
connection with the acquisition of Real Properties or other permitted Investments, by the Company, and will be in addition to the
Acquisition Fees paid to the Advisor; (ii) 0.75% of the amount available or outstanding under any refinanced loan or line of credit
of the Company, and will be in addition to the Acquisition Fees paid to the Advisor; or (iii) 0.75% of the Company’s proportionate
share of the amount available or outstanding under any refinanced loan or line of credit in the case of Investments made through
a Joint Venture, and will be in addition to the Acquisition Fees paid to the Advisor. Financing Coordination Fees will only be
payable if the Advisor or its Affiliates provides services in connection with the origination, assumption or refinancing of debt
that the Company uses to acquire Real Properties or other permitted Investments. The Advisor may pay some or all of the Financing
Coordination Fee to third parties if the Advisor subcontracts with such third parties to coordinate financing obtained by the Company.
The Advisor shall submit an invoice to the Company following the closing or closings of each debt financing or refinancing obtained
by the Company, accompanied by a computation of the Financing Coordination Fee. The Financing Coordination Fee payable to the Advisor
shall be paid at the closing of the debt financing upon receipt of the invoice by the Company.

 

 (f)         Special
Limited Partnership Interests.   In addition, an Affiliate of the Advisor has made a capital
contribution of $1,000 to the Operating Partnership in exchange for Special Limited Partnership Interests.  The Special
Limited Partnership Interests shall be entitled to the distributions provided for, and shall be subject to redemption by the
Operating Partnership, in accordance with the terms of the Operating Partnership Agreement.  To the extent distributions
to the Special Limited Partnership Interests are not paid from net sales proceeds, such amounts will count against the limit
on Total Operating Expenses set forth in the Articles of Incorporation. 

    	11

    	 

    

 

 

10.         EXPENSES.

 

 (a)         In
addition to the fees paid to the Advisor pursuant to Section 9 hereof and subject to the limitations set forth in the Articles
of Incorporation, the Company or the Operating Partnership shall pay directly or reimburse the Advisor for all of the expenses
paid or incurred by the Advisor in connection with the services it provides to the Company and the Operating Partnership pursuant
to this Agreement, including, but not limited to: 

 

(i)         Organizational and
Offering Expenses only upon such time as the Minimum Offering Amount has been achieved; provided, however, that (1) the
Company shall not reimburse the Advisor to the extent such reimbursement would cause the total amount of Organization and Offering
Expenses attributable to the Initial Public Offering paid by the Company and the Operating Partnership to exceed 15.0% of the Gross
Proceeds from the Initial Public Offering raised as of the date of the reimbursement; (2) within 60 days after the end of
the month in which the current Offering terminates, the Advisor shall reimburse the Company to the extent the Organizational and
Offering Expenses borne by the Company exceed 15% of the Gross Proceeds raised in the completed Offering; and (3) the
Company shall not reimburse the Advisor for any Organization and Offering Expenses that the Independent Directors determine are
not fair and commercially reasonable to the Company.

 

(ii)        Acquisition Expenses
incurred in connection with the selection and acquisition of Investments subject to the aggregate 6.0% cap on Acquisition Fees,
Acquisition Expenses and Financing Coordination Fees set forth in Section 9(b);

 

(iii)       the actual cost
of goods and services used by the Company and obtained from entities not affiliated with the Advisor;

 

(iv)       interest and other
costs for borrowed money, including discounts, points and other similar fees;

 

(v)        taxes and assessments
on income of the Company or Investments;

 

(vi)       costs associated
with insurance required in connection with the business of the Company or by the Directors;

 

(vii)      expenses of managing
and operating Investments owned by the Company, whether payable to an Affiliate of the Company or a non-Affiliated Person;

 

(viii)     all expenses
in connection with payments to the Directors for attending meetings of the Directors and Stockholders;

 

    	12

    	 

    

 

(ix)        expenses associated
with a Listing, if applicable, or with the issuance and distribution of Shares, such as selling commissions and fees, advertising
expenses, taxes, legal and accounting fees, listing and registration fees, and other Organization and Offering Expenses;

 

(x)         expenses connected
with payments of Distributions in cash or otherwise made or caused to be made by the Company to the Stockholders;

 

(xi)        expenses of organizing,
revising, amending, converting, modifying, or terminating the Company or the Articles of Incorporation;

 

(xii)       expenses of maintaining
communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder
reports, proxy statements and other reports required by governmental entities;

 

(xiii)      administrative
service expenses (including (a) personnel costs; provided, however, that no reimbursement shall be made for costs of personnel
to the extent that such personnel perform services in transactions for which the Advisor receives Acquisition Fees, Financing Coordination
Fees, Asset Management Fees, hotel management fees or real estate sales commissions, and (b) the Company’s allocable share
of other overhead of the Advisor such as rent and utilities); and

 

(xiv)      audit, accounting
and legal fees and other fees for professional services relating to the operations of the Company and all such fees incurred at
the request, or on behalf of, the Board or any committee of the Board;

 

(xv)       out-of-pocket costs
for the Company to comply with all applicable laws, regulations and ordinances, including without limitation, the Sarbanes-Oxley
Act of 2002, as amended; and

 

(xvi)      all other out-of-pocket
costs incurred by the Advisor in performing its duties hereunder.

 

(b)         Expenses incurred
by the Advisor on behalf of the Company and the Operating Partnership and payable pursuant to this Section 10 shall be reimbursed
no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company and the Operating
Partnership and the calculation of the Asset Management Fee during each quarter, and shall deliver such statement to the Company
and the Operating Partnership within 45 days after the end of each quarter. Notwithstanding
anything this Agreement to the contrary, the expenses enumerated in this Section 10 shall not become reimbursable to the Advisor
unless and until the Company raises $2 million the Minimum Offering Amount.

 

11.         OTHER SERVICES.
Should the Directors request that the Advisor or any director, officer or employee thereof render services for the Company and
the Operating Partnership other than set forth in Section 3, such services shall be separately compensated at such rates and in
such amounts as are agreed by the Advisor and the Independent Directors, subject to the limitations contained in the Articles of
Incorporation, and shall not be deemed to be services pursuant to the terms of this Agreement.

