AMENDED AND RESTATED ADVISORY AGREEMENT
 
BY AND AMONG
 
PHILLIPS EDISON GROCERY CENTER REIT II, INC.,
 
PHILLIPS EDISON GROCERY CENTER OPERATING PARTNERSHIP II, L.P. and
 
PHILLIPS EDISON NTR II, LLC

 
Effective as of September 1, 2017
 
 

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TABLE OF CONTENTS

 
 
 
 
Page
1.
 
DEFINITIONS
 
1
 
 
 
 
 
2.
 
APPOINTMENT
 
6
 
 
 
 
 
3.
 
DUTIES OF THE ADVISOR
 
6
 
 
 
 
 
4.
 
AUTHORITY OF ADVISOR
 
9
 
 
 
 
 
5.
 
FIDUCIARY RELATIONSHIP
 
9
 
 
 
 
 
6.
 
NO PARTNERSHIP OR JOINT VENTURE
 
9
 
 
 
 
 
7.
 
BANK ACCOUNTS
 
9
 
 
 
 
 
8.
 
RECORDS AND FINANCIAL STATEMENTS
 
9
 
 
 
 
 
9.
 
LIMITATIONS ON ACTIVITIES
 
9
 
 
 
 
 
10.
 
INVESTMENT OPPORTUNITIES AND ALLOCATIONS
 
10
 
 
 
 
 
11.
 
FEES
 
10
 
 
 
 
 
12.
 
EXPENSES
 
12
 
 
 
 
 
13.
 
OTHER SERVICES
 
13
 
 
 
 
 
14.
 
REIMBURSEMENT TO THE ADVISOR
 
13
 
 
 
 
 
15.
 
OTHER ACTIVITIES OF THE ADVISOR
 
13
 
 
 
 
 
16.
 
VOTING AGREEMENT
 
14
 
 
 
 
 
17.
 
THE PHILLIPS EDISON AND PECO NAMES
 
14
 
 
 
 
 
18.
 
TERM OF AGREEMENT
 
14
 
 
 
 
 
19.
 
TERMINATION BY THE PARTIES
 
14
 
 
 
 
 
20.
 
ASSIGNMENT TO AN AFFILIATE
 
15
 
 
 
 
 

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21.
 
PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION
 
15
 
 
 
 
 
22.
 
INCORPORATION OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP
AGREEMENT
 
15
 
 
 
 
 
23.
 
INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP
 
15
 
 
 
 
 
24.
 
INDEMNIFICATION BY ADVISOR
 
16
 
 
 
 
 
25.
 
NOTICES
 
17
 
 
 
 
 
26.
 
MODIFICATION
 
17
 
 
 
 
 
27.
 
SEVERABILITY
 
18
 
 
 
 
 
28.
 
GOVERNING LAW
 
18
 
 
 
 
 
29.
 
ENTIRE AGREEMENT
 
18
 
 
 
 
 
30.
 
NO WAIVER
 
18
 
 
 
 
 
31.
 
PRONOUNS AND PLURALS
 
18
 
 
 
 
 
32.
 
HEADINGS
 
18
 
 
 
 
 
33.
 
EXECUTION IN COUNTERPARTS
 
18
 
 
 
 
 
34.
 
THIRD PARTY BENEFICIARIES
 
18

  

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AMENDED AND RESTATED ADVISORY AGREEMENT
 THIS AMENDED AND RESTATED ADVISORY AGREEMENT (this “Agreement”), effective as
of September 1, 2017, is entered into among Phillips Edison Grocery Center REIT
II, Inc., a Maryland corporation (the “Company”), Phillips Edison Grocery Center
Operating Partnership II, L.P., a Delaware limited partnership (the “Operating
Partnership”), and Phillips Edison NTR II, LLC, a Delaware limited liability
company (the “Advisor”). 

WITNESSETH
 
WHEREAS, the Company is a Maryland corporation created in accordance with
Maryland General Corporation Law and intends to qualify as a REIT (as defined
below);
 
WHEREAS, the Company is the sole member of PE Grocery Center OP GP II LLC, the
general partner of the Operating Partnership;

WHEREAS, the Company, the Operating Partnership and the Advisor entered into
that certain Advisory Agreement dated as of December 3, 2015 (the “Original
Agreement”);
 
WHEREAS, the Company, the Operating Partnership and the Advisor entered into
that certain First Amendment to the Advisory Agreement effective as of March 22,
2016;

WHEREAS, the Company, the Operating Partnership and the Advisor entered into
that certain Second Amendment to the Advisory Agreement effective as of August
2, 2016;

WHEREAS, the Company, the Partnership and the Advisor desire to amend and
restate the Original Agreement;
 
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 of Directors of the Company, all as provided herein;
and
 
WHEREAS, the Advisor (as defined below) is willing to render such services,
subject to the supervision of the Board of Directors of the Company, on the
terms and subject to the 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 set forth below:
 
“Acquisition Expenses” means any and all expenses, exclusive of Acquisition
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,
including, without limitation, legal fees and expenses, travel and
communications expenses, brokerage fees, 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 Fee” means the fee payable to the Advisor or its Affiliates
pursuant to Section 11(a).
 
“Advisor” means Phillips Edison NTR II, LLC, a Delaware limited liability
company, any successor advisor to the Company and the Operating Partnership, or
any Person to which Phillips Edison NTR II, LLC or any successor advisor
subcontracts substantially all its functions. Notwithstanding the foregoing, a
Person hired or retained by Phillips Edison NTR II, LLC to perform property
management and related services for the Company or

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the Operating Partnership that is not hired or retained to perform substantially
all the functions of Phillips Edison NTR II, LLC with respect to the Company and
the Operating Partnership as a whole shall not be deemed to be an Advisor. 
 
“Affiliate” or “Affiliated” means with respect to any Person, (i) any other
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
Person; (ii) any other 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 Person; (iii) any other Person directly or indirectly
controlling, controlled by or under common control with such Person; (iv) any
executive officer, director, trustee or general partner of such Person; and
(v) any legal entity for which such Person acts as an executive officer,
director, trustee or general partner.  For purposes of this definition, the
terms “controls,” “is controlled by,” or “is under common control with” shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of an entity, whether through ownership
or voting rights, by contract or otherwise. 
 
