Document:

Exhibit
10.5

 

POSITIVEID CORP

  

 

CONVERTIBLE DEBENTURE 

 

	$275,000.00	June 30, 2014

 

THIS DEBENTURE HAS NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AS TO THIS DEBENTURE OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

FOR VALUE RECEIVED,
the undersigned, PositiveID Corp., a Delaware corporation (the "Company"), hereby promises to pay to Macallan Partners,
LLC (the "Lender"), or its registered assigns, the principal sum of TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($275,000.00)
(or so much thereof as shall have been advanced by the Lender to the Company hereunder subject to an Original Issue Discount of
10%, together with interest (computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months)
on the unpaid principal balance of this Debenture from the date of this Debenture until paid, at the rate of ten percent (10%)
per annum.

 

		1.	PAYMENT.

 

(a)Payments of the
principal of and interest on this Debenture shall be made in lawful money of the United States of America at the current address
of the registered holder of this Debenture as recorded in the Company’s books.

 

(b)Interest accruing
on the outstanding principal balance of this Debenture during the term of this Debenture shall be paid at the Final Maturity, which
shall be May 25, 2015. Upon the occurrence of any Event of Default (as such term is defined hereinafter) and acceleration of the
indebtedness hereunder, or after the Expiration Date (including without limitation any time from and after the entry of a judgment
for sums due), any unpaid principal of this Indenture shall bear interest at the rate of eighteen percent (18%) per annum until
paid. There shall be a 10 day grace period for payments to be made hereunder (but interest shall be computed to the actual date
of payment).

 

(c)The outstanding principal
balance of this Debenture, together with all accrued but unpaid interest thereon, may be prepaid, at the Company's option at any
time prior to the Expiration Date, provided that the Company shall give written notice of any such prepayment to the registered
holder of this Debenture no later than fifteen (15) days prior to the date filed for prepayment (the “Prepayment Date”).
Upon the Prepayment Date the Company shall pay a prepayment penalty of 125% of the outstanding principal balance plus all accrued
and unpaid interest thereon. (the “Prepayment Penalty”).

 

    	 

    	 

    

  

		2.	REGISTRATION AND TRANSFER.

 

(a)The Company shall
maintain at its principal executive offices a register for this Debenture, in which the Company shall record the name and address
of the person in whose name this Debenture has been issued and the name and address of each transferee and prior owner thereof.
The Company may deem and treat the person in whose name this Debenture is so registered as the holder and owner thereof for all
purposes and all notices hereunder to the registered holder may be to the address indicated on such register.

 

(b)This Debenture
may be transferred only by the surrendering thereof for registration of transfer duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder. The Company may condition its registration of such transfer upon (a) the opinion
of counsel reasonably acceptable to the Company that the transfer of this Debenture does not violate the Act or any state securities
or blue sky laws, and (b) the payment to it of a sum sufficient to cover any stamp tax or other governmental charge imposed in
respect of such transfer.

 

		3.	COMMON STOCK CONVERSION RIGHTS AND SHARE RESERVATION
RIGHTS.

 

(a)               
The Lender has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding and
unpaid Principal Sum and accrued interest (and any other fees) under any convertible balance due by the Company, into fully paid
and non-assessable shares of common stock of the Company as per this conversion formula: Number of shares receivable upon conversion
equals the dollar conversion amount divided by the Conversion Price. The Conversion price is equal to 60% of the lowest VWAP
price during the 15 days prior to the election to convert. Notice of Lender’s conversion may be delivered to Borrower
by method of Lender’s choice (including but not limited to email, facsimile, mail, overnight courier, or personal delivery),
and all conversions shall be cashless and not require further payment from the Lender. If no objection is delivered from Borrower
to Lender regarding calculations in the conversion notice within 24 hours of delivery of the conversion notice, the Company shall
have been thereafter deemed to have irrevocably confirmed and irrevocably ratified such conversion notice and waived any objection
thereto. The Company shall deliver the shares from any conversion to Lender (in any name directed by Lender) within 2 (two) business
days of conversion notice delivery.

