Filed Pursuant to Rule 424(b)(3)
Registration No. 333-198305
MOODY NATIONAL REIT II, INC.
SUPPLEMENT NO. 3 DATED JULY 13, 2015
TO THE PROSPECTUS DATED JANUARY 20, 2015
This document supplements, and should be read in conjunction with, our prospectus dated January 20, 2015, as supplemented by Prospectus Supplement No. 1, dated March 5, 2015, and Prospectus Supplement No. 2, dated May 19, 2015, relating to our offering of up to $1,100,000,000 in shares of our common stock. Terms used and not otherwise defined in this Supplement No. 3 shall have the same meanings as set forth in our prospectus. The purpose of this Supplement No. 3 is to disclose:
| ● | the status of our public offering; | |
| ● | a potential property acquisition; | |
| ● | our declaration of a cash distribution to our stockholders; | |
| ● | the issuance of restricted stock to our independent directors; and | |
| ● | an update to our subscription agreement. |
Status of Our Public Offering
We commenced our initial public offering of up to $1,100,000,000 in shares of our common stock on January 20, 2015. The terms of our public offering required us to deposit all subscription proceeds in escrow pursuant to the terms of our escrow agreement with UMB Bank, N.A., our escrow agent, until the earlier of the date that we receive subscriptions aggregating at least $2,000,000 (including shares purchased by our sponsor, its affiliates and our directors and officers) or January 20, 2016. On July 2, 2015, we received subscriptions aggregating $2,000,000, and the subscription proceeds held in escrow were released to us. As of July 2, 2015, we had received and accepted investors’ subscriptions for and issued 81,349 shares of our common stock in our public offering, resulting in gross offering proceeds of approximately $2,033,722.
Potential Property Acquisition
On July 2, 2015, our board of directors authorized our officers to take the necessary actions to pursue the acquisition of a hotel property located in Boston, Massachusetts commonly known as the Hampton Inn Boston Logan Airport, or the Hampton Inn Boston, from a third party seller for an aggregate purchase price of approximately $57,000,000, excluding acquisition costs. Moody National REIT I, Inc., a public, non-listed REIT also sponsored by our sponsor, is currently under contract to acquire the Hampton Inn Boston and is expected to assign the purchase agreement to us. We intend to finance the acquisition of the Hampton Inn Boston with proceeds from our public offering and debt secured by the Hampton Inn Boston.
The Hampton Inn Boston is a 227-room, select-service hotel. The Hampton Inn Boston is located within close proximity to Boston Logan International Airport, and just five miles from downtown Boston. Management believes that the Hampton Inn Boston is adequately insured for its present use and has no current plans for material renovations or improvements at the Hampton Inn Boston. The Hampton Inn Boston faces competition from other select-service hotels in the Boston area.
The acquisition of the Hampton Inn Boston is subject to significant conditions to closing, including: (1) the assignment of the purchase agreement for the Hampton Inn Boston to us, (2) our ability to raise sufficient additional offering proceeds in our public offering to fund the purchase price of the Hampton Inn Boston, (3) our ability to obtain appropriate financing secured by the Hampton Inn Boston, and (4) the absence of a material adverse change to the Hampton Inn Boston prior to the date of the acquisition. There is no assurance that we will close the acquisition of the Hampton Inn Boston on the terms described above or at all.
Declaration of Cash Distribution
On July 2, 2015, our board of directors authorized and declared the payment of cash distributions to our stockholders. The distribution will (1) accrue daily to our stockholders of record as of the close of business on each day commencing on August 1, 2015, (2) be payable in cumulative amounts on or before the 15th day of each calendar month with respect to the prior month, and (3) be calculated at a rate of $0.00479 per share of our common stock per day, a rate which, if paid each day over a 365-day period, is equivalent to a 7.0% annualized distribution rate based on a purchase price of $25.00 per share of our common stock.