“Agreement” has the meaning set forth in the preamble, and such term shall
include any amendment or supplement hereto from time to time.

“Annual Subordinated Performance Fee” means the fees payable to the Advisor or
its assignees pursuant to Section 11(e).
 
“Articles of Incorporation” means the charter of the Company, as the same may be
amended from time to time.
  
“Asset Management Fee” means the fee payable to the Advisor pursuant to
Section 11(h).

“Average Invested Assets” has the meaning set forth in the Corporate Governance
Guidelines.  For an equity interest owned in a Joint Venture, the calculation of
Average Invested Assets shall take into consideration the underlying Joint
Venture’s aggregate book value for the equity interest.
 
“Board of Directors” or “Board” means the Board of Directors of the Company.
 
“Bylaws” means the bylaws of the Company, as amended and as the same are in
effect from time to time.
 
“Cause” means (i) fraud, criminal conduct, willful misconduct or illegal or
negligent breach of fiduciary duty by the Advisor, or (ii) if any of the
following events occur:  (A) the Advisor shall breach any material provision of
this Agreement, and after written notice of such breach, shall not cure such
default within thirty (30) days or have begun action within thirty (30) days to
cure the default which shall be completed with reasonable diligence; (B) the
Advisor shall be adjudged bankrupt or insolvent by a court of competent
jurisdiction, or an order shall be made by a court of competent jurisdiction for
the appointment of a receiver, liquidator, or trustee of the Advisor, for all or
substantially all its property by reason of the foregoing, or if a court of
competent jurisdiction approves any petition filed against the Advisor for
reorganization, and such adjudication or order shall remain in force or unstayed
for a period of thirty (30) days; or (C) the Advisor shall institute proceedings
for voluntary bankruptcy or shall file a petition seeking reorganization under
the federal bankruptcy laws, or for relief under any law for relief of debtors,
or shall consent to the appointment of a receiver for itself or for all or
substantially all its property, or shall make a general assignment for the
benefit of its creditors, or shall admit in writing its inability to pay its
debts, generally, as they become due.
 
“Change of Control” means a change of control of the Company of a nature that
would be required to be reported in response to the disclosure requirements of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, as enacted
and in force on the date hereof, whether or not the Company is then subject to
such reporting requirements; provided, however, that, without limitation, a
Change of Control shall be deemed to have occurred if:  (i) any “person” (within
the meaning of Section 13(d) of the Exchange Act, as enacted and in force on the
date hereof) is or becomes the “beneficial owner” (as that term is defined in
Rule 13d-3, as enacted and in force

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on the date hereof, under the Exchange Act) of securities of the Company
representing 9.8% or more of the combined voting power of the Company’s
securities then outstanding; (ii) there occurs a merger, consolidation or other
reorganization of the Company which is not approved by the Board of Directors;
(iii) there occurs a sale, exchange, transfer or other disposition of
substantially all the assets of the Company to another Person, which disposition
is not approved by the Board of Directors; or (iv) there occurs a contested
proxy solicitation of the Stockholders that results in the contesting party
electing candidates to a majority of the Board of Directors’ positions next up
for election.
 
“Code” means the 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. 
 
“Common Stock” means the shares of the Company’s common stock, par value $0.01
per share.
 
“Company” has the meaning set forth in the preamble.
 
“Competitive Real Estate Commission” means a real estate or brokerage commission
for the purchase or sale of an asset which is reasonable, customary and
competitive in light of the size, type and location of the asset.
 
“Construction Fee” means a fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitation on a Property.
“Contract Purchase Price” has the meaning set forth in the Corporate Governance
Guidelines.
 
“Contract Sales Price” means the total consideration received by the Company for
the sale of an Investment.

“Corporate Governance Guidelines” means the Corporate Governance Guidelines
adopted by the Board on August 2, 2016, as amended from time to time.
 
“Cost of Assets” means, with respect to a Real Estate Asset, the purchase price,
Acquisition Expenses, capital expenditures and other customarily capitalized
costs, but shall exclude Acquisition Fees associated with such Real Estate
Asset. Excluded from Cost of Assets is the purchase price, Acquisition Expenses,
capital expenditures and other customarily capitalized costs with respect to any
Real Estate Asset held by the TPG Joint Venture or a subsidiary thereof.
 
“Director” means a director of the Company.

“Disposition Fees” means the fees payable to the Advisor pursuant to
Section 11(c).
 
“Distributions” means any distributions of money or other property by the
Company to Stockholders, including distributions that may constitute a return of
capital for U.S. federal income tax purposes.
 
“Excess Amount” has the meaning set forth in Section 14.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor statute thereto. Reference to any provision of the
Exchange Act 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.
 
“Expense Year” has the meaning set forth in Section 14.

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“FINRA” means the Financial Industry Regulatory Authority, Inc.
 
“GAAP” means United States generally accepted accounting principles,
consistently applied.
 
“Good Reason ” means:  (i) any failure to obtain a satisfactory agreement from
any successor to the Company or the Operating Partnership to assume and agree to
perform obligations under this Agreement; or (ii) any material breach of this
Agreement of any nature whatsoever by the Company or the Operating Partnership.
 
“Indemnitee” has the meaning set forth in Section 23.
 
“Independent Director” has the meaning set forth in the Corporate Governance
Guidelines.
  
“Investments” means any investments by the Company or the Operating Partnership,
directly or indirectly, in Real Estate Assets, Real Estate Related Loans or any
other asset, but excluding any investments in Real Estate Assets, Real Estate
Related Loans or any other asset by the TPG Joint Venture or a subsidiary
thereof.
 
“Joint Ventures” means the joint venture or partnership or other similar
arrangements (other than between the Company and the Operating Partnership) in
which the Company or the Operating Partnership or any of their subsidiaries is a
co-venturer, limited liability company member, limited partner or general
partner, which are established to acquire or hold Investments.
 