 

(a)   
The Borrower shall irrevocably place 8,000,000 shares of the Company’s common stock on reserve with the Company’s
Transfer Agent to ensure that there are sufficient shares available for the conversion of this Debenture. So long as any of the
Notes are outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Notes, a number of shares of Common Stock equal to 4x the
value of the outstanding principal and interest of the note as shall from time to time be necessary to effect the conversion of
all of the Notes then outstanding (without regard to any limitations on conversions) (the “Required Reserve Amount”).

 

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(b)              
Insufficient Authorized Shares. If, notwithstanding Section 3(b), and not in limitation thereof, at any time while any of
the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal
to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take
all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than twenty (20)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized shares of Common Stock.  In connection with such meeting, the Company shall provide
each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’ approval of
such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they
approve such proposal. 

 

(c)               
In the event that the outstanding shares of the common stock subject to the conversion are changed into or exchanged for
a different number or kind of shares of the Company or other securities of the Company by reason of merger, consolidation, re-capitalization,
re-classification, stock split, stock dividend or combination of shares, the Company shall make an appropriate and equitable adjustment
in the number and kind of shares as to which the conversion shall be applicable, to the end that after such event the Lender’s
proportionate interest is preserved after the occurrence of such event.

 

(d)       
If Borrower fails to deliver shares in accordance with the timeframe stated this Section; the Lender, at any time prior to selling
all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable to the unsold shares
and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Company
(under Lender’s and Borrower’s expectations that any returned conversion amounts will tack back to the original date
of this Debenture). In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive
of the day of conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (inclusive of
the day of the conversion) until share delivery is made; and such penalty will be added to the Principal Sum of this Debenture
(under Lender’s and Borrower’s expectations that any penalty amounts will tack back to the original date of this Debenture).

 

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		4.	ADJUSTMENT FOR CAPITAL CHANGES; MERGER OR CONSOLIDATION;
NON-DILUTION PROVISIONS.

  

(a)In the event of
a stock dividend, stock split, recapitalization, combination, subdivision or other similar corporate change with respect to the
capital stock of the Company, the Board of Directors of the Company shall make an appropriate and proportional adjustment in the
aggregate number of shares of Common Stock into which this Debenture is convertible and/or the Conversion Price per share of Common
Stock.

 

(b)If any merger
or consolidation of the Company or the sale of all or substantially all of its assets shall occur, then, as a condition to such
merger, consolidation or sale, lawful and adequate provision shall be made whereby the registered holder of this Debenture shall
thereafter have the right to receive upon the basis and upon the terms and conditions specified herein (including without limitation
payment of the applicable Conversion Price) and in lieu of the shares of Common Stock of the Company immediately theretofore receivable
upon conversion of this Debenture, such shares of stock, securities or assets as may be issued or payable with respect to or in
exchange for such shares of Common Stock immediately theretofore receivable by such holder had such merger or consolidation not
taken place. The Company shall not effect any such consolidation or merger, unless prior to or simultaneously with the consummation
thereof, the successor (if other than the Company) resulting from such consolidation or merger shall assume, by written instrument
executed and delivered to the holder, the obligation to deliver to the holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the holder may be entitled to receive.

 

(c)The Conversion
Price shall be subject to automatic adjustment from time to time as follows:

 

(1)If the
Company shall at any time or from time to time hereafter issue (an “Issuance”) any Common Stock, options or other securities
of the Company convertible into or exchangeable for Common Stock without consideration or for a consideration per share less than
the Conversion Price then in effect for this Debenture immediately prior to such issuance, the Conversion Price shall forthwith
be adjusted to a price equal to:

 

(i)an amount equal
to the sum of:

 

(A)(i) The total number of
shares of Common Stock outstanding immediately prior to such Issuance, plus the maximum amount of all additional Common Stock issuable
upon conversion of this Debenture, multiplied by (ii) the Conversion Price in effect immediately prior to such Issuance, and

 

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(B) the aggregate consideration
received or receivable by the Company on account of the Issuance, divided by

 

(ii)the total number of shares of Common Stock outstanding
immediately after the Issuance (including for such purpose the maximum amount of additional Common Stock issuable upon conversion
of this Debenture plus the maximum amount of Common Stock issued or issuable pursuant to the Issuance).