Issuance of Restricted Stock to Our Independent Directors
Pursuant to our independent directors’ compensation plan, upon raising $2,000,000 in gross offering proceeds in our public offering, each of our two independent directors, Douglas Y. Bech and Charles L. Horn, received an initial grant of 5,000 shares of our restricted common stock. The shares of restricted common stock vest in four equal quarterly installments beginning on the first day of the first quarter following the date of grant; provided, however, that the restricted stock will become fully vested on the earlier to occur of (1) the termination of the independent director’s service as a director due to death or disability, or (2) a change in control of our company.
Update to Subscription Agreement
In connection with raising the $2,000,000 minimum offering amount in our public offering, we updated our subscription agreement. A copy of our updated form subscription agreement, which supersedes and replaces the form of subscription agreement filed as Appendix B to our prospectus, is attached to this supplement asExhibit A.
EXHIBIT A
FORM OF SUBSCRIPTION AGREEMENT
| APPENDIX B FORM OF SUBSCRIPTION AGREEMENT SUBSCRIPTION AGREEMENT INSTRUCTIONS FOR THE PROSPECTUS DATED JANUARY 20, 2015 |
Please refer to the following instructions in completing the attached Signature Page. Failure to follow these instructions may result in the rejection of your subscription.
Individuals desiring to purchases shares of common stock (the “Shares”) in Moody National REIT II, Inc., a Maryland corporation (the “Company”), must sign and deliver a copy of the attached subscription agreement signature page (“Signature Page”) along with the acknowledgement of receipt of the prospectus in Section 5 of this Subscription Agreement. If this subscription is accepted, it will be held, together with the accompanying payment, on the terms described in the Company’s prospectus dated January 20, 2015 (the “Prospectus”). Subscriptions may be rejected in whole or in part by the Company in its sole and absolute discretion. Upon completion of this transaction, investors will receive a confirmation of purchase, subject to acceptance by the Company, within 30 days from the date the subscription is received. In no event may a subscription for Shares be accepted until at least five business days after the date the subscriber receives the final Prospectus.
| 1. | INVESTMENT:A minimum investment of $2,500 is required. A check for the full purchase price of the shares subscribed for should be made payable to “Moody National REIT II, Inc.” Shares may be purchased only by persons meeting the standards set forth under the Section of the Prospectus entitled “Suitability Standards.” Please indicate the state in which the sale was made in Section 1 of this Subscription Agreement. If this is an initial investment, please check the box indicating it as such. Otherwise, please check the “Additional Investment” box. The “Additional Investment” box must be checked in order for this subscription to be combined with another subscription for purposes of a volume discount. A completed Subscription Agreement is required for each initial and additional investment. |
| 2. | FORM OF OWNERSHIP: Please check the appropriate box to indicate the type of entity or type of individuals subscribing. |
| 3. | CUSTODIAL OWNERSHIP ACCOUNTS: If applicable, please provide the information requested for Custodial Accounts in this Section. Please enter the exact name in which the Shares are to be held and the mailing address and telephone numbers of the registered owner of this investment. In the case of a qualified plan or trust, this will be the address of the trustee. |
| 4. | REGISTRATION INFORMATION AND ADDRESS: Please enter the exact name in which the Shares are to be held. For joint tenants with a right of survivorship or tenants-in-common, include the names of both investors. In the case of partnerships or corporations, include the name of an individual to whom correspondence will be addressed. Trusts should include the name of the trustee. All investors must complete the space provided for taxpayer identification number or social security number. By signing in Section 11, the investor(s) is/are certifying that the taxpayer or social security number(s) is/are correct. Enter the mailing address and telephone numbers of the registered owner of this investment. In the case of a qualified plan or trust, this will be the address of the trustee. |
