Exhibit 10.1

AMENDED AND RESTATED ADVISORY AGREEMENT

THIS AMENDED AND RESTATED ADVISORY AGREEMENT, dated as of March 2, 2019, is by
and among CNL Healthcare Properties II, Inc., a corporation organized under the
laws of the State of Maryland (the “Company”), CHP II Partners, LP, a limited
partnership organized under the laws of the State of Delaware (the “Operating
Partnership”), and CHP II Advisors, LLC, a limited liability company organized
under the laws of the State of Delaware (the “Advisor”).

W I T N E S S E T H

WHEREAS, the Company has filed with the Securities and Exchange Commission a
Registration Statement (No. 333-206017) on Form S-11 registering $2,000,000,000
of its Common Shares (as defined below) to be offered to the public in a primary
offer and pursuant to a distribution reinvestment plan, and the Company may
subsequently issue Securities (as defined below) other than such shares or
otherwise raise additional capital;

WHEREAS, the Company has qualified as a REIT (as defined below), and invested
its funds in investments permitted by the terms of the Prospectus (as defined
below) and Sections 856 through 860 of the Code (as defined below);

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

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

WHEREAS, the Company, the Operating Partnership and the Advisor are parties to
that certain Advisory Agreement dated as of March 2, 2016, as renewed from time
to time (the “Advisory Agreement”); and

WHEREAS, the parties hereto desire to amend and restate the Advisory Agreement
in its entirety hereby.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto agree as follows:

(1)    Definitions. As used in this Amended and Restated Advisory Agreement (the
“Agreement”), the following terms have the definitions hereinafter indicated:

Acquisition Expenses. Any and all expenses, exclusive of Acquisition Fees,
incurred by the Company, the Operating Partnership, the Advisor, or any of their
Affiliates in connection with the selection, acquisition, development or
construction of any investment, including any Real Property, Real Estate Related
Securities, Loans, or Permitted Investments, whether or not acquired, including,
without limitation, legal fees and expenses, travel and communications expenses,
costs of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, title insurance premiums, and the costs of
performing due diligence.

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

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Advisor. CHP II Advisors, LLC, a limited liability company organized under the
laws of the State of Delaware, or any successor advisor to the Company and the
Operating Partnership. Notwithstanding the foregoing, a Person hired or retained
by CHP II Advisors, LLC to perform property management and related services for
the Company and the Operating Partnership that is not hired or retained to
perform substantially all of the functions of CHP II Advisors, LLC with respect
to the Company or the Operating Partnership as a whole shall not be deemed to be
an Advisor.

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

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

Asset. Any Real Property, Real Estate Related Security, Loan, Permitted
Investment or other investment (other than investments in bank accounts or money
market funds) owned by the Company, directly or indirectly through one or more
of its Joint Ventures or Subsidiaries, and any other investment made by the
Company, directly or indirectly through one or more of its Joint Ventures or
Subsidiaries.

Asset Management Fee. Asset Management Fee shall have the meaning set forth in
Section 9(a) of this Agreement.

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

Board of Directors, Board or Directors. The persons holding such office, as of
any particular time, under the Articles of Incorporation of the Company, whether
they be the Directors named therein or additional or successor Directors.

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

Cause. With respect to the termination of this Agreement, (a) fraud, criminal
conduct, willful misconduct or willful or negligent breach of fiduciary duty by
the Advisor; or (b) a material breach of this Agreement of any nature whatsoever
by the Advisor, which breach is not cured within 30 days of notice given to the
Advisor specifying the nature of the alleged breach.

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

Common Shares. The shares of common stock, par value $0.01 per share, of the
Company that may be issued from time to time in accordance with the terms of the
Articles of Incorporation and applicable law.

Company. Company shall have the meaning set forth in the preamble of this
Agreement.

 

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Company Property. Any and all property, real, personal or otherwise, tangible or
intangible, which is transferred or conveyed to the Company, the Operating
Partnership, any Subsidiary or any Joint Venture of any of the foregoing
(including all rents, income, profits and gains therefrom), and which is owned
or held by, or for the account of, the Company, the Operating Partnership, any
Subsidiary or any Joint Venture of any of the foregoing.

Competitive Real Estate Commission. A real estate or brokerage commission for
the purchase or sale of property which is reasonable, customary, and competitive
in light of the size, type, and location of the property.

Construction Fee. A fee or other remuneration for acting as general contractor
and/or construction manager to construct improvements, supervise and coordinate
projects or to provide major repairs or rehabilitations on a Real Property.