 

    	13

    	 

    

 

12.          REIMBURSEMENT
TO THE ADVISOR  . The Company may reimburse the Advisor, at the end of each fiscal quarter, for Total Operating Expenses
incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter
commencing on the fourth fiscal quarter after the quarter in which the Corporation makes its first investment in an Asset, for
Total Operating Expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of two percent of Average
Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such 12-month period. Any Excess Amount
paid to the Advisor during a fiscal quarter shall be repaid to the Company or, at the option of the Company, subtracted from the
Total Operating Expenses reimbursed during the subsequent fiscal quarter. If there is an Excess Amount in any Expense Year and
the Independent Directors determine that such excess was justified based on unusual and nonrecurring factors which they deem sufficient,
then the Excess Amount may be carried over and included in Total Operating Expenses in subsequent Expense Years and reimbursed
to the Advisor in one or more of such years, provided that there shall be sent to the Stockholders a written disclosure of such
fact, together with an explanation of the factors the Independent Directors considered in determining that such excess expenses
were justified. Such determination shall be reflected in the minutes of the meetings of the Board. The Company will not reimburse
the Advisor or its Affiliates for services for which the Advisor or its Affiliates are entitled to receive Acquisition Fees, Financing
Coordination Fees, Asset Management Fees, hotel management fees or real estate commissions. All figures used in the foregoing
computation shall be determined in accordance with generally accepted accounting principles applied on a consistent basis. 

 

13.         RELATIONSHIP
OF THE PARTIES. The Company and the Operating Partnership, on the one hand, and the Advisor on the other, are not partners
or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners of joint venturers
or impose any liability as such on either of them.

 

14.         OTHER ACTIVITIES
OF THE ADVISOR. Nothing herein contained shall prevent the Advisor or any of its Affiliates from engaging in or earning fees
from other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the
management of other programs advised, sponsored or organized by the Advisor or its Affiliates; nor shall this Agreement limit or
restrict the right of any director, officer, member, partner, employee, or stockholder of the Advisor or its Affiliates to engage
in or earn fees from any other business or to render services of any kind to any other partnership, corporation, firm, individual,
trust or association and earn fees for rendering such services. The Advisor may, with respect to any Investment in which the Company
is a participant, also render advice and service to each and every other participant therein, and earn fees for rendering such
advice and service. Specifically, it is contemplated that the Company may enter into joint ventures or other similar co-investment
arrangements with certain Persons, and pursuant to the agreements governing such joint ventures or arrangements, the Advisor may
be engaged to provide advice and service to such Persons, in which case the Advisor will earn fees for rendering such advice and
service.

 

The Advisor shall report
to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest
in any other partnership, corporation, firm, individual, trust or association. The Advisor or its Affiliates shall promptly disclose
to the Board knowledge of such condition or circumstance. If the Advisor or its Affiliates have sponsored other investment programs
with similar investment objectives which have investment funds available at the same time as the Company, it shall be the duty
of the Board (including the Independent Directors) to ensure that the Advisor and its Affiliates adopt the method approved by the
Independent Directors by which investments are to be allocated to the competing investment entities and to use their best efforts
to ensure that such method is applied fairly to the Company.

 

    	14

    	 

    

 

15.         TERM OF AGREEMENT.
This Agreement shall have an initial term of one year from the Effective Date and may be
renewed for an unlimited number of successive one-year terms upon mutual consent of the Parties.  The Company will evaluate
the performance of the Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no more than
one year.  Any such renewal must be approved by the Independent Directors.

 

16.         TERMINATION BY
THE PARTIES. This Agreement may be terminated (i) immediately by the Company or the Operating Partnership for Cause or upon
the bankruptcy of the Advisor, (ii) upon 60 days written notice without Cause and without penalty by a majority of the Independent
Directors of the Company or (iii) upon 60 days written notice with Good Reason by the Advisor. The provisions of Sections 17 through
30 survive termination of this Agreement.

 

17.         ASSIGNMENT TO
AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate with the majority approval of the Board (including
a majority of the Independent Directors). The Advisor may assign any rights to receive fees or other payments under this Agreement
to any Person without obtaining the approval of the Board. This Agreement shall not be assigned by the Company or the Operating
Partnership without the consent of the Advisor, except in the case of an assignment by the Company or the Operating Partnership
to a corporation, limited partnership or other organization which is a successor to all of the assets, rights and obligations of
the Company or the Operating Partnership, in which case such successor organization shall be bound hereunder and by the terms of
said assignment in the same manner as the Company and the Operating Partnership are bound by this Agreement.

 

18.         PAYMENTS TO AND
DUTIES OF ADVISOR UPON TERMINATION.

 

(a)         After the Termination
Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from
the Company or the Operating Partnership within 30 days after the effective date of such termination all unpaid reimbursements
of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement, subject to the 2%/25%
Guidelines to the extent applicable.

 

(b)         The Advisor shall
promptly upon termination:

 

(i)         pay over to the
Company and the Operating Partnership all money collected and held for the account of the Company and the Operating Partnership
pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled;

 

(ii)        deliver to the
Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering
the period following the date of the last accounting furnished to the Board;

 

(iii)       deliver to the
Board all assets, including all Investments, and documents of the Company and the Operating Partnership then in the custody of
the Advisor; and

 

(iv)       cooperate with
the Company and the Operating Partnership to provide an orderly management transition.

 

    	15

    	 

    

 

19.         INDEMNIFICATION
BY THE COMPANY AND THE OPERATING PARTNERSHIP. The Company and the Operating Partnership shall indemnify and hold harmless the
Advisor and its Affiliates, including their respective directors (the “Indemnitees,” and each an “Indemnitee”),
from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed
by insurance, and to the extent that such indemnification would not be inconsistent with the laws of the State of Maryland, the
Articles of Incorporation or the provisions of Section II.G of the NASAA REIT Guidelines. In addition, the Company and the Operating
Partnership shall indemnify and hold harmless the officers of the Company and the Advisor and its Affiliates from all liability,
claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’
fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, and to
the extent that such indemnification would not be inconsistent with the laws of the State of Maryland or the Articles of Incorporation.
Notwithstanding the foregoing, the Company and the Operating Partnership shall not provide for indemnification of an Indemnitee
for any loss or liability suffered by such Indemnitee, nor shall they provide that an Indemnitee be held harmless for any loss
or liability suffered by the Company and the Operating Partnership, unless all of the following conditions are met:

 

(a)         the Indemnitee has
determined, in good faith, that the course of conduct that caused the loss or liability was in the best interest of the Company
and the Operating Partnership;

 

(b)         the Indemnitee was
acting on behalf of, or performing services for, the Company or the Operating Partnership;

 

(c)         such liability or
loss was not the result of negligence or misconduct by the Indemnitee; and

 

(d)         such indemnification
or agreement to hold harmless is recoverable only out of the Company’s net assets and not from the Stockholders.