“Listing” means the listing of the Common Stock on a national securities
exchange, or the inclusion of the Common Stock for trading in the
over-the-counter-market.
 
“Loans” means 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.
 
“Net Income” means, 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. 

“Net Sales Proceeds” means, in the case of a transaction described in clause (i)
of the definition of Sale, the proceeds of any such transaction less the amount
of selling expenses incurred by or on behalf of the Company, including all real
estate commissions, closing costs and legal fees and expenses. In the case of a
transaction described in clause (ii) of the definition of Sale, Net Sales
Proceeds means the proceeds of any such transaction less the amount of selling
expenses incurred by or on behalf of the Company, including any legal fees and
expenses and other selling expenses incurred in connection with such
transaction. In the case of a transaction described in clause (iii) of the
definition of Sale, Net Sales Proceeds means the proceeds of any such
transaction actually distributed to the Company or the Operating Partnership
from the Joint Venture less the amount of any selling expenses, including legal
fees and expenses incurred by or on behalf of the Company (other than those paid
by the Joint Venture). In the case of a transaction or series of transactions
described in clause (iv) of the definition of Sale, Net Sales Proceeds means the
proceeds of any such transaction (including the aggregate of all payments under
a Mortgage on or in satisfaction thereof other than regularly scheduled interest
payments) less the amount of selling expenses incurred by or on behalf of the
Company, including all commissions, closing costs and legal fees and expenses.
In the case of a transaction described in clause (v) of the definition of Sale,
Net Sales Proceeds means the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Company, including any legal
fees and expenses and other selling expenses incurred in connection with such
transaction. Net Sales Proceeds shall also include Refinancing Proceeds and any
other amounts that the Company determines, in its discretion, to be economically
equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any
reserves established by the Company, which shall be determined by the Board in
its sole discretion.
  
“Notice” has the meaning set forth in Section 25.
 
“Operating Partnership” has the meaning set forth in the preamble.

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“Operating Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated as of January 22, 2015
(as it may be amended from time to time), among the Company, PE Grocery Center
OP GP II LLC and Phillips Edison Special Limited Partner II LLC as the same may
be amended from time to time.
 
“OP Units” means units of limited partnership interest in the Operating
Partnership.
 
“PECO Member” shall mean PECO Value Added Grocery Manager, LLC.
 
“Person” has the meaning set forth in the Corporate Governance Guidelines.
  
“Real Estate Assets” means any investment by the Company or the Operating
Partnership in unimproved and improved Real Property (including fee or leasehold
interests, options and leases), directly, through one or more subsidiaries or
through a Joint Venture (net of any interest held in such investment by a
partner or member of a joint venture unaffiliated with the Partnership).
  
“Real Estate Related Loans” means any investments in mortgage loans and other
types of real estate related debt financing, including, mezzanine loans, bridge
loans, convertible mortgages, wraparound mortgage loans, construction mortgage
loans, loans on leasehold interests and participations in such loans, by the
Company or the Operating Partnership, directly, through one or more subsidiaries
or through a Joint Venture.
 
“Real Property” means (i) land, (ii) rights in land (including leasehold
interests), and (iii) any buildings, structures, improvements, furnishings,
fixtures and equipment located on or used in connection with land and rights or
interests in land.

“Refinancing Proceeds” means the proceeds of the refinancing of any indebtedness
of the Company, less the amount of expenses incurred by or on behalf of the
Company in connection with such refinancing.
  
“REIT” means a corporation, trust, association or other legal entity (other than
a real estate syndication) that is engaged primarily in investing in equity
interests in real estate (including fee ownership and leasehold interests) or in
loans secured by real estate or both, as defined pursuant to Sections 856
through 860 of the Code and any successor or other provisions of the Code
relating to real estate investment trusts (including provisions as to the
attribution of ownership of beneficial interests therein) and the regulations
promulgated thereunder.
 
“Sale” or “Sales” means 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 direct or indirect ownership of any Real Estate
Assets, Loan or other Investment or portion thereof, including the lease of any
Real Estate Assets consisting of a building only, and including any event with
respect to any Real Estate Assets that 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 the direct or indirect interest of the
Company or the Operating Partnership in any Joint Venture in which it is a
co-venturer, member 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, member or partner sells,
grants, transfers, conveys, or relinquishes its direct or indirect ownership of
any Real Estate Assets or portion thereof, including any event with respect to
any Real Estate Assets, Loans or other Investments which gives rise to insurance
claims or condemnation awards; (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 direct or indirect
interest in any Real Estate Related Loans or portion thereof (including with
respect to any Real Estate Related 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 direct or indirect 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

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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.

Excluded from the foregoing definition shall be any transaction or series of
transactions whereby: (i) the Company or the Operating Partnership directly or
indirectly sells, grants, transfers, conveys, or relinquishes its direct or
indirect ownership of any Real Estate Assets, Loan or other Investment or
portion thereof to the TPG Joint Venture or a subsidiary thereof; and (ii) the
TPG Joint Venture directly or indirectly sells, grants, transfers, conveys, or
relinquishes its direct or indirect ownership of any Real Estate Assets, Loan or
other Investment or portion thereof, including any event with respect to any
Real Estate Assets, Loans or other Investments which gives rise to insurance
claims or condemnation awards.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time,
or any successor statute thereto. Reference to any provision of the Securities
Act 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. 
 
“Shares” means the shares of beneficial interest or of common stock of the
Company of any class or series, including Common Stock, that has the right to
elect the Directors of the Company.
 
“Sponsor” means Phillips Edison Limited Partnership, a Delaware limited
partnership.
 
“Stockholders” means the holders of record of the Shares as maintained on the
books and records of the Company or its transfer agent.

“Subordinated Participation Interest” means a profits interest in the Operating
Partnership designated as a Class B Unit in accordance with the terms of the
Operating Partnership Agreement. 
  
“Termination Date” means the date of termination of this Agreement.
 
“Total Operating Expenses” has the meaning set forth in the Corporate Governance
Guidelines.  

