Document:

Moody National REIT II, Inc. S-11

Exhibit
10.2

 

 

 

 

 

LIMITED PARTNERSHIP AGREEMENT 

OF 

MOODY NATIONAL OPERATING PARTNERSHIP
II, LP

A DELAWARE LIMITED PARTNERSHIP 

 

August 15, 2014

 

 

 

 

 

 

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	ARTICLE 1 DEFINED TERMS	1
	 	 
	ARTICLE 2 PARTNERSHIP FORMATION AND IDENTIFICATION	7
	 	2.1	Formation.	7
	 	2.2	Name, Office and Registered Agent.	7
	 	2.3	Term and Dissolution.	7
	 	2.4	Filing of Certificate and Perfection of Limited Partnership.	8
	 	 	 	 
	ARTICLE 3 BUSINESS OF THE PARTNERSHIP	8
	 	 
	ARTICLE 4 CAPITAL CONTRIBUTIONS AND ACCOUNTS	8
	 	4.1	Capital Contributions.	8
	 	4.2	Additional Capital Contributions and Issuances of Additional Partnership Interests.	8
	 	4.3	Additional Funding.	9
	 	4.4	Capital Accounts.	9
	 	4.5	No Third-Party Beneficiary.	10
	 	 	 	 
	ARTICLE 5 PROFITS AND LOSSES; DISTRIBUTIONS	10
	 	5.1	Allocation of Profit and Loss.	10
	 	5.2	Distribution of Cash.	12
	 	5.3	REIT Distribution Requirements.	13
	 	5.4	Distributions Upon Liquidation.	13
	 	 	 	 
	ARTICLE 6 RIGHTS, OBLIGATIONS AND  POWERS OF THE GENERAL PARTNER	13
	 	6.1	Management of the Partnership.	13
	 	6.2	Delegation of Authority.	16
	 	6.3	Indemnification and Exculpation of Indemnitees.	16
	 	6.4	Liability of the General Partner.	17
	 	6.5	Reimbursement of General Partner.	18
	 	6.6	Outside Activities.	18
	 	6.7	Employment or Retention of Affiliates.	19
	 	6.8	Title to Partnership Assets.	19
	 	 	 	 
	ARTICLE 7 CHANGES IN GENERAL PARTNER	19
	 	7.1	Transfer of the General Partner’s Partnership Interests.	19
	 	7.2	Admission of a Substitute or Additional General Partner.	20
	 	7.3	Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.	20
	 	7.4	Removal of a General Partner.	21
	 	 	 	 
	ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS	22
	 	8.1	Management of the Partnership.	22
	 	8.2	Power of Attorney.	22
	 	8.3	Limitation on Liability of Limited Partners.	22
	 	8.4	Redemption of Special Limited Partnership Interests.	22

 

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	ARTICLE 9 TRANSFERS OF LIMITED PARTNERSHIP INTERESTS AND SPECIAL LIMITED PARTNERSHIP INTERESTS	23
	 	9.1	Restrictions on Transfer of Limited Partnership Interests.	23
	 	9.2	Admission of Substitute Limited Partner.	24
	 	9.3	Rights of Assignees of Partnership Interests.	25
	 	9.4	Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.	25
	 	 	 	 
	ARTICLE 10 BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS	26
	 	10.1	Books and Records.	26
	 	10.2	Custody of Partnership Funds; Bank Accounts.	26
	 	10.3	Fiscal and Taxable Year.	26
	 	 	 	 
	ARTICLE 11 AMENDMENT OF AGREEMENT	26
	 	 
	ARTICLE 12 GENERAL PROVISIONS	27
	 	12.1	Notices.	27
	 	12.2	Survival of Rights.	27
	 	12.3	Additional Documents.	27
	 	12.4	Severability.	27
	 	12.5	Entire Agreement.	27
	 	12.6	Pronouns and Plurals.	27
	 	12.7	Headings.	27
	 	12.8	Counterparts.	28
	 	12.9	Governing Law.	28
	 	 	 	 
	EXHIBIT A: CONTRIBUTIONS & INTEREST	A-1

 

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LIMITED PARTNERSHIP AGREEMENT

OF

MOODY NATIONAL OPERATING PARTNERSHIP
II, LP

This Limited Partnership
Agreement is entered into this 15th day of August, 2014, between Moody National REIT II, Inc., a Maryland corporation, as the General
Partner, and the Limited Partners set forth on Exhibit A attached hereto. Capitalized terms used herein but
not otherwise defined shall have the meanings given to them in Article 1.

AGREEMENT

WHEREAS, the General
Partner intends to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended;

WHEREAS, Moody National
Operating Partnership II, LP was formed on July 29, 2014 as a limited partnership under the laws of the State of Delaware, pursuant
to a Certificate of Limited Partnership filed with the Office of the Secretary of State of the State of Delaware on July 29, 2014;

WHEREAS, the General
Partner desires to conduct its current and future business through the Partnership; and

WHEREAS, the parties
hereto wish to establish herein their respective rights and obligations in connection with all of the foregoing and certain other
matters.

NOW, THEREFORE,
in consideration of the foregoing, of mutual covenants between the parties hereto, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINED
TERMS

The following defined
terms used in this Agreement shall have the meanings specified below:

“Act”
means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time.

“Additional
Funds” has the meaning set forth in Section 4.3 hereof.

“Adjusted
Capital Account” means, with respect any Partner, the Capital Account of such Partner as of the end of each Partnership
taxable year or other allocation period (i) increased by any amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) and the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(g)(5) and (ii) decreased by the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital
Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

    	

    	 

    

“Adjusted
Capital Account Deficit” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Adjusted
Capital Account as of the end of the relevant Partnership taxable year or other allocation period.

“Administrative
Expenses” means (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) those
administrative costs and expenses of the General Partner, including any salaries or other payments to directors, officers or employees
of the General Partner, and any accounting and legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the extent not included in clause (ii) above,
REIT Expenses; provided, however, that Administrative Expenses shall not include any administrative costs and expenses
incurred by the General Partner that are attributable to a Property or partnership interests in a Subsidiary Partnership that are
owned by the General Partner directly.

“Advisor”
or “Advisors” means the Person or Persons, if any, appointed, employed or contracted by the General Partner
and responsible for directing or performing the day-to-day business affairs of the General Partner, including any Person to whom
such Advisor subcontracts substantially all of such functions.

“Advisory
Agreement” means the agreement between the General Partner, the Advisor and the partnership pursuant
to which the Advisor will direct or perform the day-to-day business affairs of the General Partner.

“Affiliate”
means, with respect to any Person, (i) any Person directly or indirectly, owning, controlling or holding with the power to
vote 10% or more of the outstanding voting securities of such other Person; (ii) any Person 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 an
executive officer, director, trustee or general partner.

“Agreement”
means this Limited Partnership Agreement, as amended, modified supplemented or restated from time to time, as the context requires.

“Articles
of Incorporation” means the Articles of Incorporation of the General Partner, as amended or restated from time to time,
as filed with the Maryland State Department of Assessments and Taxation.

“Capital
Account” has the meaning provided in Section 4.4 hereof.

“Capital
Contribution” means, with respect to any Partner, any cash, cash equivalents or the fair market value of other property
which such Partner contributes or is deemed to contribute to the Partnership pursuant to Section 4.1 or 4.2 hereof.
Any reference to the Capital Contribution of a Partner shall include the Capital Contribution
made by a predecessor holder of the Partnership Interests of such Partner. 

“Certificate”
means any instrument or document that is required under the laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the Partnership (either by themselves or pursuant to
the power-of-attorney granted to the General Partner in Section 8.2 hereof) and filed for recording in the appropriate public
offices within the State of Delaware or such other jurisdiction to perfect or maintain the Partnership as a limited partnership,
to effect the admission, withdrawal, or substitution of any Partner of the Partnership, or to protect the limited liability of the
Limited Partners as limited partners under the laws of the State of Delaware or such other jurisdiction.

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“Code”
means the Internal Revenue Code of 1986, as amended, and as hereafter amended from time to time. Reference to any particular provision
of the Code shall mean that provision in the Code at the date hereof and any successor provision of the Code.

“Commission”
means the U.S. Securities and Exchange Commission.

“Director”
means a member of the board of directors of the General Partner.

 

“Event
of Bankruptcy” means, as to any Person, the filing of a petition for relief as to such Person as debtor or
bankrupt under the Bankruptcy Code of 1978 or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or bankruptcy of such Person as finally
determined by a court proceeding; filing by such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of his assets; commencement of any proceedings
relating to such Person as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another,
provided that if such proceeding is commenced by another, such Person indicates his approval of such proceeding, consents
thereto or acquiesces therein, or such proceeding is contested by such Person and has not been finally dismissed within 90
days.