 

Notwithstanding the foregoing,
an Indemnitee shall not be indemnified by the Company and the Operating Partnership for any losses, liabilities or expenses arising
from or out of an alleged violation of federal or state securities laws by such Indemnitee unless one or more of the following
conditions are met:

 

(a)         there has been a successful
adjudication on the merits of each count involving alleged securities law violations as to the Indemnitee;

 

(b)         such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or

 

(c)         a court of competent
jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for indemnification has been advised of the position of the
Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities
of the Company or the Operating Partnership were offered or sold as to indemnification for violation of securities laws.

 

In addition, the advancement
of the Company’s or the Operating Partnership’s funds to an Indemnitee for legal expenses and other costs incurred
as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions
are satisfied:

 

(a)         the legal action relates
to acts or omissions with respect to the performance of duties or services on behalf of the Company or the Operating Partnership;

 

    	16

    	 

    

 

(b)         the legal action is
initiated by a third party who is not a Stockholder or the legal action is initiated by a stockholder acting in such stockholder’s
capacity as such and a court of competent jurisdiction specifically approves such advancement; and

 

(c)         the Indemnitee undertakes
to repay the advanced funds to the Company or the Operating Partnership, together with the applicable legal rate of interest thereon,
in cases in which such Indemnitee is found not to be entitled to indemnification.

 

20.         INDEMNIFICATION
BY ADVISOR. The Advisor shall indemnify and hold harmless the Company and the Operating Partnership from contract or other
liability, claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability,
claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s
bad faith, fraud, misfeasance, intentional misconduct, negligence or reckless disregard of its duties; provided, however, that
the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation
given by the Advisor.

 

 21.EXCLUSION
OF CERTAIN TRANSACTIONS  . In the event the Company or the Operating Partnership shall propose to enter into any transaction
in which a Director or an officer of the Company, and the Advisor, or any Affiliate of the Company, the Operating Partnership
or the Advisor has a direct or indirect interest, then such transaction shall be approved by a majority of the Board and also
by a majority of the Independent Directors. 

 

 22.          NON-SOLICITATION.
During the period commencing on the Effective Date and ending one year following the Termination Date, the Company shall not,
without the Advisor’s prior written consent, directly or indirectly (i) solicit or encourage any person to leave the employment
or other service of the Advisor or its Affiliates; or (ii) hire on behalf of the Company or any other person or entity, any person
who has left its employment within the one year period following the termination of that person’s employment the Advisor
or its Affiliates. During the period commencing on the date hereof through and ending one year following the Termination Date,
the Company will not, whether for its own account or for the account of any other Person, intentionally interfere with the relationship
of the Advisor or its Affiliates with, or endeavor to entice away from the Advisor or its Affiliates, any person who during the
term of the Agreement is, or during the preceding one-year period, was a tenant, co-investor, co-developer, joint venturer or
other customer of the Advisor or its Affiliates.

 

 23.          NOTICES.
Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method
of giving such notice, report or other communication is required by the Articles of Incorporation, the Bylaws, or accepted by
the Party to whom it is given, and shall be given by being delivered by hand, by facsimile transmission, by courier or overnight
carrier or by registered or certified mail to the addresses set forth herein:

 

	To the Board and to the Company:	
        Moody National REIT II, Inc. 

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

         

	
         with a copy to (which shall
        not constitute notice): 

           

           
	 Alston &
        Bird LLP  

         1201 West Peachtree
        Street 

         Atlanta, GA
        30309 

         Attention: Rosemarie
        A. Thurston 

         

	To the Operating Partnership:	
        Moody National Operating Partnership
II, LP 

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

 

    	17

    	 

    

 

	To the Advisor:	
        Moody National Advisor II, LLC 

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

  

 Any Party may at any
time give notice in writing to the other Parties of a change in its address for the purposes of this Section 23. 

 

 24.          MODIFICATION.
This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing
signed by the Parties hereto, or their respective successors or assignees.

 

 25.          SEVERABILITY.
The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.

 

 26.          CONSTRUCTION.
The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Maryland.

 

 27.          ENTIRE
AGREEMENT. This Agreement contains the entire agreement and understanding among the Parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or
implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof. This Agreement may not
be modified or amended other than by an agreement in writing.

 

 28.          INDULGENCES,
NOT WAIVERS. Neither the failure nor any delay on the part of a Party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the Party
asserted to have granted such waiver.

 

 29.          GENDER.
Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

 

 30.          TITLES
NOT TO AFFECT INTERPRETATION. The titles of Sections and Subsections contained in this Agreement are for convenience only,
and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 

 31.          EXECUTION
IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original
as against any Party whose signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures
of all of the Parties reflected hereon as the signatories.

 

[Signatures on following page.]

 

    	18

    	 

    

 

IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement as of the date and year first above written.

 

	 	Moody National REIT II, Inc.
	 	 	 