“TPG Joint Venture” shall mean the Joint Venture named Phillips Edison Value
Added Grocery Venture, LLC by and among PECO Member, PE OP II Value Added
Grocery, LLC and TPG RE II Electricity SPV, LP.
 
“2%/25% Guidelines” has the meaning set forth in Section 14.
 
2.            APPOINTMENT.   The Company and the Operating Partnership hereby
appoint the Advisor to serve as their advisor to perform the services set forth
herein on the terms and subject to the conditions set forth in this Agreement
and subject to the supervision of the Board, and the Advisor hereby accepts such
appointment.
 
3.            DUTIES OF THE ADVISOR.   The Advisor will use commercially
reasonable 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 from time to time by the Board.  In
performance of this undertaking, subject to the supervision of the Board and
consistent with the provisions of the Articles of Incorporation, Bylaws and the
Operating Partnership Agreement, the Advisor will either directly or by engaging
an Affiliate or a third-party, perform the following duties:  
 
(a)           serve as the Company’s and the Operating Partnership’s investment
and financial advisor;
 
(b)           provide the daily management for the Company and the Operating
Partnership and perform and supervise the various administrative functions
necessary for the day-to-day management of the operations of the Company and the
Operating Partnership;

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(c)    investigate, select and, on behalf of the Company and the Operating
Partnership, engage and conduct business with and supervise the performance of
such Persons as the Advisor deems necessary to the proper performance of its
obligations hereunder (including 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,
property managers, real estate management companies, real estate operating
companies, securities investment advisors, mortgagors, the registrar and the
transfer agent 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 entering into contracts in the name of the Company and the
Operating Partnership with any of the foregoing);
 
(d)           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 Board 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;
 
(e)           subject to the provisions of Section 4, (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 and reviewing and analyzing financial
information for each of the Investments and the overall portfolio; (viii) select
Joint Venture partners, structure corresponding agreements and oversee and
monitor these relationships; (ix) oversee, supervise and evaluate Affiliated and
non-Affiliated property managers who perform services for the Company or the
Operating Partnership; (x) oversee Affiliated and non-Affiliated Persons with
whom the Advisor contracts to perform certain of the services required to be
performed under this Agreement; (xi) manage accounting and other record-keeping
functions for the Company and the Operating Partnership, including reviewing and
analyzing the capital and operating budgets for the Real Estate Assets and
generating an annual budget for the Company; (xii) recommend various liquidity
events to the Board when appropriate; and (xiii) source and structure Real
Estate Related Loans; 
  
(f)           upon request, provide the Board with periodic reports regarding
prospective investments;
 
(g)           make investments in, and dispositions of, Investments within the
discretionary limits and authority as granted by the Board;
 
(h)           negotiate on behalf of the Company and the Operating Partnership
with banks or other lenders for Loans to be made to the Company, the Operating
Partnership or any of their subsidiaries, and negotiate with investment banking
firms and broker-dealers on behalf of the Company, the Operating Partnership or
any of their subsidiaries, or negotiate private sales of Shares or obtain Loans
for the Company, the Operating Partnership or any of their subsidiaries, but in
no event in such a manner so that the Advisor shall be acting as broker-dealer
or underwriter; provided, however, 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, the Operating Partnership or any of their
subsidiaries;
 
(i)           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;

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(j)    from time to time, or at any time reasonably requested by the Board, make
reports to the Board 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;
 
(k)           provide the Company and the Operating Partnership with all
necessary cash management services;
 
(l)           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;
 
(m)           notify the Board of all proposed material transactions before they
are completed;
 
(n)           effect any private placement of OP Units, tenancy-in-common
(“TIC”) or other interests in Investments as may be approved by the Board;
 
(o)           perform investor-relations and Stockholder communications
functions for the Company;
  
(p)           render such services as may be reasonably determined by the Board
of Directors consistent with the terms and conditions herein;
 
(q)           maintain the Company’s accounting and other records and assist the
Company in filing all reports required to be filed by it with the Securities and
Exchange Commission, the Internal Revenue Service and other regulatory agencies;
 
(r)           do all things reasonably necessary to assure its ability to render
the services described in this Agreement;
 
(s)           intentionally omitted;
 
(t)           intentionally omitted;

(u)    from time to time, or at any time reasonably requested by the Board, make
reports to the Board on the Advisor’s performance of services to the Company and
the Operating Partnership under this Agreement;

(v)    make reports to the Independent Directors each quarter of the investments
that have been made by other programs sponsored by the Advisor or any of its
Affiliates, as well as any investments that have been made by the Advisor or any
of its Affiliates directly, in each case to the extent such investments
constitute a conflict of interest or a potential conflict of interest with the
investment policies and objectives of the Company;

(w)    manage and coordinate with the transfer agent the monthly distribution
process and payments to Stockholders;

(x)    provide the Company’s officers and the Board with timely updates related
to the overall regulatory environment affecting the Company, as well as managing
compliance with such matters, including compliance with the Sarbanes Oxley Act
of 2002;

(y)    consult with the Company’s officers and the Board relating to the
corporate governance structure and appropriate policies and procedures related
thereto; and
 
(z)    perform all reporting, record keeping, internal controls and similar
matters in a manner that allows the Company to comply with applicable law,
including federal and state securities laws and the Sarbanes Oxley Act of 2002.

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Notwithstanding the foregoing or anything else that may be to the contrary in
this Agreement, the Advisor may delegate any of the foregoing duties to any
Person so long as the Advisor or its Affiliates remain 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 9), and subject to the
continuing and exclusive authority of the Board over the supervision of the
Company, the Company, acting on the authority of the Board of Directors, hereby
delegates to the Advisor the authority to perform the services described in
Section 3.
 
(b)           Notwithstanding anything herein to the contrary, all Investments
will require the prior approval of the Board, any particular Directors specified
by the Board or any committee of the Board specified by the Board, as the case
may be.
 
(c)           If a transaction requires approval by the Independent Directors,
the Advisor or its Affiliates or assignees, as applicable, will deliver to the
Independent Directors all documents and other information reasonably required by
them to evaluate properly the proposed transaction.
 
