Exhibit 10.5

DEALER MANAGER AGREEMENT

CNL HEALTHCARE PROPERTIES II, INC.

THIS DEALER MANAGER AGREEMENT (this “Agreement”) is made and entered into as of
the 2nd day of March, 2016, between CNL HEALTHCARE PROPERTIES II, INC., a
Maryland corporation (the “Company”) and CNL SECURITIES CORP., a Florida
corporation (the “Dealer Manager”).

WHEREAS, the Company has prepared and filed with the U.S. Securities and
Exchange Commission (the “SEC”) a registration statement on Form S-11
(Registration No. 333-206017) with respect to the continuous public offer and
sale (the “Offering”) of an aggregate of up to $2,000,000,000 in shares in any
combination of the Class A shares (“Class A Shares”), Class T shares (“Class T
Shares”) and Class I shares (“Class I Shares”) of the Company’s common stock
(collectively, the “Shares”), of which up to $1,750,000,000 is intended to be
offered in the Company’s primary offering (the “Primary Offering”) and up to
$250,000,000 is intended to be offered pursuant to the Company’s distribution
reinvestment plan (the “Distribution Reinvestment Plan”), pursuant to the
Securities Act of 1933, as amended (the “1933 Act”), and the applicable rules
and regulations of the SEC promulgated  thereunder (the “Regulations”);
provided, that the Company reserves the right to reallocate the Shares offered
between the Distribution Reinvestment Plan and the Primary Offering; and

WHEREAS, the Company’s registration statement on Form S-11 and the prospectus
contained therein, as finally amended or supplemented on the date the
registration statement is declared effective by the SEC (including financial
statements, exhibits and all other documents related thereto filed as a part
thereof), and any registration statement filed under Rule 462 of the
Regulations,  are respectively hereinafter referred to as the “Registration
Statement” and the “Prospectus,” except that (i) if the Company files a
post-effective amendment to such registration statement, then the term
“Registration Statement” shall, from and after the declaration of the
effectiveness of such post-effective amendment by the SEC, refer to such
registration statement as amended by such post-effective amendment, and the term
“Prospectus” shall refer to the amended or supplemented prospectus then on file
with the SEC, and (ii) if the Prospectus filed by the Company pursuant to Rule
424(b) or 424(c) of the Regulations shall differ from the prospectus on file at
the time the Registration Statement or the most recent post-effective amendment
thereto, if any, shall have become effective, then the term “Prospectus” shall
refer to such prospectus filed pursuant to Rule 424(b) or 424(c) from and after
the date on which it shall have been filed with the SEC; and

WHEREAS, the Dealer Manager is a corporation incorporated and presently in good
standing in the State of Florida, and is presently (a) registered as a
broker-dealer with the SEC; (b) a member of the Financial Industry Regulatory
Authority, Inc. (“FINRA”); and (c) licensed or registered with the authorities
administering the securities laws in all fifty (50) states in the United States,
the District of Columbia and the Commonwealth of Puerto Rico as a securities
broker-dealer authorized to offer and sell to members of the public securities
of the type represented by the Shares; and

WHEREAS, the Offering shall be made pursuant to the terms and conditions of this
Agreement, the Registration Statement and the Prospectus and, further, pursuant
to the terms and conditions of all applicable federal securities laws and
applicable securities laws of all jurisdictions in which the Shares are offered
and sold; and

WHEREAS, the Company desires to retain the Dealer Manager to use its best
efforts to offer and sell the Shares on behalf of the Company and to manage
offers and sales by others, and the Dealer Manager is willing and desires to
accept such retention and serve as the Dealer Manager for the Company for the
sale of Shares, all upon the terms and conditions set forth in this Agreement
and the Prospectus.

 

 

 

 

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NOW, THEREFORE, in consideration of the terms and conditions hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is agreed between the Company and the Dealer
Manager as follows:

Article 1
Appointment

Subject to and in accordance with the terms and conditions set forth in this
Agreement, the Company hereby appoints the Dealer Manager as the dealer manager
of the Offering to use its best efforts to effect offers and sales of the Shares
pursuant to the Offering on behalf of the Company and to manage Share offers and
sales by Participating Brokers and Registered Investment Advisors whom the
Dealer Manager may retain (“Share Offers and Sales”).  The Dealer Manager hereby
accepts such appointment as defined below.

Article 2
Sale of Shares

2.1Best Efforts.  The Dealer Manager shall use its best efforts to conduct Share
Offers and Sales in such quantities and to such persons as shall be in
accordance with the terms and conditions set forth in this Agreement, the
Registration Statement and the Prospectus.  The Dealer Manager shall perform
services hereunder during the period (the “Offering Period”) commencing on the
initial effective date of the Registration Statement and ending on the earliest
of the following: (a) the later of (i) three years after such effective date, or
(ii) if deemed necessary by the Company and at the Company’s election, such
later date to which the Company is permitted to extend the Offering in
accordance with the rules of the SEC; (b) the acceptance by the Company of
subscriptions in the Offering for Shares, including Shares available to
investors who participate in the Distribution Reinvestment Plan in an amount
equal to the maximum aggregate value of the Offering as set forth in the
Registration Statement and Prospectus; (c) the termination of the Offering by
the Company; (d) the termination of the effectiveness of the Registration
Statement; or (e) the liquidation or dissolution of the
Company.  Notwithstanding anything herein to the contrary, the Dealer Manager
shall have no obligation under this Agreement to purchase any of the Shares for
its own account.

2.2Engagement of Other Broker-Dealers.  The Company hereby acknowledges and
agrees that the Dealer Manager, in its sole discretion, may engage other
broker-dealers, registered investment advisors and other financial
intermediaries to participate in the Offering and conduct Share Offers and Sales
(the “Participating Brokers,” each a “Participating Broker”), provided that (a)
each Participating Broker is registered as a broker-dealer with the SEC, is a
member of FINRA and is duly licensed or registered (or exempt from such
licensing or registration) as a broker-dealer by the regulatory authorities in
the jurisdictions in which such Participating Broker will conduct Share Offers
and Sales, and (b) all such engagements are evidenced by written agreements, the
terms and conditions of which is substantially similar to the form of
Participating Broker agreement attached hereto as Exhibit A or in such other
form as is approved by the Company (the “Participating Broker Agreement”).  The
Dealer Manager is authorized to reallow so much of the commissions, dealer
manager fees and distribution and stockholder servicing fees which it receives
pursuant to Article 3 herein to Participating Brokers as the Dealer Manager
deems appropriate; provided, however, that the Dealer Manager shall not reallow
any such commissions, dealer manager fees or distribution and stockholder
servicing fees to registered investment advisors.  The Dealer Manager is
authorized to reimburse Participating Brokers for due diligence expenses as the
Dealer Manager deems appropriate and as provided herein.

2.3Suitability and Minimum Purchase Requirements.

(a)The Dealer Manager shall, and by virtue of entering into a Participating
Broker Agreement, each Participating Broker shall agree to, with respect to
Share Offers and Sales, affirm that it will use every reasonable effort to
assure that Shares are offered and sold (including Shares made available for
purchase pursuant to the Distribution Reinvestment Plan) only to prospective
investors who, in each case:

(i)meet the investor suitability standards for the purchase of Shares, including
the minimum income and net worth standards and the minimum purchase requirements
set forth in the Prospectus, as amended and supplemented (the “Investor
Standards and Requirements”);

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(ii)can reasonably benefit from an investment in the Shares based on such
prospective investor’s overall investment objectives and portfolio structure; 

(iii)are able to bear the economic risk of the investment based on such
prospective investor’s overall financial situation; and

(iv)have an apparent understanding of (A) the fundamental risks of the
investment; (B) the risk that such prospective investor may lose its entire
investment; (C) the lack of liquidity of the Shares; (D) the restrictions on
transferability of the Shares; (E) the background and qualifications of CHP II
Advisors, LLC, the advisor to the Company (the “Advisor”); and (F) the tax and
other legal and financial consequences of an investment in the Shares.  

(b)Pursuant to the terms of the Participating Broker Agreement, the Dealer
Manager shall require Participating Brokers to make the determinations required
pursuant to Section 2.3(a) based on information they have obtained from each
prospective investor, including but not limited to such prospective investor’s
age, investment objectives, investment experience, income, net worth, financial
situation, other investments of the prospective investor and any other pertinent
factors deemed by the Dealer Manager to be relevant.  The Dealer Manager will
rely upon each Participating Broker to gather such information and make such
suitability determinations with respect to investors solicited by such
Participating Broker.

(c)The Dealer Manager shall require each Participating Broker to maintain such
records evidencing compliance with the determination of the Investor Standards
and Requirements, as required by Sections 2.3(a) and 2.3(b) herein for a period
not less than that required in order to comply with all applicable federal,
state and other statutory and regulatory requirements, including, without
limitation the Statement of Policy Regarding Real Estate Investment Trusts of
the North American Securities Administrators Association, Inc., as amended (the
“NASAA Guidelines”).

(d)In connection with Share Offers and Sales conducted by the Dealer Manager,
the Dealer Manager shall use reasonable efforts to ensure that each investor who
elects to participate in the Distribution Reinvestment Plan meets the Investor
Standards and Requirements.

(e)The Dealer Manager shall comply fully with all the applicable provisions of
FINRA’s rules (the “FINRA Rules”).

(f)The Dealer Manager agrees to comply with the applicable provisions of Article
III.C of the NASAA Guidelines.

(g)The Dealer Manager shall communicate to each of its sales agents, registered
representatives and other appropriate persons associated with it the Investor
Standards and Requirements, and shall require each Participating Broker to
acknowledge compliance with the NASAA Guidelines and the FINRA Rules.

2.4Approved Sales Literature.  The Dealer Manager shall use and distribute in
conjunction with Share Offers and Sales only the Prospectus, the Subscription
Agreement (as defined below), and such sales literature, advertising and other
material as shall have been previously approved by the Company or an authorized
agent of the Company in writing and all appropriate regulatory agencies (the
“Approved Sales Literature”), and hereby agrees that it shall not, and shall
instruct Participating Brokers not to, use or distribute in conjunction with
Share Offers and Sales any information other than Approved Sales Literature.

2.5Jurisdictions.  The Dealer Manager shall conduct (and cause the Participating
Broker to conduct) Share Offers and Sales only in those jurisdictions specified
in writing by the Company.  The Company shall specify only such jurisdictions
where the offer and sale of its Shares have been authorized by appropriate
regulatory authorities or where it has determined such authorization is not
required.  No Shares shall be offered or sold in any other jurisdictions.

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Article 3

Subscription Payment Procedures

3.1In order to purchase Shares, subscriber must complete and execute a
subscription agreement in substantially the most recent form thereof attached as
an appendix to the Registration Statement encompassing the Prospectus (a
“Subscription Agreement”).  Checks for subscriptions shall be made payable in
the amount per Share as described in the Prospectus, subject to certain
discounts as set forth in the Prospectus.  The Dealer Manager shall, and shall
cause the Participating Brokers to, instruct subscribers to make checks for
subscriptions payable to the order of “UMB BANK, N.A., as EA for CNL HEALTHCARE
PROPERTIES II, INC.” or, after the Company raises $2 million in the Offering
(the “Minimum Offering”), to the Company, and shall promptly return any check
made payable to another party to the Participating Broker or subscriber who
submitted such check no later than the end of the next business day following
its receipt.  The Dealer Manager shall, and shall cause Participating Brokers
to, instruct subscribers to wire funds directly to UMB Bank, N.A. (the “Escrow
Agent”) as set forth in the Subscription Agreement.  Checks received which
conform to the foregoing instructions shall be transmitted under one of the
transmittal procedures described below. Notwithstanding the foregoing, until $20
million (the “Washington Minimum”) has been raised in the Offering, investments
from Washington investors will be held in a segregated account held by the
escrow agent and until $87.5 million (the “Pennsylvania Minimum”) has been
raised in the Offering, investments from Pennsylvania investors will be held in
a segregated account held by the escrow agent. Unless and until the Washington
Minimum or the Pennsylvania Minimum has been respectively reached, the Dealer
Manager shall, and shall cause the Participating Brokers investors in those
states shall continue to make checks for subscriptions payable to the order of
“UMB BANK, N.A., as EA for CNL HEALTHCARE PROPERTIES II, INC.”

3.2Where, pursuant to a Participating Broker’s internal supervisory procedures,
internal supervisory review is conducted at the same location at which
subscription documents and checks are received from subscribers, checks will be
transmitted by the end of the next business day following receipt by the
Participating Broker for deposit to DST Systems, Inc., as the processing agent
for the Escrow Agent (the “Processing Agent”) or, after the Minimum Offering (or
Washington Minimum or Pennsylvania Minimum, as applicable) has been achieved, to
the Company or its agent.

3.3Where, pursuant to a Participating Broker’s internal supervisory procedures,
final internal supervisory review is conducted at a different location, checks
will be transmitted by the end of the next business day following receipt by the
Participating Broker to the office of the Participating Broker conducting such
final internal supervisory review (the “Final Review Office”).  The Final Review
Office will in turn by the end of the next business day following receipt by the
Final Review Office, transmit such checks for deposit to the Processing Agent
for the Escrow Agent or, after the Minimum Offering (or Washington Minimum or
Pennsylvania Minimum, as applicable) has been achieved, to the Company or its
agent.

3.4Where the Dealer Manager (or its agent) receives investor proceeds, checks
will be transmitted by the Dealer Manager (or its agent) for deposit to the
Processing Agent for the Escrow Agent or, after the Minimum Offering (or
Washington Minimum or Pennsylvania Minimum, as applicable) has been achieved, to
the Company or its agent as soon as practicable but in any event by the end of
the second business day following receipt by the Dealer Manager (or its agent).
Checks of rejected potential investors will be promptly returned to such
potential investors.

Article 4
Compensation

4.1Commissions, Dealer Manager Fees and Distribution and Stockholder Servicing
Fee.

(a)Except as may be provided in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time, the Company
shall pay to the Dealer Manager, as compensation for all services to be rendered
by the Dealer Manager pursuant to this Agreement, a commission of seven percent
(7.0%) of the gross proceeds from the completed sale of Class A Shares in the
Primary Offering, and two percent (2.0%) of the gross proceeds from the
completed sale of Class T Shares in the Primary Offering, regardless of whether
such Shares are sold by the Dealer Manager or a Participating Broker. The
Company will not pay commissions for sales of Class A or Class T Shares pursuant
to the Distribution Reinvestment Plan, and will not

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pay commissions for sales of any Class I Shares in the Primary Offering or
pursuant to the Distribution Reinvestment Plan.  The Company may pay reduced
commissions or eliminate commissions on certain sales of Shares in accordance
with, and on the terms set forth in, the Prospectus and Section 4.2(a) and
4.2(b) herein, which reduction or elimination of commissions will not change the
net proceeds to the Company.  Such commission rate shall remain in effect during
the full term of this Agreement unless otherwise changed by a written agreement
between the parties hereto.  The Dealer Manager may reallow all or any portion
of such selling commissions to Participating Brokers as it sees fit. 

(b)Except as may be provided in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time, the Company
shall pay to the Dealer Manager a dealer manager fee for assistance in selling
and marketing the Shares of two and three-fourths percent (2.75%) of the gross
proceeds from the completed sale of Class A Shares and Class T Shares in the
Primary Offering. The Company will not pay a dealer manager fee for sales of
Class A or Class T Shares pursuant to the Distribution Reinvestment Plan, and
will not pay a dealer manager fee for sales of any Class I Shares in the Primary
Offering or pursuant to the Distribution Reinvestment Plan.   The Dealer Manager
may reallow all or any portion of this dealer manager fee for each Share sold by
a Participating Broker which agrees to comply with one or more of the following
conditions:

(i)have and use internal marketing support personnel (such as telemarketers or a
marketing director) to assist the Dealer Manager’s marketing team;

(ii)have and use internal marketing communications vehicles, including, but not
limited to, newsletters, conference calls, interactive technology and internal
mail to promote the Company and this Offering;

(iii)provide access to registered representative list, updated quarterly;

(iv)assist investors with reinvestments and redemptions;

(v)maintain the technology necessary to adequately service investors as
otherwise associated with the Offering; and

(vi)provide other services as requested by investors from time to time.