“General
Partner” means Moody National REIT II, Inc. and any Person who becomes a substitute or additional General Partner as
provided herein, and any of their successors as General Partner, until such Person ceases to be a General Partner pursuant to the
terms of this Agreement.

“General
Partnership Interest” means a Partnership Interest held by the General Partner that is a general partnership interest.

“Indemnitee”
means (i) any Person made a party to a proceeding by reason of its status as the General Partner or a director, officer or
employee of the General Partner or the Partnership, and (ii) such other Persons (including Affiliates of the General Partner
or the Partnership) as the General Partner may designate from time to time, in its sole and absolute discretion.

“Independent
Directors” means a Director who is not on the date of determination, and within the last two years from the date of
determination has not been, directly or indirectly associated with the Sponsor of the General Partner or the Advisor by virtue
of (i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, other than the General Partner,
(ii) employment by the Sponsor, the Advisor or any of their Affiliates, (iii) service as an officer or director of the
Sponsor, the Advisor or any of their Affiliates, other than as a Director, (iv) performance of services, other than as a
Director, for the General Partner, (v) service as a director or trustee of more than three real estate investment trusts
organized by the Sponsor or advised by the Advisor or (vi) maintenance of a material business or professional relationship
with the Sponsor, the Advisor or any of their Affiliates. A business or professional relationship is considered “material”
if the aggregate gross revenue derived by the Director from the Sponsor, the Advisor and their Affiliates (excluding fees for
serving as an independent director of the General Partner or other real estate investment trust or real estate program organized
or advised or managed by the Sponsor or its Affiliates) exceeds five percent of either the Director’s annual gross revenue
during either of the last two years or the Director’s net worth on a fair market value basis. An indirect association with
the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or
father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with the Sponsor, the Advisor, any
of their Affiliates or the General Partner.

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“Limited
Partner” means any Person named as a Limited Partner on Exhibit A attached
hereto, as such exhibit may be amended and restated from time to time, and any Person who becomes an additional Limited Partner
or a Substitute Limited Partner, in such Person’s capacity as a Limited Partner in
the Partnership.

“Limited
Partnership Interest” means the ownership interest of a Limited Partner       in the
Partnership at any particular time, including the right of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the obligations of such Limited Partner to comply with
all the provisions of this Agreement and of such Act.

“Listing”
means the listing of the REIT Shares on a national securities exchange or the receipt by holders of the REIT Shares of securities
that are listed on a national securities exchange in exchange for REIT Shares. Upon such Listing, the shares shall be deemed “Listed.”

 

“Nonrecourse
Deduction” has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

“Nonrecourse
Liability” has the meaning provided in Regulations Section 1.704(b)(3).

“Partner”
means any General Partner or Limited Partner.

“Partner
Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that
would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations
Section 1.704-2(i)(3).

“Partner
Nonrecourse Debt” has the meaning provided in Regulations Section 1.704-2(b)(4).

“Partner
Nonrecourse Debt Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership
Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance
with Regulations Section 1.704-2(i)(3).

“Partner
Nonrecourse Deductions” has the meaning provided in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2), and the amount
of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance
with Regulations Sections 1.704-2(i)(2).

“Partnership”
means Moody National Operating Partnership II, LP, a Delaware limited partnership.

“Partnership
Interest” means an ownership interest in the Partnership held by a Limited Partner, the Special Limited Partner or the
General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.

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“Partnership
Minimum Gain” has the meaning provided in Regulations Sections 1.704-2(b)(2) and 1.704-2(d), and the amount of Partnership
Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Partnership Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(d).

“Partnership
Record Date” means the record date established by the General Partner for the distribution of cash pursuant to Section 5.2
hereof.

“Partnership
Year” shall mean the Partnership’s taxable year or any shorter period for which Partnership profits and losses
are allocated.

“Percentage
Interest” means, with respect to any Partner other than a Special Limited Partner, the percentage determined by dividing
the Capital Accounts of such Partner by the sum of the Capital Accounts of all Partners (other than Special Limited Partners).

“Person”
means any individual, partnership, limited liability company, corporation, joint venture, trust or other entity.

“Profit
and Loss” has the meaning set forth in Article 5 hereof.

“Property”
means any Real Estate Asset or other investment in which the Partnership holds an ownership interest.

“Real Estate
Asset” means unimproved and improved real property, real estate related assets and any direct or indirect interest therein,
including, without limitation, fee or leasehold interests, options, leases, partnership and joint venture interests, equity and
debt securities of entities that own real estate, loans secured by real property including first or second mortgage loans, mezzanine
loans and participations in such loans, preferred equity interests secured by a property owner’s interest in real property
and other contractual rights in real estate.

“Regulations”
means the Federal income tax regulations promulgated under the Code, as amended and as hereafter amended from time to time. Reference
to any particular provision of the Regulations shall mean that provision of the Regulations on the date hereof and any successor
provision of the Regulations.

“REIT”
means a real estate investment trust under Sections 856 through 860 of the Code.

“REIT
Share” means ownership (including beneficial ownership) of a share of common stock in the General Partner (or
successor entity, as the case may be).

“REIT Expenses”
means (i) costs and expenses relating to the formation and continuity of existence and operation of the General Partner and
any Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included within the definition of General Partner),
including taxes, fees and assessments associated therewith, any and all costs, expenses or fees payable to any director, officer,
or employee of the General Partner, (ii) costs and expenses relating to any public offering and registration of securities
by the General Partner and all statements, reports, fees and expenses incidental thereto, including, without limitation, underwriting
discounts and selling commissions applicable to any such offering of securities, and any costs and expenses associated with any
claims made by any holders of such securities or any underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the General Partner, (iv) costs and expenses associated with the preparation and
filing of any periodic or other reports and communications by the General Partner under federal, state or local laws or regulations,
including filings with the Commission, (v) costs and expenses associated with compliance by the General Partner with laws,
rules and regulations promulgated by any regulatory body, including the Commission and any securities exchange, (vi) costs
and expenses associated with any 401(k) plan, incentive plan, bonus plan or other plan providing for compensation for the employees
of the General Partner, (vii) costs and expenses incurred by the General Partner relating to any issuing or redemption of
Partnership Interests, and (viii) all other operating or administrative costs of the General Partner incurred in the ordinary
course of its business on behalf of or in connection with the Partnership.

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“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Special
Limited Partner” means the holder of a Special Limited Partnership Interests.

“Special
Limited Partnership Interest” means the ownership interest of a Special Limited Partner in the Partnership issued pursuant
to Section 4.2(d) with the rights and obligations provided under this Agreement.

“Sponsor”
means any Person which (a) is directly or indirectly instrumental in organizing, wholly or in part, the General Partner, (b) will
control, manage or participate in the management of the General Partner, and any Affiliate of any such Person, (c) takes the initiative,
directly or indirectly, in founding or organizing the General Partner, either alone or in conjunction with one or more other Persons,
(d) receives a material participation in the General Partner in connection with the founding or organizing of the business of
the General Partner, in consideration of services or property, or both services and property, (e) has a substantial number of
relationships and contacts with the General Partner, (f) possesses significant rights to control Properties, (g) receives fees
for providing services to the General Partner which are paid on a basis that is not customary in the industry or (h) provides
goods or services to the General Partner on a basis which was not negotiated at arm’s-length with the General Partner. “Sponsor”
does not include any Person whose only relationship with the General Partner is that of an independent property manager and whose
only compensation is as such, or wholly independent third parties such as attorney, accountants and underwriters whose only compensation
is for professional services.

“Subsidiary”
means, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting
equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

“Subsidiary
Partnership” means any partnership of which the partnership interests therein are owned by the General Partner or a direct
or indirect subsidiary of the General Partner.

“Substitute
Limited Partner” means any Person admitted to the Partnership as a Limited Partner pursuant to Section 9.2 hereof.

“Termination
Event” means the termination or nonrenewal of the Advisory Agreement (i) in connection with a merger, sale of assets
or transaction involving the General Partner pursuant to which a majority of the Directors then in office are replaced or removed,
(ii) by the Advisor for “good reason” (as defined in the Advisory Agreement) or (iii) by the General Partner other
than for “cause” (as defined in the Advisory Agreement).

“Transfer” has the meaning provided
in Section 9.2(a) hereof.

 

                                            

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ARTICLE 2

PARTNERSHIP
FORMATION AND IDENTIFICATION

2.1               
Formation.

The Partnership
was formed as a limited partnership pursuant to the Act, and all other pertinent laws of the State of Delaware, for the purposes
and upon the terms and conditions set forth in this Agreement.