	   	 By: 	 /s/ Brett C. Moody 
	 	 	Brett C. Moody
	 	 	Chief Executive Officer and President
	 	 	 
	 	Moody National Operating Partnership II, LP
	 	 	 
	 	By:	Moody National REIT II, Inc., 

its General Partner

 

	 	 By: 	 /s/ Brett C. Moody 
	 	 	Brett C. Moody
	 	 	Chief Executive Officer and President    

 

	 	Moody National Advisor II, LLC
	 	 	 
	 	By:	 Moody National REIT Sponsor, LLC                  
	 	 	 
	 	 	By: Moody National REIT Sponsor SM, LLC

 

	 	 By: 	 /s/ Brett C. Moody 
	 	 	Brett C. Moody
	 	 	 Member

   

Signature Page to Advisory AgreementMoody National REIT II, Inc. S-11/A

Exhibit 10.3

 

ESCROW AGREEMENT

 

 THIS ESCROW AGREEMENT
 (this “Escrow Agreement”), dated as of January 12, 2015, is entered into by and among MOODY NATIONAL
REIT II, INC., a Maryland corporation (the “Company”), MOODY SECURITIES, LLC, a Delaware limited liability
company, as dealer manager for the Company (the “Dealer Manager”), and UMB Bank, N.A., as escrow agent (the
“Escrow Agent”). 

 

WHEREAS, the
Company is registering for sale to the public (the “Offering”) a maximum of $1,100,000,000 in shares of its
common stock, $0.01 par value per share (the “Shares”);

 

WHEREAS, this Escrow
Agreement shall be effective on the date on which the Securities and Exchange Commission declares effective the Company’s
Registration Statement on Form S-11 relating to the Offering;

 

WHEREAS, the Dealer Manager has been
engaged by the Company to offer and sell the Shares on a “best-efforts” basis in the Offering through a network of
participating broker-dealers (the “Dealers”);

 

WHEREAS, the
Company and the Dealer Manager desire to establish an escrow account (the “Escrow Account”) as further described
herein and to deposit funds contributed by subscribers subscribing to purchase Shares (“Subscribers”) with
the Escrow Agent in the Escrow Account, to be held for the benefit of the Subscribers and the Company until such time as subscriptions
for the Minimum Amount (as defined below) have been deposited into escrow in accordance with the terms of this Escrow Agreement;

 

WHEREAS, the Company
has engaged DST Systems, Inc., a Delaware corporation (the “Transfer Agent”), to act as “transfer agent”
as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

 

WHEREAS, the Escrow
Agent has agreed to receive and hold in escrow all funds received from Subscribers in payment for the Shares (“Subscriber
Funds”) until the earlier of (i) such time as subscriptions for the minimum offering amount of $2,000,000 (including
Shares purchased by the Company’s sponsor, its affiliates and the Company’s officers and directors) (the “Minimum
Amount”) have been received and accepted by the Company or (ii) the close of business on the date exactly one year from
the date of the commencement of the Offering (the “Expiration Date”) (the Company shall provide written notice
of such Expiration Date to the Escrow Agent), and to hold and distribute such Subscriber Funds in accordance with the terms and
conditions herein set forth; and

 

WHEREAS, the
Escrow Agent is willing to accept appointment as escrow agent upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in
consideration of the premises set forth above and other good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:

 

1.         Escrow
of Subscriber Funds.

 

(a)         On
or before the commencement of the Offering, the Company shall establish the Escrow Account with the Escrow Agent, which
shall be entitled “UMB Bank, N.A., as Escrow Agent for Moody National REIT II.” During the term of this Escrow
Agreement, all Subscriber Funds will be delivered to the Escrow Agent within one (1) business day following: (i) the receipt
of the Subscriber Funds by the Company or the Dealer Manager and (ii) such subscription being accepted by the Company. Upon
receipt of good and collected Subscriber Funds by the Escrow Agent, all such Subscriber Funds shall be retained in the Escrow
Account by the Escrow Agent and invested as stated below. During the term of this Escrow Agreement, the Company and the
Dealer Manager shall cause all checks received by and made payable to each of them in payment for the Shares to be endorsed
in favor of the Escrow Agent and delivered to the Escrow Agent for deposit in the Escrow Account. Subscriber Funds also may
be wired directly to the Escrow Account using wire instructions provided by the Escrow Agent.

 

    	 

    	 

    

 

(b)         Escrow Agent shall
have no duty to make any disbursement, investment or other use of Subscriber Funds until and unless it has good and collected
funds. In the event that any checks deposited in the Escrow Account are returned or prove uncollectible after the funds represented
thereby have been released by the Escrow Agent, then the Company shall promptly reimburse the Escrow Agent for any and all costs
incurred for such, upon request, and the Escrow Agent shall deliver the returned checks to the Company. The Escrow Agent shall
be under no duty or responsibility to enforce collection of any check delivered to it hereunder. The Escrow Agent reserves the
right to deny, suspend or terminate participation by a Subscriber to the extent the Escrow Agent deems it advisable or necessary
to comply with applicable laws.

 

2.         Operation
of the Escrow.

 

(a)         Until
such time as the Company has received gross subscription proceeds equal to the Minimum Amount and the Subscriber Funds are disbursed
from the Escrow Account in accordance with Section 2(b) hereof, Subscribers will be instructed to make checks, drafts,
wires, Automated Clearing House (ACH) or money orders (“Instruments of Payment”) for subscriptions payable
to the order of “UMB Bank, N.A., as Escrow Agent for Moody National REIT II, Inc.” Completed subscription agreements
and Instruments of Payment for the purchase price shall be remitted to the address designated for the receipt of such agreements
and Instruments of Payment. Any Instruments of Payment made payable to a party other than the Escrow Agent shall be returned to
the Dealer Manager or the Dealer who submitted such Instrument of Payment not later than the end of the second business
day following receipt by the Dealer of such materials. When a Dealer’s internal supervisory procedures are conducted at
the site at which the Instruments of Payment and the Subscription Materials (as defined below) are initially received by such
Dealer, by noon of the next business day after receipt of any Instruments of Payment and Subscription Materials, such Dealer will
send to the Escrow Agent such Instruments of Payment along with each Subscriber’s name, address, executed IRS Form W-9,
number of Shares purchased and purchase price remitted and any other subscription documentation (the “Subscription Materials”).
When the Dealer’s internal supervisory procedures are conducted at a different location (the “Final Review Office”),
the Dealer shall transmit the Instruments of Payment and the Subscription Materials to the Final Review Office by noon
of the next business day after receipt of any Instruments of Payment and Subscription Materials, and then the Final Review Office
will, by noon of the next business day following its receipt of the Instruments of Payment and the Subscription Materials, forward
the Instruments of Payment and the Subscription Materials to the Escrow Agent. To the extent that subscription agreements and
payments are remitted by the Company, the Dealer Manager or a Dealer, the Company, the Dealer Manager or a Dealer, as applicable,
will furnish to the Escrow Agent a list detailing information regarding such subscriptions as set forth in Exhibit A. Deposits
shall be held in the Escrow Account until such funds are disbursed in accordance with this Section 2. Prior to disbursement of
the funds deposited in the Escrow Account, such funds shall not be subject to claims by creditors of the Company or any of its
affiliates. If any of the Instruments of Payment are returned to the Escrow Agent for nonpayment prior to the satisfaction of
the Minimum Amount, the Escrow Agent shall promptly notify the Transfer Agent and the Company in writing via mail, email or facsimile
of such nonpayment, and the Escrow Agent is authorized to debit the Escrow Account, as applicable, in the amount of such returned
payment as well as any interest earned on the amount of such payment and the Transfer Agent shall delete the appropriate account
from the records maintained by the Transfer Agent. The Transfer Agent will maintain a written account of each sale, which account
shall set forth, among other things, the following information: (i) the subscriber’s name and address, (ii) the
number of Shares purchased by such subscriber, and (iii) the amount paid by such subscriber for such Shares. Prior to the
termination of this Escrow Agreement, neither the Company nor the Dealer Manager will be entitled to any funds received into the
Escrow Account.