 

For purposes of the
above calculations, the number of shares of Common Stock outstanding immediately prior to the Issuance shall not include any additional
Common Stock issuable solely as a result of the adjustment of the Conversion Price resulting from the application of the foregoing
provisions.

 

(2)For the purposes
of any adjustment of the Conversion Price as set forth above:

 

(i)In the case of the issuance
of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor.

 

(ii)In the case of the issuance
of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be
the fair market value thereof, as determined in good faith by the Board of Directors.

 

(d)In the event of the occurrence
of any event or transaction not specifically provided for herein that would equitably require an adjustment to the Conversion Price
to remain consistent with the anti-dilution intent and purpose of this Article, then the Board of Directors of the Company shall
make such adjustment to the Conversion Price as they shall deem reasonable and consistent with the intentions and purposes of this
Article.

 

(e) Upon any adjustment
of the Conversion Price, the Company shall give written notice to the registered holder of this Debenture, which notice shall state
the Conversion Price resulting from such adjustment, setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.

 

(f) The Company will
at all times reserve and keep available out of its authorized Common Stock, for the purpose of issuance upon conversion of this
Debenture as herein provided, the maximum number of shares of Common Stock as shall then be issuable upon the exercise of the conversion
privileges set forth herein. The Company covenants that all shares which shall be so issuable shall, upon the conversion of this
Debenture as herein provided, be duly and validly issued and fully paid and nonassessable by the Company.

 

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		5.	EVENTS OF DEFAULT.

 

(a)If one or more
of the following events of default shall occur (an “Event of Default”):

 

(i)
the Company shall fail to pay any principal under this Debenture when due and payable (or payable by conversion) thereunder; or

 

(ii) the
Company shall fail to pay any interest or any other amount under this Debenture when due and payable (or payable by conversion)
thereunder; or

 

(iii) a
receiver, trustee or other similar official shall be appointed over the Company or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or

 

(iv) the
Company shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any; or

 

(v) the
Company shall make a general assignment for the benefit of creditors; or

 

(vi) the
Company shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or

 

(vii) an
involuntary insolvency proceeding shall be commenced or filed against the Company; or

 

(viii)
the Company shall lose its status as “DTC Eligible” or the Company’s shareholders shall lose the ability to deposit
(either electronically or by physical certificates, or otherwise) shares into the DTC System; or the shares of the Company no longer
allow for DWAC transfer for the shares; or

 

(ix) the
Company shall become delinquent in its filing requirements as a fully-reporting issuer registered with the SEC,

 

(x) the
company shall fail to maintain sufficient common shares authorized and available to satisfy the lender’s conversions for
as long as this debenture remains unpaid in whole or in part.

 

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then during the continuance of
any such Event of Default, the registered holder of this Debenture may declare by written notice all the then unpaid principal
amount of this Debenture to be due and payable as if a Prepayment Penalty was to be enforced, upon which the same shall forthwith
become due and payable, together with the interest accrued thereon, without presentation, demand, protest or notice of dishonor,
all of which the Company hereby waives. In the event of any default, the outstanding principal amount of this Debenture, plus accrued
but unpaid interest, liquidated damages, fees and other amounts owing in respect thereof shall be accelerated and shall become,
at the Lender’s election, immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default Amount
means the greater of (i) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest, liquidated damages,
fees and other amounts hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid
in full, whichever has a lower Conversion Price, multiplied by the VWAP (volume weighted average price) on the date the Mandatory
Default Amount is either demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal amount
of this Debenture, plus 100% of the accrued and unpaid interest, liquidated damages, fees and other amounts hereon. Commencing
five (5) days after the occurrence of any event of default that results in the acceleration of this Debenture, a default interest
rate shall be applicable to all borrowings. The default interest rate shall accrue at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Lender
need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Lender may
immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder
and the Lender shall have all rights as a holder of the note until such time, if any, as the Lender receives full payment pursuant
to this Section 10. No such rescission or annulment shall affect any subsequent event of default or impair any right consequent
thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.