2.2               
Name, Office and Registered Agent.

The name of the
Partnership is Moody National Operating Partnership II, LP. The specified office and place of business of the Partnership shall
be 6363 Woodway Drive, Suite 110, Houston, Texas 77057. The General Partner may at any time change the location of such office,
provided the General Partner gives notice to the Partners of any such change. The name and address of the Partnership’s registered
agent is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19801. The sole
duty of the registered agent as such is to forward to the Partnership any notice that is served on him as registered agent.

2.3               
Term and Dissolution. 

(a)               
The term of the Partnership shall continue in full force and effect until dissolved upon the
first to occur of any of the following events: 

(i)              
the occurrence of an Event of Bankruptcy as to a General Partner or the dissolution, death,
removal or withdrawal of a General Partner unless the business of the Partnership is continued pursuant to Section 7.3(b)
hereof; provided that if a General Partner is on the date of such occurrence a partnership, the dissolution of such General Partner
as a result of the dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in such partnership shall not be
an event of dissolution of the Partnership if the business of such General Partner is continued by the remaining partner or partners,
either alone or with additional partners, and such General Partner and such partners comply with any other applicable requirements
of this Agreement; 

(ii)             
the passage of 90 days after the sale or other disposition of all or substantially all of
the assets of the Partnership (provided that if the Partnership receives an installment obligation as consideration for such sale
or other disposition, the Partnership shall continue, unless sooner dissolved under the provisions of this Agreement, until such
time as such note or notes are paid in full); or

(iii)
      the election by the General Partner that the Partnership should be dissolved. 

(b)               
Upon dissolution of the Partnership (unless the business of the Partnership is continued pursuant
to Section 7.3(b) hereof), the General Partner (or its trustee, receiver, successor or legal representative) shall amend or
cancel any Certificate(s) and liquidate the Partnership’s assets and apply
and distribute the proceeds thereof in accordance with Section 5.4 hereof. Notwithstanding the foregoing, the liquidating
General Partner may either (i) defer liquidation of, or withhold from distribution for a reasonable time, any assets of the
Partnership (including those necessary to satisfy the Partnership’s debts and obligations), or (ii) distribute the assets
to the Partners in kind.

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2.4               
Filing of Certificate and Perfection of Limited Partnership. 

The General Partner
shall execute, acknowledge, record and file at the expense of the Partnership, any and all amendments to the Certificate(s) and
all requisite fictitious name statements and notices in such places and jurisdictions as may be necessary to cause the Partnership
to be treated as a limited partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in which
the Partnership conducts business.

ARTICLE
3

BUSINESS
OF THE PARTNERSHIP

The purpose and
nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by
a limited partnership organized pursuant to the Act, provided, however, that such business shall be limited to and conducted in
such a manner as to permit the General Partner at all times to qualify as a REIT, unless the General Partner determines that it
no longer intends to qualify as a REIT, and in a manner such that the General Partner will not be subject to any taxes under Section 857
or 4981 of the Code, (ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of the
foregoing or the ownership of interests in any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole
and absolute discretion to qualify or cease qualifying as a REIT, the Partners acknowledge that the General Partner intends to
qualify as a REIT for federal income tax purposes and that such qualification and the avoidance of income and excise taxes on the
General Partner inures to the benefit of all the Partners and not solely to the General Partner. Notwithstanding the foregoing,
the Limited Partners agree that the General Partner may terminate its status as a REIT under the Code at any time to the full extent
permitted under the Articles of Incorporation. The General Partner on behalf of the Partnership shall also be empowered to do any
and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded
partnership” that is taxable as a corporation under Section 7704 of the Code.

ARTICLE
4

CAPITAL
CONTRIBUTIONS AND ACCOUNTS

4.1               
Capital Contributions. 

The Capital Contributions
and Partnership Interests of each Partner are set forth on Exhibit A, as the same shall be amended from time to time
by the General Partner to the extent necessary to reflect accurately sales, exchanges or other Transfers, redemptions, Capital
Contributions, the issuance of additional Partnership Interests, or similar events having an effect on a Partner’s ownership
of Partnership Interests.

4.2               
Additional Capital Contributions and Issuances of Additional Partnership Interests. 

Except as provided
in this Section 4.2 or in Section 4.3, the Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership.

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(a)       The
General Partner is hereby authorized to cause the Partnership to issue additional Partnership Interests for any Partnership purpose
at any time or from time to time to the Partners (including the General Partner) or to other Persons for such consideration and
on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the
approval of any Limited Partner. Any additional Partnership Interests issued thereby may be issued in one or more classes, or one
or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special
rights, powers and duties, all as shall be determined by the General Partner in its sole and absolute discretion and without the
approval of any Limited Partner, subject to Delaware law, including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of Partnership Interests; (ii) the right of each such class
or series of Partnership Interests to share in Partnership distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership. Without limiting the foregoing, the General Partner
is expressly authorized to cause the Partnership to issue Partnership Interests for less than fair market value, so long as the
General Partner concludes in good faith that such issuance is in the best interests of the General Partner and the Partnership.
In the event that the Partnership issues additional Partnership Interests pursuant to this Section 4.2(a), the General Partner
shall make such revisions to this Agreement as it deems necessary to reflect the issuance of such additional Partnership Interests.

(b)       The
General Partner may make additional Capital Contributions to the Partnership from time to time, such contributions being credited
to its Capital Account in its General Partnership Interest.

(c)       The General
Partner, in its sole and absolute discretion, may also (i) issue Partnership Interests or designate a new class of Partnership
Interests for issuance to Persons in exchange for services provided or to be provided by such Persons to or for the benefit of
the Partnership; and (ii) require such Persons who provide services to or for the benefit of the Partnership to make a Capital
Contribution to the Partnership in connection with the issuance of Partnership Interests to such Person. Further, the General Partner,
in its sole and absolute discretion, may (x) subject such Partnership Interests to vesting, forfeiture and additional restrictions
on transfer pursuant to the terms of a vesting agreement and (y) amend this Agreement to provide for (A) special allocations
of Profit or Loss to such Partnership Interests, (B) the redemption or forfeiture of such Partnership Interests upon certain
events, (C) the terms and conditions of the conversion of such Partnership Interests into Partnership Interests of another
class, (D) voting rights of the holders of such Partnership Interests and/or (E) such other matters as the General Partner
deems appropriate.

(d)       The Partnership
issued Special Limited Partnership Interests to Moody National LPOP II, LLC in exchange for the cash contribution reflected on Exhibit
A hereto and for services performed or to be performed for the Partnership and its Subsidiaries, and admitted such Person as
the Special Limited Partner. The Special Limited Partner shall be entitled to certain distributions as provided in Section 5.2
and certain preferential allocations of items of income and gain under Section 5.1. The Special Limited Partnership Interests will
be subject to the transfer restrictions set forth in Article 9 and will be subject to redemption pursuant to Section 8.6.

4.3               
Additional Funding. 

If the General Partner
determines that it is in the best interests of the Partnership to provide for additional Partnership funds (“Additional
Funds”) for any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds from
outside borrowings or (ii) elect to have the General Partner or any of its Affiliates provide such Additional Funds to the
Partnership through loans or otherwise.

4.4               
Capital Accounts. 

The Partnership shall maintain
for each Partner a separate Capital Account in accordance with the rules of Regulations Section 1.704-l(b)(2)(iv).

 

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4.5               
No Third-Party Beneficiary. 

No creditor or other
third party having dealings with the Partnership shall have the right to enforce the right or obligation of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and
agreed that the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto
and their respective successors and assigns. None of the rights or obligations of the Partners herein set forth to make Capital
Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by
the Partnership to secure any debt or other obligation of the Partnership or of any of the Partners. In addition, it is the intent
of the parties hereto that no distribution to any Limited Partner shall be deemed a return of money or other Property in violation
of the Act. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Limited
Partner is obligated to return such money or Property, such obligation shall be the obligation of such Limited Partner and not
of the General Partner. Without limiting the generality of the foregoing, a deficit Capital Account of a Partner shall not be deemed
to be a liability of such Partner nor an asset or Property of the Partnership.

 

ARTICLE 5

PROFITS
AND LOSSES; DISTRIBUTIONS

5.1               
Allocation of Profit and Loss. 

Profit
and loss of the Partnership shall be determined in accordance with Section 704(b) of the Code and the Treasury Regulations thereunder
and shall be allocated in accordance with this Article 5.

(a)               
Profit.