 

    	2

    	 

    

 

(b)         If at any time
on or prior to the Expiration Date, the subscription proceeds received by the Escrow Agent are equal to or greater than the Minimum
Amount, the Escrow Agent shall promptly notify the Company and the Dealer Manager. After the Escrow Agent delivers such notice,
the Company shall deliver to the Escrow Agent a written instruction from an officer of the Company stating that the Minimum Amount
has been timely raised and authorizing the delivery of all subscription funds in the Escrow Account to the Company. Thereafter,
the Escrow Agent shall (i) disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing the
principal amount of the gross subscription payments from Subscribers received by the Escrow Agent, and (ii) within ten (10) business
days after the first business day of the succeeding month, disburse to such Subscribers any interest accrued thereon; provided,
however, that the Escrow Agent shall not disburse those funds of a Subscriber whose subscription has been rejected or rescinded
of which the Escrow Agent has been notified by the Company, or otherwise in accordance with the Company’s written request.

 

(c)         After the satisfaction
of the provisions of this Section 2 with respect to the disbursement of funds, in the event that the Company receives subscriptions
made payable to the Escrow Agent, subscription proceeds may continue to be received in the Escrow Account, but to the extent that
the process shall not be subject to escrow due to the Company reaching the Minimum Amount, the proceeds shall not be subject to
this Escrow Agreement, and at the instruction of the Company to the Escrow Agent, shall be transferred from the Escrow Account
or deposited into, as the case may be, a commercial deposit account in the name of the Company with the Escrow Agent (the “Deposit
Account”) that has been previously established by the Company, unless otherwise directed by the Company. No provisions
of this Escrow Agreement shall apply to the Deposit Account.

 

(d)         If, as of the Expiration
Date, the funds in the Escrow Account do not equal or exceed the Minimum Amount, the Escrow Agent shall promptly notify the
Company. Within ten (10) days following the Company’s receipt of such notice, the Escrow Agent shall promptly return directly
to each Subscriber (i) by check or wire transfer, the subscription funds deposited in the Escrow Account on behalf of such Subscriber
(unless earlier disbursed in accordance with this Escrow Agreement), or (ii) the Instruments of Payment delivered to the Escrow
Agent with respect to such Subscriber’s subscription if such Instrument of Payment has not been processed for collection
prior to such time, in either case, together with any interest income thereon. Notwithstanding the above, in the event the Escrow
Agent has not received an executed IRS Form W-9 at such time for each Subscriber, the Escrow Agent shall remit an amount to the
Subscribers in accordance with the provisions hereof, withholding the applicable percentage for backup withholding required by
the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), from any interest income on subscription
proceeds attributable to each Subscriber for whom the Escrow Agent does not possess an executed IRS Form W-9. However, the Escrow
Agent shall not be required to remit any payments until the Escrow Agent has collected funds represented by such payments.

 

    	3

    	 

    

 

3.         Identity
of Subscribers.

 

The Company or the
Dealer Manager shall furnish to the Escrow Agent with each delivery of an Instrument of Payment, a list of the Subscribers
who have paid for the Shares showing the name, address, tax identification number, amount of Shares subscribed for and the
amount paid and deposited with the Escrow Agent. This information comprising the identity of Subscribers shall be provided to
the Escrow Agent in the format set forth on Exhibit A to this Escrow Agreement (the “List of
Subscribers”). All Subscriber’s funds so deposited shall not be subject to any liens or charges by the
Company, the Dealer Manager or the Escrow Agent, or judgments or creditors’ claims against the Company, until released
to the Company as provided herein. The Company understands and agrees that the Company shall not be entitled to any
Subscriber’s funds on deposit in the Escrow Account and no such funds shall become the property of the Company except
when released to the Company pursuant to this Escrow Agreement. The Company, the Dealer Manager and the Escrow Agent will
treat all Subscriber information as confidential. The Escrow Agent shall not be required to accept any funds from Subscribers
which are not accompanied by the information on the List of Subscribers.

 

4.         Rejected
Subscriptions.

 

In the event the Escrow
Agent receives written notice from the Company or the Dealer Manager that the Company or Dealer Manager has rejected a Subscriber’s
subscription, the Escrow Agent shall pay to the applicable Subscriber, within ten (10) business days after receiving notice of
the rejection, by first class United States mail at the address appearing on the List of Subscribers, or at such other address
or fed wire instructions as are furnished to the Escrow Agent by the Subscriber in writing, all collected sums paid by the Subscriber
for Shares and received by the Escrow Agent, together with any interest earned thereon.