| 5. | INVESTOR ACKNOWLEDGMENT: Please separately initial each representation made by the investor where indicated. Except in the case of fiduciary accounts, the investor may not grant any person a power of attorney to make such representations on such investor’s behalf. |
| 6. | SUITABILITY ACKNOWLEDGEMENT: Please complete this Section so that the Company and your broker-dealer can assess whether your subscription is suitable given your financial condition. |
| 7. | DISTRIBUTION REINVESTMENT PLAN: By electing the distribution reinvestment plan, the investor elects to reinvest 100% of cash distributions otherwise payable to such investor in common stock of the Company. If cash distributions are to be sent to an address other than that provided in Section 4 (such as a bank, brokerage firm or savings and loan, etc.), please provide the name, account number and address. |
| 8. | FINANCIAL ADVISOR: This Section is to be completed by the Registered Investment Advisor (RIA), or the registered representative and the broker-dealer. |
| 9. | PAYMENT INSTRUCTIONS: Please indicate the method of payment for your subscription in this Section. |
| B-1 |
| 10. | SUBSCRIBER SIGNATURES: The subscription agreement Signature Page must be signed by an authorized representative. The subscription agreement Signature Page, which has been delivered with the Prospectus, together with a check for the full purchase price, should be delivered or mailed to your broker-dealer. Only original, completed copies of subscription agreements may be accepted. Photocopied or otherwise duplicated subscription agreements cannot be accepted by the Company. |
MAILING INSTRUCTIONS
The completed subscription agreement, including the executed subscription agreement signature page and payment (if sent by mail), should be sent to:
| Via Mail | Via Overnight Delivery | |
| Moody National REIT II, Inc. | Moody National REIT II, Inc. | |
| c/o DST Services, Inc. | c/o DST Services, Inc. | |
| P.O. Box 219280 | 430 West 7th Street | |
| Kansas City, MO 64121-9280 | Kansas City, MO 64105-1407 |
IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS SUBSCRIPTION AGREEMENT SIGNATURE PAGE, PLEASE CALL (888) 457-2358.
| B-2 |
|
SUBSCRIPTION | Moody National REIT II, Inc. |
| P.O. Box 219280 | ||
| Kansas City, MO 64121-9280 | ||
| Telephone: (888) 457-2358 | ||
| Website: www.moodynationalreit.com |
| 1. INVESTMENT – See payment instructions in Section 9 below |
| Minimum investment is $2,500.Total Dollar Amount Invested: | Total Number of Shares Purchased: |
| State of Sale (if different from State of Residence): |
☐ Initial Investment; or☐Additional Investment ☐Check Enclosed; or☐Funds Wired
☐NET OF COMMISSION PURCHASE. Check this box if you are purchasing Shares from a registered investment advisor (RIA), or if you are an investment participant in a wrap account or fee in lieu of commissions account approved by the broker-dealer, RIA, or a bank acting as a trustee or fiduciary, or similar entity.
| 2. FORM OF OWNERSHIP –Non-Custodial Accounts |
| ☐ Individual | ☐ Joint Tenants with Rights of Survivorship | ☐ Tenants in Common |
| ☐Corporation – Authorized signature required.Copies of corporate resolutions designating executive officer as the person authorized to sign on behalf of corporation and authorizing the investment are required |
| ☐Partnership –Authorized signature required.A copy of the Partnership Agreement is required | |
| Identify whether General or Limited Partnership: | |
| ☐Estate –Personal representative signature required.A copy of the court appointment dated within 90 days is required. | |
| Name of Executor: | |
| ☐Trust –Trustee signature required in Section 11 below.A copy of the title and signature pages of the trust are required. | |
| Name of Trust: | |
| Name of Trustee(s): |
| ☐Qualified Pension Plan or Profit Sharing Plan (Non-Custodian) –Trustee signature required in Section 11 below.A copy of the title and signature pages of the plan are required. | |
| Name of Trustee(s): | |
| ☐Other Non-Custodial Ownership Account (Specify): |
| B-3 |
| 3.Custodial Ownership Accounts –Custodian signature required in section 10 |
Moody National REIT Sponsor, LLC does not provide custodial services; therefore, if this is a custodial account, a custodian must be indicated below. For custodial accounts, a completed copy of this Subscription Agreement should be sent directly to the custodian. The custodian will forward the subscription documents and wire the appropriate funds pursuant to the payment instructions in Section 9 below.