After giving effect
to the special allocations in Sections 5.1(c), 5.1(d) and 5.1(e), profit of the Partnership for each Partnership Year or other
applicable period of the Partnership shall be allocated to the Partners in the following order and priority:

(i)    
       Profit shall be allocated to the General Partner until the cumulative Profit allocated to
the General Partner pursuant to this Section 5.1(a)(i) equals the cumulative Loss allocated to the General Partner pursuant to
Section 5.1(b)(ii).

(ii)  
       Profit shall be allocated to the Partners (other than the Special Limited Partner) in accordance
with their Percentage Interests.

(b)               
Loss.

After giving effect
to the special allocations in Sections 5.1(c), 5.1(d) and 5.1(e), loss of the Partnership for each Partnership Year or other applicable
period of the Partnership shall be allocated to the Partners in the following order and priority:

(i)                
Loss shall be allocated to the Partners (other than the Special Limited Partner) in accordance
with their Percentage Interests, provided that loss shall not be allocated to a Partner pursuant to this Section 5.1(b)(i) to the
extent that such allocation would cause or increase an Adjusted Capital Account Deficit at the end of any fiscal year.

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(ii)  
            Loss shall be allocated to the General Partner.

(c)               
Special Allocations. The following regulatory allocations shall be made in the following order
and priority:

(i)    
           Minimum Gain Chargeback. Notwithstanding the provisions of this Section 5.1, if there is a
net decrease in Partnership Minimum Gain during any Partnership Year, each Partner shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be
so allocated shall be determined in accordance with Regulations Section 1.704-2(0(6). This Section 5.1(c)(i) is intended to comply
with the minimum gain chargeback requirements in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii)       
Partner Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1,
if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Year, each
Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner's share of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(i)(4). This Section 5,1(c)(ii)
is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(i) and shall be interpreted consistently
therewith.

(iii)
     Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments, allocations
or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.7044(b)(2)(ii)(d)(6)
and such Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain (consisting of a pro rata portion
of each item of Partnership income, including gross income and gain for the Partnership Year) shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, its Adjusted Capital Account
Deficit created by such adjustments, allocations or distributions as quickly as possible. This Section 5.1(c)(iii) is intended
to constitute a "qualified income offset" under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

(iv)
     No Excess Deficit. To the extent that any Partner has or would have, as a result of an allocation
of Net Loss (or item thereof), an Adjusted Capital Account Deficit, such amount of Net Loss (or item thereof) shall be allocated
to the other Partners in accordance with Section 5.1(b), but in a manner which will not produce an Adjusted Capital Account Deficit
as to such Partners. To the extent such allocation would result in all Partners having Adjusted Capital Account Deficits, such
Net Loss (or item thereof) shall be allocated to the General Partner.

(v)  
     Nonrecourse Deductions. Nonrecourse Deductions for any Partnership Year shall be allocated
to the Partners (other than the Special Limited Partner) in accordance with their respective Percentage Interests. If the General
Partner determines in its good faith discretion that the Partnership's Nonrecourse Deductions must be allocated in a different
ratio to satisfy the safe harbor requirements of the Regulations promulgated under Section 704(b) of the Code, the General Partner
is authorized, upon notice to the Limited Partners, to revise the prescribed ratio for such Partnership Year to the numerically
closest ratio which would satisfy such requirements.

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(vi)
     Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Partner who bears the economic
risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance
with Regulations Sections 1.704-2(6)(4) and 1.704-2(i).

(vii)         
Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated
as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such
item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to such section of the Regulations.

(d)               
Priority Allocations to the Special Limited Partner. Notwithstanding
the provisions of Sections 5.1(a) and 5.1(b) above, the Special Limited Partner shall be allocated
on a priority basis items of income or gain, including, without limitation, items of gain from a sale (including but not limited
to net capital gain realized in connection with the adjustment to the tax book value of Partnership assets under Section 704(b)
of the Code) on a cumulative basis pursuant to this Section 5.1(d) in an amount equal to the amount of distributions made (or in
connection with a sale or winding up or liquidation of the Partnership, to be made) to such Partner.

(e)               
Allocations Between Transferor and Transferee. If a Partner transfers any part or all of its
Partnership Interests or if Percentage Interests vary during a Partnership Year, the General Partner, in its sole and absolute
discretion, shall determine which method authorized under the Code and the Regulations shall be used to allocate the distributive
shares.

(f)               
Allocations for Tax Purposes. All allocations for federal income tax purposes shall be consistent
with all allocations in this Section 5.1, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4).
The General Partner shall have the authority to elect the method to be used by the Partnership for allocating items of income,
gain, and expense as required by Section 704(c) of the Code including a method that may result in a Partner receiving a disproportionately
larger share of the Partnership tax depreciation deductions, and such election shall be binding on all Partners.

(g)               
Revisions to Allocations to Reflect Issuance of Additional Interests. In the event that the
Partnership issues additional Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Article
4 hereof, the General Partner shall make such revisions to this Section 5.1 as it deems necessary to reflect the terms of the issuance
of such additional Partnership Interests, including making preferential allocations to classes of Partnership Interests that are
entitled thereto. Such revisions shall not require the consent or approval of any other Partner.

5.2               
Distribution of Cash. 

(a)               
The Partnership shall distribute cash on a quarterly (or, at the election of the General Partner,
more frequent) basis, in an amount determined by the General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other distribution period) in accordance with Section
5.2(b). 

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(b)               
Except for distributions pursuant to Section 5.4 of this Agreement in connection with the
dissolution and liquidation of the Partnership and subject to the provisions of Section 5.2(c) and 5.3 of this Agreement, distributions
shall be made (i) first, 100% to the Partners (other than Special Limited
Partner) in accordance with their respective Percentage Interests on the Partnership Record Date until the Limited Partners (other
than the Special Limited Partner) have received cumulative distributions under this Section 5.2(b) equal to the aggregate Capital
Contributions made by the Limited Partners (other than the Special Limited Partner) to the Partnership plus a cumulative, noncompounded
pre-tax rate of return thereon of 6.0% per annum, determined by taking into account the dates on which all such Capital Contributions
and distributions were made and (ii) second, (A) 85% to the Partners (other than the Special Limited Partner), in accordance with
their respective Percentage Interests on the Partnership Record Date and (B) 15% to the Special Limited Partner.

(c)               
In the event that the Partnership issues additional Partnership Interests to the General Partner
or any Additional Limited Partner pursuant to Article 4 hereof, the General Partner shall make such revisions to this Section 5.2
as it deems necessary to reflect the issuance of such additional Partnership Interests. 

5.3               
REIT Distribution Requirements.

The General Partner
shall use its commercially reasonable efforts to cause the Partnership to distribute amounts sufficient to enable the General Partner
to make stockholder distributions that will allow the General Partner to (i) meet its distribution requirement for qualification
as a REIT as set forth in Section 857 of the Code and (ii) avoid any federal income or excise tax liability imposed by
the Code.

5.4               
Distributions Upon Liquidation. 

Upon liquidation
of the Partnership, after payment of, or adequate provision for, debts and obligations of the Partnership, including any Partner
loans, any remaining assets of the Partnership shall be distributed to all Partners in accordance with their Capital Accounts.
To the extent deemed advisable by the General Partner, appropriate arrangements (including the use of a liquidating trust) may
be made to assure that adequate funds are available to pay any contingent debts or obligations.

ARTICLE
6

RIGHTS,
OBLIGATIONS AND

POWERS OF THE GENERAL PARTNER

6.1               
Management of the Partnership.

(a)               
Except as otherwise expressly provided in this Agreement, the General Partner shall have full,
complete and exclusive discretion to manage and control the business of the Partnership for the purposes herein stated, and shall
make all decisions affecting the business and assets of the Partnership. Subject to the restrictions specifically contained in
this Agreement, the powers of the General Partner shall include, without limitation, the authority to take the following actions
on behalf of the Partnership: 

(i)               
to acquire, purchase, own, operate, lease and dispose of any Real Estate Asset that the General
Partner determines is necessary or appropriate or in the best interests of the business of the Partnership; 

(ii)             
to construct buildings and make other improvements on the Properties;

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(iii)
     to authorize, issue, sell, redeem or otherwise purchase any Partnership Interests or any securities
(including secured and unsecured debt obligations of the Partnership, debt obligations of the Partnership convertible into any
class or series of Partnership Interests, or options, rights, warrants or appreciation rights relating to any Partnership Interests)
of the Partnership; 

(iv)
     to borrow or lend money for the Partnership, issue or receive evidence of indebtedness in
connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment
of, any such indebtedness, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s
assets; 

(v)            
to pay, either directly or by reimbursement, for all operating costs and general administrative
expenses of the Partnership to third parties or to the General Partner or its Affiliates as set forth in this Agreement; 