 

5.         Term
of Escrow.

 

Unless otherwise provided
in this Escrow Agreement, final termination of this Escrow Agreement shall occur on the date that (a) all funds held in the Escrow
Account are distributed either to the Company or to Subscribers and the Company has informed the Escrow Agent in writing to close
the Escrow Account, (b) all funds held in the Escrow Account are distributed to a successor escrow agent upon written instructions
from the Company or (c) the Escrow Agent receives written notice from the Company or the Dealer Manager that the Company terminated
the Offering. After the termination of this Escrow Agreement, the Company and the Dealer Manager shall not deposit, and the Escrow
Agent shall not accept, any additional amounts representing payments by prospective Subscribers.

 

6.         Duty
and Limitation on Liability of the Escrow Agent.

 

(a)         The
Escrow Agent’s rights and responsibilities shall be governed solely by this Escrow Agreement. Neither the Offering documents,
nor any other agreement or document shall govern the Escrow Agent even if such other agreement or document is referred to herein,
is deposited with, or is otherwise known to, the Escrow Agent.

 

(b)         The
Escrow Agent shall be under no duty to determine whether the Company or the Dealer Manager is complying with the requirements
of the Offering or applicable securities or other laws in tendering the Subscriber Funds to the Escrow Agent. The Escrow Agent
shall not be responsible for, or be required to enforce, any of the terms or conditions of any Offering document or other agreement
between the Company or the Dealer Manager and any other party.

 

    	4

    	 

    

 

(c)         The
Escrow Agent may conclusively rely upon and shall be fully protected in acting upon any statement, certificate, notice,
request, consent, order, opinion or advice of counsel, or other document believed by it to be genuine and to have been signed
or presented by the Company or the Dealer Manager. The Escrow Agent shall have no duty or liability to verify any such
statement, certificate, notice, request, consent, order or other document. Upon or before the execution of this Escrow
Agreement, the Company and the Dealer Manager shall deliver to the Escrow Agent authorized signers’ lists in the form
of Exhibit B to this Escrow Agreement. The Escrow Agent shall not be bound by any notice of demand, or any waiver,
modification, termination or rescission of this Escrow Agreement or any of the terms hereof, unless evidenced by a writing
delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall give its prior written consent thereto. The Escrow Agent shall not be responsible, may conclusively
rely upon and shall be protected, indemnified and held harmless by the Company and by the Dealer Manager, acting jointly and
severally, for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of any document
or property received, held or delivered by it hereunder, or of the signature or endorsement thereon, or for any description
therein; nor shall the Escrow Agent be responsible or liable in any respect on account of the identity, authority or rights
of the persons executing or delivering or purporting to execute or deliver any document, property or this Escrow
Agreement.

 

(d)         The
Escrow Agent shall be under no obligation to institute and/or defend any action, suit or proceeding in connection with this Escrow
Agreement unless first indemnified to its reasonable satisfaction.

 

(e)         The
Escrow Agent may consult outside counsel of its own choice with respect to any question arising under this Escrow Agreement and
the Escrow Agent shall not be liable for any action taken or omitted in good faith upon the advice of such counsel.

 

(f)         The
Escrow Agent shall not be liable for any action taken or omitted by it except to the extent that a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of loss.

 

(g)         The
Escrow Agent is acting solely as escrow agent hereunder and owes no duties, covenants or obligations, fiduciary or otherwise,
to any person by reason of this Escrow Agreement, except as otherwise explicitly set forth in this Escrow Agreement, and no implied
duties, covenants or obligations, fiduciary or otherwise shall be read into this Escrow Agreement against the Escrow Agent. The
Escrow Agent shall have no duty to enforce any obligation of any person, other than as provided herein. The Escrow Agent shall
be under no liability to anyone by reason of any failure on the part of any party hereto or any maker, endorser or other signatory
of any document or any other person to perform such person’s obligations under any such document. Except as set forth in
(f) above, the Escrow Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken
or omitted, in good faith, and in the exercise of its own best judgment.

 

(h)         In
the event of any disagreement between any of the parties to this Escrow Agreement, or between any of them and any other
person, including any Subscriber, resulting in adverse or conflicting claims or demands being made in connection with the
matters covered by this Escrow Agreement, or in the event that the Escrow Agent is in doubt as to what action it should take
hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any
other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent
shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be
entitled to continue so to refrain from acting until (i) the rights of all interested parties shall have been fully and
finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been adjudged and all doubt
resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing
signed by all such persons. Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the order, judgment,
decree or levy of any court, with jurisdiction, and the Escrow Agent is hereby authorized in its sole discretion to comply
with and obey any such orders, judgments, decrees or levies. In the event that the Escrow Agent shall become involved in any
arbitration or litigation relating to the Subscriber Funds, the Escrow Agent is authorized to comply with any decision
reached through such arbitration or litigation.

 

    	5

    	 

    

 

(i)         In
the event that any controversy should arise with respect to this Escrow Agreement, the Escrow Agent shall have the right, at its
option, to institute an interpleader action in any court of competent jurisdiction to determine the rights of the parties.

 

(j)         IN
NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES
OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

 

(k)         The
parties agree that the Escrow Agent had no role in the preparation of the Offering documents, has not reviewed any such documents,
and makes no representations or warranties with respect to the information contained therein or omitted therefrom.

 

(l)         The
Escrow Agent shall have no obligation, duty or liability with respect to compliance with any federal or state securities, disclosure
or tax laws concerning the Offering documents or the issuance, offering or sale of the Shares.

 

(m)         The
Escrow Agent shall have no duty or obligation to monitor the application and use of the Subscriber Funds once transferred to the
Company, that being the sole obligation and responsibility of the Company.

 

7.         Escrow
Agent’s Fee. The Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached
hereto as Exhibit C, which compensation shall be paid by the Company. The fee agreed upon for the services rendered
hereunder is intended as full compensation for the Escrow Agent’s services as contemplated by this Escrow Agreement; provided,
however, that in the event that the conditions for the disbursement of funds under this Escrow Agreement are not fulfilled, or
the Escrow Agent renders any material service not contemplated in this Escrow Agreement, or there is any assignment of interest
in the subject matter of this Escrow Agreement, or any material modification hereof, or if any material controversy arises hereunder,
or the Escrow Agent is made a party to any litigation relating to this Escrow Agreement, or the subject matter hereof, then the
Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney’s fees and expenses, occasioned by any delay, controversy, litigation or event, and the same shall be
paid by the Company. The Company’s obligations under this Section 7 shall survive the resignation or removal of the Escrow
Agent and the assignment or termination of this Escrow Agreement.