| ☐ | Traditional IRA | ☐ | Roth IRA | |
| ☐ | KEOGH Plan | ☐ | Simplified Employee Pension/Trust (SEP) | |
| ☐ | Pension or Profit-Sharing Plan | ☐ | Uniform Gift to Minors Act | |
| ☐ | Other Custodial Ownership Account (Specify): | |||
Required for all Custodial Ownership Accounts:
| Name of Custodian: | Trustee: | Other Administrator: | |||
| Mailing Address: | |||||
| City: | State: | Zip Code: |
| Custodian Telephone Number: |
| Custodian Tax Identification Number: |
| Custodian Account Number: |
| 4. REGISTRATION INFORMATION AND ADDRESS –Please complete the following applicable information |
| Name of Investor/Trustee in which Shares are to be Registered (Please print clearly): | |
| Name of Joint Investor/Joint Trustee in which Shares are to be Registered(if applicable): | |
| Name of Trust in which Shares are to be Registered (if applicable): | |
| Taxpayer Identification Number (Trust & Custodial Accounts must provide TIN and SSN): |
| Social Security Number(s) Investor/Trustee: | Joint Investor/Trustee: |
| Physical Address of Investor(may not be a P.O. Box): |
| City: | State: | Zip Code: |
| Mailing Address of Investor (If different from above. P.O. Box is acceptable): |
| City: | State: | Zip Code: |
| Daytime Telephone Number: | Evening Telephone Number: |
| E-Mail Address: |
| Citizenship Status of Investor/Trustee | ☐ U.S. Citizen | ☐ Resident Alien | ☐ Non-Resident Alien |
| Citizenship Status of Joint Investor/Trustee | ☐ U.S. Citizen | ☐ Resident Alien | ☐ Non-Resident Alien |
| Investor/Trustee Driver’s License No./State of Issue: | Date of Birth (MM/DD/YYYY): |
| Joint Investor/Trustee Driver’s License No./State of Issue: | Date of Birth (MM/DD/YYYY): |
| B-4 |
| 5. INVESTOR ACKNOWLEDGEMENT |
Please separately initial each of the representations below. In the case of joint investors, each investor must initial. Except in the case of fiduciary accounts, you may not grant any person power of attorney to make such representations on your behalf. In order to induce the Company to accept this subscription, I (we) hereby represent and warrant that:
| Investor | Co-Investor | ||||||||
| (a) | I (we) received a final Prospectus for the Company relating to the Shares, wherein the terms and conditions of the offering are described, five business days in advance of the date hereof. | Initials | Initials | ||||||
| (b) | I (we) accept the terms and conditions of the Company’s charter. | Initials | Initials | ||||||
| (c) | I am (we are) purchasing Shares for my (our) own account and acknowledge that the investment is not liquid. | Initials | Initials | ||||||
| (d) | I (we) acknowledge that the assignability and transferability of the Shares is restricted and will be governed by the Company’s charter and bylaws and all applicable laws as described in the Prospectus. | Initials | Initials | ||||||
| (e) | I (we) acknowledge that there is no public market for the Shares and, accordingly, it may not be possible to readily liquidate an investment in the Company. | Initials | Initials |
| B-5 |
| 6. SUITABILITY ACKNOWLEDGEMENT |
Please separately initial ALL that apply:
| Investor | Co-Investor | ||||||||
| · | I (we) have a net worth (exclusive of home, home furnishings and automobiles) of $250,000 or more. | Initials | Initials | ||||||
| · | I (we) have a net worth (exclusive of home, home furnishings and automobiles) of at least $70,000 and had during the last year or that I (we) will have during the current tax year a minimum of $70,000 annual gross income. | Initials | Initials | ||||||
| · | If anAlabama investor, I (we) have a liquid net worth of at least 10 times my (our) investment in the Company and its affiliates. | Initials | Initials | ||||||
| · | If anIowa investor, my (our) maximum in the Company and affiliated programs cannot exceed 10% if my (our) liquid net worth. “Liquid net worth” shall be defined as that portion of net worth (total assets, exclusive of home, auto and home furnishings minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities. | Initials | Initials | ||||||