(vi)
     to guarantee or become a co-maker of indebtedness of the General Partner or any Subsidiary
thereof, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any such
guarantee or indebtedness, and secure such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s
assets; 

(vii)           to
use assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly or by reimbursement, of all Administrative Expenses and
REIT Expenses of the General Partner, the Partnership or any Subsidiary of either, to third parties or to the General Partner
as set forth in this Agreement; 

(viii)        
to lease all or any portion of any of the Partnership’s assets, whether or not the terms
of such leases extend beyond the termination date of the Partnership and whether or not any portion of the Partnership’s
assets so leased are to be occupied by the lessee, or, in turn, subleased in whole or in part to others, for such consideration
and on such terms as the General Partner may determine; 

(ix)     
to prosecute, defend, arbitrate, or compromise any and all claims or liabilities in favor
of or against the Partnership, on such terms and in such manner as the General Partner may reasonably determine, and similarly
to prosecute, settle or defend litigation with respect to the Partners, the Partnership, or the Partnership’s assets;

(x)       
to file applications, communicate, and otherwise deal with any and all governmental agencies
having jurisdiction over, or in any way affecting, the Partnership’s assets or any other aspect of the Partnership business;

(xi)
     to make or revoke any election permitted or required of the Partnership by any taxing authority;

(xii)        
to maintain such insurance coverage for public liability, fire and casualty, and any and all
other insurance for the protection of the Partnership, for the conservation of Partnership assets, or for any other purpose convenient
or beneficial to the Partnership, in such amounts and such types, as it shall determine from time to time; 

(xiii)        
to determine whether or not to apply any insurance proceeds for any Property to the restoration
of such Property or to distribute the same; 

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(xiv)        
to establish one or more divisions of the Partnership, to hire and dismiss employees of the
Partnership or any division of the Partnership, and to retain legal counsel, accountants, consultants, real estate brokers, and
such other persons, as the General Partner may deem necessary or appropriate in connection with the Partnership business and to
pay therefor such remuneration as the General Partner may deem reasonable and proper; 

(xv)           to
retain other services of any kind or nature in connection with the Partnership business, and to pay therefor such remuneration
as the General Partner may deem reasonable and proper; 

(xvi)         to
negotiate and conclude agreements on behalf of the Partnership with respect to any of the rights, powers and authority conferred
upon the General Partner; 

(xvii)         to
maintain accurate accounting records and to file promptly all federal, state and local income tax returns on behalf of the Partnership;

(xviii)        to
distribute Partnership cash or other Partnership assets in accordance with this Agreement; 

(xix)           to form or acquire an interest in, and contribute Property to, any further limited or general
partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of Property to, its Subsidiaries and any other Person in which it has an equity interest from
time to time); 

(xx)            
to establish Partnership reserves for working capital, capital expenditures, contingent liabilities,
or any other valid Partnership purpose; 

(xxi)           
to merge, consolidate or combine the Partnership with or into another Person; 

(xxii)         
to do any and all acts and things necessary or prudent to ensure that the Partnership will
not be classified as a “publicly traded partnership” that is taxable as a corporation under Section 7704 of the
Code; and 

(xxiii)         to take such other action, execute, acknowledge, swear to or deliver such other documents
and instruments, and perform any and all other acts that the General Partner deems necessary or appropriate for the formation,
continuation and conduct of the business and affairs of the Partnership (including, without limitation, all actions consistent
with allowing the General Partner at all times to qualify as a REIT unless the General Partner voluntarily terminates its REIT
status) and to possess and enjoy all of the rights and powers of a general partner as provided by the Act. 

(b)               
Except as otherwise provided herein, to the extent the duties of the General Partner require
expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent
that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be
deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third
parties or to undertake any individual liability or obligation on behalf of the Partnership. 

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6.2               
Delegation of Authority.

The General Partner
may delegate any or all of its powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal with
any Person for the transaction of the business of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may approve.

6.3               
Indemnification and Exculpation of Indemnitees.

(a)                The
Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or
several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising
from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the
result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money,
Property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe
that the act or omission was unlawful. Any indemnification pursuant to this Section 6.3 shall be made only out of
the assets of the Partnership.

(b)               
The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an Indemnitee
who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification
by the Partnership as authorized in this Section 6.3 has been met, and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. 

(c)               
The indemnification provided by this Section 6.3 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity. 

(d)               
The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such
other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have
the power to indemnify such Person against such liability under the provisions of this Agreement. 

(e)               
For purposes of this Section 6.3, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the
meaning of this Section 6.3; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of
the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership. 

(f)               
In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement. 

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(g)               
An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.3
because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement. 

(h)               
The provisions of this Section 6.3 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. 

(i)                 Notwithstanding
the foregoing, the Partnership may not indemnify or hold harmless an Indemnitee for any liability or loss unless all of the
following conditions are met: (i) the Indemnitee has determined, in good faith, that the course of conduct that caused
the loss or liability was in the best interests of the Partnership; (ii) the Indemnitee was acting on behalf of or
performing services for the Partnership; (iii) the liability or loss was not the result of (A) negligence or
misconduct, in the case that the Indemnitee is a director of the General Partner (other than an Independent
Director), the Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that
the Indemnitee is an Independent Director; and (iv) the indemnification or agreement to hold harmless is recoverable
only out of net assets of the Partnership. In addition, the Partnership shall not provide indemnification for any loss,
liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one
or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count
involving alleged material securities law violations as to the Indemnitee; (ii) such claims have been dismissed with
prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) 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 Commission and of the published position of any state securities regulatory authority in which securities of the
General Partner or the Partnership were offered or sold as to indemnification for violations of securities laws.

6.4               
Liability of the General Partner. 

(a)               
Notwithstanding anything to the contrary set forth in this Agreement, the General Partner
shall not be liable for monetary damages to the Partnership or any Partners for losses sustained or liabilities incurred as a result
of errors in judgment or of any act or omission if the General Partner acted in good faith. The General Partner shall not be in
breach of any duty that the General Partner may owe to the Limited Partners or the Partnership or any other Persons under this
Agreement or of any duty stated or implied by law or equity provided the General Partner, acting in good faith, abides by the terms
of this Agreement. 

(b)               
The Limited Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership, itself and its stockholders collectively, that the General Partner is under no obligation to consider the separate
interests of the Limited Partners (including, without limitation, the tax consequences to Limited Partners or the tax consequences
of some, but not all, of the Limited Partners) in deciding whether to cause the Partnership to take (or decline to take) any actions.
In the event of a conflict between the interests of its stockholders on one hand and the Limited Partners on the other, the General
Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either its stockholders or the Limited
Partners; provided, however, that for so long as the General Partner directly owns a controlling interest in the Partnership, any
such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse
to either its stockholders or the Limited Partner shall be resolved in favor of the stockholders. The General Partner shall not
be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection
with such decisions, provided that the General Partner has acted in good faith. 

    	17

    	 

    

(c)               
Subject to its obligations and duties as General Partner set forth in Section 6.1 hereof,
the General Partner may exercise any of the powers granted to it under this Agreement and perform any of the duties imposed upon
it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence
on the part of any such agent appointed by it in good faith. 

(d)                Notwithstanding
any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT or (ii) to prevent the General Partner from incurring any taxes under Section 857,
Section 4981, or any other provision of the Code, is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners.

(e)               
Any amendment, modification or repeal of this Section 6.4 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the General Partner’s liability to the Partnership
and the Limited Partners under this Section 6.4 as in effect immediately prior to such amendment, modification or repeal with
respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating
to such matters may arise or be asserted. 

6.5               
Reimbursement of General Partner. 

(a)               
Except as provided in this Section 6.5 and elsewhere in this Agreement (including the
provisions of Articles 5 and 6 regarding distributions, payments and allocations to which it may be entitled), the General Partner
shall not be compensated for its services as general partner of the Partnership. 

(b)               
The General Partner shall be reimbursed on a monthly basis, or such other basis as the General
Partner may determine in its sole and absolute discretion, for all Administrative Expenses incurred by the General Partner. Reimbursement
of Administrative Expenses shall be treated as an expense of the Partnership and not as allocations of Partnership income or gain.

6.6               
Outside Activities. 

Subject to the Articles
of Incorporation and any agreements entered into by the General Partner or its Affiliates with the Partnership or a Subsidiary,
any officer, director, employee, agent, trustee, Affiliate or stockholder of the General Partner, the General Partner shall be
entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership,
including business interests and activities substantially similar or identical to those of the Partnership. None of the Partnership,
Limited Partners or any other Person shall have any rights by virtue of this Agreement or the partnership relationship established
hereby in any such business ventures, interests or activities, and the General Partner shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures, interests and activities to the Partnership or any Limited Partner,
even if such opportunity is of a character which, if presented to the Partnership or any Limited Partner, could be taken by such
Person.