 

8.         Investment
of Subscriber Funds; Income Allocation and Reporting.

 

(a)         The
Escrow Agent shall invest the Subscriber Funds, including any and all interest and investment income, in accordance with the written
instructions provided to the Escrow Agent and signed by the Company. In the absence of written investment instructions from the
Company, the Escrow Agent shall deposit and invest the Subscriber Funds, including any and all interest and investment income,
in UMB Money Market Special, a UMB money market deposit account. Any interest received by the Escrow Agent with respect
to the Subscriber Funds, including reinvested interest shall become part of the Subscriber Funds, and shall be disbursed pursuant
to this Escrow Agreement. The Company agrees that, for tax reporting purposes, all interest or other taxable income earned on
the Subscriber Funds in any tax year shall be taxable to the Company. Notwithstanding anything herein to the contrary, funds in
the Escrow Account may only be invested in “Short Term Investments” in compliance with Rule 15c2-4 of the Exchange
Act.

 

    	6

    	 

    

  

(b)         The
Escrow Agent shall be entitled to sell or redeem any such investments as the Escrow Agent deems necessary to make any payments
or distributions required under this Escrow Agreement. The Escrow Agent shall have no responsibility or liability for any loss
which may result from any investment or sale of investment made pursuant to this Escrow Agreement. The parties acknowledge that
the Escrow Agent is not providing investment supervision, recommendations, or advice.

 

(c)         At any time pursuant
to this Escrow Agreement interest income earned on Subscriber Funds deposited in the Escrow Account (“Escrow Income”)
is to be paid to a Subscriber, the Escrow Agent shall promptly provide directly to such Subscriber the amount of Escrow Income
payable to such Subscriber; provided that the Escrow Agent is in possession of such Subscriber’s executed IRS Form W-9.
In the event an executed IRS Form W-9 is not received for each Subscriber the Escrow Agent shall remit an amount to the Subscribers
in accordance with the provisions hereof, withholding the applicable percentage for backup withholding required by the Internal
Revenue Code, as then in effect, from any Escrow Income attributable to those Subscribers for whom the Escrow Agent does not possess
an executed IRS Form W-9. Escrow Income shall be remitted to Subscribers at the address provided by the Dealer Manager or the
Company to the Escrow Agent, which the Escrow Agent shall be entitled to rely upon, and without any deductions for escrow expenses.

 

(d)         The
Company agrees to indemnify and hold the Escrow Agent harmless from and against any and all taxes, additions for late payment,
interest, penalties and other expenses that may be assessed against the Escrow Agent on or with respect to the Subscriber Funds
unless any such tax, addition for late payment, interest, penalties and other expenses shall be determined by a court of competent
jurisdiction to have been primarily caused by the Escrow Agent’s gross negligence or willful misconduct. The terms of this
paragraph shall survive the assignment or termination of this Escrow Agreement and the resignation or removal of the Escrow Agent.

 

9.         Notices.
All notices, requests, demands, and other communications under this Escrow Agreement shall be in writing and shall be deemed
to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the
day of transmission if sent by facsimile to the facsimile number given below, with written confirmation of receipt, (c) on the
day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States
Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by registered or
certified mail, postage prepaid, and properly addressed, return receipt requested, to the party as follows, provided, however,
that notice to the Escrow Agent will be deemed give upon receipt by the Escrow Agent:

 

If to the Company:

Moody National
REIT II, Inc.

6363 Woodway Drive

Suite 110

Houston, Texas 77057

Attn:Treasurer

Phone: 713-977-7500

Facsimile: 713-977-7505

 

    	7

    	 

    

 

If to Dealer Manager:

Moody Securities,
LLC

6363 Woodway Drive

Suite 110

Houston, Texas 77057

Attn:Compliance Officer

Phone: 800-510-7348

Facsimile: 713-273-6663

 

If to Escrow Agent:

UMB Bank,
N.A.

1010 Grand Blvd, 4th Floor

Kansas City, Missouri 64106

Attn: Lara Stevens, Corporate Trust  & Escrow Services Dept.

Phone: (816) 860-3017

Facsimile: (816) 860-3029

 

Any party may change its address for purposes of this
section by giving the other party written notice of the new address in the manner set forth above.

 

10.         Indemnification
of Escrow Agent. The Company and the Dealer Manager hereby jointly and severally indemnify, defend and hold harmless the Escrow
Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel
fees and expenses, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the
Escrow Agent arising out of or relating in any way to this Escrow Agreement or any transaction to which this Escrow Agreement
relates unless such loss, liability, cost, damage or expense is finally determined by a court of competent jurisdiction to have
been primarily caused by the gross negligence or willful misconduct of the Escrow Agent. The terms of this Section 10 shall survive
the assignment or termination of this Escrow Agreement and the resignation or removal of the Escrow Agent.

 

11.         Resignation.
The Escrow Agent may resign upon thirty (30) days’ advance written notice to the Company. If a successor escrow agent is
not appointed within the thirty (30) day period following such notice, the Escrow Agent may petition any court of competent jurisdiction
to name a successor escrow agent or interplead the Subscriber Funds with such court, whereupon the Escrow Agent’s duties
hereunder shall terminate.

 

12.         Successors
and Assigns. Except as otherwise provided in this Escrow Agreement, no party hereto shall assign this Escrow Agreement
or any rights or obligations hereunder without the prior written consent of the other parties hereto and any such attempted assignment
without such prior written consent shall be void and of no force and effect. This Escrow Agreement shall inure to the benefit
of and shall be binding upon the successors and permitted assigns of the parties hereto. Any corporation or association into which
the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or
substantially all of its corporate trust business and assets in whole or in part, or any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the
successor escrow agent under this Escrow Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges
as its predecessor, without the execution or filing of any instrument or paper or the performance any further act.

 

13.         Governing
Law; Jurisdiction. This Escrow Agreement shall be construed, performed, and enforced in accordance with, and governed
by, the internal laws of the State of Missouri, without giving effect to the principles of conflicts of laws thereof.