(c)Except as may be provided in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time, the Company
will pay to the Dealer Manager an annual distribution and stockholder servicing
fee in connection with sales of Class T Shares and Class I Shares in the Primary
Offering during the term of this Agreement, subject to the limitations set forth
below. The annual distribution and stockholder servicing fee of 1.0% per annum
and 0.50% per annum of the then-current Primary Offering price (or, in certain
cases as described in the Prospectus, the amount of the estimated net asset
value per Share) per Class T Share and Class I Share, respectively, will accrue
daily and be paid to the Dealer Manager quarterly in arrears, as provided in the
“The Plan of Distribution” section of the Prospectus. For Class T Shares and
Class I Shares, the Dealer Manager agrees to provide oversight services related
to administration of the annual distribution and stockholder servicing fee,
which may include oversight of the Company’s Transfer Agent, tracking
underwriting compensation consistent with applicable regulatory limits,
monitoring the applicable cap on the annual distribution and stockholder
servicing fee for the Class T Shares and Class I Shares, and assistance with
Stockholder share conversions. The Dealer Manager may reallow all or a portion
of the distribution and stockholder servicing fee to one or more Participating
Brokers or other broker-dealers providing services with respect to the Class T
Shares or Class I Shares to the extent a Participating Broker Agreement or other
servicing agreement with such Participating Broker or servicing broker-dealer
provides for such a reallowance. All determinations regarding reallowance of the
annual distribution and stockholder servicing fee will be made in good faith in
its sole discretion. Additionally, for Class T Shares and Class I Shares, the
Dealer Manager also agrees to use commercially reasonable efforts to cause a
Participating Broker whose Participating Broker Agreement provides for a
reallowance of the annual distribution and stockholder servicing fee to make
available on-going shareholder and account maintenance services with respect to
the Company’s Class T Shares and/or Class I Shares, as applicable, in accordance
with the terms of such Participating Broker’s Participating Broker Agreement.

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(d)The Company will cease paying the annual distribution and stockholder
servicing fee with respect to Class T Shares held in any particular account, and
those Class T Shares will convert into a number of Class A Shares determined by
multiplying each Class T Share to be converted by the applicable “Conversion
Rate” described in the Prospectus, on the earlier of (i) a listing of the Class
A Shares on a national securities exchange; (ii) a merger or consolidation of
the Company with or into another entity, or the sale or other disposition of all
or substantially all of the Company’s assets; (iii) after the termination of the
primary offering in which the initial Class T Shares in the account were sold,
the end of the month in which total underwriting compensation paid in the
primary offering is not less than 10% of the gross proceeds of the primary
offering from the sale of Class A, Class T and Class I Shares; and (iv) the end
of the month in which the total underwriting compensation paid in a primary
offering with respect to such Class T Shares purchased in a primary offering,
comprised of the dealer manager fees, selling commissions, and annual
distribution and stockholder servicing fees, is not less than 9.75% of the gross
offering price of those Class T Shares purchased in such primary offering
(excluding shares purchased through our distribution reinvestment plan and those
received as stock dividends). If the Company redeems a portion, but not all of
the Class T Shares held in a stockholder’s account, the total underwriting
compensation limit and amount of underwriting compensation previously paid will
be prorated between the Class T Shares that were redeemed and those Class T
Shares that were retained in the account. Likewise, if a portion of the Class T
Shares in a stockholder’s account is sold or otherwise transferred in a
secondary transaction, the total underwriting compensation limit and amount of
underwriting compensation previously paid will be prorated between the Class T
Shares that were transferred and the Class T Shares that were retained in the
account.  

(e)The Company will cease paying the annual distribution and stockholder
servicing fee with respect to Class I Shares held in any particular account, and
those Class I Shares will convert into a number of Class A Shares determined by
multiplying each Class I Share to be converted by the applicable “Conversion
Rate” described in the Prospectus, on the earlier of (i) a listing of the Class
A Shares on a national securities exchange; (ii) a merger or consolidation of
the Company with or into another entity, or the sale or other disposition of all
or substantially all of the Company’s assets; (iii) after the termination of the
primary offering in which the initial Class I Shares in the account were sold,
the end of the month in which total underwriting compensation paid in the
primary offering is not less than 10% of the gross proceeds of the primary
offering from the sale of Class A, Class T and Class I Shares; and (iv) the end
of the month in which the total underwriting compensation paid in a primary
offering with respect to such Class I Shares purchased in a primary offering,
comprised of the dealer manager fees, selling commissions, and annual
distribution and stockholder servicing fees, is not less than 9.75% of the gross
offering price of those Class I Shares purchased in such primary offering
(excluding shares purchased through our distribution reinvestment plan and those
received as stock dividends). If the Company redeems a portion, but not all of
the Class I Shares held in a stockholder’s account, the total underwriting
compensation limit and amount of underwriting compensation previously paid will
be prorated between the Class I Shares that were redeemed and those Class I
Shares that were retained in the account. Likewise, if a portion of the Class I
Shares in a stockholder’s account is sold or otherwise transferred in a
secondary transaction, the total underwriting compensation limit and amount of
underwriting compensation previously paid will be prorated between the Class I
Shares that were transferred and the Class T Shares that were retained in the
account.

(f)The Company will further cease paying the annual distribution and stockholder
servicing fee on any Class T or Class I Share that is redeemed or repurchased,
as well as upon the Company’s dissolution, liquidation or the winding up of the
Company’s affairs, or a merger or other extraordinary transaction in which the
Company is a party and, with respect to Class T Shares, in which the Class T
Shares as a class are exchanged for cash or other securities, or, with respect
to Class I Shares, in which the Class I Shares as a class are exchanged for cash
or other securities. If the Company liquidates (voluntarily or otherwise),
dissolves or winds up its affairs, then, immediately before such liquidation,
dissolution or winding up, the Class T Shares and Class I Shares will
automatically convert to Class A Shares at the applicable Conversion Rate and
the Company’s net assets, or the proceeds therefrom, will be distributed to the
holders of Class A Shares, which will include all converted Class T Shares and
Class I Shares, in accordance with their proportionate interests. A distribution
and stockholder servicing fee will not be paid on any Class A Shares sold in the
Primary Offering or pursuant to the Distribution Reinvestment Plan or any Class
T or Class I Shares pursuant to the Distribution Reinvestment Plan.

(g)The Dealer Manager may reimburse Participating Brokers for (i) technology
costs and (ii) other costs and expenses associated with the Offering, the
facilitation of the marketing of the Shares and the

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ownership of such Shares by the customers of Participating Brokers from the
portion of the selling commissions and the dealer manager fee retained by the
Dealer Manager.   

4.2Reduced Fees and Other Fee Matters.

(a)Notwithstanding Section 4.1 herein, in accordance with the terms of the
Prospectus, which may be amended and supplemented from time to time, the
following persons and entities may purchase Class A Shares net of the seven
percent (7.0%) commission and the two and three-fourths percent (2.75%) dealer
manager fee (assuming no other discounts apply): (i) the Advisor and its or the
Company’s officers, directors, employees or affiliates, or the officers,
directors and employees of such affiliates, and their immediate family members;
(ii) any plan established exclusively for the benefit of the persons or entities
listed in (i) above; (iii) if approved by the Company’s board of
directors,  joint venture partners, consultants and other service providers; and
(iv) Participating Brokers and their directors, officers or employees (and the
immediate family members of any of the foregoing persons).  Further
notwithstanding Section 4.1 herein, in accordance with the terms of the
Prospectus, which may be amended and supplemented from time to time, the
following persons and entities may purchase Class A Shares net of the seven
percent (7.0%) commission (assuming no other discounts apply): (i) a client of
an investment advisor registered under the Investment Advisers Act of 1940, as
amended, or under applicable state securities laws that is affiliated with or
dually registered with a Participating Broker whom the investor has agreed to
pay compensation for investment advisory services or other investment advice
(other than a broker-dealer who does not have a fixed or “wrap” account or other
asset fee arrangement with the investor); (ii) a person whose contract for
investment advisory and related brokerage services includes a fixed fee or
fee-based program, also known as a “wrap” account or other alternative fee
arrangements; (iii) a person investing in a bank trust account with respect to
which the decision-making authority for investments has been delegated to the
bank trust department, and (iv) a person investing through a family office, or
any endowment, foundation or pension fund.  For purposes of this paragraph,
“immediate family members” shall have the meaning set forth in the
Prospectus.  In addition, Participating Brokers that have a contractual
arrangement with their clients for the payment of fees on terms that are
inconsistent with the acceptance of all or a portion of the commissions and the
dealer manager fee may elect not to accept all or a portion of their
compensation in the form of commissions and the dealer manager fees offered by
the Company for Class A Shares that they sell.  In that event, such Shares shall
be sold to the investor net of all or a portion of the seven percent (7.0%)
commission and the two and three-fourths percent (2.75%) dealer manager fee. The
amount of net proceeds to the Company will not be affected by reducing or
eliminating commissions and dealer manager fees payable in connection with sales
to investors described in this paragraph.  In addition, in accordance with the
terms of the Prospectus, which may be amended and supplemented from time to
time, the commissions and dealer manager fees for purchases of Class A Shares of
more than $5.0 million are negotiable, details of which will be set forth in a
supplement to the Prospectus.  

(b)In accordance with the volume discounts schedule set forth in the “Plan of
Distribution” section of the Prospectus, the amount of selling commissions
otherwise payable shall be reduced with respect to sales to a subscriber or
group of subscribers based upon the aggregate number of Class A Shares purchased
by such subscriber or group through the same Participating Broker. Participating
Brokers and/or subscribers are responsible for requesting that subscriptions be
combined, if applicable, for the purpose of determining whether such
subscriptions qualify for volume discounts.  

(c)No selling commissions, dealer manager fees or distribution and stockholder
servicing fees will be paid in connection with Shares purchased through the
Distribution Reinvestment Plan.

(d)A Participating Broker may withhold the selling commissions and dealer
manager fees to which it is entitled from the purchase price for the Shares in
the Offering and forward the balance of the subscription proceeds to the Company
if (i) the Participating Broker is legally permitted to do so and (ii) (A) the
Participating Broker meets all applicable net capital requirements under the
rules of FINRA or other applicable rules regarding such an arrangement; (B) the
Participating Broker forwards the subscription agreement to the Company and
receives the Company’s written acceptance of the subscription prior to
forwarding the purchase price for the Shares, net of the selling commissions and
dealer manager fees to which the Participating Broker is entitled, to the
Company or an agent designated by the Company; and (C) the Participating Broker
verifies that there are sufficient funds in the investor’s account with the
Participating Broker to cover the entire cost of the subscription.

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4.3Due Diligence.   

(a)The Advisor shall reimburse the Dealer Manager for detailed and itemized bona
fide due diligence expenses incurred by the Dealer Manager or reimbursed by the
Dealer Manager to the Participating Brokers or their agents in connection with
the Offering.  All due diligence expense reimbursements paid by the Dealer
Manager to Participating Brokers or their agents shall be reimbursed by the
Advisor to the Dealer Manager, subject to such Participating Broker providing
detailed and itemized invoices supporting such expenses and having received
prior approval thereof from the Dealer Manager and the Company.

(b)The Dealer Manager shall keep strictly confidential all materials sent to it
in connection with due diligence conducted on the Offering, including but not
limited to all materials labeled “for due diligence use only” unless such
material is required to be disclosed pursuant to any applicable law, regulation,
judicial or administrative order, decree or subpoena, or request by a regulatory
organization having authority pursuant to applicable law.

4.4Completed Sale.

(a)The Company shall accept or reject each subscription within thirty (30) days
of receipt thereof.  If a subscription is rejected, all related subscription
funds, without deduction for any expenses, shall be returned to the subscriber
within ten (10) business days following the date such subscription is
rejected.  A sale of a Share shall be deemed by the Company to be completed for
purposes of Section 4.1 herein if and only if (i) the Company has received a
properly completed and executed Subscription Agreement, together with payment of
the full applicable purchase price of each purchased Share, from an investor who
satisfies the applicable suitability standards and minimum purchase requirements
set forth in the Prospectus as determined by the Participating Broker (or Dealer
Manager if applicable) in accordance with Section 2.3 of this Agreement; (ii)
the Company has accepted such subscription; (iii) the Minimum Offering (or
Washington Minimum or Pennsylvania Minimum, as applicable) has been reached, and
(iv) such investor has been admitted as a stockholder of the Company.  In
addition, no sale of Shares shall be completed until at least five (5) business
days after the date on which the subscriber receives a copy of the Prospectus.

(b)The Dealer Manager hereby acknowledges and agrees that the Company, in its
sole and absolute discretion, may accept or reject any subscription, in whole or
in part, for any reason whatsoever, and no commission, dealer manager fee or
annual distribution and stockholder servicing fee will be paid to the Dealer
Manager with respect to that portion of any subscription which is rejected.

4.5Payment.  Except as otherwise provided herein, the commissions and dealer
manager fees specified in Section 4.1 herein for the sale of any Shares shall be
payable in cash by the Company no later than seven (7) days after the investor
subscribing for the Shares is admitted as a stockholder of the
Company.  Investors whose subscriptions for Shares are accepted shall be
admitted no later than the end of the calendar month following the month in
which such subscriptions are accepted.  Notwithstanding anything to the contrary
contained herein, in the event that the Company pays any commission or fees to
the Dealer Manager for a sale by it or a Participating Broker of one or more
Shares and the subscription is subsequently rescinded as to one or more of the
Shares covered by such subscription, the Company shall decrease the next payment
of commissions or other compensation otherwise payable to the Dealer Manager by
the Company under this Agreement by an amount equal to the applicable rate
established in Section 4.1 of this Agreement, multiplied by the price of the
Shares as to which the subscription is rescinded.  In the event that no payment
of commissions or other compensation is due to the Dealer Manager after such
rescinded subscription occurs, the Dealer Manager shall pay the amount specified
in the preceding sentence to the Company within seven (7) days following receipt
of notice by the Dealer Manager from the Company stating the amount owed as a
result of rescinded subscriptions. Notwithstanding the foregoing, no
commissions, payments or amounts whatsoever will be paid to the Dealer Manager
under this Article 4 unless or until the Minimum Offering (or Washington Minimum
or Pennsylvania Minimum, as applicable) has been reached. Until the Minimum
Offering (or Washington Minimum or Pennsylvania Minimum, as applicable) is
reached, investments will be held in escrow.  If the Minimum Offering (or
Washington Minimum or Pennsylvania Minimum, as applicable) is not reached within
the time period specified in the Escrow Agreement, investments will be promptly
returned to investors in accordance with the Prospectus.

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4.6The Company will not be liable or responsible to any Participating Broker for
direct payment of commissions, dealer manager fees or distribution and
stockholder servicing fees to such Participating Broker; it is the sole and
exclusive responsibility of the Dealer Manager for payment of commissions,
reallowance of dealer manager fees and distribution and stockholder servicing
fees to Participating Brokers.   

4.7Non-Cash Compensation and Sales Incentives.  The Company or its affiliates
may provide certain non-cash compensation for registered representatives of the
Dealer Manager and the Participating Brokers or other compensation as described
in the Prospectus.  In accordance with FINRA regulations, these items may not in
any event exceed an aggregate of $100 per annum per participating registered
representative and they may not be preconditioned on the achievement of a sales
target.  In the event any other sales incentives are provided to registered
representatives of the Dealer Manager or the Participating Brokers, they shall
be paid only in cash, and such payments shall be made only to the Dealer Manager
or the Participating Brokers rather than to their registered
representatives.  Sales incentive programs offered to the Dealer Manager or to
Participating Brokers must first have been submitted for review by FINRA, and
must comply with FINRA Rule 5110 or 2310, as applicable.  Costs incurred in
connection with such sales incentive programs, if any, shall be considered
underwriting compensation.