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6.7               
Employment or Retention of Affiliates. 

(a)               
Any Affiliate of the General Partner may be employed or retained by the Partnership and may
otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent,
lender or otherwise) and may receive from the Partnership any compensation, price, or other payment therefor which the General
Partner determines to be fair and reasonable. 

(b)               
The Partnership may lend or contribute to its Subsidiaries or other Persons in which it has
an equity investment, and such Persons may borrow funds from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Subsidiary
or any other Person. 

(c)               
The Partnership may transfer assets to joint ventures, other partnerships, corporations or
other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as the General
Partner deems are consistent with this Agreement, applicable law and the REIT status of the General Partner. 

(d)               
Except as expressly permitted by this Agreement, neither the General Partner nor any of its
Affiliates shall sell, transfer or convey any Property to, or purchase any Property from, the Partnership, directly or indirectly,
except pursuant to transactions that are, in the General Partner’s sole discretion, on terms that are fair and reasonable
to the Partnership. 

6.8               
Title to Partnership Assets. 

Title to Partnership
assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion
thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or
more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate
of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions
of this Agreement; provided, however, that the General Partner shall use its best efforts to cause beneficial and record title
to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets shall be recorded as the
Property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets
is held.

ARTICLE
7

CHANGES
IN GENERAL PARTNER

7.1               
Transfer of the General Partner’s Partnership Interests.

(a)               
The General Partner shall not transfer all or any portion of its Partnership Interests or
withdraw as General Partner except as provided in, or in connection with a transaction contemplated by, Section 7.1(c). 

(b)               
Except as otherwise provided in Section 7.1(c) hereof, the General Partner shall not
engage in any merger, consolidation or other combination with or into another Person or the sale of all or substantially all of
its assets (other than in connection with a change in the General Partner’s state of incorporation or organizational form),
in each case which results in a change of control of the General Partner (a “Transaction”), unless the consent
of Limited Partners holding more than 50% of the Percentage Interests of the Limited Partners is obtained. 

    	19

    	 

    

(c)               
Notwithstanding Section 7.1(a) or (b), 

(i)               
a General Partner may transfer all or any portion of its General Partnership Interests to
(A) a wholly owned Subsidiary of such General Partner or (B) the owner of all of the ownership interests of such General Partner,
and following a transfer of all of its General Partnership Interests, may withdraw as General Partner; and 

(ii)  
      the General Partner may engage in a transaction not required by law or by the rules of any
national securities exchange on which the General Partner’s shares are listed to be submitted to the vote of the holders
of the General Partner’s shares. 

7.2               
Admission of a Substitute or Additional General Partner. 

A Person shall be
admitted as a substitute or additional General Partner of the Partnership only if the following terms and conditions are satisfied:

(a)               
the Person to be admitted as a substitute or additional General Partner shall have accepted
and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents
or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner, and a certificate
evidencing the admission of such Person as a General Partner shall have been filed for recordation and all other actions required
by Section 2.4 hereof in connection with such admission shall have been performed; 

(b)               
if the Person to be admitted as a substitute or additional General Partner is a corporation
or a partnership it shall have provided the Partnership with evidence satisfactory to counsel for the Partnership of such Person’s
authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and 

(c)               
counsel for the Partnership shall have rendered an opinion (relying on such opinions from
other counsel as may be necessary) that (i) the admission of the Person to be admitted as a substitute or additional General
Partner is in conformity with the Act and (ii) none of the actions taken in connection with the admission of such Person as
a substitute or additional General Partner will cause (x) the Partnership to be classified other than as a partnership for
federal tax purposes, or (y) the loss of any Limited Partner’s limited liability. 

7.3               
Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner. 

(a)               
Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant
to Section 7.4(a) hereof) or the death, withdrawal, removal or dissolution of a General Partner (except that, if a General
Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal
of a partner in, such partnership shall be deemed not to be a dissolution of such General Partner if the business of such General
Partner is continued by the remaining partner or partners), the Partnership shall be dissolved and terminated unless the Partnership
is continued pursuant to Section 7.3(b) hereof. The merger of the General Partner with or into any entity that is admitted
as a substitute or successor General Partner pursuant to Section 7.2 hereof shall not be deemed to be the withdrawal, dissolution
or removal of the General Partner. 

    	20

    	 

    

(b)                Following
the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.4(a) hereof) or
the death, withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is, on the date of such
occurrence, a partnership, the withdrawal of, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is
continued by the remaining partner or partners), the Limited Partners, within 90 days after such occurrence, may elect to
continue the business of the Partnership for the balance of the term specified in Section 2.3 hereof by selecting,
subject to Section 7.2 hereof and any other provisions of this Agreement, a substitute General Partner by consent of a
majority in interest of the Limited Partners. If the Limited Partners elect to continue the business of the Partnership and
admit a substitute General Partner, the relationship with the Partners and of any Person who has acquired an interest of
a Partner in the Partnership shall be governed by this Agreement.

7.4               
Removal of a General Partner. 

(a)               
Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General Partner,
such General Partner shall be deemed to be removed automatically; provided, however, that if a General Partner is on the date of
such occurrence a partnership, the withdrawal, death or dissolution of, Event of Bankruptcy as to, or removal of, a partner in,
such partnership shall be deemed not to be a dissolution of the General Partner if the business of such General Partner is continued
by the remaining partner or partners. The Limited Partners may not remove the General Partner, with or without cause. 

(b)               
If a General Partner has been removed pursuant to this Section 7.4 and the Partnership
is continued pursuant to Section 7.3 hereof, such General Partner shall promptly transfer and assign its Partnership Interests
in the Partnership to the substitute General Partner approved by a majority in interest of the Limited Partners in accordance with
Section 7.3(b) hereof and otherwise be admitted to the Partnership in accordance with Section 7.2 hereof. At the time
of assignment, the removed General Partner shall be entitled to receive from the substitute General Partner the fair market value
of the Partnership Interests of such removed General Partner as reduced by any damages caused to the Partnership by such General
Partner. Such fair market value shall be determined by an appraiser mutually agreed upon by the General Partner and a majority
in interest of the Limited Partners within ten (10) days following the removal of the General Partner. In the event that the
parties are unable to agree upon an appraiser, the removed General Partner and a majority in interest of the Limited Partners each
shall select an appraiser. Each such appraiser shall complete an appraisal of the fair market value of the removed General Partner’s
Partnership Interest within thirty (30) days of the General Partner’s removal, and the fair market value of the removed General
Partner’s Partnership Interest shall be the average of the two appraisals; provided, however, that if the higher appraisal
exceeds the lower appraisal by more than 20% of the amount of the lower appraisal, the two appraisers, no later than forty (40)
days after the removal of the General Partner, shall select a third appraiser who shall complete an appraisal of the fair market
value of the removed General Partner’s Partnership Interest no later than sixty (60) days after the removal of the General
Partner. In such case, the fair market value of the removed General Partner’s Partnership Interest shall be the average of
the two appraisals closest in value. 

(c)               
The Partnership Interests of a removed General Partner, during the time after default until
transfer under Section 7.4(b), shall be converted to that of a Limited Partner; provided, however, such removed General Partner
shall not have any rights to participate in the management and affairs of the Partnership, and shall not be entitled to any portion
of the income, expense, profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to the
Limited Partners. Instead, such removed General Partner shall receive and be entitled only to retain distributions or allocations
of such items that it would have been entitled to receive in its capacity as General Partner, until the transfer is effective pursuant
to Section 7.4(b). 

    	21

    	 

    

(d)               
All Partners shall have given and hereby do give such consents, shall take such actions and
shall execute such documents as shall be legally necessary, desirable and sufficient to effect all the foregoing provisions of
this Section. 

ARTICLE
8

RIGHTS
AND OBLIGATIONS OF THE LIMITED PARTNERS

8.1               
Management of the Partnership.

The Limited Partners
shall not participate in the management or control of Partnership business nor shall they transact any business for the Partnership,
nor shall they have the power to sign for or bind the Partnership, such powers being vested solely and exclusively in the General
Partner.

8.2               
Power of Attorney. 

Each Limited Partner
hereby irrevocably appoints the General Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and
in its name, place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be deemed necessary or desirable by the General Partner
to carry out fully the provisions of this Agreement and the Act in accordance with their terms, which power of attorney is coupled
with an interest and shall survive the death, dissolution or legal incapacity of the Limited Partner, or the transfer by the Limited
Partner of any part or all of its Partnership Interests, unless otherwise stated in this Agreement.