(d)           The Board may, at any time upon the giving of 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.            FIDUCIARY RELATIONSHIP.   The Advisor, as a result of its
relationship with the Company and the Operating Partnership pursuant to this
Agreement, has a fiduciary responsibility and duty to the Company, the
Stockholders, the Operating Partnership and the partners of the Operating
Partnership. 
 
6.            NO PARTNERSHIP OR JOINT VENTURE.   The parties to this Agreement
are not partners or joint venturers with each other and nothing herein shall be
construed to make them partners or joint venturers or impose any liability as
such on either of them.
 
7.            BANK ACCOUNTS.   The Advisor may establish and maintain one or
more bank accounts in the name of the Company or 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 Board may approve; provided,
that no funds shall be commingled with the funds of the Advisor; and, upon
request, the Advisor shall render appropriate accountings of such collections
and payments to the Board and to the auditors of the Company. 
 
8.            RECORDS AND FINANCIAL STATEMENTS.   The Advisor, in the conduct of
its responsibilities to the Company and the Operating Partnership, shall
maintain adequate and separate books and records for the Company’s and the
Operating Partnership’s operations in accordance with GAAP, which shall be
supported by sufficient documentation to ascertain that such books and records
are properly and accurately recorded. Such books and records shall be the
property of the Company and the Operating Partnership and shall be available for
inspection by the Board and by counsel, auditors and other authorized agents of
the Company and the Operating Partnership, at any time or from time to time
during normal business hours. Such books and records shall include all
information necessary to calculate and audit the fees or reimbursements paid
under this Agreement. The Advisor shall utilize procedures to attempt to ensure
such control over accounting and financial transactions as is reasonably
required to protect the Company’s and the Operating Partnership’s assets from
theft, error or fraudulent activity. All financial statements that the Advisor
delivers to the Company and the Operating Partnership shall be prepared on an
accrual basis in accordance with GAAP, except for special financial reports that
by their nature require a deviation from GAAP. The Advisor shall liaise with the
Company’s officers and independent auditors and shall provide such officers and
auditors with the reports and other information that the Company so requests.

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9.    LIMITATIONS ON ACTIVITIES.   Notwithstanding anything herein to the
contrary, the Advisor shall refrain from taking any action which, in its sole
judgment, or in the sole judgment of the Company, made in good faith, would
(a) adversely affect the status of the Company as a REIT, unless the Board has
determined that REIT qualification is not in the best interests of the Company
and its Stockholders, (b) subject the Company to regulation under the Investment
Company Act of 1940, as amended, (c) require the Advisor to register as a
broker-dealer with the Securities and Exchange Commission or any state, (d)
violate the Articles of Incorporation or Bylaws of the Company, or (e) violate
any law, rule, regulation or statement of policy of any governmental body or
agency having jurisdiction over the Company, the Operating Partnership or the
Shares, or otherwise not be permitted by the Articles of Incorporation or
Bylaws, 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.

10.    INVESTMENT OPPORTUNITIES AND ALLOCATIONS.   The Advisor shall use
commercially reasonable efforts to present investment opportunities to the
Company that are consistent with the investment policies and objectives of the
Company, but neither the Advisor nor any Affiliate of the Advisor shall be
obligated generally to present any particular investment opportunity to the
Company even if the opportunity is of the character that, if presented to the
Company, could be taken by the Company.

11.         FEES.
 
(a)            Acquisition Fee.  Subject to Section 11(b), the Company shall pay
an Acquisition Fee to the Advisor, its Affiliates or assignees as compensation
for services rendered in connection with the investigation, selection,
development, construction and acquisition (by purchase, investment or exchange)
of Investments. If the Advisor is terminated without Cause pursuant to Section
19(a), the Advisor or its Affiliates shall be entitled to an Acquisition Fee for
any Investments acquired after the Termination Date for which a contract to
acquire any such Investment had been entered into at or prior to the Termination
Date. The total Acquisition Fee payable to the Advisor or its Affiliates shall
equal 0.85% of the Contract Purchase Price of each Investment.  The purchase
price allocable for an Investment held through a Joint Venture shall equal the
product of (i) the Contract Purchase Price of the Investment and (ii) the direct
or indirect ownership percentage in the Joint Venture held directly or
indirectly by the Company or the Operating Partnership.  For purposes of this
Section 11(a), “ownership percentage” shall be the percentage of capital stock,
membership interests, partnership interests or other equity interests held by
the Company or the Operating Partnership, without regard to classification of
such equity interests.  The Company shall pay to the Advisor or its Affiliates
the Acquisition Fee promptly upon the closing of the Investment.   
 
(b)            Limitation on Total Acquisition Fees and Acquisition Expenses.  

(i) The total of all Acquisition Fees (as defined in the Corporate Governance
Guidelines) and Acquisition Expenses payable in connection with the Company’s
total portfolio of Investments and reinvestments, if any, shall be reasonable
and shall not exceed an amount equal to four and one-half percent (4.5%) of the
Contract Purchase Price of the Company’s total portfolio of Investments or four
and one-half percent (4.5%) of the amount advanced for the Company’s total
portfolio of Investments.

(ii) In accordance with the Corporate Governance Guidelines, the total of all
Acquisition Fees and Acquisition Expenses payable in connection with any
Investment or any reinvestment shall be reasonable and shall not exceed an
amount equal to four and one-half percent (4.5%) of the Contract Purchase Price
of the Investment or four and one-half percent (4.5%) of the amount advanced for
any Investment; provided, however, that a majority of the Directors (including a
majority of the Independent Directors) not otherwise interested in the
transaction may approve fees and expenses in excess of these limits if they
determine the transaction to be commercially competitive, fair and reasonable to
the Company.
 
(c)            Disposition Fees.  In connection with a Sale in which the Advisor
or any of its Affiliates provides a substantial amount of services, as
determined by the Independent Directors, the Company shall pay to the

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Advisor or its assignees a Disposition Fees up to the lesser of (i) 1.7% of the
Contract Sales Price and (ii) one-half of the Competitive Real Estate Commission
paid if a non-Affiliate broker is also involved; provided, however, that in no
event may the Disposition Fees paid to the Advisor, its Affiliates and
non-Affiliates, exceed the lesser of six percent (6.0%) of the Contract Sales
Price and a Competitive Real Estate Commission.
 