 

14.         Severability.
In the event that any part of this Escrow Agreement is declared by any court or other judicial or administrative body to
be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions
of this Escrow Agreement shall remain in full force and effect.

 

    	8

    	 

    

 

15.         Amendments;
Waivers. This Escrow Agreement may be amended or modified, and any of the terms, covenants, representations,
warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of
a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Escrow Agreement, in any one or more instances, shall not be deemed to
be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant,
representation, or warranty of this Escrow Agreement. The Company and the Dealer Manager agree that any requested waiver, modification
or amendment of this Escrow Agreement shall be consistent with the terms of the Offering.

 

16.         Entire
Agreement. This Escrow Agreement contains the entire understanding among the parties hereto with respect to the escrow
contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written,
with regard to such escrow.

 

17.         References
to Escrow Agent. Other than disclosures required to be disclosed in Offering documents, no printed or other matter
in any language (including, without limitation, the Offering document, any supplement or amendment relating thereto, notices,
reports and promotional material) which mentions the Escrow Agent’s name or the rights, powers, or duties of the Escrow
Agent shall be issued by the Company or the Dealer Manager, or on the Company’s or Dealer Manager’s behalf unless
the Escrow Agent shall first have given its specific written consent thereto.

 

18.         Section
Headings. The section headings in this Escrow Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Escrow Agreement.

 

19.         Counterparts.
This Escrow Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute
the same instrument.

 

20.         Electronic
Transactions. The parties hereto agree that the transactions described herein may be conducted and related documents
may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing
of any claim, action or suit in the appropriate court of law.

 

21.         Patriot
Act Compliance; Tax Matters. Pursuant to the Subscription Agreement completed by Subscribers, the Company and the Dealer Manager
agree to provide the Escrow Agent completed Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents
that the Escrow Agent may reasonably request (collectively, “Tax Reporting Documentation”) at the time of execution
of this Escrow Agreement and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001,
as amended from time to time. The parties hereto understand that if such Tax Reporting Documentation is not so certified to the
Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code, as it may be amended from time to time, to withhold
a portion of any interest or other income earned on the investment of monies or other property held by the Escrow Agent pursuant
to this Escrow Agreement. The Company shall be treated as the owner of the Subscriber Funds for federal and state income tax purposes
and the Company will report all income, if any, that is earned on, or derived from, the Subscriber Funds as its income, in such
proportions, in the taxable year or years in which such income is properly includible and pay any taxes attributable thereto.

 

[Signature page follows.]

 

    	9

    	 

    

 

IN WITNESS WHEREOF, the parties hereto
have caused this Escrow Agreement to be executed the day and year first set forth above.

 

 MOODY NATIONAL REIT II, INC. 

   /s/ Brett C. Moody 

   

 Brett C. Moody 

 Chief Executive Officer and President 

   

 MOODY SECURITIES, LLC, as Dealer Manager 

   /s/ Melinda G. LeGaye 

   

 Name: Melinda G. LeGaye 

 Title: President 

   

 UMB BANK, N.A., as Escrow Agent 

 /s/ Lara Stevens 

   

 Lara Stevens  

 Vice President 

 

    	10

    	 

    

  

EXHIBIT A

 

LIST OF SUBSCRIBERS

 

 Pursuant to the Escrow Agreement dated
January 12, 2015 by and between Moody National REIT II, Inc. (the “Company”), Moody Securities, LLC (the “Dealer
Manager”) and UMB Bank, N.A., as escrow agent (the “Escrow Agent”), the Company and the Dealer Manager
hereby certify that the following investors have paid money for the purchase of the Shares in the Company and the money has been
deposited with the Escrow Agent: 

 

	1.	Name of Subscriber
	 	Address

Tax Identification Number

Amount of Securities subscribed for

Amount of money paid and deposited with Escrow Agent

 

	2.	Name of Subscriber
	 	Address
 Tax Identification Number 
 Amount of Securities subscribed for 
 Amount of money paid and deposited with Escrow Agent  

  

 MOODY SECURITIES, LLC, as Dealer Manager 

   

 By: 

   

   

 Its: President 

   

 MOODY NATIONAL REIT II, INC. 

   

 By: 

   

   

 Its: Chairman of the Board, 

 Chief Executive Officer and 

 President 

 

    	 

    	 

    

  

EXHIBIT B

 

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

Account Name: Moody National REIT II, Inc. Subscription
Escrow

 

The specimen signatures shown below are the
specimen signatures of the individuals who have been designated as Authorized Representatives of, and are authorized to initiate
and approve transactions of all types for the above-mentioned account on behalf of Moody National REIT II, Inc.

 

	Name/Title	 	Specimen Signature	 
	 	 	 	 
	 Robert W. Engel, CFO 	 	 /s/
                                         Robert W. Engel 	 
	 	 	 	 
	 Stefanie McGinnis 	 	 /s/
                                         Stefanie McGinnis 	 
	 	 	 	 
	 Melinda G. LeGaye 	 	 /s/
                                         Melinda G. LeGaye 	 

 

    	 

    	 

    

  

EXHIBIT C

 

ESCROW AGENT FEE

 

	Acceptance Fee 	 	 
	 	Review escrow agreement, establish account	 	$3,250
	 	 	 	 
	Annual Fees 	 	 
	 	Annual Escrow Agent	 	$2,500
	 	 	 	 
	Transactional Fees	 	 
	 	Outgoing Wire Transfer	 	$35 each
	 	Overnight Delivery/Mailings	 	$16.50 each
	 	IRS Tax Reporting	 	$10 per 1099
	 	Daily BAI File to Transfer Agent	 	$2.50 per Business Day
	 	Daily Wire Ripping to Transfer Agent	 	$10 per Business Day

 

Acceptance fee and first year Annual Escrow
Agent fee will be payable at the initiation of the escrow. Thereafter, the Annual Escrow Agent fees will be billed in advance
and Transactional Fees will be billed quarterly in arrears. Other fees and expenses will be billed as incurred.

 

Fees specified are for the regular, routine
services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements
involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged
based upon time required at the then standard hourly rate. In addition to the specified fees, all expenses related to the administration
of the Escrow Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage,
shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.

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