4.8FINRA Rules.  Notwithstanding the foregoing or anything contained herein to
the contrary, in no event shall the Company pay or give or cause to be paid or
given any compensation or incentives in excess of amounts permitted under
applicable FINRA rules or published guidance.

Article 5
Term of Agreement

5.1Commencement and Expiration.  This Agreement shall commence as of the
effective date first above written and, unless sooner terminated pursuant to
Section 5.2 herein or by operation of law, shall automatically terminate at the
end of the Offering Period.

5.2Termination.  After this Agreement becomes effective, either party may
terminate it at any time for any reason by giving thirty (30) days’ written
notice to the other party; provided, however, that this Agreement shall in any
event automatically terminate at the first occurrence of any of the following
events: (a) the Registration Statement for offer and sale of the Shares shall
cease to be effective; (b) the Company shall be dissolved or liquidated; or (c)
the Dealer Manager’s license or registration to act as a broker-dealer shall be
revoked or suspended by any federal, self-regulatory or state agency and such
revocation or suspension is not cured within ten (10) days after the date of
such occurrence.  In any event, this Agreement shall be deemed suspended during
any period for which such license is revoked or suspended. Either party may
terminate this Agreement with respect to any class of Shares at any time for any
reason by giving thirty (30) days’ written notice to the other party. The
termination of this Agreement with respect to a specific class of Shares will
not cause the Agreement to terminate with respect to any other class of Shares.

5.3Obligations Surviving Expiration or Termination.

(a)In addition to any other obligations of the Dealer Manager that survive the
expiration or termination of this Agreement, the Dealer Manager, upon the
expiration or termination of this Agreement, shall: (i) promptly forward to the
Company any and all funds in its possession which were received from investors
for the sale of Shares; and (ii) promptly deliver to the Company all records and
documents in its possession which relate to the Offering and are not designated
as dealer copies.  The Dealer Manager, at its sole expense, may make and retain
copies of all such records and documents, but shall keep all such information
confidential.  The Dealer Manager shall use its best efforts to cooperate with
the Company to accomplish an orderly transfer of management of the Offering, if
any, to a party designated by the Company.

(b)In addition to any other obligations of the Company that survive the
expiration or termination of this Agreement, the Company, upon expiration or
termination of this Agreement, shall pay to the Dealer Manager all commissions,
dealer manager fees and distribution and stockholder servicing fees to which the
Dealer Manager is or becomes entitled under Article 4 at such time or times as
such commissions, dealer manager fees and distribution and stockholder servicing
fees become payable pursuant to Article 4 herein.

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Article 6
Representations, Warrants and Covenants of the Dealer Manager

6.1Representations, Warranties and Covenants.  The Dealer Manager represents,
warrants and covenants to the Company during the full term of this Agreement, as
follows:

(a)At all times during the Offering Period, it is and shall be: (i) a
corporation duly organized and validly existing under the laws of the State of
Florida with full power and authority to conduct its business; (ii) a member in
good standing of FINRA; and (iii) a broker-dealer registered with the SEC under
the Securities Exchange Act of 1934, as amended (the “1934 Act”) and under the
securities laws of all fifty (50) states, the District of Columbia, and the
Commonwealth of Puerto Rico with the authority to engage in the public offer and
sale of securities of the type represented by the Shares.

(b) The Dealer Manager shall, and, by virtue of entering into the Participating
Broker Agreement, each Participating Broker shall agree to assure that all Share
Offers and Sales are made in compliance with: (i) the terms of the Registration
Statement, the Prospectus and this Agreement; (ii) the requirements of
applicable federal and state securities laws and regulations; and (iii) the
applicable rules of FINRA, including, without limitation, FINRA Rule 2121, FINRA
Rule 2310 and FINRA Rule 5141.

(c)In each jurisdiction, the Dealer Manager shall, and by virtue of entering
into the Participating Broker Agreement, each Participating Broker shall agree
to, assure that only Participating Brokers and those of the Dealer Manager’s
agents, employees or representatives who have effective licenses or
registrations in such jurisdiction, as and if required by the securities or
“blue sky” laws of such jurisdiction, review the suitability of Shares for,
offer Shares for sale to, solicit offers to buy Shares from, otherwise negotiate
with respect to, discuss the terms or merits of an investment in the Shares
with, or provide any documents relating to the Shares to, any investors resident
in such jurisdiction.

(d)The Dealer Manager shall offer and sell, and, by virtue of entering into a
Participating Broker Agreement, each Participating Broker shall agree to offer
and sell, the Shares only in those jurisdictions specified in writing by the
Company.  In effecting offers or sales in a jurisdiction, the Dealer Manager
shall comply with all special conditions and limitations imposed on the Dealer
Manager by such jurisdiction, as set forth in the blue sky survey (indicating
the jurisdictions where it is believed offers and sales of the Shares may be
made under applicable securities laws), which survey shall be made available by
the Company to the Dealer Manager as soon as it is received by the Company.

(e)The Dealer Manager will not purchase Shares for its own account.

(f)The Dealer Manager has the power and authority to enter into and perform this
Agreement; and the execution and delivery of this Agreement by the Dealer
Manager has been duly and validly authorized by all necessary action.  This
Agreement constitutes the valid and binding agreement of the Dealer Manager,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar state or federal debtor relief laws from time to time in effect which
affect the enforcement of creditors’ rights generally and by general equitable
principles. The Dealer Manager is not in violation of its articles of
incorporation or bylaws or in default under any agreement, indenture or
instrument the effect of which violation or default would be material to the
Dealer Manager.  None of: (i) the execution and delivery by the Dealer Manager
of this Agreement; (ii) the consummation by the Dealer Manager of any of the
transactions herein contemplated; and (iii) the compliance by the Dealer Manager
with the provisions hereof, does or will in any material respect conflict with
or result in a breach of any term or provision of the articles of incorporation
or bylaws of the Dealer Manager or conflict with, result in a breach, violation
or acceleration of, or constitute a default under, the terms of any indenture or
other agreement or instrument to which the Dealer Manager is a party or by which
it is bound or any material statute, order or regulation applicable to the
Dealer Manager of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Dealer Manager.  The Dealer
Manager is not a party to, bound by or in breach or violation of any indenture
or other agreement or instrument or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it that adversely affects: (A) the
ability of the Dealer Manager to perform its obligations under this Agreement;
or (B) the business, operations, financial condition,

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properties or assets of the Dealer Manager, except, with respect to any
indenture, agreement or other instrument, such breach that would not reasonably
be expected to have a material adverse effect.  

(g)The Dealer Manager shall verify the identity of each investor, if any, to
whom it offers and sells Shares under its “customer identification program” and
verify the source of the investor’s funds as required by the anti-money
laundering rules of FINRA, the SEC and the Department of Treasury, and shall
screen such investors against current lists of individuals and organizations
available from the Office of Foreign Asset Control (“OFAC”).  The Dealer Manager
shall not accept subscriptions from any person, entity or organization in a
blocked jurisdiction.  The Dealer Manager shall file any necessary or
appropriate suspicious activity reports and currency transaction reports and
other required reports under applicable “know your customer” and “anti-money
laundering” laws and regulations in respect of investors or potential
investors.  The Dealer Manager has in place and adheres to a comprehensive
anti-money laundering program that meets the requirements of FINRA Rule 3310,
Department of Treasury regulations issued pursuant to Title III of the USA
PATRIOT Act and other applicable laws and regulations.  The Dealer Manager
agrees to cooperate with the Company in gathering additional information in
respect of an investor or the source of the investor’s funds as reasonably
requested by the Company, and agrees to cooperate with the Company in connection
with anti-money laundering laws and regulations.  By forwarding an investor’s
subscription information to the Company, the Dealer Manager represents and
warrants that it has verified the identity of the investor and the source of the
investor’s funds, that the investor is not listed on the OFAC list, and that the
Dealer Manager, after conducting commercially reasonable diligence, is not aware
of any suspicious or illegal activity associated with the investor or the source
of the investor’s funds.  The Dealer Manager is not responsible for customer
identification issues regarding investors identified by Participating Brokers.

(h)There are no actions or proceedings against, or investigations of, the Dealer
Manager pending or, to the knowledge of the Dealer Manager, threatened, before
any court, arbitrator, administrative agency or other tribunal: (i) asserting
the invalidity of this Agreement; (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement; or (iii) that might
materially and adversely affect the performance by the Dealer Manager of its
obligations under, or the validity or enforceability of, this Agreement.

(i)Solicitation and other activities by the Dealer Manager hereunder shall be
undertaken only in accordance with this Agreement, the Prospectus, the 1933 Act,
the 1934 Act, and the applicable rules and regulations of the SEC, FINRA and any
other applicable securities or blue sky laws and regulations.  The Dealer
Manager agrees that it shall not, and by virtue of entering into a Participating
Broker Agreement, each participating Broker shall agree not to, use or authorize
the use of any solicitation material other than the Prospectus and Approved
Sales Literature, which, in all cases, shall be accompanied or preceded by
delivery of the Prospectus.

(j)The Dealer Manager agrees to be bound by the terms of the Escrow Agreement
dated March 2, 2016 among UMB Bank, N.A., as escrow agent, the Dealer Manager
and the Company, a copy of which is available upon request,  and the Dealer
Manager further agrees that it will not represent or imply that UMB Bank, N.A.,
as the escrow agent identified in the Prospectus, has investigated the
desirability or advisability of an investment in the Company or has approved,
endorsed or passed upon the merits of the Shares or the Company, nor will the
Dealer Manager use the name of said escrow agent in any manner whatsoever in
connection with the offer or sale of the Shares other than by acknowledgment
that it has agreed to serve as escrow agent.

Article 7
Representations, Warrants and Covenants of the Company

7.1Representations, Warranties and Covenants.  The Company represents, warrants
and covenants to the Dealer Manager, during the full term of this Agreement,
that:

(a)The Company has filed the Registration Statement and related Prospectus under
the 1933 Act with the SEC, and has filed such amendments thereto and such
amended or supplemented Prospectuses as may have been required as of the date
hereof.  The SEC has not issued any order preventing or suspending the use of
any preliminary prospectus or the Prospectus.

(b)At the time the Registration Statement becomes effective, including at the
time that any post-effective amendment thereto becomes effective, the
Registration Statement and the Prospectus contained

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therein shall comply with the provisions of the 1933 Act and the Regulations; at
the time the Registration Statement becomes effective, including at the time
that any post-effective amendment thereto becomes effective, the Registration
Statement shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; and the Registration Statement or an amendment thereto at the time
it becomes effective, and the Prospectus during the Offering Period, will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided,
however, that the representations and warranties in this Article 7 shall not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by the Dealer Manager expressly for use in the
Registration Statement or the Prospectus.  Every contract or other document
required by the 1933 Act or the Regulations to be filed as an exhibit to the
Registration Statement has been so filed. 

(c)The Company shall use its best efforts to: (i) prevent the issuance of any
order by the SEC, any state regulatory authority or any other regulatory
authority which suspends the effectiveness of the Registration Statement,
prevents the use of the Prospectus, or otherwise prevents or suspends the
Offering; and (ii) obtain the lifting of any such order if issued. The Company
shall not accept any subscriptions for Shares during the effectiveness of any
stop order if the Registration Statement becomes unavailable for use in
connection with the Offering for any reason.

(d)The Company shall give the Dealer Manager written notice when the
Registration Statement becomes effective and shall deliver to the Dealer Manager
a conformed copy of the Registration Statement, including its exhibits, and such
number of copies of the Registration Statement, without exhibits, and the
Prospectus, and any supplements and amendments thereto which are filed with the
SEC, as the Dealer Manager may reasonably request for Share Offers and Sales.

(e)To the extent required by the SEC, FINRA or state securities agencies or
bodies, the Company will disclose an estimated value of the Company’s common
stock, on a per Share basis, and related information, in accordance with the
requirements of such agencies or bodies.

(f)In the event the Company learns of any circumstances or facts, the existence
of which causes the Company to believe that such circumstances or facts: (i)
render the Registration Statement or Prospectus inaccurate or misleading as to
any material facts; or (ii) should under applicable law otherwise be disclosed
in a supplement or amendment to the Registration Statement, Prospectus or any
Approved Sales Literature, it shall file an amendment or supplement to the
Registration Statement, Prospectus or to any Approved Sales Literature as soon
as practicable.  The Company shall promptly notify the Dealer Manager of any
post-effective amendments or supplements to the Registration Statement or
Prospectus and shall make available to the Dealer Manager sufficient copies
thereof for its own use or distribution to the Participating Brokers for Share
Offers and Sales.

(g)The Company at all times during the Offering Period is and will be duly
organized and legally existing as a corporation pursuant to the laws of the
State of Maryland with full power and authority to conduct business as described
in the Prospectus; the Company has the power and authority to enter into and
perform this Agreement; and the execution and delivery of this Agreement by the
Company has been duly and validly authorized by all necessary corporate
action.  This Agreement constitutes the valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights
generally and by general equitable principles. The Company is not in violation
of its articles of incorporation or bylaws or in default under any agreement,
indenture or instrument the effect of which violation or default would be
material to the Company.  None of: (i) the issuance and sale of the Shares; (ii)
the execution and delivery by the Company of this Agreement; (iii) the
consummation by the Company of any of the transactions herein contemplated; and
(iv) the compliance by the Company with the provisions hereof, does or will in
any material respect (A) conflict with or result in a breach of any term or
provision of the articles of incorporation or bylaws of the Company or (B)
conflict with, result in a breach, violation or acceleration of, or constitute a
default under, the terms of any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or  any material statute,
order or regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the

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Company.  The Company is not a party to, bound by or in breach or violation of
any indenture or other agreement or instrument, or subject to or in violation of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it that adversely affects:
(A) the ability of the Company to perform its obligations under this Agreement;
or (B) the business, operations, financial condition, properties or assets of
the Company, except, with respect to any indenture, agreement or other
instrument, such breach that would not reasonably be expected to have a material
adverse effect. 

(h)There are no actions or proceedings against, or investigations of, the
Company pending or, to the knowledge of the Company, threatened, before any
court, arbitrator, administrative agency or other tribunal: (i) asserting the
invalidity of this Agreement; (ii) seeking to prevent the issuance of the Shares
or the consummation of any of the transactions contemplated by this Agreement;
(iii) that might materially and adversely affect the performance by the Company
of its obligations under, or the validity or enforceability of, this Agreement,
or the Shares; or (iv) seeking to affect materially and adversely the federal
income tax attributes of the Shares as described in the Prospectus.  As of the
date hereof, as of the date on which the Registration Statement (or any
amendment thereto) becomes effective, and as of the date on which the Prospectus
(or any supplement thereto) is filed with the SEC, there has not been and shall
not have been: (A) any request by the SEC for any further amendment to the
Registration Statement or the Prospectus or for any additional information; (B)
any issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or, to the knowledge of the Company, the institution or
threat of any proceeding for that purpose; or (C) any notification with respect
to the suspension of the qualification of the Shares for sale in any
jurisdiction or, to the knowledge of the Company, any initiation or threat of
any proceeding for such purpose.  No consent, approval, authorization or order
of, or filing or registration with, any state or federal court or governmental
agency or body other than FINRA approval or as otherwise expressly noted in this
Agreement for the effectiveness of the Registration Statement, and blue sky
filings is required for the consummation by the Company of the transactions
contemplated by the terms of the Agreement.

(i)Any taxes, fees and other governmental charges in connection with the
execution and delivery of this Agreement or the execution, delivery and sale of
the Shares have been or will be paid on or prior to the date first above
written.

(j)The Company is not, and will use its best efforts to prevent the Company from
being classified as an “investment company” or under the control of an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.

(k)The Company has complied and will comply with all applicable federal and
state laws in connection with the offer and sale of the Shares as well as the
laws of any other applicable jurisdiction.