(d)            Intentionally omitted.
  
(e)            Annual Subordinated Performance Fee. The Company may pay the
Advisor, its Affiliates or its assignees an Annual Subordinated Performance Fee
calculated on the basis of the total return to Stockholders, payable annually in
arrears in any year in which the Company’s total return on Stockholders’ capital
contributions exceeds six percent (6%) per annum, in an amount equal to 12.75%
of the excess total return, provided, that the Annual Subordinated Performance
Fee shall not exceed 8.5% of the aggregate total return for such year. The
Annual Subordinated Performance Fee may only be paid from Net Sales Proceeds.
  
(f)           Payment of Fees.   In connection with the Acquisition Fee,
Disposition Fee and Annual Subordinated Performance Fee, the Company shall pay
such fees to the Advisor or its Affiliates in cash, in Shares, or a combination
of both, the form of payment to be determined in the sole discretion of the
Advisor. For the purposes of the payment of any fees in Shares, each Share shall
be valued by the Board in good faith (A) at the estimated value thereof,
calculated in accordance with the provisions of NASD Rule 2340(c)(1) (or any
successor or similar FINRA rule), or (B) if no such rule shall then exist, at
the fair market value thereof.

(g)            Intentionally omitted. 
 
(h)            Asset Management Fee.   The Company shall pay the Advisor or its
assignees as compensation for the asset management services described in Section
3 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to
0.0566695% multiplied by the Cost of Assets as of the last day of the preceding
monthly period. The Asset Management Fee shall be payable monthly in arrears on
the first business day of each month. The Advisor shall submit an invoice to the
Company, accompanied by a computation of the Asset Management Fee for the
applicable period. The Asset Management Fee will be appropriately prorated for
any partial month.

In addition, the Company shall cause the Operating Partnership to periodically
issue Subordinated Participation Interests in the Operating Partnership to the
Advisor or its assignees, pursuant to the terms and conditions contained in the
Operating Partnership Agreement, in connection with the Advisor’s (its
Affiliates’ or its assignees’) management of the Operating Partnership’s assets.

12.           EXPENSES.
 
(a)           In addition to the compensation paid to the Advisor pursuant to
Section 11, the Company or the Operating Partnership shall pay directly or
reimburse the Advisor for the expenses paid or incurred by the Advisor or its
Affiliates in connection with the services they provide to the Company and the
Operating Partnership pursuant to this Agreement, as set forth below:
 
(i)             Intentionally omitted;
 
(ii)           Acquisition Expenses, subject to the limitation set forth in
Section 11(b);
 
(iii)          the actual out-of-pocket cost of goods and services used by the
Company and obtained from entities not Affiliated with the Advisor;
 
(iv)          interest and other costs for Loans, including discounts, points
and other similar fees; 
 
(v)           taxes and assessments on income of the Company or Investments;

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(vi)    costs associated with insurance required in connection with the business
of the Company or by the Board;
 
(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 Board and Stockholders;
 
(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;
 
(x)           expenses connected with payments of Distributions;
 
(xi)          expenses of organizing, revising, amending, converting, modifying
or terminating the Company, the Operating Partnership or any subsidiary thereof
or the Articles of Incorporation, Bylaws, Corporate Governance Guidelines or
governing documents of the Operating Partnership or any subsidiary of the
Company or the Operating Partnership;
 
(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 costs and expenses
incurred by the Advisor or its Affiliates in fulfilling its duties hereunder,
including reasonable salaries and wages, benefits and overhead of all employees
of the Advisor or its Affiliates directly involved in the performance of such
services; provided, however, that no reimbursement shall be made for costs of
such employees of the Advisor or its Affiliates to the extent that such
employees perform services for which the Advisor receives a separate fee; and
 
(xiv)        audit, accounting and legal fees.
 
(b)           Expenses incurred by the Advisor on behalf of the Company and the
Operating Partnership or in connection with the services provided by the Advisor
hereunder and payable pursuant to this Section 12 shall be reimbursed, no less
than monthly, to the Advisor in the manner and proportion directed by the
Advisor.
  
13.          OTHER SERVICES.    Should the Board request that the Advisor or any
director, officer, employee or assignee 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 customary rates and in such customary
amounts as are agreed upon by the Advisor and the Board, as applicable,
including a majority of the Independent Directors, subject to the limitations
contained in the Articles of Incorporation and Corporate Governance Guidelines,
and shall not be deemed to be services pursuant to the terms of this Agreement.
 
14.          REIMBURSEMENT TO THE ADVISOR.    The Company shall not reimburse
the Advisor at the end of any fiscal quarter in which Total Operating Expenses
incurred by the Advisor for the four (4) consecutive fiscal quarters then ended
(the “Expense Year”) exceed (the “Excess Amount”) the greater of two percent
(2%) of Average Invested Assets or twenty-five percent (25%) 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 (or the Company shall disclose such fact to the
Stockholders in the next quarterly report of the Company or by filing a

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Current Report on Form 8-K with the SEC within 60 days of such quarter end),
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.  All figures
used in the foregoing computation shall be determined in accordance with GAAP
applied on a consistent basis.
 
15.          OTHER ACTIVITIES OF THE ADVISOR.   Except as set forth in this
Section 15, nothing herein contained shall prevent the Advisor or any of its
Affiliates from engaging in or earning fees from other activities, including the
rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Sponsor 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
any of its Affiliates to engage in or earn fees from any other business or to
render services of any kind to any other Person and earn fees for rendering such
services; provided, however, that the Advisor must devote sufficient resources
to the Company’s business to discharge its obligations to the Company under this
Agreement.  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 Person.  If the
Advisor, Director or Affiliates thereof have sponsored other investment programs
with similar investment objectives which have investment funds available at the
same time as the Company, the Advisor shall inform the Board of the method to be
applied by the Advisor in allocating investment opportunities among the Company
and competing investment entities and shall provide regular updates to the Board
of the investment opportunities provided by the Advisor to competing programs in
order for the Board (including the Independent Directors) to fulfill its duty to
ensure that the Advisor and its Affiliates use their reasonable best efforts to
apply such method fairly to the Company.  