  

(b)Should the indebtedness
represented by this Debenture or any part thereof be collected in any proceeding or placed in the hands of attorneys for collection,
the Company agrees to pay, in addition to the principal and interest due and payable hereon, all costs of collecting this Debenture,
including reasonable attorneys' fees and expenses.

  

		6.	MISCELLANEOUS.

 

(a)If the date of
any payment required by this Debenture be Saturday, Sunday or a bank holiday, such payment shall be payable on the first business
day following such date.

 

(b)The Company hereby
expressly waives presentment, demand, protest or any other notice whatsoever.

 

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(c)Borrower shall have
the right to enter into secured or unsecured borrowings from commercial banks and comparable commercial credit institutions for
the purpose of financing inventory and fixed assets, upon approval of the Board of Directors of the Company (“Permitted Borrowings”).
Permitted Borrowings shall not require the prior approval of the Lender. All other borrowings by the Company shall be subject to
the prior written approval of the Lender.

 

(d) This Debenture
shall be binding upon and shall inure to the benefit of the parties hereto, their successors, heirs and assigns.

 

(e)The invalidity
or partial invalidity of any provision of this Debenture shall affect only such provision or part thereof and the balance of this
Debenture shall remain in effect.

 

(f)It is understood
and agreed that no failure or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power
or privilege hereunder.

 

		7.	CHOICE OF LAW & VENUE

 

(a) All
questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law
thereof. Any claim or controversy arising out of or relating to the interpretation, application or enforcement of any provision
of this Agreement, shall be submitted for resolution to a court of competent jurisdiction in New York. The parties hereby consent
to personal jurisdiction and venue in New York.

 

 

 

 

 

IN WITNESS WHEREOF,
the Company has caused this Debenture to be executed, sealed and delivered on the date first above written.

 

 

 

	 	PositiveID Corp.
	 	 	 
	 	 	 
	 	By:	/s/ William Caragol

 

    	8Moody National REIT II, Inc. S-11 

Exhibit 10.1

 

FORM OF

 

ADVISORY AGREEMENT

 

among

 

MOODY
NATIONAL REIT II, Inc.,

 

MOODY
NATIONAL OPERATING PARTNERSHIP II, LP,

 

AND

 

Moody
national Advisor II, LLC

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

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

 

    	 

    	 

    

 

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

 

    	 

    	 

    

 

ADVISORY AGREEMENT

 

THIS ADVISORY AGREEMENT,
dated as of the [__] day of [__], 2014 (this “Agreement”), is entered into by and among Moody National REIT
II, Inc., a Maryland corporation (the “Company”), Moody National Operating Partnership II, LP, a Delaware limited
partnership (the “Operating Partnership”) and Moody National Advisor II, LLC, a Delaware limited liability
company (the “Advisor,” and collectively with the Company and the Operating Partnership, the “Parties”).1
Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

 

W I T N E S S E T H

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

1 Please advise
as to whether Moody National Realty Company should be added as a party to this Advisory Agreement. Note, to account for Moody
REIT I, we added a new section in the Conflicts of Interest section (Form S-11) – “Allocation of Investment Opportunities.”

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Director.
A member of the Board.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	4

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	5

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

Stockholders.
The registered holders of the Shares.

 

Termination Date.
The date of termination of this Agreement.