(l)The Company shall, during the full term of this Agreement, abide by all
applicable provisions of its governing instruments, as the same may be amended.

(m)The Company shall use its best efforts to cause, at or prior to the time the
Registration Statement becomes effective, the qualification or registration of
the Shares for offering and sale under the securities laws of such jurisdictions
as shall be determined by the Company, in consultation with the Dealer Manager.

(n)The Company has not, prior to the date of this Agreement, engaged in any
activities with respect to the interests of this Agreement that would be
inconsistent with any of the provisions of this Agreement, except for any
activities that would not have a material adverse effect on the Company.  

(o)The Shares have been duly authorized, and, when issued, delivered and paid
for in accordance with the terms of the Agreement and as described in the
Prospectus and the Company’s charter, shall be duly and validly issued, fully
paid and non-assessable and  shall conform, in all material respects, to the
description thereof contained in the Prospectus; no holder thereof  shall be
subject to personal liability for the obligations of the Company solely by
reason of being such a holder; such Shares are not subject to any statutory
preemptive rights of any stockholder of the Company; and all corporate action
required to be taken for the authorization, issue and sale of such Shares has
been validly and sufficiently taken.

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(p)The financial statements of the Company included or incorporated by reference
in the Prospectus fairly present in all material respects the financial position
of the Company as of the date indicated and have been prepared in conformity
with generally accepted accounting principles as in effect in the United States
of America from time to time or such other accounting basis mandated by the
SEC. 

(q)The Company has filed all material federal, state and foreign income tax
returns required to be filed by or on behalf of the Company on or before the due
dates therefore (taking into account all extensions of time to file) and has
paid or provided for the payment of all such material taxes indicated by such
tax returns and all assessments received by the Company to the extent that such
taxes or assessments have become due.

(r)The Company has been organized in conformity with the requirements for
qualification and taxation as a real estate investment trust for federal income
tax purposes, and the Company is solely responsible for engaging in methods of
operation to enable it to meet the requirements for qualification and taxation
as a real estate investment trust under the Internal Revenue Code of 1986, as
amended.

Article 8
Payment of Costs and Expenses

8.1Dealer Manager.  The Dealer Manager shall pay all of its own costs and
expenses, including the fees and expenses of counsel, incident to the
performance of its obligations under this Agreement which are not expressly
assumed by the Advisor in Section 4.3, except as otherwise provided in the
indemnification provisions of Article 9 and hereunder in Section 8.2.

8.2Advisor.  The Advisor shall pay all costs and expenses related to:

(a)the registration of the Offering with the SEC, including the cost of
preparation, printing, filing and delivery of the Registration Statement and all
copies of the Prospectus used in the Offering, and any amendments or supplements
to such documents;

(b)the preparation and printing of the form of Subscription Agreement to be used
in the sale of the Shares;

(c)the preparation and printing of the blue sky memorandum or survey and the
qualification or registration of the Shares under the securities or “blue sky”
laws of the jurisdictions where the Shares are to be offered or sold;

(d)the filing of the Registration Statement and any related documents, including
any amendments or supplements to such documents with FINRA;

(e)the preparation, printing and filing of all advertising and Approved Sales
Literature relating to the Company or the sale of Shares;

(f)any filing fees, and fees and disbursements to its counsel, accountants,
transfer agents, escrow agents and other agents which are in any way related to
any of the above items; and

(g)the salaries and non-transaction based compensation paid to employees and
agreed fees of agents of the Company for performing services for the Company.  

Article 9
Indemnification

9.1Indemnification.

(a)The Company agrees, to the extent permitted by applicable federal and state
law (including, but not limited to federal and state securities law), to
indemnify, defend and hold harmless the Dealer Manager and each Participating
Broker and their respective officers, directors, partners, employees, associated

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persons, agents and control persons, (collectively, the “Broker-Dealer
Indemnified Persons”) from and against any and all losses, claims, damages,
liabilities and expenses, including reasonable legal and other expenses incurred
in defense of any thereof, whether joint or several, under the 1933 Act or
otherwise (collectively, “Losses”), to which the Dealer Manager or a
Participating Broker may (or may be threatened to) become subject, insofar as
such Losses or any Proceeding (as defined below) in respect thereof arise out of
or are based upon: (i) a breach or alleged breach by the Company of any of its
representations, warranties or covenants in this Agreement, or (ii) an untrue
statement or alleged untrue statement of a material fact (or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading) contained in the
Approved Sales Literature, the Registration Statement or the Prospectus, or any
amendment or supplement thereto (except to the extent any such actual or alleged
statement or omission is based on information supplied by or on behalf of the
Dealer Manager or such Participating Broker); and the Company shall reimburse
each Broker-Dealer Indemnified Person for any legal or other expenses
(including, but not limited to, reasonable attorneys’ fees) reasonably incurred
by such Broker-Dealer Indemnified Person in connection with investigating or
defending any actual or threatened claim, action, suit or other proceeding in
respect of any Loss (a “Proceeding”) instituted against or faced by the Dealer
Manager or a Participating Broker, whether or not resulting in any
liability.  For purposes of this Article 9, “control person” means, with respect
to any particular person, any other person who possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of such particular person, whether through the ownership of voting
securities, by contract, or otherwise.  For purposes of this Article 9,
“associated persons” shall be as defined under FINRA laws and regulations. 

(b)The Company shall not be required to indemnify or hold harmless any
Broker-Dealer Indemnified Person from or against any Loss suffered by the Dealer
Manager, or a Participating Broker unless: (i) such Broker-Dealer Indemnified
Person has determined, in good faith, that its course of conduct was in the best
interests of the Company; (ii) such Broker-Dealer Indemnified Person was acting
on behalf of or performing services on behalf of the Company; (iii) such Loss
was not the result of negligence or misconduct on the part of such Broker-Dealer
Indemnified Person or any other Broker-Dealer Indemnified Person; and (iv) such
Loss is recoverable only out of the net assets of the Company and not from the
personal assets of its stockholders.

(c)Notwithstanding anything to the contrary in Section 9.1(a), a Broker-Dealer
Indemnified Person shall not be indemnified by the Company for any Loss arising
from or out of an alleged violation of federal or state securities laws by such
Broker-Dealer Indemnified Person 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 laws violations as to such Broker-Dealer
Indemnified Person; (ii) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to such Broker-Dealer Indemnified
Person; or (iii) a court of competent jurisdiction approves a settlement of the
claims against such Broker-Dealer Indemnified Person and finds that
indemnification of the settlement and related costs should be made, and the
court considering the request for indemnification has been advised of the
position of the SEC and of the published position of any state securities
regulatory authority in which securities of the Company were offered or sold as
to indemnification for violations of securities laws.

(d)The Dealer Manager shall indemnify, defend and hold harmless the Company and
its officers, directors, partners, employees, associated persons, agents and
control persons (collectively, the “Company Indemnified Persons”), from and
against any and all Losses to which the Company may become subject, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon: (i)
a breach or alleged breach by the Dealer Manager of any of its representations,
warranties or covenants in this Agreement, (ii) any untrue statement or alleged
untrue statement of any material fact made by the Dealer Manager or any of its
officers, directors, partners, employees, associated persons, agents and control
persons, to any offeree or purchaser of any Shares (other than any statement
contained in the Prospectus or any Approved Sales Literature, or any amendment
or supplement thereto, unless such statement was based on information supplied
by the Dealer Manager), or (iii) any omission or alleged omission by the Dealer
Manager or any of its officers, directors, partners, employees, associated
persons, agents and control persons, to state to any offeree or purchaser of any
Shares a material fact necessary in order to make the statements made to such
offeree or purchaser not misleading in light of the circumstances under which
they were made (other than any such material fact omitted from Approved Sales
Literature, the Prospectus, or any amendment or supplement thereto, unless such
omission was based on information supplied by the Dealer Manager); and shall
reimburse each Company Indemnified Person for any legal or other expenses
(including, but not limited to,

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reasonable attorneys’ fees) reasonably incurred by such Company Indemnified
Person in connection with investigating or defending any Proceeding, whether or
not resulting in any liability. 

(e)The Participating Broker Agreements shall contain a provision by which each
Participating Broker agrees to indemnify and hold harmless the Company from and
against certain Losses resulting from specified acts or omissions of such
Participating Broker, and designates the Company as a third-party beneficiary
empowered to enforce such provision.

9.2Contribution and Notices.

(a)If the rights to indemnification provided for in Section 9.1 would by their
terms be available to a person hereunder (collectively, the “Indemnified
Parties” and individually, an “Indemnified Party”), but is held to be
unavailable by a court of competent jurisdiction for any reason, then the
Company, the Dealer Manager and the Participating Brokers, to the extent an
indemnifying party with respect to an Indemnified Party (each to such extent, an
“Indemnifying Party”), shall contribute to the aggregate of such losses, claims,
damages and liabilities as are contemplated in those paragraphs (including, but
not limited to, any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any claim, action, suit
or proceeding) in the ratio in which the net proceeds of the Offering of Shares
have been actually received and retained by such Indemnifying Party.  However,
the right of contribution described in the preceding sentences is subject to the
following limitation: No person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

(b)Any Indemnified Party entitled to contribution or indemnification under this
Article 8 shall, promptly after receipt of such notice of commencement of any
action, suit, proceeding or claim against him or it in respect of which a claim
for contribution or indemnification may be made against another Indemnifying
Party or Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties.  Failure to so notify such other Indemnifying Party or
Indemnifying Parties shall not relieve such other Indemnifying Party or
Indemnifying Parties from any other obligation it or they may have hereunder or
otherwise, unless the Indemnifying Party has been materially prejudiced in its
ability to defend the action as a result of such delay.  If such other
Indemnifying Party or Indemnifying Parties are so notified, such other
Indemnifying Party or Indemnifying Parties shall be entitled to participate in
the defense of such action, suit, proceeding or claim at its or their own
expense or in accordance with arrangements satisfactory to all parties who may
be required to contribute.  After notice from such other Indemnifying Party or
Indemnifying Parties to the Indemnified Party entitled to contribution or
indemnification of its or their acknowledgement of its or their obligations
hereunder and its or their election to assume its or their own defense, the
Indemnifying Party or Indemnifying Parties so electing shall not be liable for
any legal or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to indemnification or contribution in connection with
the defense thereof, other than the reasonable costs of investigation.  No party
shall be required to contribute or provide indemnification with respect to the
settlement amount of any action or claim settled without its consent.

Article 10
Miscellaneous

10.1Notices.  Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be deemed
to be delivered when delivered in person or deposited in the United States mail,
properly addressed and stamped with the required postage, registered or
certified mail, return receipt requested, to the intended recipient as set forth
below.

If to the Company:

CNL Healthcare Properties II, Inc.

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention: Chief Financial Officer

 

 

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With a copy to:

CNL Healthcare Properties II, Inc.

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention:    General Counsel

 

 

If to the Dealer Manager:

CNL Securities Corp.

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention:   Corporate Counsel

 

 

Any party may change its address specified above by giving each other party
notice of such change in accordance with this Section 10.1.

10.2Invalid Provision.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.

10.3No Partnership.  Nothing in this Agreement shall be construed or interpreted
to constitute the Dealer Manager or the Participating Brokers as being in
association with or in partnership with the Company or one another, and instead,
this Agreement only shall constitute the Dealer Manager as a broker authorized
by the Company to sell and to manage the sale by others of the Shares according
to the terms set forth in the Registration Statement, the Prospectus and this
Agreement.  Nothing herein contained shall render the Dealer Manager or the
Company liable for the obligations of any of the Participating Brokers or one
another.

10.4Third-Party Beneficiaries.  The Participating Brokers shall be third-party
beneficiaries of Article 9 of this Agreement; otherwise, there shall be no
third-party beneficiaries of this Agreement, and other than the Participating
Brokers with respect to Article 9, no provision of this Agreement is intended
for the benefit of any person or entity not a party to this Agreement, and no
third party shall be deemed to be a beneficiary of any provision of this
Agreement.  Further, no other third party shall by virtue of any provision of
this Agreement have a right of action or an enforceable remedy against either
party to this Agreement.

10.5Survival.  The following provisions of the Agreement shall survive the
expiration or termination of this Agreement: Section 4.1 and 4.5 (for sales
occurring prior to termination), Article 8, Article 9, and this Article 10.

10.6Entire Agreement.  This Agreement constitutes the complete understanding
among the parties hereto, and no variation, modification or amendment to this
Agreement shall be deemed valid or effective unless and until it is signed by
all parties hereto.

10.7Definitions.  Any terms used but not defined herein shall have the meanings
given to them in the Prospectus.

10.8Successors and Assigns.  No party shall assign (voluntarily, by operation of
law or otherwise) this Agreement or any right, interest or benefit under this
Agreement without the prior written consent of the other party.  Subject to the
foregoing, this Agreement shall be fully binding upon, inure to the benefit of,
and be enforceable by, the parties hereto and their respective successors and
assigns.

10.9Nonwaiver.  The failure of any party to insist upon or enforce strict
performance by the other party of any provision of this Agreement or to exercise
any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such party’s right to assert or rely upon any
such provision or right in that or any other instance; rather, such provision or
right shall be and remain in full force and effect.

10.10Applicable Law.  This Agreement shall be interpreted, construed and
enforced in all respects in accordance with the laws of the State of Florida
without reference to conflict of laws principles.

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10.11Access to Information.  In connection with the Dealer Manager’s engagement
hereunder, the Company shall make available to the Dealer Manager any
information concerning the Offering as the Dealer Manager reasonably
requests.  The Company shall use commercially reasonable efforts to assure the
accuracy and completeness of all of such information at the time it is furnished
to Dealer Manager.  The Dealer Manager shall treat all information provided by
the Company as confidential per the provisions contained in Section 4.3(b)
herein. 

10.12Transfer Agent.  The Company may authorize the Transfer Agent to provide
information to a Participating Broker regarding recordholder information about
the clients of such Participating Broker who have invested with the Company on
an on-going basis for so long as such Participating Broker has a relationship
with such client.  The Dealer Manager shall require that Participating Brokers
not disclose any password for a restricted website or portion of website
provided to such Participating Broker in connection with the Offering and not
disclose to any person, other than an officer, director, employee or agent of
such Participating Brokers with a need to know, any material downloaded from
such a restricted website or portion of a restricted website.

10.13Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument comprising this Agreement.  Facsimile signatures on
counterparts of this Agreement are hereby authorized and shall be acknowledged
as if such facsimile signatures were an original execution.

(signature page follows)

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IN WITNESS WHEREOF, the parties hereto have each duly executed this Dealer
Manager Agreement as of the day and year set forth in the preamble to this
Agreement.

 

COMPANY:

 

 

 

CNL HEALTHCARE PROPERTIES II, INC.

 

 

 

By:

/s/ Stephen H. Mauldin

 

Name:

Stephen H. Mauldin

 

Title:

Chief Executive Officer and President

 

 

 

 

DEALER MANAGER:

 

 

 

CNL SECURITIES CORP.

 

 

 

By:

/s/ Neil D. Menard

 

Name:

Neil D. Menard

 

Title:

President

 

 

 

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Exhibit A

FORM OF PARTICIPATING BROKER AGREEMENT

CNL HEALTHCARE PROPERTIES II, INC.

THIS PARTICIPATING BROKER AGREEMENT (the “Agreement”) is made and entered into
as of the      day of __________________, 201_, between CNL SECURITIES CORP., a
Florida corporation (the “Dealer Manager”), and
_______________________________________a _____________________________(the
“Broker”).