8.3               
Limitation on Liability of Limited Partners.

No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall be liable to the
Partnership only to make payments of its Capital Contribution, if any, as and when due hereunder. After its Capital Contribution
is fully paid, no Limited Partner shall, except as otherwise required by the Act, be required to make any further Capital Contributions
or other payments or lend any funds to the Partnership.

8.4               
Redemption of Special Limited Partnership Interests.

Upon the earliest to occur of (a) the termination
or nonrenewal of the Advisory Agreement for “cause” (as defined in the Advisory Agreement), (b) a Termination Event,
or (c) the Listing, the Special Limited Partnership Interests will be redeemed.

 

(a)               
If the Advisory Agreement is terminated or not renewed by the General Partner for “cause”
(as defined in the Advisory Agreement), all of the Special Limited Partnership Interests shall be redeemed by the Partnership for
$1 within thirty (30) days after the termination or nonrenewal of the Advisory Agreement.

    	22

    	 

    

(b)                Upon
the occurrence of a Termination Event or the Listing, the Special Limited Partnership Interests shall be redeemed for an
aggregate amount equal to the amount that would have been distributed to the Special Limited Partner under
Section 5.2(b) if all assets of the Partnership had been sold for their fair market value, all liabilities of the
Partnership had been satisfied in full according to their terms, and remaining proceeds were distributed to the Partners
pursuant to Section 5.2. Such redemption shall occur no later than thirty (30) days after the date of a Termination Event and
no later than 240 days after the Listing. In determining the fair market value of the assets of the
Partnership, (i) in connection with a Termination Event, the General Partner shall obtain an appraisal of the assets of
the Partnership (excluding any assets which may be readily marked to market) and (ii) in connection with the Listing,
the General Partner shall make such determination (a) taking into account, in the event of a Listing on a national
securities exchange only, the market value of the General Partner’s listed shares based upon the average closing price,
or average of bid and asked prices, as the case may be, during a period of thirty (30) days during which such shares are
traded beginning one hundred and twenty (120) days after the Listing or (b) taking into account the value of the General
Partner’s shares based upon the initial public offering price in the event of an underwritten public offering. Payment
to the Special Limited Partner upon a Termination Event or a Listing shall be paid, at the Special Limited Partner’s
discretion, in the form of (a) shares of the General Partner’s common stock or (b) a non-interest bearing
promissory note. In the event the Advisor elects to receive shares of the General Partner’s common stock and the
General Partner’s shares are not listed on a national securities exchange, at the option of the Advisor, the Advisor
and the General Partner shall enter into an agreement whereby the General Partner shall register such shares of common stock
with the Commission. However, any payments under a promissory note may not be made in connection with a Termination Event
until either (a) the closing of asset sales that result in aggregate, cumulative distributions to the Partners (other
than the Special Limited Partner) of the Partnership from operating income, sales proceeds and other sources in an amount
equal to their Capital Contributions to the Partnership plus a 6.0% cumulative non-compounded annual pre-tax return thereon,
or (b) a Listing (each a “Subsequent Liquidity Event”). In addition, the principal amount of the
promissory note issued in connection with a Termination Event will be subject to reduction as of the date of the Subsequent
Liquidity Event by an amount that will ensure that, in connection with the Subsequent Liquidity Event, the Special Limited
Partner does not receive in excess of 15% of the distributions that are made or are deemed to be made by the
Partnership after the Partners (other than the Special Limited Partner) have received or are deemed to have received
aggregate, cumulative distributions equal to their Capital Contributions to the Partnership plus a 6.0% cumulative
non-compounded annual pre-tax return thereon.

 ARTICLE
9

TRANSFERS
OF LIMITED PARTNERSHIP INTERESTS AND SPECIAL LIMITED PARTNERSHIP INTERESTS

9.1               
Restrictions on Transfer of Limited Partnership Interests. 

(a)               
No Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all
or any portion of his Limited Partnership Interests, or any of such Limited Partner’s economic rights as a Limited Partner,
whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a “Transfer”) without
the consent of the General Partner, which consent may be granted or withheld in its sole and absolute discretion. Any such purported
transfer undertaken without such consent shall be considered to be null and void ab initio and shall not be given effect. The General
Partner may require, as a condition of any Transfer to which it consents, that the transferor assume all costs incurred by the
Partnership in connection therewith. 

(b)               
No Limited Partner may withdraw from the Partnership other than as a result of a permitted
Transfer of all of its Limited Partnership Interest pursuant to this Article 9. Upon the permitted Transfer or redemption of all
of a Limited Partnership Interests, such Limited Partner shall cease to be a Limited Partner. 

    	23

    	 

    

(c)                No
Limited Partner may effect a Transfer of its Limited Partnership Interests, in whole or in part, if, in the opinion of legal
counsel for the Partnership, such proposed Transfer would require the registration of the Limited Partnership
Interests under the Securities Act or would otherwise violate any applicable federal or state securities or blue sky law
(including investment suitability standards).

(d)               
No Transfer by a Limited Partner of its Limited Partnership Interests, in whole or in part,
may be made to any Person if (i) in the opinion of the General Partner based on the advice of legal counsel for the Partnership,
if appropriate, the transfer would result in the Partnership’s being treated as an association taxable as a corporation (other
than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code); (ii) in the opinion of the General
Partner based on the advice of legal counsel for the Partnership, if appropriate, it would adversely affect the ability of the
General Partner to continue to qualify as a REIT or subject the General Partner to any additional taxes under Section 857
or Section 4981 of the Code; (iii) such transfer is effectuated through an “established securities market”
or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code;
(iv) such Transfer would cause the General Partner to own 10% or more of the ownership interests of any tenant of a Property held
by the partnership within the meaning of Section 856(d)(2)(B) of the Code; or (v) such Transfer would result in the General Partner
being “closely held” within the meaning of Section 856(h) of the Code. 

(e)               
Any Transfer in contravention of any of the provisions of this Article 9 shall be void and
ineffectual and shall not be binding upon, or recognized by, the Partnership. 

(f)               
Prior to the consummation of any Transfer under this Article 9, the transferor and/or the
transferee shall deliver to the General Partner such opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer. 

9.2               
Admission of Substitute Limited Partner. 

(a)               
Subject to the other provisions of this Article 9, an assignee of the Limited Partnership
Interest of a Limited Partner (which shall be understood to include any purchaser, transferee, donee, or other recipient of any
disposition of such Limited Partnership Interests) shall be deemed admitted as a Limited Partner of the Partnership only with the
consent of the General Partner and upon the satisfactory completion of the following: 

(i)    
      The assignee shall have accepted and agreed to be bound by the terms and provisions of this
Agreement by executing a counterpart or an amendment thereof, including a revised Exhibit A, and such other documents or
instruments as the General Partner may require in order to effect the admission of such Person as a Limited Partner. 

(ii)  
      To the extent required, an amended Certificate evidencing the admission of such Person as
a Limited Partner shall have been signed, acknowledged and filed for record in accordance with the Act. 

(iii)
      The assignee shall have delivered a letter containing the representation set forth in Section 9.1(a)
hereof and the agreement set forth in Section 9.1(b) hereof. 

(iv)
      If the assignee is a corporation, partnership or trust, the assignee shall have provided the
General Partner with evidence satisfactory to counsel for the Partnership of the assignee’s authority to become a Limited
Partner under the terms and provisions of this Agreement.

    	24

    	 

    

(v)  
      The assignee shall have executed a power of attorney containing the terms and provisions set
forth in Section 8.2 hereof. 

(vi)
      The assignee shall have paid all legal fees and other expenses of the Partnership and the
General Partner and filing and publication costs in connection with its substitution as a Limited Partner. 

(vii)          
The assignee has obtained the prior written consent of the General Partner to its admission
as a Substitute Limited Partner, which consent may be given or denied in the exercise of the General Partner’s sole and absolute
discretion. 

9.3               
Rights of Assignees of Partnership Interests. 

(a)               
Subject to the provisions of Sections 9.1 and 9.2 hereof, except as required by operation
of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by any Limited Partner of
its Partnership Interests until the Partnership has received notice thereof. 

(b)               
Any Person who is the assignee of all or any portion of a Limited Partner’s Limited
Partnership Interests, but does not become a Substitute Limited Partner and desires to make a further assignment of such Limited
Partnership Interest, shall be subject to all the provisions of this Article 9 to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of its Limited Partnership Interests. 

9.4               
Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner. 