16.    VOTING AGREEMENT.
(a)     The Company shall have no obligation to take any action necessary to
cause a representative of the Advisor to be a member of the Board of Directors
of the Company.
(b)     The Advisor agrees that, with respect to any Shares now or hereinafter
owned by it, the Advisor will not vote or consent on matters submitted to the
stockholders of the Company regarding (i) the removal of the Advisor or any
Affiliate of the Advisor or (ii) any transaction between the Company and the
Advisor or any of its Affiliates. This voting restriction shall survive until
such time that the Advisor is no longer serving as such.
17.    THE PHILLIPS EDISON AND PECO NAMES. The Advisor and its Affiliates have
or may have a proprietary interest in the names “Phillips Edison” and “PECO.”
The Advisor hereby grants to the Company, to the extent of any proprietary
interest the Advisor may have in any of the names “Phillips Edison” and “PECO,”
a non‑transferable, non‑assignable, non‑exclusive royalty‑free right and license
to use the names “Phillips Edison” and “PECO” during the term of this Agreement.
The Company agrees that the Advisor and its Affiliates will have the right to
approve of any use by the Company of the names “Phillips Edison” and “PECO,”
such approval not to be unreasonably withheld or delayed. Accordingly, and in
recognition of this right, if at any time the Company ceases to retain the
Advisor or one of its Affiliates to perform advisory services for the Company,
the Company will, promptly after receipt of written request from the Advisor,
cease to conduct business under or use the names “Phillips Edison” and “PECO” or
any derivative thereof and the Company shall change its name and the names of
any of its subsidiaries to a name that does not contain any of the names
“Phillips Edison” and “PECO” or any other word or words that might, in the
reasonable discretion of the Advisor, be susceptible of indication of some form
of relationship between the Company and the Advisor or any its Affiliates. At
such time, the Company will also make any changes to any trademarks,
servicemarks or other marks necessary to remove any references to any of the
names “Phillips Edison” or “PECO.” Consistent with the foregoing, it is
specifically recognized that the Advisor or one or

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more of its Affiliates has in the past and may in the future organize, sponsor
or otherwise permit to exist other investment vehicles (including vehicles for
investment in real estate) and financial and service organizations having any of
the names “Phillips Edison” or “PECO” as a part of their name, all without the
need for any consent (and without the right to object thereto) by the Company.
Neither the Advisor nor any of its Affiliates makes any representation or
warranty, express or implied, with respect to the names “Phillips Edison” or
“PECO” licensed hereunder or the use thereof (including without limitation as to
whether the use of the name “Phillips Edison” or “PECO” will be free from
infringement of the intellectual property rights of third parties).
Notwithstanding the preceding, the Advisor represents and warrants that it is
not aware of any pending claims or litigation or of any claims threatened in
writing regarding the use or ownership of the names “Phillips Edison” or “PECO.”
 
18.          TERM OF AGREEMENT.   This Agreement shall continue in force until
January 22, 2018.  Thereafter, the Agreement may be renewed for an unlimited
number of successive terms not to exceed one year each upon mutual consent of
the parties. The Board (including a majority of the Independent Directors) will
evaluate the performance of the Advisor annually.
 
19.          TERMINATION BY THE PARTIES.   This Agreement may be terminated
immediately by the Independent Directors of the Company, without Cause and
without penalty, upon thirty (30) days’ written notice to the Advisor; provided,
however, that the Company may accelerate the termination of this Agreement if an
earlier termination is necessary to allow the Company to draw funds from any
Company-level debt facility and the Company provides notice to the Advisor of
the need for such earlier termination. This Agreement may be terminated upon
sixty (60) days’ prior written notice (a) by the Advisor, without Cause and
without penalty, (b) by the Advisor for Good Reason, or (c) by the Advisor upon
a Change of Control; provided, that termination of this Agreement with Cause
shall be upon forty-five (45) days’ prior written notice.  The provisions of
Sections 17 and 21 through 34 (inclusive) of this Agreement shall survive any
expiration or earlier termination of this Agreement. 
 
20.          ASSIGNMENT TO AN AFFILIATE.   This Agreement may be assigned by the
Advisor to an Affiliate with the approval of a majority of the Directors
(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 Directors.  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 Person which is a successor to all the assets, rights and
obligations of the Company or the Operating Partnership, in which case such
successor Person shall be bound hereunder and by the terms of said assignment in
the same manner as the Company or the Operating Partnership, as applicable, is
bound by this Agreement.
 
21.          PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.
 
(a)             Amounts Owed.  After the Termination Date, the Advisor shall be
entitled to receive from the Company or the Operating Partnership within thirty
(30) days after the Termination Date all amounts then accrued and owing to the
Advisor, including all its interest in the Company’s income, losses,
distributions and capital by payment of an amount equal to the then-present fair
market value of the Advisor’s, subject to the 2%/25% Guidelines to the extent
applicable. In the event that the termination of this Agreement is accelerated
by the Company as permitted under Section 19, the Company shall continue to pay
to the Advisor the fees contemplated under this Agreement during the 30-day
period that follows the Company’s delivery to the Advisor of its initial written
notice of termination.
  
(b)            Advisor’s Duties.  The Advisor shall promptly upon termination of
this Agreement: 
 
(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;

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(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.
 
22.         INCORPORATION OF THE ARTICLES OF INCORPORATION, CORPORATE GOVERNANCE
GUIDELINES AND THE OPERATING PARTNERSHIP AGREEMENT.  To the extent that the
Articles of Incorporation, the Corporate Governance Guidelines or the Operating
Partnership Agreement as in effect on the date hereof impose obligations or
restrictions on the Advisor or grant the Advisor certain rights which are not
set forth in this Agreement, the Advisor shall abide by such obligations or
restrictions and such rights shall inure to the benefit of the Advisor with the
same force and effect as if they were set forth herein.
 