WHEREAS, CNL Healthcare Properties II, Inc. (the “Company”) is offering to the
public (the “Offering”) on a “best efforts” continuous basis an aggregate of up
to $2,000,000,000 in shares of any combination of the Class A shares (“Class A
Shares”), Class T shares (“Class T Shares”) and Class I shares (“Class I
Shares”) of the Company’s common stock, $0.01 par value per share (collectively,
the “Shares”), of which up to $1,750,000,000 is intended to be offered in the
Company’s primary offering (the “Primary Offering”) and up to $250,000,000 is
intended to be offered pursuant to the Company’s distribution reinvestment plan
(“Distribution Reinvestment Plan”), upon the terms and conditions set forth in
the Prospectus (as defined below); provided, that the Company reserves the right
to reallocate Shares offered between the Primary Offering and the Distribution
Reinvestment Plan; and

WHEREAS, the Company has prepared and filed with the U.S. Securities and
Exchange Commission (the “SEC”) its registration statement on Form S-11
(Registration No. 333-206017) with respect to the Offering pursuant to the
Securities Act of 1933, as amended (the “1933 Act”), and the rules and
regulations of the SEC promulgated thereunder (the “Regulations”); and

WHEREAS, the Company’s registration statement on Form S-11 and the prospectus
contained therein, as finally amended or supplemented on the date the
registration statement is declared effective by the SEC (including financial
statements, exhibits and all other documents related thereto filed as a part
thereof) and any registration statement filed under Rule 462 of the Regulations,
are respectively hereinafter referred to as the “Registration Statement” and the
“Prospectus,” except that (i) if the Company files a post-effective amendment to
such registration statement, then the term “Registration Statement” shall, from
and after the declaration of the effectiveness of such post-effective amendment
by the SEC, refer to such registration statement as amended by such
post-effective amendment, and the term “Prospectus” shall refer to the amended
or supplemented prospectus then on file with the SEC, and (ii) if the Prospectus
filed by the Company pursuant to Rule 424(b) or 424(c) of the Regulations shall
differ from the prospectus on file at the time the Registration Statement or the
most recent post-effective amendment thereto, if any, shall have become
effective, then the term “Prospectus” shall refer to such prospectus filed
pursuant to Rule 424(b) or 424(c) from and after the date on which it shall have
been filed with the SEC; and

WHEREAS, the Dealer Manager, which has heretofore entered into a dealer manager
agreement (the “Dealer Manager Agreement”) with the Company pursuant to which it
has been designated the Dealer Manager, on a best-efforts basis, to offer and
sell and manage the offer and sale by others of the Shares pursuant to the terms
of such agreement, the Registration Statement and the Prospectus, is a
corporation incorporated and presently in good standing in the State of Florida,
and is presently (a) registered as a broker-dealer with the SEC; (b) a member in
good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”);
and (c) licensed or registered with the authorities administering the securities
laws in all fifty (50) states in the United States, the District of Columbia and
the Commonwealth of Puerto Rico as a securities broker-dealer authorized to
offer and sell to members of the public securities of the type represented by
the Shares; and

WHEREAS, the Broker is an entity organized and presently in good standing in the
state(s) and/or foreign or other jurisdictions in which it does business, and is
presently (a) registered as a broker-dealer with the SEC; (b) a member in good
standing of FINRA; and (c) licensed or registered (or exempt from such licensing
or registration) with the appropriate regulatory agency of each jurisdiction in
which it will offer and sell the Shares as a securities broker-dealer qualified
to offer and sell to members of the public securities of the type represented by
the Shares; and

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WHEREAS, the offer and sale of the Shares shall be made pursuant to the terms
and conditions of this Agreement, the Registration Statement and the Prospectus
and, further, pursuant to the terms and conditions of all applicable federal
securities laws and applicable securities laws of all jurisdictions in which the
Shares are offered and sold; and

WHEREAS, the Dealer Manager desires to retain the Broker to use its best efforts
to offer and sell the Shares on behalf of the Company, and the Broker is willing
and desires to accept such retention, all upon the terms and conditions set
forth in this Agreement and the Prospectus.

NOW, THEREFORE, in consideration of the terms and conditions hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is agreed between the Dealer Manager and the
Broker as follows:

1.Relationship.  

(a)Subject to and in accordance with the terms and conditions herein set forth
in this Agreement, the Dealer Manager hereby retains the Broker to use its best
efforts to effect offers and sales of all or any portion of the Shares pursuant
to the Offering for the account of the Company (“Share Offers and Sales”).  The
Broker hereby accepts such retention and covenants, warrants and agrees to
conduct Share Offers and Sales according to all of the terms and conditions of
this Agreement, the Registration Statement, the Prospectus, all applicable
state, federal and other jurisdictional laws, including the 1933 Act, and any
and all regulations and rules pertaining thereto, heretofore or hereafter issued
by the SEC and FINRA as well as all applicable laws and regulations of foreign
jurisdictions.  The Broker and its associated persons (as such term is defined
under FINRA laws and regulations) shall have no authority to give any
information or make any representations in connection with any offer or sale of
the Shares other than as contained in the Prospectus, the Subscription Agreement
(as defined below), and the Approved Sales Literature (as defined herein), each
as amended and supplemented.  

(b)The Broker shall use its best efforts, promptly following receipt of written
notice from the Dealer Manager of the effectiveness of the Registration
Statement, to sell the Shares to persons in accordance with all such terms as
are contained in this Agreement and in the Prospectus, as amended and
supplemented.  The Broker shall use and distribute, in connection with the offer
and sale of the Shares, only the then current Prospectus, the Subscription
Agreement, and such sales literature and advertising as shall have been approved
in writing by the Company and/or the Dealer Manager (the “Approved Sales
Literature”).  The Dealer Manager reserves the right to establish such
additional procedures as it may deem necessary to ensure compliance with the
requirements of the Registration Statement, and the Broker shall comply with all
such additional procedures to the extent that it has received written notice
thereof.

(c)In order to purchase Shares, the subscriber must complete and execute a
subscription agreement substantially in the form attached as an Appendix to the
Registration Statement (a “Subscription Agreement”). Checks for subscriptions
shall be made payable in the amount per Share as described in the Prospectus,
subject to certain discounts as set forth in the Prospectus.  The Broker shall
instruct subscribers to make checks for subscriptions payable to the order of
“UMB BANK, N.A., as EA for CNL HEALTHCARE PROPERTIES II, INC.” or, after the
Company raises $2 million in the Offering (the “Minimum Offering”), to the
Company, and shall promptly return any check made payable to any other party
directly to the subscriber who submitted such check.  The Broker shall instruct
subscribers to wire funds directly to UMB Bank, N.A. (the “Escrow Agent”) or,
after the Company has reached the Minimum Offering, to the Company as set forth
in the Subscription Agreement. Checks received which conform to the foregoing
instructions shall be transmitted under one of the transmittal procedures
described below. Notwithstanding the foregoing, unless and until the Washington
Minimum or the Pennsylvania Minimum (as each are defined in the Managing Dealer
Agreement) have each been respectively reached, investors in each those states
shall continue to make checks for subscriptions payable to the order of “UMB
BANK, N.A., as EA for CNL HEALTHCARE PROPERTIES II, INC.” If the Washington
Minimum is satisfied within the time provided for in the Prospectus, investments
from Washington investors will be released from escrow and if the Pennsylvania
Minimum is satisfied within the time provided for in the Prospectus, investments
from Pennsylvania investors will be released from escrow.

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(d)Where, pursuant to the Broker’s internal supervisory procedures, internal
supervisory review is conducted at the same location at which Subscription
Agreements and checks are received from subscribers, checks will be transmitted
by the end of the next business day following receipt by the Broker for deposit
to DST Systems, Inc., as the processing agent for the Escrow Agent (the
“Processing Agent”) or, after the Minimum Offering (or Washington Minimum or
Pennsylvania Minimum, as applicable) has been achieved, to the Company or its
agent. 

(e)Where, pursuant to the Broker’s internal supervisory procedures, final
internal supervisory review is conducted at a different location, checks will be
transmitted by the end of the next business day following receipt by the Broker
to the office of the Broker conducting such final internal supervisory review
(the “Final Review Office”).  The Final Review Office will in turn by the end of
the next business day following receipt by the Final Review Office, transmit
such checks for deposit to the Processing Agent for the Escrow Agent or, after
the Minimum Offering (or Washington Minimum or Pennsylvania Minimum, as
applicable) has been achieved, to the Company or its agent.

(f)Subscription Agreements for the Offering will be executed as described in the
Prospectus.  The Company will accept or reject each subscription within thirty
(30) days of receipt of a subscription.   If a subscription solicited by the
Broker is rejected, the Broker shall ensure that all related subscription funds,
without deduction for any expenses, are returned to the relevant subscriber
within ten (10) business days following the date such subscription is
rejected.  A sale of a Share shall be deemed to be completed if and only if: (i)
the Company has received a properly completed and executed Subscription
Agreement, together with payment of the full applicable purchase price of each
purchased Share, from an investor who satisfies the applicable suitability
standards and minimum purchase requirements set forth in the Prospectus, as
amended and supplemented (the “Investor Standards and Requirements”) as
determined by the Broker in accordance with the provisions of this Agreement;
(ii) the Company has accepted such subscription; and (iii) such investor has
been admitted as a stockholder of the Company.  In addition, no sale of Shares
shall be completed until at least five (5) business days after the date on which
the subscriber receives a copy of the Prospectus.  

(g)The Broker hereby acknowledges and agrees that the Company, in its sole and
absolute discretion, may accept or reject any subscription, in whole or in part,
for any reason whatsoever, and no commission, dealer manager fee or distribution
and stockholder servicing fee will be paid to the Broker with respect to that
portion of any subscription which is rejected.  

2.Compensation of Broker.

(a)Up-Front Selling Commission. As compensation for completed sales of Shares
and for services to be rendered by the Broker hereunder, the Dealer Manager
shall reallow to the Broker an upfront commission in an amount of up to the
corresponding Class percentage set forth on Schedule I to this Agreement of the
gross proceeds on such completed sales of Shares by the Broker, subject to
reduction as provided herein or in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time. The Broker
shall not receive commissions for sales of Class A or Class T Shares pursuant to
the Distribution Reinvestment Plan, or for sales of any Class I Shares in the
Primary Offering or pursuant to the Distribution Reinvestment Plan.  

(b)  Up-Front Dealer Manager Fee.  Except as may be provided in the “Plan of
Distribution” section of the Prospectus, which may be amended and supplemented
from time to time, the Dealer Manager may reallow to the Broker, in its sole
discretion, all or a portion of the dealer manager fee received by it in an
amount of up to the corresponding percentage set forth on Schedule I of gross
proceeds of completed sales of Class A Shares or Class T Shares in the Primary
Offering by such Broker as a marketing fee if such Broker has executed the
addendum to this Agreement, attached as Schedule I to this Agreement, whereby
Broker agrees to use its internal marketing support personnel to assist the
Dealer Manager’s marketing team and their internal marketing communication tools
to promote the Company as more specifically set forth in and conditioned on the
terms of Schedule I attached hereto.  Such rates shall remain in effect during
the full term of this Agreement unless otherwise changed by a written agreement
between the parties hereto. The Broker shall not receive reallowance of dealer
manager fees for sales of Class A or Class T Shares pursuant to the Distribution
Reinvestment Plan, or for sales of any Class I Shares in the Primary Offering or
pursuant to the Distribution Reinvestment Plan.

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(c)Distribution and Stockholder Servicing Fee. Except as may be provided in the
“Plan of Distribution” section of the Prospectus, which may be amended and
supplemented from time to time, the Dealer Manager may agree to reallow to the
Broker, as compensation for the sale of Shares in the Offering and for ongoing
shareholder services rendered, all or a portion of the annual distribution and
stockholder servicing fee received by the Dealer Manager as described in the
Dealer Manager Agreement and the Prospectus with respect to the Class T Shares
and/or the Class I Shares sold in the Primary Offering by the Broker during the
term of this Agreement if the Broker has elected to sell Class T Shares or Class
I Shares, as applicable, and has executed the addendum to this Agreement
attached as Schedule I to this Agreement, which sets forth the terms and
conditions of the Dealer Manager’s reallowance of the distribution and
stockholder servicing fee to Broker. The annual distribution and stockholder
servicing fee will be based the then-current Primary Offering price (or, in
certain cases described in the Prospectus, the amount of the estimated net asset
value per Share) per Class T Share and Class I Share. The Broker shall not
receive reallowance of distribution and stockholder servicing fees for sales of
Class T or Class I Shares pursuant to the Distribution Reinvestment Plan, or for
sales of any Class A Shares in the Primary Offering or pursuant to the
Distribution Reinvestment Plan. 

(d)Commissions and any reallowance of the dealer manager fees or distribution
and stockholder servicing fees shall be payable to the Broker by the Dealer
Manager after such acceptance of the Subscription Agreement in accordance with
the terms of this Agreement; provided however, that commissions, reallowance of
dealer manager fees or distribution and stockholder servicing fees shall not be
paid by the Dealer Manager: (i) other than from commissions, dealer manager fees
or distribution and stockholder servicing fees, as applicable, received from the
Company for the sale of its Shares; (ii) until any and all commissions, dealer
manager fees and distribution and stockholder servicing fees, as applicable,
payable by the Company to the Dealer Manager have been received by the Dealer
Manager; (iii) until the Minimum Offering (or Washington Minimum or Pennsylvania
Minimum, as applicable) has been reached; and (iv) to the extent the commission,
dealer manager fee or distribution and stockholder servicing fee payable to any
broker dealer exceeds the amount allowed by any regulatory agency.  Broker
acknowledges that, if the Company pays commissions, dealer manager fees or
distribution and stockholder servicing fees to the Dealer Manager, the Company
is relieved of any obligation for commissions, dealer manager fees or
distribution and stockholder servicing fees, as applicable, to the Broker. The
Company may rely on and use the preceding acknowledgment as a defense against
any claim by the Broker for commissions, dealer manager fees or distribution and
stockholder servicing fees the Company pays to the Dealer Manager but that
Dealer Manager fails to remit to the Broker.  The Company (and the Dealer
Manager) may pay reduced commissions dealer manager fees and/or distribution and
stockholder servicing fees or may eliminate such compensation on certain sales
of Shares, including the reduction or elimination of compensation in accordance
with the following paragraphs of this Section 2.  Any such reduction or
elimination of compensation will not, however, change the net proceeds to the
Company.

(e)Notwithstanding anything to the contrary contained in this Section 2, in the
event that the Dealer Manager has reallowed any commission and/or fees to the
Broker for the sale of one or more Shares and the subscription is rescinded or
rejected as to one or more of the Shares covered by such subscription, the
Broker shall pay the amount specified to the Dealer Manager within ten (10) days
following mailing of notice to the Broker by the Dealer Manager stating the
amount owed as a result of rescinded or rejected subscriptions, and if the
Broker fails to pay such amount, the Dealer Manager shall have the right to
offset such amounts owed against future compensation due and otherwise payable
to the Broker (it being understood and agreed that such right to offset shall
not be in limitation of any other rights or remedies that the Dealer Manager may
have in connection with such failure).  

(f)After the Minimum Offering (or Washington Minimum or Pennsylvania Minimum, as
applicable) has been reached, the Broker may withhold the selling commissions
and reallowance of dealer manager fees to which it is entitled from the purchase
price for the Shares in the Offering and forward the balance to DST Systems,
Inc., which acts as the Company’s transfer agent (the “Transfer Agent”) if it
represents to the Dealer Manager that: (i) the Broker is legally permitted to do
so; and (ii) (A) the Broker meets all applicable net capital requirements under
the rules of FINRA or other applicable rules regarding such an arrangement; (B)
the Broker has forwarded the Subscription Agreement to the Company’s Transfer
Agent and received the Company’s written acceptance of the subscription prior to
forwarding the purchase price for the Shares, net of the commissions and dealer
manager fees to which the Broker is entitled, to the Company’s Transfer Agent;
and (C) the Broker has

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verified that there are sufficient funds in the investor’s account with the
Broker to cover the entire cost of the subscription. 