Contract Purchase Price. The amount actually paid in respect of the purchase of
a Real Property and the amount budgeted in respect of the development,
construction or improvement of a Real Property, the amount of funds advanced
with respect to a Loan or the amount actually paid in respect to the purchase of
other Real Estate Related Securities or Permitted Investments, in each case
exclusive of Acquisition Fees and Acquisition Expenses.

Dealer Manager. CNL Securities Corp., an Affiliate of the Advisor, or such other
Person or entity selected by the Board of Directors to act as the dealer manager
for an Offering. CNL Securities Corp. is a member of FINRA.

Dealer Manager Fee. The dealer manager fee payable to the Dealer Manager for
serving as the dealer manager for an Offering and reallowable to Soliciting
Dealers with respect to Equity Shares sold by them.

Development Fee. The fee for the packaging of a Company Property, including
negotiating and approving plans and assisting in obtaining zoning and necessary
variances and financing for a specific Company Property to be developed or under
development, either initially or at a later date.

Director. A member of the Board of Directors of the Company.

Distribution Fee. The distribution and stockholder servicing fee payable to the
Dealer Manager as additional compensation for serving as the dealer manager for
an Offering and reallowable to Soliciting Dealers with respect to Equity Shares
sold by them.

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

Distribution Reinvestment Plan. Any reinvestment plan adopted from time to time
by the Company pursuant to which the Company’s stockholders may elect to have
all or a portion of their cash distributions reinvested in additional Common
Shares.

Equity Shares. Shares of capital stock of the Company of any class or series,
including Common Shares or Preferred Shares. The use of the term “Equity Shares”
or any term defined by reference to the term “Equity Shares” shall refer to the
particular class or series of capital stock of the Company which is appropriate
under the context.

Excess Amount. Excess Amount shall have the meaning set forth in Section 13 of
this Agreement.

Expense Year. Expense Year shall have the meaning set forth in Section 13 of
this Agreement.

 

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FINRA. The Financial Industry Regulatory Authority.

GAAP. 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
Securities and Exchange Commission.

Good Reason. With respect to the termination of this Agreement, (a) in
connection with a merger, reorganization, business combination, share exchange,
acquisition by any Person or related group of Persons of beneficial ownership of
all or substantially all of the Equity Shares in one or more related
transactions (pursuant to which transactions the Stockholders receive cash,
Listed or non-Listed equity Securities for their Equity Shares, or a combination
thereof), a sale of substantially all of the assets, or other similar
transaction involving the Company or the Operating Partnership; (b) any failure
to obtain a satisfactory agreement from any successor to the Company and/or the
Operating Partnership to assume and agree to perform the Company’s and/or the
Operating Partnership’s obligations under this Agreement, whether or not a
majority of the Directors then in office are replaced or removed; or (c) any
material breach of this Agreement of any nature whatsoever by the Company and/or
the Operating Partnership, which breach is not cured within 30 days of notice
given to the Company and/or the Operating Partnership specifying the nature of
the alleged breach.

Gross Proceeds. The purchase price of all Equity Shares sold for the account of
the Company through all Offerings, without deduction for Organization and
Offering Expenses.

Incentive Fees. The Subordinated Share of Net Sales Proceeds and the
Subordinated Incentive Fee.

Independent Director. Independent Director shall have the meaning set forth in
the Articles of Incorporation.

Initial Public Offering. The Company’s first public offering of Equity Shares
pursuant to an effective registration statement filed under the Securities Act
of 1933, as amended.

Invested Capital. The amount calculated by multiplying the total number of
Common Shares issued and outstanding by the purchase price paid per share,
without deduction for Organization and Offering Expenses, Sales Commissions,
Dealer Manager Fees or Distribution Fees, reduced by the amount paid to redeem
Common Shares pursuant to the Company’s redemption plan.

Joint Ventures. Those joint venture or partnership arrangements in which the
Company, the Operating Partnership or any of its Subsidiaries is a co-venturer
or partner and which are established to acquire Real Properties, Real Estate
Related Securities, Loans or Permitted Investments.

Liquidity Event. A Listing or any merger, reorganization, business combination,
share exchange, acquisition by any Person or related group of Persons of
beneficial ownership of all or substantially all of the Equity Shares, or sale
of all or substantially all of the Company’s assets, in one or more related
transactions, or other similar transaction involving the Company or the
Operating Partnership pursuant to which the Stockholders receive for their
Equity Shares, as full or partial consideration, cash, Listed or non-Listed
equity Securities or combination thereof.

Listing or Listed. With respect to any Securities, the listing of such
Securities on a national securities exchange or the receipt by the holders of
such Securities of other Securities that are approved for trading on a national
securities exchange in exchange for their prior Securities. With regard to any
Securities, upon commencement of trading of such Securities on a national
securities exchange, the Securities shall be deemed “Listed.”