The occurrence of
an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership,
and the business of the Partnership shall continue if an order for relief in a bankruptcy proceeding is entered against a Limited
Partner, the trustee or receiver of his estate or, if he dies, his executor, administrator or trustee, or, if he is finally adjudicated
incompetent, his committee, guardian or conservator, shall have the rights of such Limited Partner for the purpose of settling
or managing his estate property and such power as the bankrupt, deceased or incompetent Limited Partner possessed to assign all
or any part of his Partnership Interests and to join with the assignee in satisfying conditions precedent to the admission of the
assignee as a Substitute Limited Partner.

    	25

    	 

    

 ARTICLE
10

BOOKS
AND RECORDS; ACCOUNTING; TAX MATTERS

10.1            
Books and Records. 

At all times during
the continuance of the Partnership, the Partners shall keep or cause to be kept at the Partnership’s specified office true
and complete books of account in accordance with generally accepted accounting principles, including: (a) a current list of
the full name and last known business address of each Partner, (b) a copy of the Certificate of Limited Partnership and all
Certificates of amendment thereto, (c) copies of the Partnership’s federal, state and local income tax returns and reports,
(d) copies of this Agreement and amendments thereto and any financial statements of the Partnership for the three most recent
years and (e) all documents and information required under the Act. Any Partner or its duly authorized representative, upon
paying the costs of collection, duplication and mailing, shall be entitled to inspect or copy such records during ordinary business
hours.

10.2           
Custody of Partnership Funds; Bank Accounts. 

(a)               
All funds of the Partnership not otherwise invested shall be deposited in one or more accounts
maintained in such banking or brokerage institutions as the General Partner shall determine, and withdrawals shall be made only
on such signature or signatures as the General Partner may, from time to time, determine. 

(b)               
All deposits and other funds not needed in the operation of the business of the Partnership
may be invested by the General Partner in investment grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers’ acceptances and municipal notes and bonds. The funds
of the Partnership shall not be commingled with the funds of any other Person except for such commingling as may necessarily result
from an investment in those investment companies permitted by this Section 10.2(b). 

10.3         
Fiscal and Taxable Year. 

The fiscal and taxable
year of the Partnership shall be the calendar year.

ARTICLE
11

AMENDMENT
OF AGREEMENT

The General Partner’s
consent shall be required for any amendment to this Agreement. The General Partner, without the consent of the Limited Partners,
may amend this Agreement in any respect; provided, however, that the following amendments shall require the consent of Limited
Partners holding more than 50% of the Percentage Interests of the Limited Partners:

(a)               
any amendment that would adversely affect the rights of the Limited Partners to receive the
distributions payable to them hereunder, other than with respect to the issuance of additional Partnership Interests pursuant to
Section 4.2 hereof; 

(b)               
any amendment that would alter the Partnership’s allocations of profit and loss to the
Limited Partners, other than with respect to the issuance of additional Partnership Interests pursuant to Section 4.2 hereof;
or 

(c)               
any amendment that would impose on the Limited Partners any obligation to make additional
Capital Contributions to the Partnership. 

    	26

    	 

    

ARTICLE
12

GENERAL
PROVISIONS

12.1          
Notices. 

All
communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered
personally or upon deposit in the United States mail, registered, postage prepaid return receipt requested, to the Partners at
the addresses set forth in Exhibit A attached hereto; provided, however, that any Partner may specify a different address
by notifying the General Partner in writing of such different address. Notices to the Partnership shall be delivered or mailed
to its specified office.

12.2          Survival of Rights. 

Subject to the provisions
hereof limiting transfers, this Agreement shall be binding upon and inure to the benefit of the Partners and the Partnership and
their respective legal representatives, successors, transferees and assigns.

12.3         
Additional Documents. 

Each Partner agrees
to perform all further acts and execute, swear to, acknowledge and deliver all further documents which may be reasonable, necessary,
appropriate or desirable to carry out the provisions of this Agreement or the Act.

12.4          
Severability. 

If any provision
of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision shall be deemed
to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability
shall not affect the remainder hereof.

12.5          
Entire Agreement. 

This Agreement and
exhibits attached hereto constitute the entire Agreement of the Partners and supersede all prior written agreements and prior and
contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.

12.6          
Pronouns and Plurals. 

When the context
in which words are used in the Agreement indicates that such is the intent, words in the singular number shall include the plural
and the masculine gender shall include the neuter or female gender as the context may require.

12.7           Headings. 

The Article headings
or sections in this Agreement are for convenience only and shall not be used in construing the scope of this Agreement or any particular
Article.

    	27

    	 

    

12.8           Counterparts.

This Agreement may
be executed in several counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute
one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

12.9           Governing Law.

This Agreement shall
be governed by and construed in accordance with the laws of the State of Delaware; provided, however, that any cause of action
for violation of federal or state securities laws shall not be governed by this Section 12.9.

    	28

    	 

    

IN WITNESS WHEREOF,
the parties hereto have hereunder affixed their signatures to this Agreement, all as of the 15th day of August, 2014.

	 	GENERAL PARTNER:
	 	 	 
	 	Moody National REIT II, Inc.
	 	 	 
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett C. Moody
	 	 	Chief Executive Officer
	 	 	 
	 	LIMITED PARTNER:
	 	 	 
	 	Moody OP Holdings II, LLC
	 	 	 
	 	By:	Moody National REIT II, Inc., Sole Member 
	 	 	 
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett C. Moody
	 	 	Member
	 	 	 
	 	SPECIAL LIMITED PARTNER:
	 	 	 
	 	Moody National LPOP II, LLC
	 	 	 
	 	By:	Moody National Advisor II, LLC, Sole Member
	 	 	 
	 	By:	   Moody National REIT Sponsor, LLC, Sole Member
	 	 	 
	 	 	      By:   Moody National REIT Sponsor SM, LLC
	 	 	 
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett C. Moody
	 	 	Member

 

    	

    	 

    

EXHIBIT
A

CONTRIBUTIONS & INTERESTS

 

	Partner	 	Address	 	Cash
 Contribution	 	Contributions	 	General Partnership

                                                                                Interest (%)
	 	Limited Partnership Interest (%)	 	Special Limited Partnership Interest (%)
	 
GENERAL PARTNER: 
	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 
	Moody National REIT II, Inc.	 	6363 Woodway Drive 
Suite 110 
Houston, Texas 77057	 			 	 	 		 	 	 	100	%	 	 	 	 
	LIMITED PARTNERS: 
	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 
	Moody OP Holdings II, LLC	 	6363 Woodway Drive 
Suite 110 
Houston, Texas 77057	 	$	1,000	 	 	 			 	 			 	100%	 	 
	Moody National LPOP II, LLC 

	 	6363 Woodway Drive 
Suite 110 
Houston, Texas 77057	 	$	1,000	 	 	 		 	 	 	 	 	 	 	 	100%
	Totals	 	 	 	$	2,000	 	 	 		 	 	 	 	 	 	 	 	 

 

A-1Moody National REIT II, Inc. S-11

Exhibit 10.3

 

FORM OF 

ESCROW AGREEMENT

 

THIS ESCROW
AGREEMENT (this “Escrow Agreement”), dated as of [ _ ], 2014, 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. 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 the end 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 the end of the next business day after receipt of any Instruments of Payment and Subscription Materials, and
then the Final Review Office will, by the end 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 Transfer Agent, the Company, the Dealer Manager or a
Dealer, the Transfer Agent, 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. The Transfer Agent will promptly
deliver all monies received in good order from subscribers (or from the Company, the Dealer Manager or Dealers transmitting
monies and subscriptions from subscribers) for the payment of Shares to the Escrow Agent for deposit in the Escrow Account.
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

Facsimile: (713) 977-7505

 

    	7

    	 

    

 

If to Dealer Manager:

Moody Securities,
LLC

6363 Woodway Drive

Suite 110

Houston, Texas 77057

Attn:Compliance Officer

Facsimile: (949) 786-7505

 

If to Escrow Agent:

UMB Bank,
N.A.

1010 Grand Blvd, 4th Floor

Kansas City, Missouri 64106

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

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.

  

 

Brett C. Moody

Chief Executive Officer and President

 

MOODY SECURITIES, LLC, as Dealer Manager

  

 

Name:

Title:

 

UMB BANK, N.A., as Escrow Agent

 

 

Lara Stevens 

Vice President

 

    	10

    	 

    

  

EXHIBIT A

 

LIST OF SUBSCRIBERS

 

Pursuant to the Escrow Agreement dated [__],
2014 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:

 

MOODY NATIONAL REIT II, INC.

 

By: 

 

 

Its:

 

    	 

    	 

    

  

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	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

    	 

    	 

    

  

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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