(g)Except as may be provided in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time, the
following persons and entities may purchase Class A Shares net of the seven
percent (7.0%) commissions and the two and three-fourths percent (2.75%) dealer
manager fee (assuming no other discounts apply): (i) the Advisor and its or the
Company’s officers, directors, employees or affiliates, or the officers,
directors and employees of such affiliates, and their immediate family members;
(ii) any plan established exclusively for the benefit of the persons or entities
listed in (i) above; (iii) if approved by the Company’s board of
directors,  joint venture partners, consultants and other service providers; and
(iv) Participating Brokers and their directors, officers or employees (and the
immediate family members of any of the foregoing persons).  Further except as
may be provided in the “Plan of Distribution section of the Prospectus, which
may be amended and supplemented from time to time, the following persons and
entities may purchase Class A Shares net of the seven percent (7.0%) commission
(assuming no other discounts apply): (i) a client of an investment advisor
registered under the Investment Advisers Act of 1940, as amended, or under
applicable state securities laws that is affiliated with or dually registered
with a Participating Broker whom the investor has agreed to pay compensation for
investment advisory services or other investment advice (other than a
broker-dealer who does not have a fixed or “wrap” account or other asset fee
arrangement with the investor); (ii) a person whose contract for investment
advisory and related brokerage services includes a fixed fee or fee-based
program, also known as a “wrap” account or other alternative fee arrangements;
(iii) a person investing in a bank trust account with respect to which the
decision-making authority for investments has been delegated to the bank trust
department, and (iv) a person investing through a family office, or any
endowment, foundation or pension fund.  For purposes of this paragraph,
“immediate family members” shall have the meaning set forth in the
Prospectus.  The amount of net proceeds to the Company will not be affected by
reducing or eliminating commissions and dealer manager fees payable in
connection with sales to investors described in this paragraph. In addition, in
accordance with the terms of the Prospectus, which may be amended and
supplemented from time to time, the commissions and dealer manager fees for
purchases of Class A Shares of more than $5.0 million are negotiable, details of
which will be set forth in a supplement to the Prospectus.

(h)In accordance with the volume discounts schedule set forth in the “Plan of
Distribution” section of the Prospectus, as amended and supplemented, the amount
of selling commissions otherwise payable may be reduced with respect to sales to
a subscriber or group of subscribers based upon the aggregate of Class A Shares
purchased by such subscriber or group through the Broker.  The Broker shall
assume exclusive responsibility for failures with respect to the calculation,
offer or omissions of investor qualifications for reduced commissions or
discounts for volume purchases or otherwise, as described in the Prospectus.  To
the extent an investor qualifies for a volume discount on a particular purchase,
such investor’s subsequent purchases, regardless of the Shares subscribed for in
such purchases, will also qualify for: (i) that volume discount; or (ii) to the
extent the subsequent purchase when aggregated with the prior purchases
qualifies for a greater volume discount, such greater discounts.  For purposes
of determining the applicability of discounts, a single “purchaser” shall have
the meaning set forth in the Prospectus. For purposes of volume discounts, all
such Shares must be purchased through the same Broker.  Any such discounts will
reduce the amount of compensation otherwise payable to the Broker.  

(i)No commissions, dealer manager fees or distribution and stockholder servicing
fees will be paid to the Broker in connection with any Shares purchased through
the Distribution Reinvestment Plan.

3.Association with Other Brokers  

It is expressly understood between the Dealer Manager and the Broker that the
Dealer Manager may cooperate with respect to Share Offers and Sales with other
broker dealers who are registered as broker dealers with the SEC, members of
FINRA and duly licensed by the appropriate regulatory agency of each
jurisdiction in which they will conduct Share Offers and Sales, or with broker
dealers exempt from all such registration requirements.  Such other
participating broker dealers may be retained by the Dealer Manager as brokers on
terms and conditions identical or similar to this Agreement and shall receive
such rates of compensation as are agreed to between the Dealer Manager and the
respective other participating broker dealers and as are in accordance with the
terms of the Registration Statement.  The Broker understands that, to that
extent, such other participating broker dealers shall compete with the Broker in
conducting Share Offers and Sales.  

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4.Conditions of the Broker’s Obligations.   

The Broker’s obligations hereunder are subject, during the full term of this
Agreement and the Offering, to the conditions that: (a) at the effective date of
the Registration Statement and thereafter during the term of this Agreement
while any Shares remain unsold, the Registration Statement shall remain in full
force and effect authorizing the Offering; (b) no stop order suspending the
effectiveness of the Offering or other order restraining the Offering shall have
been issued nor proceedings therefore initiated or threatened by any state
regulatory agency or the SEC; and (c) the Dealer Manager shall have performed
all of its obligations hereunder.  

5.Conditions to the Dealer Manager’s Obligations.  

The obligations of the Dealer Manager hereunder are subject, during the full
term of this Agreement and the Offering, to the conditions that: (a) at the
effective date of the Registration Statement and thereafter during the term of
this Agreement while any Shares remain unsold, the Registration Statement shall
remain in full force and effect authorizing the Offering; (b) no stop order
suspending the effectiveness of the Offering or other order restraining the
Offering shall have been issued nor proceedings therefore initiated or
threatened by any state regulatory agency or the SEC; and (c) the Broker shall
have performed all of its obligations hereunder.  

6.Representations, Warranties and Covenants of the Dealer Manager.  

The Dealer Manager represents, warrants and covenants during the full term of
this Agreement that:

(a)The Dealer Manager is duly incorporated, validly existing, and in good
standing under the laws of the state of Florida.  

(b)The Dealer Manager is a member of FINRA and is a broker dealer registered as
such with the SEC under the Securities Exchange Act of 1934, as amended (the
“1934 Act”), and under the securities laws of all fifty states in the United
States, the District of Columbia and the Commonwealth of Puerto Rico, and has
the authority to engage in the public offer and sale of securities of the type
represented by the Shares.  

(c)The Dealer Manager has the requisite corporate power and authority to execute
this Agreement and to perform its duties hereunder, and the execution and
delivery by it of this Agreement and the consummation of the transactions herein
contemplated will not result in any violation of, or be in conflict with, or
constitute a default under, its organizational documents or any agreement or
instrument to which the Dealer Manager is a party or by which the Dealer Manager
or its properties are bound, or any judgment, decree, order, or, to its
knowledge, any statute, rule or regulation applicable to it.  

(d)This Agreement has been duly authorized by the Dealer Manager and when
executed and delivered by the Dealer Manager and the other party hereto, will be
the Dealer Manager’s legal, valid and binding agreement, enforceable in
accordance with its terms, except to the extent that the enforceability hereof
may be limited by: (i) bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, or similar laws from time to time in effect and
affecting the rights of creditors generally; (ii) limitations upon the power of
a court to grant specific performance or any other remedy with respect to the
enforcement of this Agreement; (iii) judicial discretion; or (iv) the extent
that the indemnification provisions of this Agreement are or may be held to be
in violation of public policy (under either state or federal law) in the context
of the offer, offer for sale, or sale of securities.  

(e)The Dealer Manager agrees to have in place and adhere to a commercially
reasonable program of customer privacy in compliance with applicable laws and
industry best practices designed to assure the confidentiality and security of
confidential investor information, as required by Regulation S-P and other
applicable laws.  The Dealer Manager will promptly notify the Broker of any
breaches of security or loss of confidential customer information in respect of
investors in the Company.  

(f)The Dealer Manager agrees to have in place and adhere to a “business
continuity plan” in conformity with the rules of FINRA and to cooperate with the
Broker on business continuity plan matters.  

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(g)The Dealer Manager shall use its best efforts to cause the Company to
maintain the effectiveness of the Registration Statement and to file such
applications or amendments to the Registration Statement as may be reasonably
necessary for that purpose.   

(h)The Dealer Manager shall advise the Broker whenever and as soon as it
receives or learns of any order issued by the SEC or the regulatory agency of
any jurisdiction which suspends the effectiveness of the Registration Statement
or prevents the use of the Prospectus or which otherwise prevents or suspends
the Offering, or receives notice of any proceedings regarding any such order.  

(i)The Dealer Manager shall use its best efforts to prevent the issuance of any
order described herein at subparagraph (h) hereof and to obtain the lifting of
any such order if issued.  

(j)The Dealer Manager shall give the Broker notice when the Registration
Statement becomes effective and shall deliver to the Broker such number of
copies of the Prospectus, and any supplements and amendments thereto, which are
filed with the SEC, as the Broker may reasonably request for Share Offers and
Sales.  This delivery may be in electronic format.  

(k)The Dealer Manager shall promptly notify the Broker of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and shall
furnish the Broker with copies of any revised Prospectus and/or supplements and
amendments to the Prospectus.  This delivery may be in electronic format.  

7.Representations, Warrants and Covenants of the Broker.  

The Broker represents, warrants and covenants during the full term of this
Agreement that:

(a)The Broker is duly organized, validly existing, and in good standing under
the laws of the jurisdiction in which it was formed.  

(b)The Broker is a member of FINRA and a broker dealer registered as such with
the SEC under the 1934 Act, and under the securities laws of the jurisdictions
in which the Shares are to be offered or sold, and has the authority to engage
in the public offer and sale of securities of the type represented by the
Shares.  

(c)The Broker has the requisite entity power and authority to execute this
Agreement and to perform its duties hereunder, and the execution and delivery by
it of this Agreement and the consummation of the transactions herein
contemplated will not result in any violation of, or be in conflict with, or
constitute a default under, its organizational documents or any agreement or
instrument to which the Broker is a party or by which the Broker or its
properties are bound, or any judgment, decree, order, or, to its knowledge, any
statute, rule or regulation applicable to it.  

(d)This Agreement has been duly authorized by the Broker, and when executed and
delivered by the Broker and the other parties hereto, will be the Broker’s
legal, valid and binding agreement, enforceable in accordance with its terms,
except to the extent that the enforceability hereof may be limited by: (i)
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, or
similar laws from time to time in effect and affecting the rights of creditors
generally; (ii) limitations upon the power of a court to grant specific
performance or any other remedy with respect to the enforcement of this
Agreement; (iii) judicial discretion; or (iv) the extent that the
indemnification provisions of this Agreement are or may be held to be in
violation of public policy (under either state or federal law) in the context of
the offer, offer for sale, or sale of securities.  

(e)The Broker agrees to have in place and adhere to a commercially reasonable
program of customer privacy in compliance with applicable laws and industry best
practices designed to assure the confidentiality and security of confidential
investor information, as required by Regulation S-P and other applicable
laws.  The Broker will promptly notify the Dealer Manager of any breaches of
security or loss of confidential customer information in respect of investors in
the Company.  

(f)The Broker agrees to have in place and adhere to a “business continuity plan”
in conformity with the rules of FINRA and to cooperate with the Dealer Manager
on business continuity plan matters.

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(g)The Broker agrees that all Share Offers and Sales will be made in compliance
with: (i) the terms of the Registration Statement, the Prospectus and this
Agreement; (ii) the requirements of applicable federal and state securities laws
and regulations; and (iii) the applicable rules of FINRA, including, without
limitation, FINRA Rule 2040, FINRA Rule 2121, FINRA Rule 2310 and FINRA Rule
5141.   

(h)The Broker shall offer and sell Shares only in jurisdictions where and in a
manner that the Shares may be legally offered and sold, only through Broker’s
registered representatives appropriately registered and licensed to sell Shares
in such jurisdictions, and only to such persons in such jurisdictions who shall
be legally qualified to purchase the Shares, only to the extent the Broker is
authorized to sell such class of Shares as set forth on Schedule I to this
Agreement.  The Company is responsible, at or prior to the time the Registration
Statement becomes effective, to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as the Company shall elect.  The
Dealer Manager assumes no obligation or responsibility in respect of the
qualification of the Shares under the laws of any jurisdiction.  The blue sky
survey for the Company indicates or will indicate the jurisdictions where it is
believed that offers and sales of the Shares may be effected under the
applicable blue sky, state or other securities laws.  In effecting offers or
sales in a jurisdiction, the Broker will comply with all special conditions and
limitations imposed by such jurisdiction, as set forth in the blue sky survey
for the Company.  If the blue sky survey for the Company is not enclosed
herewith, it will be made available to the Broker at a later date.  In no
circumstances will the Broker engage in any activities hereunder in any
jurisdiction: (i) which is not listed in the blue sky survey as a jurisdiction
where offers and sales of the Shares may be effected under the blue sky or
securities laws of such jurisdiction or (ii) in which Broker may not lawfully so
engage.  The blue sky survey shall not be considered Approved Sales
Literature.  

(i)The Broker shall use every reasonable effort to assure that Shares are
offered (both at the time of an initial subscription and at the time of any
additional subscriptions, including initial enrollments and increased
participations in the Distribution Reinvestment Plan) only to prospective
investors who, in each case:

(i)meets the Investor Standards and Requirements;

(ii)can reasonably benefit from an investment in the Shares based on the
prospective investor’s overall investment objectives and portfolio structure;

(iii)is able to bear the economic risk of the investment based on such
prospective investor’s overall financial situation; and

(iv)has an apparent understanding of (A) the fundamental risks of the
investment; (B) the risk that such prospective investor may lose its entire
investment; (C) the lack of liquidity of the Shares; (D) the restrictions on
transferability of the Shares; (E) the background and qualifications of the
Advisor to the Company and its affiliates; and (F) the need for such prospective
investor to consult with its own advisers regarding any tax consequences to such
prospective investor of an investment in the Shares.  

The Broker will make the determinations required to be made by it pursuant to
this subparagraph for each purchase of Shares by an investor, including any
purchases pursuant to the Distribution Reinvestment Plan, based on information
it has obtained from a prospective investor, including, at a minimum, but not
limited to, the prospective investor’s age, investment objectives, investment
experience, income, net worth, financial situation, other investments and
information gathered pursuant to FINRA’s anti-money laundering rules and the
SEC’s current books and records rules, as well as any other pertinent factors
deemed by the Broker to be relevant.  

(j)In addition to complying with the provisions of subparagraph (i) herein, and
not in limitation of any other obligations of the Broker to determine
suitability imposed by federal law or the law of a sales jurisdiction, the
Broker agrees that it will comply fully with all of the applicable provisions of
the FINRA Rules, and the following provisions:

(i)The Broker shall have reasonable grounds to believe, based upon information
provided by the investor concerning his investment objectives, other
investments, financial situation and needs, and upon any other information known
by the Broker, that (A) each investor

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to whom the Broker sells Shares is or will be in a financial position
appropriate to enable him to realize to a significant extent the benefits
(including tax benefits) of an investment in the Shares, (B) each investor to
whom the Broker sells Shares has a fair market net worth sufficient to sustain
the risks inherent in an investment in the Shares (including potential loss and
lack of liquidity), and (C) the Shares otherwise are or will be a suitable
investment for each investor to whom it sells Shares, and the Broker shall
maintain files disclosing the basis upon which the determination of suitability
was made; 

(ii)The Broker shall not execute any transaction involving the purchase of
Shares in a discretionary account without prior written approval of the
transaction by the investor;

(iii)The Broker is solely responsible for its obligations under Section 11 of
the 1933 Act and shall have reasonable grounds to believe, based upon the
information made available to it, that all material facts are adequately and
accurately disclosed in the Prospectus and provide a basis for evaluating the
Shares;

(iv)In making the determination set forth in subparagraph (iii) herein, the
Broker shall evaluate items of compensation, physical properties, tax aspects,
financial stability and experience of the Company’s sponsors, conflicts of
interest and risk factors, appraisals and other reports, as well as any other
information deemed pertinent by it;

(v)If the Broker relies upon the results of any inquiry conducted by another
member of FINRA or any other third party with respect to the obligations set
forth in subparagraphs (iii) or (iv) herein, the Broker shall have reasonable
grounds to believe that such inquiry was conducted with due care, that the
persons conducting or directing the inquiry consented to the disclosure of the
results of the inquiry and that the person who participated in or conducted the
inquiry is not the Dealer Manager or a sponsor or an Affiliate of the sponsor of
the Company;

(vi)The Broker will assume exclusive responsibility for failures with respect to
the calculation, offer, or omissions of investor qualifications for reduced
commissions under discounts for volume purchases or otherwise, as described in
the Prospectus;

(vii)Prior to executing a purchase transaction in the Shares, the Broker shall
have informed the prospective investor of all pertinent facts relating to the
lack of liquidity and marketability of the Shares; and

(viii)The Broker will not place orders for Shares in amounts just below the
point at which commissions are reduced so as to benefit from a higher commission
applicable to an amount below a breakpoint, and will assume exclusive
responsibility for failures with respect to the calculation, offer, failure to
offer, or omission of investor qualifications for reduced commissions under
breakpoints for volume purchases.