Loans. Mortgage Loans and other types of debt financing provided by or held by
the Company from time to time.

 

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Market Value. The value of the Company measured in connection with an applicable
Liquidity Event determined as follows (i) in the case of the Listing of the
Common Shares of the Company on a national securities exchange, by taking the
average closing price or average of bid and asked price thereof, as the case may
be, over a period of 30 days during which the Common Shares are traded, with
such period beginning 180 days after Listing of the Company’s Common Shares,
(ii) in the case of the receipt by Stockholders of securities of another entity
that are approved for trading on a national securities exchange in connection
with the consummation of such Liquidity Event, by taking the average closing
price or average of bid and asked price thereof, as the case may be, over a
period of 30 days during which such securities are traded, with such period
beginning 180 days after the commencement of trading of such securities or
(iii) in the case of the receipt by Stockholders of securities of another entity
that are trading on a national securities exchange prior to the consummation of
the Liquidity Event, by taking the average closing price or average of bid and
asked price thereof, as the case may be, over a period of 30 days ending on the
effective date of the Liquidity Event. Any cash consideration received by the
Stockholders in connection with any Liquidity Event shall be added to the Market
Value determined in accordance with clause (i), (ii) or (iii). In the event that
the Stockholders receive non-Listed equity Securities as full or partial
consideration with respect to any Liquidity Event, no value shall be attributed
to such non-Listed equity Securities and the Market Value in any such Liquidity
Event shall be solely with respect to Listed securities and/or cash received in
such Liquidity Event, if any, as determined above.

Mortgage Loans. In connection with mortgage financing provided by or held by the
Company, notes or other evidences of indebtedness or obligations that are
secured or collateralized by Real Property owned by the borrowers.

Net Income. For any period, the Company’s total revenues determined in
accordance with GAAP applicable to such period, less the total expenses
determined in accordance with GAAP applicable to such period other than
additions to reserves for depreciation, bad debts or other similar non-cash
reserves. If the Advisor receives an Incentive Fee, Net Income, for purposes of
calculating Total Operating Expenses, shall exclude the gain from the sale of
the Company’s assets.

Net Sales Proceeds. In the case of a transaction described in clause (a) of the
definition of Sale, the proceeds of any such transaction less the amount of all
selling expenses incurred by or on behalf of the Company or the Operating
Partnership, including all real estate commissions, closing costs and legal fees
and expenses. In the case of a transaction described in clause (b) of such
definition, Net Sales Proceeds means the proceeds of any such transaction less
the amount of selling expenses incurred by or on behalf of the Company or the
Operating Partnership, including any legal fees and expenses and other selling
expenses incurred in connection with such transaction. In the case of a
transaction described in clause (c) of such definition, Net Sales Proceeds means
the Company’s or Operating Partnership’s pro rata share of the proceeds of any
such transaction received by the Joint Venture, less the Company’s or the
Operating Partnership’s pro rata amount of any selling expenses incurred by or
on behalf of the Joint Venture, less the amount of any selling expenses,
including legal fees and expenses, incurred by or on behalf of the Company or
the Operating Partnership. In the case of a transaction or series of
transactions described in clause (d) of the definition of Sale, Net Sales
Proceeds means the proceeds of any such transaction (including the aggregate of
all payments under a Mortgage Loan on or in satisfaction thereof other than
regularly scheduled interest payments) less the amount of selling expenses
incurred by or on behalf of the Company, Operating Partnership or any Joint
Venture, including all commissions, closing costs and legal fees and expenses.
In the case of a transaction described in clause (e) of such definition, Net
Sales Proceeds means the proceeds of any such transaction received by the
Company or the Operating Partnership less the amount of selling expenses
incurred in connection with such transaction. With respect to each of the
transactions or series of transactions described above in this definition, Net
Sales Proceeds means the proceeds of such transaction or series of transactions
less the amount of any real estate commissions, closing costs and legal fees and
expenses and other selling expenses incurred by or allocated to the Company, the
Operating Partnership or any Joint Venture in connection with such transaction
or series of transactions. Net Sales Proceeds shall also include any amounts
that the Company determines, in its discretion, to be economically equivalent to
proceeds of a Sale. The repayment of debt shall be deducted from the proceeds of
a transaction for the purpose of calculating Net Sales Proceeds.

 

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Offering. A public offering of Equity Shares pursuant to a Prospectus.

Operating Partnership. Operating Partnership shall mean CHP II Partners, LP, a
Delaware limited partnership.