| · | If aKansas investor, my (our) aggregate investment in this offering and other similar investments does not exceed 10% of my (our) liquid net worth. “Liquid net worth” shall be defined as that portion of my (our) total net worth that is comprised of cash, cash equivalents, and readily marketable securities, as determined in conformity with GAAP. | Initials | Initials | ||||||
| · | If aKentucky investor, my (our) investment in this offering does not exceed ten percent (10%) of my (our) liquid net worth. | Initials | Initials | ||||||
| · | If aMaine investor, my (our) aggregate investment in this offering and similar direct participation investments not exceed 10% of my (our) liquid net worth. For this purpose, “liquid net worth” is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities. | Initials | Initials | ||||||
| · | If aNebraska investor, my (our) investment in this offering and the securities of other direct participation programs (including REITs, oil and gas programs, equipment leasing programs, business development companies and commodity pools) does not exceed 10% of my (our) net worth (excluding the value of my (our) home, home furnishings, and automobiles). | Initials | Initials | ||||||
| · | If aNew Jerseyinvestor, I (we) have either (a) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of not less than $85,000, or (b) a minimum liquid net worth of $350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities. In addition, my (our) investment in the Company, its affiliates, and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) does not exceed ten percent (10%) of my (our) liquid net worth. | Initials | Initials | ||||||
| · | If aNew Mexicoinvestor, my (our) investment in the Company, shares of its affiliates and in other real estate investment trusts may not exceed ten percent (10%) of my (our) liquid net worth. “Liquid net worth” shall be defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities. | Initials | Initials | ||||||
| · | If aNorth Dakota investor, my (our) net worth is at least ten times my (our) investment in the Company. | Initials | Initials | ||||||
| · | If anOhio investor, my (our) aggregate investment in the Company, its affiliates and other non-traded real estate investment programs cannot exceed 10% of my (our) liquid net worth. "Liquid net worth" shall be defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities. | Initials | Initials | ||||||
| · | If anOregoninvestor, my (our) aggregate investment in the Company does not exceed 10% of my (our) liquid net worth. | Initials | Initials | ||||||
| · | If aTennesseeinvestor, my (our) investment in the Company must not exceed 10% of my (our) liquid net worth (exclusive of home, home furnishings and automobile). | Initials | Initials | ||||||
| · | If a non-accreditedVermontinvestor, my (our) investment in the Company cannot exceed 10% of my (our) liquid net worth. For these purposes, "liquid net worth" is defined as an investor's total assets (not including home, home furnishings, or automobiles) minus total liabilities. | Initials | Initials |
| B-6 |
| 7. DISTRIBUTION REINVESTMENT PLAN |
Non-Custodial Ownership
☐ I prefer to participate in the Distribution Reinvestment Plan (DRIP). In the event that the DRIP is not offered for a distribution, your distribution will be sent by check to the address in Section 4 above.
☐ I prefer that my distribution be paid by check to the address in Section 4 above.
☐ I prefer that my distribution be deposited directly into the account listed as follows:
| Name of Financial Institution: |
| Street Address: |
| City: | State: | Zip Code: |
| Name(s) on Account: |
☐ Checking/Savings Account(voided check is required)
☐ Brokerage Account
| Bank Routing Number: | Account Number: |
Custodial Ownership
☐ I prefer to participate in the Distribution Reinvestment Plan (DRIP). In the event that the DRIP is not offered for a distribution, your distribution will be sent to your Custodian for deposit into your Custodial account cited in Section 3 above.