(k)In each jurisdiction, the Broker will permit only those of its agents,
employees or representatives, who have effective registrations in such
jurisdiction, as and if required by the securities or “blue sky” laws of such
jurisdiction or similar securities laws of such jurisdictions, to review the
suitability of Shares for, to offer Shares for sale to, or solicit offers to buy
Shares from, or otherwise negotiate with respect to, discuss the terms or merits
of an investment in the Shares with, or provide any documents relating to the
Shares to, any investors resident in such jurisdiction.  

(l)The Broker agrees to comply with the provisions of Article III.C and E. of
the Statement of Policy Regarding Real Estate Investment Trusts of the North
American Securities Administrators Association, Inc.  

(m)The Broker agrees to retain in its files, for that period of time which shall
comply with all applicable federal, state, jurisdictional and other regulatory
requirements, information that will establish that each

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subscriber purchasing Shares falls within the permitted class of investors and
will update all such information as may be required under FINRA’s anti-money
laundering rules, customer identification procedures and the SEC’s books and
records rules.   

(n)The Broker shall conduct solicitation and other activities only in accordance
with this Agreement, the Prospectus, the 1933 Act and the applicable rules and
regulations of the SEC and FINRA.  

(o)The Broker acknowledges receipt of copies of the Prospectus describing the
terms of the Offering and the Shares offered thereby, including the Subscription
Agreement as an attachment thereto.  Neither the Broker nor any other person is
authorized by the Company or the Dealer Manager to give, and neither the Broker
nor any other person shall give, any information or make any representations
(written or oral) in connection with this Agreement or the Offering of the
Shares other than those contained in the Prospectus and Approved Sales
Literature.  Without limiting the generality of the foregoing, the Broker agrees
not to publish, circulate or otherwise use any other advertisement or
solicitation material other than the Prospectus and Approved Sales
Literature.  Broker agrees that it will deliver a copy of the Prospectus as
amended and supplemented to each investor to whom an offer is made prior to or
simultaneously with the first solicitation of an offer to sell the Shares to an
investor. Further, the Broker agrees that should it distribute any Approved
Sales Literature to prospective purchasers, such distribution shall be
accompanied or preceded by the Prospectus as then currently in effect.  Broker
agrees that it will not show or give to any investor or prospective investor or
reproduce any material or writing that is supplied to it by the Dealer Manager
and marked “broker-dealer use only” or otherwise bearing a legend denoting that
it is not to be used in connection with the sale of Shares to members of the
public. Broker agrees that it will not show or give to any investor or
prospective investor in a particular jurisdiction any material or writing that
is supplied to it by the Dealer Manager if such material bears a legend denoting
that it is not to be used in connection with the sale of Shares to members of
the public in such jurisdiction. Broker agrees that it will not use in
connection with the offer or sale of Shares any material or writing that relates
to another company supplied to it by the Company or the Dealer Manager bearing a
legend that states that such material may not be used in connection with the
offer or sale of any securities of the Company.

(p)The Broker represents that it has not engaged, and agrees that it will not
engage, in any activity in respect of the Shares in violation of the 1934 Act,
including Rule l0b-5 and Regulation M thereunder.  

(q)So long as the Shares have not been listed on a national securities exchange
or The NASDAQ Stock Market, the Broker shall, in recommending the purchase, sale
or transfer of Shares to an investor: (i) inform such investor of all pertinent
facts relating to the lack of liquidity and marketability of Shares; and (ii)
have reasonable grounds to believe, based on information obtained from the
investor, that an investment in the Shares is suitable for such investor.  

(r)The Broker shall not, directly or indirectly, pay or award any finder’s fees,
commissions or other compensation to any persons engaged by a potential investor
for investment advice as an inducement to such advisor to advise the potential
investor to purchase Shares in the Company.  

(s)The Broker either: (i) shall not purchase Shares for its own account; or (ii)
shall hold for investment any Shares purchased for its own account.  

(t)The Broker hereby confirms that it is familiar with Securities Act Release
No. 4968 and Rule 15c2-8 under the 1934 Act, relating to the distribution of
preliminary and final prospectuses, and confirms that it has complied, and will
comply therewith.  Regardless of the termination of this Agreement, Broker will
deliver a Prospectus (as amended and supplemented) in transactions in the Shares
for a period of 90 days from the effective date of the Registration Statement or
such other period as may be required by the 1934 Act or the rules and
regulations thereunder.

(u)The Broker shall not in any way participate in, or effect the sale or
transfer of Shares in connection with, a tender offer with respect to the
Company’s common shares, whether or not such offer is subject to Section
14(d)(1) of the 1934 Act, other than with the written consent of the Company
and/or the Dealer Manager.  

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(v)Neither the Broker, nor any officer, director, employee or agent of the
Broker, shall disclose to any person, other than an officer, director, employee
or agent of the Broker, any password relating to a restricted website or portion
of a website provided to such Broker in connection with this Offering.  Neither
the Broker, nor any officer, director, employee or agent of the Broker, shall
disclose to any person, other than an officer, director, employee or agent of
the Broker, any material downloaded from such a restricted website or portion of
a website.   

(w)The Broker shall verify the identity of each investor to whom it offers and
sells Shares under its “customer identification program” and verify the source
of the investor’s funds as required by the anti-money laundering rules of FINRA,
the SEC and the Department of Treasury, and shall screen such investors against
current lists of individuals and organizations available from the Office of
Foreign Asset Control (“OFAC”).  The Broker shall not accept subscriptions from
any person, entity or organization in a blocked jurisdiction.  The Broker shall
file any necessary or appropriate suspicious activity reports and currency
transaction reports and other reports required under applicable “know your
customer” and “anti-money laundering” laws and regulations in respect of
investors or potential investors.  The Broker has in place and adheres to a
comprehensive anti-money laundering program that meets the requirements of FINRA
Rule 3310, Department of Treasury regulations issued pursuant to Title III of
the USA PATRIOT Act and other applicable laws and regulations.  The Broker
agrees to cooperate with the Company and the Dealer Manager in gathering
additional information in respect of an investor or the source of the investor’s
funds as reasonably requested by the Dealer Manager or the Company, and agrees
to cooperate with the Company and the Dealer Manager in connection with
anti-money laundering laws and regulations.  By forwarding an investor’s
subscription information to the Company, the Broker represents and warrants that
it has verified the identity of the investor and the source of the investor’s
funds, that the investor is not listed on the OFAC list, and that the Broker,
after conducting commercially reasonable diligence, is not aware of any
suspicious or illegal activity associated with the investor or the source of the
investor’s funds.  

(x)The Broker hereby confirms that if it intends to use electronic delivery to
distribute the Prospectus to any person that has the ability to view and
download electronically delivered documents, it agrees that:

(i)It will view and download any documents electronically delivered to it by the
Dealer Manager; and

(ii)It will comply with all applicable requirements of the SEC and FINRA and any
laws or regulations related to the electronic delivery of documents.  

(y)The Broker shall be entitled to submit Subscription Agreements using
facsimile signatures and hereby agrees to acknowledge such facsimile signatures
as if they were an original execution, and such Subscription Agreements shall be
deemed as executed when an executed facsimile thereof is transmitted to the
Company or the Dealer Manager.  

(z)The Broker shall keep strictly confidential all Offering due diligence
materials, including all materials that it may produce or that may be provided
to it by any party including its agents or counsel.

(aa)The Broker agrees to be bound by the terms of the Escrow Agreement among UMB
Bank, N.A., as escrow agent, the Dealer Manager and the Company, copies of which
are available upon request and the Broker further agrees that it will not
represent or imply that UMB Bank, N.A., as the escrow agent identified in the
Prospectus, has investigated the desirability or advisability of an investment
in the Company or has approved, endorsed or passed upon the merits of the Shares
or of the Company, nor will the Broker use the name of said escrow agent in any
manner whatsoever in connection with the offer or sale of the Shares other than
by acknowledgment that it has agreed to serve as escrow agent.  

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8.Payment of Costs and Expenses.   

(a)The Broker shall pay all costs and expenses incident to the performance of
its obligations under this Agreement, including:

(i)all expenses incident to the preparation, printing and filing of all
advertising originated by the Broker and approved by the Company and Dealer
Manager related to Share Offers and Sales; and

(ii)all other costs and expenses incurred in connection with its sales efforts
related to Share Offers and Sales that are not expressly assumed by the Company
or CHP II Advisors, LLC (the “Advisor”) in the Dealer Manager Agreement or
otherwise specifically agreed upon in writing in advance by the Dealer
Manager.  

(b)Subject to the Broker or its agent providing itemized and detailed invoices
and obtaining prior written approval from the Dealer Manager, and subject
further to the Dealer Manager receiving reimbursement from the Advisor, the
Dealer Manager may reimburse the Broker for its bona fide due diligence expenses
incurred in connection with the Offering, All reimbursements shall be made in
accordance with, and subject to restrictions and limitations imposed under the
Prospectus, existing FINRA rules and all other applicable laws and regulations.

9.Indemnification.

(a)The Broker agrees, to the extent permitted by applicable federal and state
law (including, without limitation, federal and state securities law), to
indemnify, defend and hold harmless the Company, the Dealer Manager, and their
respective officers, directors, partners, employees, associated persons, agents
and control persons (collectively, the “Dealer Manager Indemnified Persons”)
from and against any and all losses, claims, damages, liabilities and expenses,
including reasonable legal and other expenses incurred in defense of any
thereof, whether joint or several, under the 1933 Act or otherwise
(collectively, “Losses”), to which they or any of them may (or may be threatened
to) become subject, insofar as such Losses or any Proceedings (as defined below)
in respect thereof arise out of or are based upon: (i) a breach or alleged
breach by the Broker of any of its representations, warranties or covenants in
this Agreement, (ii) requests, directions, actions or inactions of or by the
Broker or its officers, employees or agents regarding Broker responsibilities
hereunder, (iii) any untrue statement or alleged untrue statement of any
material fact made by the Broker to any offeree or purchaser of any of Shares
(other than any statement contained in the Prospectus or any Approved Sales
Literature, or any amendment or supplement thereto, except for information
supplied by the Broker), or (iv) any omission or alleged omission by the Broker
to state to any offeree or purchaser of any Shares a material fact necessary in
order to make the statements made to such offeree or purchaser not misleading in
light of the circumstances under which they were made (other than any such
material fact omitted from the Prospectus or any Approved Sales Literature, or
any amendment or supplement thereto unless such omission is based on information
supplied by the Broker); and the Broker shall reimburse each Dealer Manager
Indemnified Person for any legal or other expenses (including, but not limited
to, reasonable attorneys’ fees) reasonably incurred by such Dealer Manager
Indemnified Person in connection with investigating or defending any actual or
threatened claim, action, suit or other proceeding in respect of any Loss (a
“Proceeding”), whether or not resulting in any liability.  For purposes of this
Section 9, “control person” means, with respect to any particular person, any
other person who possesses, directly or indirectly, the power to direct or cause
the direction of the management or policies of such particular person, whether
through the ownership of voting securities, by contract, or otherwise.

(b)The Dealer Manager shall indemnify, defend and hold harmless the Broker, and
its officers, directors, partners, employees, associated persons, agents and
control persons (collectively, the “Broker Indemnified Persons”), from and
against any and all Losses to which they or any of them may become subject,
under the 1933 Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon a breach or alleged breach by the Dealer
Manager of any of its representations, warranties or covenants in this
Agreement; and shall reimburse any legal or other expenses (including, but not
limited to, reasonable attorneys’ fees) reasonably incurred by the Broker in
connection with investigating or defending any Proceeding, whether or not
resulting in any liability.  

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(c)If the rights to indemnification provided for in this Section 9 would by
their terms be available to a person hereunder (collectively, the “Indemnified
Parties” and individually, an “Indemnified Party”), but is held to be
unavailable by a court of competent jurisdiction for any reason other than
because of the terms of such indemnification provision, then the Dealer Manager
and the Broker, to the extent an indemnifying party with respect to an
Indemnified Party (each, to such extent, an “Indemnifying Party”), shall
contribute to the aggregate of such losses, claims, damages and liabilities as
are contemplated in those paragraphs (including, but not limited to, any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any claim, action, suit or proceeding) in the
ratio in which the net proceeds of the Offering of Shares have been actually
received and retained by such Indemnifying Party.  For purposes of the preceding
sentence, proceeds, commissions, dealer manager fees, due diligence expense
reimbursements or other amounts paid to the Dealer Manager under the Dealer
Manager Agreement and paid by the Dealer Manager to the Broker under this
Agreement shall not be deemed received and retained by the Dealer
Manager.  However, the right of contribution described in the preceding
sentences is subject to the following limitation:  No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.   

(d)Any Indemnified Party entitled to contribution or indemnification under this
Section 9 will, promptly after receipt of such notice of commencement of any
action, suit, proceeding or claim against him or it in respect of which a claim
for contribution or indemnification may be made against another Indemnifying
Party or Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties.  Failure to so notify such other Indemnifying Party or
Indemnifying Parties shall not relieve such other Indemnifying Party or
Indemnifying Parties from any other obligation it or they may have hereunder or
otherwise, unless the Indemnifying Party has been materially prejudiced in its
ability to defend the action as a result of such delay.  If such other
Indemnifying Party or Indemnifying Parties are so notified, such other
Indemnifying Party or Indemnifying Parties shall be entitled to participate in
the defense of such action, suit, proceeding or claim at its or their own
expense or in accordance with arrangements satisfactory to all parties who may
be required to contribute.  After notice from such other Indemnifying Party or
Indemnifying Parties to the Indemnified Party entitled to contribution or
indemnification of its or their acknowledgement of its or their obligations
hereunder and its or their election to assume its or their own defense, the
Indemnifying Party or Indemnifying Parties so electing shall not be liable for
any legal or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to indemnification or contribution in connection with
the defense thereof, other than the reasonable costs of investigation.  No party
shall be required to contribute or provide indemnification with respect to the
settlement amount of any action or claim settled without its consent.  

10.Term and Termination.

(a)This Agreement shall become effective as of the date set forth in the
preamble to this Agreement.  Either party may terminate this Agreement at any
time for any reason by giving thirty (30) days’ written notice to the other
party; provided, however, that this Agreement shall in any event automatically
terminate at the first occurrence of any of the following events: (i) the
Company shall be dissolved or liquidated; (ii) the Dealer Manager Agreement has
expired or been terminated; or (iii) the Broker’s license or registration to act
as a broker dealer shall be revoked or suspended by any federal, self-regulatory
or state or other jurisdictional agency and such revocation or suspension is not
cured within ten (10) days from the date of such occurrence.  In any event, this
Agreement shall be deemed suspended during any period for which such license is
revoked or suspended.  Either party may terminate this Agreement with respect to
any class of Shares at any time for any reason by giving thirty (30) days’
written notice to the other party.  The termination of this Agreement with
respect to a specific class of Shares will not cause the Agreement to terminate
with respect to any other class. The following provisions shall survive any
termination or expiration of this Agreement: Sections 1(d), 2, 7(g), 7(m), 7(r),
and Sections 8 through 13.  

(b)In addition to any other obligations of the Broker that survive the
expiration or termination of this Agreement, the Broker, upon the expiration or
termination of this Agreement, shall (i) promptly forward to the Company any and
all funds in its possession which were received from investors for the sale of
Shares; and (ii) promptly deliver to the Company all records and documents in
its possession which relate to the Offering and are not designated as dealer
copies.  The Broker, at its sole expense, may make and retain copies of all such
records and documents, but shall keep all such information confidential.