Operating Partnership Agreement. The Limited Partnership Agreement of the
Operating Partnership between CHP II GP, LLC, a Delaware limited liability
company, and the Company, as may be amended from time to time.

OP Unit. A unit of limited partnership interest in the Operating Partnership.

Organization and Offering Expenses. Any and all costs and expenses incurred in
connection with the Company’s formation, qualification and registration, and the
marketing and distribution of Equity Shares in an Offering, including, without
limitation, the following: total underwriting and brokerage discounts and
commissions (including fees of the underwriters’ attorneys); any expense
allowance granted by the Company to the underwriter or any reimbursement of
expenses of the underwriter by the Company; legal, accounting and escrow fees;
due diligence expenses; printing, amending, supplementing, mailing and
distributing costs; personnel costs associated with processing investor
subscriptions and the preparation and dissemination of organizational and
offering documents and sales materials; telecopy and telephone costs; charges of
transfer agents, registrars, trustees, depositories and experts; and fees,
expenses and taxes related to the filing, registration and qualification of the
Equity Shares under federal and state laws.

Other Organization and Offering Expenses. Organization and Offering Expenses
with respect to an Offering, other than Sales Commissions, Dealer Manager Fees,
and Distribution Fees relating to the Initial Public Offering.

Participating Broker-Dealer. A broker-dealer who is a member of FINRA or who is
exempt from broker-dealer registration, and who, in either case, has executed a
participating broker-dealer or other agreement with the Dealer Manager to sell
Equity Shares.

Permitted Investments. All investments that are permitted to be made by a REIT
under the Code.

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

Preferred Shares. Any class or series of preferred stock, par value $0.01 per
share, of the Company that may be issued from time to time in accordance with
the terms of the Articles of Incorporation and applicable law.

Priority Return. As of any date, an aggregate amount equal to a 6% cumulative,
non-compounded, annual return on Invested Capital, prorated for any partial
year. For purposes of calculating the Priority Return for any calendar year or
portion thereof, the Company will use the daily amount of Invested Capital for
such period.

Prospectus. The most recent final prospectus of the Company relating to the
Common Shares as filed with the Securities and Exchange Commission pursuant to
Rule 424(b) under the Securities Act of 1933, as amended.

Real Estate Asset Value. The amount invested in Real Properties wholly owned by
the Company, the Operating Partnership and/or any of their respective
Subsidiaries, determined on the basis of cost (before non-cash reserves and
depreciation), plus, in the case of Real Properties owned by any Joint Venture
or partnership in which the Company, the Operating Partnership and/or any of
their Subsidiaries is the co-venturer or partner, the Company’s, Operating
Partnership’s or such Subsidiary’s, as applicable, proportionate share of the
value of such Real Properties determined on the basis of cost (before non-cash
reserves and depreciation). For the purpose of the foregoing, the cost basis of
a Real Property shall include the original contract price thereof plus any
capital improvements made thereto, exclusive of Acquisition Fees and Acquisition
Expenses, and will not be reduced for any recognized impairment.

 

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Real Estate Related Securities. The real estate related securities investments,
or such investments the Board of Directors and the Advisor mutually designate as
Real Estate Related Securities to the extent such investments could be
classified as either Real Estate Related Securities or Real Property, which are
owned from time to time by the Company, the Operating Partnership, Subsidiaries
or Joint Ventures.

Real Property. (a) Land (including, without limitation, interests deriving from
fee simple ownership, as tenant pursuant to a ground lease, or as permittee
pursuant to a United States Forest Service Permit), including the buildings,
equipment and personal property located thereon, (b) land only, including,
without limitation, interests deriving from fee simple ownership, as tenant
pursuant to a ground lease, or as permittee pursuant to a United States Forest
Service Permit, and/or (c) buildings only, which are owned from time to time by
the Company or the Operating Partnership, in each instance with respect to the
foregoing items (a)-(c) whether acquired directly or through subsidiaries, joint
venture arrangements or other partnerships, or (d) such investments the Board of
Directors and the Advisor mutually designate as Real Property to the extent such
investments could be classified as either Real Property or Real Estate Related
Securities, and including, with respect to each of the above-referenced items
(a)-(d), all tangible personal property used or usable in connection with the
operation of any business on or about the applicable property. Properties sold
by the Company, the Operating Partnership or any of their Subsidiaries to
tenancy-in-common investors shall be deemed Real Property for the purposes of
this definition so long as (x) such properties are being leased by the Company,
the Operating Partnership or any of their Subsidiaries from the
tenancy-in-common investors, and (y) such properties are reflected as assets of
the Company in accordance with GAAP.