☐ I prefer that my distribution be sent to my Custodian for deposit into my Custodial account identified in Section 3 above.
| 8. FINANCIAL ADVISOR – To be completed by the RIA or Registered Representative and the Broker-Dealer |
The Financial Advisor and in the case of a Broker-Dealer, an authorized principal of the Broker-Dealer must sign below to complete the order. The Financial Advisor and/or Broker-Dealer hereby warrant that each is duly licensed and may lawfully conduct business in the state designated as the subscriber’s legal residence or the state in which the sale was made, if different.
| Name of Broker-Dealer or Registered Investment Advisory Firm: |
| Firm Home Office Street Address: |
| City: | State: | Zip Code: |
| Name of Financial Advisor: |
| Financial Advisor Branch Code: | Financial Advisor Rep Number: |
| Financial Advisor Street Address: |
| City: | State: | Zip Code: |
| Telephone Number: | Fax Number: |
| Financial Advisor Authorized E-Mail Address: |
| Shares Sold NAV: | Purchase Volume Discount: |
| B-7 |
The undersigned confirm that they (i) have reasonable grounds to believe that the information and representations concerning the investors identified herein are true, correct and complete in all respects; (ii) have discussed such investor’s prospective purchase of Shares with such investor; (iii) have advised such investor of all pertinent facts with regard to the lack of liquidity and marketability of the Shares; (iv) have delivered a current Prospectus and related supplements, if any, to such investor; (v) have reasonable grounds to believe that the investor is purchasing these Shares for its own account; and (vi) have reasonable grounds to believe that the purchase of Shares is a suitable investment for such investor, that such investor meets the suitability standards applicable to such investor set forth in the Prospectus and related supplements, if any, and that such investor is in a financial position to enable such investor to realize the benefits of such an investment and to suffer any loss that may occur with respect thereto. The undersigned attest that the Financial Advisor and the Broker-Dealer are subject to the USA PATRIOT Act. In accordance with Section 326 of the Act, the registered representative and the Broker-Dealer have performed a Know Your Customer review of each investor who has signed this Subscription Agreement in accordance with the requirements of the Customer Identification Program.
| Signature of Financial Advisor*: | Date: | ||
| Signature of Broker-Dealer (Authorized Principal)*: | Date: |
*SIGNATURES OF THE FINANCIAL ADVISOR AND AN AUTHORIZED FIRM PRINCIPAL ARE REQUIRED FOR PROCESSING.
| E-Mail Address: |
| 9. PAYMENT INSTRUCTIONS |
☐By Mail– Checks should be made payable to “Moody National REIT II, Inc.” You should consult with your registered representative if you are unsure how to make your check payable. Forward the subscription agreement to the address set forth in the instructions to this Subscription Agreement.
☐By Wire Transfer – If paying by wire transfer, please request that the wire reference the subscriber’s name in order to assure that the wire is credited to the proper account. Wire transfers should be made to the Company. You should consult with your registered representative to confirm wiring instructions for your subscription.
| 10. SUBSCRIBER SIGNATURES |
I (we) declare that the information supplied is true and correct and may be relied upon by the Company.
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION (required). Each invest signing below, under penalties of perjury, certifies that:
| 1. | The number shown in the Investor Social Security Number/Taxpayer Identification Number field in Section 4 of this form is my correct Social Security Number/Taxpayer Identification Number (or I am waiting for a number to be issued to me); |
| 2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; |
| 3. | I am a U.S. person (including a non-resident alien). |
NOTE: You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.
The Company is required by law to obtain, verify and record certain personal information from you or persons on your behalf in order to establish the account. Required information includes name, date of birth, permanent residential address and social security/taxpayer identification number. We may also ask to see other identifying documents. If you do not provide the information, the Company may not be able to open your account. By signing the Subscription Agreement, you agree to provide this information and confirm that this information is true and correct. If we are unable to verify your identity, or that of another person(s) authorized to act on your behalf, or if we believe we have identified potentially criminal activity, we reserve the right to take action as we deem appropriate which may include closing your account.
| Signature of Individual Owner: | Date: |
| Print or Type Name: |
| Signature of Joint Account Owner: | Date: |
| Print or Type Name: |
| Signature of Custodian Trustee, Officer, General Partner or other Authorized Person: |
Date: |
| Print or Type Name: |
| Signature of Additional Person(if required): | Date: |
| Print or Type Name: |
| B-8 |