23.          INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP. 
 
(a)           The Company and the Operating Partnership, jointly and severally,
shall indemnify and hold harmless the Advisor and its Affiliates, as well as
their respective officers, directors, equity holders, members, partners,
stockholders, other equity holders and employees (collectively, the
“Indemnitees,” and each, an “Indemnitee”), from and against all losses, claims,
damages, losses, joint or several, expenses (including reasonable attorneys’
fees and other legal fees and expenses), judgments, fines, settlements, and
other amounts (collectively, “Losses,” and each, a “Loss”) arising in the
performance of their duties hereunder, including reasonable attorneys’ fees, to
the extent such Losses are not fully reimbursed by insurance, and to the extent
that such indemnification would not be inconsistent with the Corporate
Governance Guidelines. Notwithstanding the foregoing, the Company and the
Operating Partnership shall not provide for indemnification of an Indemnitee for
any Loss suffered by such Indemnitee, nor shall they provide that an Indemnitee
be held harmless for any Loss suffered by the Company and the Operating
Partnership, unless all the following conditions are met:
 
(i)           the Indemnitee has determined, in good faith, that the course of
conduct that caused the loss or liability was in the best interest of the
Company and the Operating Partnership;
 
(ii)          the Indemnitee was acting on behalf of, or performing services
for, the Company or the Operating Partnership;
 
(iii)         such Loss was not the result of negligence or willful misconduct
by the Indemnitee; and
 
(iv)        such indemnification or agreement to hold harmless is recoverable
only out of the Company’s net assets and not from the Stockholders.
 
(b)           Notwithstanding the foregoing, an Indemnitee shall not be
indemnified by the Company and the Operating Partnership for any Losses 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:
 
(i)           there has been a successful adjudication on the merits of each
count involving alleged securities law violations as to the Indemnitee; 
 
(ii)         such claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the Indemnitee; or
 
(iii)         a court of competent jurisdiction approves a settlement of the
claims against the Indemnitee and finds that indemnification of the settlement
and the related costs should be made, and the court considering the

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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.
 
(c)           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 the following conditions are satisfied:
 
(i)           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;
 
(ii)          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
 
(iii)         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.
 
24.          INDEMNIFICATION BY ADVISOR.   The Advisor shall indemnify and hold
harmless the Company and the Operating Partnership from Losses, including
reasonable attorneys’ fees to the extent that such Losses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, willful misfeasance, intentional misconduct, gross 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.

The Advisor, on behalf of PECO Member, shall indemnify and hold harmless the
Company and the Operating Partnership from Losses, including reasonable
attorneys’ fees, to the extent that such Losses are not fully reimbursed by
insurance and are incurred by reason of PECO Member’s bad faith, fraud, willful
misfeasance, intentional misconduct, gross negligence or reckless disregard of
its duties as Manager (as defined in the operating agreement of Phillips Edison
Value Added Grocery Venture, LLC) of the TPG Joint Venture; 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 PECO
Member in connection with the TPG Joint Venture.
 
25.          NOTICES.   Any notice, report or other communication (each a
“Notice”) required or permitted to be given hereunder shall be in writing unless
some other method of giving such Notice is required by the Articles of
Incorporation, the Bylaws, and shall be given by being delivered by hand, by
courier or overnight carrier or by registered or certified mail to the addresses
set forth below: 

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To the Company:
Phillips Edison Grocery Center REIT II, Inc.
 
11501 Northlake Drive
 
Cincinnati, Ohio 45249
 
Attention: R. Mark Addy, Co-President and Chief Operating Officer
 
 
 
 
 
 
 
with a copy to:
 
 
 
DLA Piper LLP (US)
 
4141 Parklake Drive, Suite 300
 
Raleigh, North Carolina 27612
 
Attention:  Robert Bergdolt, Esq.
 
 
 
 
To the Operating Partnership:
Phillips Edison Grocery Operating Partnership II, L.P.
 
11501 Northlake Drive
 
Cincinnati, Ohio 45249
 
Attention:  R. Mark Addy

 
 
 
with a copy to:

DLA Piper LLP (US)
4141 Parklake Drive, Suite 300
Raleigh, North Carolina 27612
Attention:  Robert Bergdolt, Esq.
 
 
 
 
 
 
 
 
To the Advisor:
Phillips Edison NTR II LLC
 
11501 Northlake Drive
 
Cincinnati, OH 45249
 
Attention:  R. Mark Addy
 
 
 
with a copy to:
 
 
 
DLA Piper LLP (US)
 
4141 Parklake Drive, Suite 300
 
Raleigh, North Carolina 27612
 
Attention:  Robert Bergdolt, Esq.
 
 

 
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 25.

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26.          MODIFICATION.   This Agreement shall not be amended, supplemented,
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.
 
27.          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.
 
28.         GOVERNING LAW.   The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of New York as at the
time in effect, without regard to the principles of conflicts of laws thereof.
 
29.          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.  
 
30.          NO WAIVER.   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.
 
31.         PRONOUNS AND PLURALS.   Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
 
32.          HEADINGS.   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. 
 
33.          EXECUTION IN COUNTERPARTS.   This Agreement may be executed
(including by facsimile transmission) with counterpart signature pages or 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.

34.    THIRD PARTY BENEFICIARIES. Except for those Persons entitled to
indemnification under Section 23 who shall be third party beneficiaries of this
Agreement, no other Person is a third party beneficiary of this Agreement.

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
 
 
Phillips Edison Grocery Center REIT II, Inc.
      
By:     /s/ R. Mark
Addy                                                                  
   R. Mark Addy, President
 
 

Phillips Edison Grocery Center Operating Partnership II, L.P.

By: Phillips Edison Grocery Center REIT II, Inc., its general partner
     
By:     /s/ R. Mark
Addy                                                                  
   R. Mark Addy, President
 
 

Phillips Edison NTR II LLC

By:     /s/ R. Mark
Addy                                                                  
   R. Mark Addy, President

 
 

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