 

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

 

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

 

    	6

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	7

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	8

    	 

    

 

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

 

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

 

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

 

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

 

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

 

4.         AUTHORITY OF ADVISOR.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	9

    	 

    

 

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

 

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

 

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

 

9.         FEES.

 

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

 

    	10

    	 

    

 

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

 

(c)         Disposition
Fees. If the Advisor provides a substantial amount of services, as determined by the Independent Directors in connection
with a Sale, the Company shall pay a Disposition Fee to the Advisor equal to up to one-half of the brokerage commission paid but
in no event an amount greater than 3.0% of the Contract Sales Price. Any Disposition Fee payable under this Section 9(c) may be
paid in addition to real estate commissions paid to non-Affiliates, provided that the total real estate commissions (including
such Disposition Fee) paid to all Persons by the Company for each Investment shall not exceed 6.0% of the Contract Sales Price.

 

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

 

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

 

(f)         Organizational
and Offering Expenses. The cumulative Organizational and Offering Expenses paid by the Company will not exceed 15.0% of
Gross Proceeds from the sale of Shares in the Primary Offering.

 

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

 

    	11

    	 

    

 

(h)         Exclusion of
Certain Transactions. In the event the Company or the Operating Partnership shall propose to enter into any transaction
in which a Director or an officer of the Company, and the Advisor, or any Affiliate of the Company, the Operating Partnership or
the Advisor has a direct or indirect interest, then such transaction shall be approved by a majority of the Board and also by a
majority of the Independent Directors.

 

10.         EXPENSES.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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12.         REIMBURSEMENT
TO THE ADVISOR. Commencing with the end of the fourth fiscal quarter following the fiscal quarter in which the Company completes
its first Investment, the Company shall not reimburse the Advisor at the end of any fiscal quarter in which Total Operating Expenses
for the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”)
the greater of 2.0% of Average Invested Assets or 25.0% of Net Income (the “2%/25% Guidelines”) for such year.
Any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company or, at the option of the Company,
subtracted from the Total Operating Expenses reimbursed during the subsequent fiscal quarter. If there is an Excess Amount in any
Expense Year and the Independent Directors determine that such excess was justified based on unusual and nonrecurring factors which
they deem sufficient, then the Excess Amount may be carried over and included in Total Operating Expenses in subsequent Expense
Years and reimbursed to the Advisor in one or more of such years, provided that there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the Independent Directors considered in determining that such
excess expenses were justified. Such determination shall be reflected in the minutes of the meetings of the Board. The Company
will not reimburse the Advisor or its Affiliates for services for which the Advisor or its Affiliates are entitled to receive Acquisition
Fees, Financing Coordination Fees, Asset Management Fees, hotel management fees or real estate commissions. All figures used
in the foregoing computation shall be determined in accordance with generally accepted accounting principles applied on a consistent
basis.

 

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

 

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

 

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

 

    	14

    	 

    

 

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

 

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

 

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

 

18.         PAYMENTS TO AND
DUTIES OF ADVISOR UPON TERMINATION.

 

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

 

(b)         The Advisor shall
promptly upon termination:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	16

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

         

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

         

         
	
        Alston & Bird
LLP 

        2828 North Harwood
Street, Suite 1800 

        Dallas, Texas
75201 

        Attention: Gustav F. Bahn

         

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

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

 

    	17

    	 

    

 

	To the Advisor:	
        Moody National Advisor II, LLC 

        6363 Woodway, Suite 110 

        Houston, Texas 77057 

        Facsimile: (713) 977-7505 

        Attention: Brett C. Moody 

  

Any Party may at any time
give notice in writing to the other Parties of a change in its address for the purposes of this Section 22.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signatures on following page.]

 

    	18

    	 

    

 

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

 

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

its General Partner

 

	 	By:	 
	 	 	Brett C. Moody
	 	 	Chief Executive Officer and President    

 

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

 

	 	By:	 
	 	 	Brett C. Moody
	 	 	 Member

   

Signature Page to Advisory Agreement

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