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11.Notices.   

All notices and communications hereunder shall be in writing and shall be deemed
to have been given and delivered when deposited in the United States mail,
postage prepaid, registered or certified mail, to the applicable address set
forth in this Section 11.  

If sent to the Dealer Manager:

CNL Securities Corp.  

CNL Center at City Commons

450 South Orange Avenue, Suite 1300

Orlando, Florida 32801

Attention:  Corporate Counsel

 

If sent to the Broker:

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 

Any party may change its address specified above by giving the other party
notice of such change in accordance with this Section.

 

12.Successors.  

This Agreement shall be binding upon and inure to the benefit of the parties
hereto, their respective legal representatives and successors.  This Agreement
may be assigned or transferred by the Broker only upon the prior written consent
of the Dealer Manager.

13.Miscellaneous.  

(a)This Agreement shall be construed in accordance with the applicable laws of
the State of Florida, excluding the choice of law provisions thereof.  If it
becomes necessary for any party to this Agreement to institute litigation to
enforce or construe any of its terms, then the prevailing party in such action
shall be entitled to recover an award of reasonable attorneys’ fees.  Any
aggrieved party may proceed to enforce its rights in the appropriate action at
law or in equity.  Venue for all suits arising out of this Agreement shall lie
exclusively in the courts of Orange County, Florida.  By execution of this
Agreement, each party hereby submits itself to the in personam jurisdiction of
all courts of Orange County, Florida, and waives any right they may have to seek
any change of jurisdiction or venue.  

(b)Nothing in this Agreement shall constitute the Broker as in association with
or in partnership with the Dealer Manager or the Company.  Instead, this
Agreement shall only authorize the Broker to sell the Shares according to the
terms as expressly set forth herein; provided, further, that the Broker shall
not in any event have any authority to act as the agent or broker of the Dealer
Manager except according to the terms expressly set forth herein.  

(c)This Agreement embodies the entire understanding between the parties to the
Agreement. Schedule I (as it may be amended from time to time) is, by this
reference, incorporated into and made a part of this

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Agreement. No variation, modification or amendment to this Agreement (including
Schedule I) shall be deemed valid or effective unless it is in writing and
signed by both parties hereto.  

(d)If any provision of this Agreement shall be deemed void, invalid or
ineffective for any reason, the remainder of the Agreement shall remain in full
force and effect.  

(e)Any capitalized terms used herein without definition shall have the meanings
given to them in the Prospectus.  

(f)The failure of any party to insist upon or enforce strict performance by any
other party of any provision of this Agreement or to exercise any right under
this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party’s right to assert or rely upon any such provision or right
in that or any other instance; rather, such provision or right shall be and
remain in full force and effect.

(g)The Company shall be a third party beneficiary of Section 9(a) of this
Agreement; otherwise there shall be no third party beneficiaries of this
Agreement, and other than the Company with respect to Section 9(a) herein, no
provision of this Agreement is intended to be for the benefit of any person or
entity not a party to this Agreement, and no third party shall be deemed to be a
beneficiary of any provision of this Agreement.  Further, no third party shall
by virtue of any provision of this Agreement have a right of action or an
enforceable remedy against either party to this Agreement.  

(h)This Agreement may be executed in counterpart copies, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument comprising this Agreement.

(signature page follows)

 

 

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EXHIBIT 1.2

 

IN WITNESS WHEREOF, the parties hereto have each duly executed this
Participating Broker Agreement as of the day and year set forth in the preamble
hereto.  

BROKER

 

 

 

DEALER MANAGER FOR

 

 

 

 

CNL HEALTHCARE PROPERTIES II, INC.

 

 

 

 

 

 

 

 

 

 

CNL SECURITIES CORP.

 

 

 

 

 

 

By:

 

 

 

By:

 

Printed Name:

 

 

 

Printed Name:

 

Title:

 

 

 

Title:

 

 

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SCHEDULE I

Addendum to Participating Broker Agreement

Name of Broker: _________________________________

The following reflects the selling commission, marketing fee and/or distribution
and stockholder servicing fee as agreed upon between CNL Securities Corp. (the
“Dealer Manager”) and the Broker, effective as of the effectiveness of the
Participating Broker Agreement (the “Agreement”) between the Dealer Manager and
the Broker in connection with the offering of Shares of CNL Healthcare
Properties II, Inc. (the “Company”).

Marketing Support Fee

Eligibility to receive the reallowance of the dealer manager fee described
herein is conditioned upon the Broker’s compliance with one or more of the
following conditions.  Any determination regarding the Broker’s compliance with
the listed conditions will be made in good faith by the Dealer Manager, in its
sole discretion.

(i) The Broker has and uses internal marketing support personnel (such as
telemarketers, or a marketing director) to assist the Dealer Manager’s marketing
team;

(ii) The Broker has and uses internal marketing communications vehicles,
including, but not limited to, newsletters, conference calls, interactive
software and internal mail to promote the Company and the Offering;

(iii) The Broker will provide access to its registered representative list,
updated quarterly;

(iv) The Broker will assist investors with reinvestments and redemptions;

(v) The Broker will maintain the technology necessary to adequately service the
Company’s investors as otherwise associated with the Offering; and

(vi) The Broker will provide such information and other services as requested by
investors from time to time.

Distribution and Stockholder Servicing Fee

The terms and conditions of the Distribution and Stockholder Servicing Fee
(“Distribution Fee”) are subject to the Prospectus as may be amended or
supplemented from time to time.  If Broker elects to sell Class T Shares and/or
Class I Shares, the Dealer Manager may reallow to Broker an annual distribution
and stockholder servicing fee in an amount described below, for each Class T
Share or Class I Share, as applicable, sold by the Broker in the Primary
Offering during the term of this Agreement. The distribution and stockholder
servicing fee will accrue daily and will be paid quarterly in arrears as
described in the Prospectus. The Broker waives any and all rights to receive
compensation, including the Distribution Fee, until it is paid to and received
by the Dealer Manager.

Eligibility to receive the Distribution Fee for Class T Shares and/or Class I
Shares is conditioned upon: (i) the existence of an effective Participating
Broker Agreement or ongoing shareholder servicing agreement between the Dealer
Manager and the Broker, (ii) the provision of on-going services with respect to
the Shares by the Broker, which may include ongoing account maintenance,
assistance with recordkeeping, assistance with distributions payments and
reinvestment decisions, assistance with Share repurchase requests, assistance
with Share conversion processing, or providing such other similar services as
the shareholder may reasonable require in connection investment in the class of
Shares, and (iii) acting as broker-dealer of record with respect to such
Shares  (in which case the Broker agrees to promptly notify the Dealer Manager
in writing if it is no longer the broker-dealer of record with respect to some
or all of the Shares) or, if not acting as broker-dealer of record, otherwise
providing advanced written confirmation to the Dealer Manager that it performed
shareholder services to be provided to the account with respect to the Shares.
In connection with this provision, the Broker agrees to reasonably cooperate to
provide certification to the Company, the Dealer Manager, and its agents
(including its auditors) confirming the provision of services to each particular
class of shareholder upon reasonable request. The Broker hereby represents by
its acceptance of each payment of the Distribution and Stockholder Servicing Fee
that it complies with each of the above requirements and is providing the
above-described services.

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Notwithstanding the foregoing, upon the date, if any, the Dealer Manager is
notified that the Broker is no longer meets the above eligibility requirements
of the Distribution Fee with respect to such Class T Shares or Class I Shares,
as applicable, then Broker’s entitlement to the distribution and stockholder
servicing fee related to such Class T Shares or Class I Shares, shall cease, and
Broker shall not receive the distribution and stockholder servicing fee for any
portion of the quarter in which Broker is not eligible on the last day of the
quarter; provided, however, if there is a  change in the broker-dealer of record
with respect to the Class T Shares or Class I Shares, as applicable, made in
connection with a change in the registration of record for the Class T Shares or
Class I Shares on the Company’s books and records (including, but not limited
to, a reregistration due to a sale or a transfer or a change in the form of
ownership of the account), then the Participating Broker shall be entitled to a
pro rata portion of the distribution and stockholder servicing fees related to
the Class T Shares or Class I Shares, as applicable, for the portion of the
quarter for which the Participating Broker was the broker dealer of record.

Thereafter, the Distribution Fee may be reallowed by the Dealer Manager to
another Participating Broker or other servicing broker-dealer meeting the
eligibility requirements of the Class T Shares or Class I Shares, if any,
pursuant to a Participating Broker Agreement or similar servicing agreement with
the Dealer Manager that provides for such reallowance.  The Dealer Manager may
also reallow some or all of the distribution and stockholder servicing fee to
other broker-dealers who provide services with respect to the Class T Shares or
Class I Shares pursuant to a servicing agreement with the Dealer Manager to the
extent such servicing agreement provides for such reallowance, all in accordance
with the terms of such servicing agreement. All determinations regarding the
reallowance of the distribution and stockholder servicing fee will be made by
the Dealer Manager in good faith in its sole discretion.

Conversion of Class T Shares and I Shares; Termination of the Distribution Fee.

Payment of the Distribution Fee with respect to the Class T Shares and/or Class
I Shares (as each class may be applicable) sold by the Broker in the Primary
Offering will terminate, and those Class T Shares and/or Class I Shares (as
applicable) will convert into a number of Class A Shares determined by
multiplying each Class T Share or Class I Share to be converted by the
applicable “Conversion Rate” described in the Prospectus, on the earlier of (i)
a listing of the Class A Shares on a national securities exchange; (ii) a merger
or consolidation of the Company with or into another entity, or the sale or
other disposition of all or substantially all of the Company’s assets; (iii)
after the termination of the primary offering in which the initial Class T
Shares or Class I shares in the account were sold, the end of the month in which
total underwriting compensation paid in the primary offering is not less than
10% of the gross proceeds of the primary offering from the sale of Class A,
Class T and Class I Shares; and (iv) with respect to Class T Shares, the end of
the month in which the total underwriting compensation paid in a primary
offering with respect to such Class T Shares purchased in a primary offering,
comprised of the dealer manager fees, selling commissions and annual
distribution and stockholder servicing fees, is not less than 9.75% of the gross
offering price of those Class T Shares purchased in in such primary offering
(excluding shares purchased through our distribution reinvestment plan and those
received as stock dividends) or with respect to Class I Shares, the end of the
month in which the total underwriting compensation paid in a primary offering
with respect to such Class I Shares purchased in a primary offering, consisting
of the dealer manager fees, selling commissions and annual distribution and
stockholder servicing fees, is not less than 9.75% of the gross offering price
of those Class I Shares purchased in such primary offering (excluding shares
purchased through our distribution reinvestment plan and those received as stock
dividends.

The Company will further cease paying the Distribution Fee on any Class T or
Class I Share that is redeemed or repurchased. If the Company redeems a portion,
but not all of the Class T Shares held in a stockholder’s account, the total
underwriting compensation limit and amount of underwriting compensation
previously paid will be prorated between the Class T Shares that were redeemed
and those Class T Shares that were retained in the account. Likewise, if a
portion of the Class T Shares in a stockholder’s account is sold or otherwise
transferred in a secondary transaction, the total underwriting compensation
limit and amount of underwriting compensation previously paid will be prorated
between the Class T Shares that were transferred and the Class T Shares that
were retained in the account.

The Company will further cease paying the annual distribution and stockholder
servicing fee on any Class T or Class I Share upon the Company’s dissolution,
liquidation or the winding up of the Company’s affairs, or a merger or other
extraordinary transaction in which the Company is a party and, with respect to
Class T Shares, in which the Class T Shares as a class are exchanged for cash or
other securities, or, with respect to Class I Shares, in which the Class I
Shares as a class are exchanged for cash or other securities.

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If the Company liquidates (voluntarily or otherwise), dissolves or winds up its
affairs, then, immediately before such liquidation, dissolution or winding up,
the Class T Shares and Class I Shares will automatically convert to Class A
Shares at the applicable Conversion Rate and the Company’s net assets, or the
proceeds therefrom, will be distributed to the holders of Class A Shares, which
will include all converted Class T Shares and Class I Shares, in accordance with
their proportionate interests.

A distribution and stockholder servicing fee will not be paid on any Class A
Shares sold in the Primary Offering or pursuant to the Distribution Reinvestment
Plan or any Class T or Class I Shares pursuant to the Distribution Reinvestment
Plan.

Share Class Election

 

CHECK EACH APPLICABLE BOX BELOW IF THE BROKER ELECTS TO PARTICIPATE IN THE
LISTED SHARE CLASS

 

o   Class A Shares

o   Class T Shares

o   Class I Shares

The following reflects the Selling Commission, Marketing Fee and/or the
Distribution Fee as agreed upon between the Dealer Manager and the Broker for
the applicable Share Class.

 

 

________ (Initials)

 

 

Upfront Selling Commission of 7.0% of price per Class A Share*

 

By initialing here, the Broker hereby agrees to the terms of the Agreement and
this Schedule with respect to the Class A Shares.

 

________ (Initials)

 

 

Upfront Selling Commission of 2.0% of price per Class T Share*

 

By initialing here, the Broker hereby agrees to the terms of the Agreement and
this Schedule with respect to the Class T Shares.

 

________ (Initials)

 

 

Upfront Marketing Fee of up to [___]% of price per Class A Share*

By initialing here, the Broker agrees to the terms of eligibility for the
Marketing Fee set forth in the Agreement and this Schedule I for the Class A
Shares. Should the Broker choose to opt out of this provision, it will not be
eligible to receive the Marketing Fee and initialing is not necessary.

________ (Initials)

 

Upfront Marketing Fee of up to [__]% of price per Class T Share*

By initialing here, the Broker agrees to the terms of eligibility for the
Marketing Fee set forth in the Agreement and this Schedule I for the Class T
Shares. Should the Broker choose to opt out of this provision, it will not be
eligible to receive the Marketing Fee and initialing is not necessary.

 

________ (Initials)

 

 

Distribution Fee of up to [__]% (Annualized Rate) of price per Class T Share**

By initialing here, the Broker agrees to the terms of eligibility for the
Distribution Fee set forth in the Agreement and this Schedule I for the Class T
Shares. Should the Broker choose to opt out of this provision, it will not be
eligible to receive the Distribution Fee and initialing is not necessary.

 

________ (Initials)

 

 

Distribution Fee of up to [__]% (Annualized Rate) of  price per Class I Share**

By initialing here, the Broker agrees to the terms of eligibility for the
Distribution Fee set forth in the Agreement and this Schedule I for the Class I
Shares. Should the Broker choose to opt out of this provision, it will not be
eligible to receive the Distribution Fee and initialing is not necessary.

 

* Paid on Shares of the applicable Class sold by Broker, excluding Shares sold
pursuant to the Distribution Reinvestment Plan, as provided in this Agreement
and in the Prospectus.

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** Paid on Shares of the applicable Class sold by Broker, excluding Shares sold
pursuant to the Distribution Reinvestment Plan, as provided in this Agreement
and in the Prospectus. The Distribution Fee will be based on the then-current
Primary Offering price (or, in certain circumstances as described in the
Prospectus, the amount of the estimated net asset value per Share) per Class T
Share and Class I Share.

 

(Signature page follows)

5

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IN WITNESS WHEREOF, the parties hereto have each duly executed this Addendum to
the Participating Broker Agreement as of the day and year set forth in the
preamble hereto.

 

BROKER

 

 

 

DEALER MANAGER FOR CNL HEALTHCARE PROPERTIES II, INC.

 

 

 

 

 

 

 

 

CNL SECURITIES CORP.

(Name of Broker)

 

 

 

 

 

 

 

 

 

By:

 

 

 

By:

 

Printed Name:

 

 

 

Printed Name:

 

Title:

 

 

 

Title:

 

 

6