REIT. A “real estate investment trust” as defined pursuant to sections 856
through 860 of the Code.

Sale or Sales. Any transaction or series of transactions whereby (a) the Company
or the Operating Partnership directly or indirectly (except as described in
other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any Real Property or portion thereof, and
including any event with respect to any Real Property which gives rise to a
significant amount of insurance proceeds or condemnation awards; (b) the Company
or the Operating Partnership directly or indirectly (except as described in
other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the
Company or the Operating Partnership in any Joint Venture in which it is a
co-venturer or partner; (c) any Joint Venture directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of any Real Property or portion thereof,
including any event with respect to any Real Property which gives rise to
insurance claims or condemnation awards; (d) the Company or the Operating
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, conveys or relinquishes its interest in any
mortgage or portion thereof (including with respect to any mortgage, all
payments thereunder or in satisfaction thereof other than regularly scheduled
interest payments) of amounts owed pursuant to such mortgage and any event which
gives rise to a significant amount of insurance proceeds or similar awards; or
(e) the Company, the Operating Partnership or any Joint Venture directly or
indirectly (except as described in other subsections of this definition) sells,
grants, transfers, conveys, or relinquishes its ownership of any or all of the
Company’s (i) Assets, or (ii) other asset or assets not previously described in
this definition or any portion thereof.

Securities. Any Equity Shares, any other stock, shares or other evidences of
equity or beneficial or other interests, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as “securities” or any certificates of interest, shares or participations
in, temporary or interim certificates for, receipts for, guarantees of, or
warrants, options or rights to subscribe to, purchase or acquire, any of the
foregoing, if and only if any such item is treated as a “security” under the
Securities Exchange Act of 1934, as amended, or applicable state securities
laws, and solely to the extent that such item has not otherwise been designated
as Real Property by the Board of Directors and the Advisor as contemplated
herein.

 

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Sales Commission. Any and all commissions payable to underwriters, dealer
managers or other broker-dealers in connection with the sale of Equity Shares,
including, without limitation, commissions payable to the Dealer Manager.

Soliciting Dealers. Those broker-dealers that are members of the Financial
Industry Regulatory Authority, Inc., or that are exempt from broker-dealer
registration, and that, in either case, enter into selected dealer or other
agreements with the Dealer Manager to sell or provide services with respect to
Equity Shares.

Sponsor. CNL Financial Group, LLC, a Florida limited liability company.

Stockholders. The registered holders of the Company’s Equity Shares.

Subordinated Incentive Fee. The fee payable to the Advisor under Section 9(e).

Subordinated Share of Net Sales Proceeds. The fee payable to the Advisor under
Section 9(d).

Subsidiary. Any corporation, limited liability company, partnership, business
trust or other entity of which the Company, directly or indirectly, owns or
controls at least fifty percent (50%) of the voting securities or economic
interests.

Termination Date. The date of termination of this Agreement.

Termination Event. The termination or non-renewal of this Agreement (a) by the
Advisor for Good Reason or (b) by the Company and the Operating Partnership
other than for Cause.

Total Operating Expenses. All expenses paid or incurred by the Company, as
determined under GAAP, that are in any way related to the operation of the
Company or to Company business, including Asset Management Fees, but excluding
(a) the expenses of raising capital such as Organization and Offering Expenses,
legal, audit, accounting, underwriting, brokerage, listing, registration and
other fees, printing and other such expenses and taxes incurred in connection
with the issuance, distribution, transfer, registration and Listing of Equity
Shares; (b) interest payments; (c) taxes; (d) non-cash expenditures such as
depreciation, amortization and bad debt reserves; (e) the Subordinated Incentive
Fee, the Subordinated Share of Net Sales Proceeds and any incentive fees paid in
compliance with Section 8.6 of the Articles of Incorporation, notwithstanding
the next succeeding clause (f); and (f) Acquisition Fees, Acquisition Expenses,
real estate commissions on the resale of real property and other expenses
connected with the acquisition, origination, disposition and ownership of real
estate interests, mortgage loans or other property, including the costs of
foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property.

2%/25% Guidelines. 2%/25% Guidelines shall have the meaning set forth in
Section 13 of this Agreement.

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

 

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(3)    Duties of the Advisor. The Advisor undertakes to use its commercially
reasonable efforts to present to the Company and the Operating Partnership
potential investment opportunities and to provide a continuing and suitable
investment program consistent with the investment objectives and policies of the
Company as determined and adopted from time to time by the Directors. In
performance of this undertaking, subject to the supervision of the Directors and
consistent with the provisions of the Prospectus, Articles of Incorporation and
Bylaws of the Company, and the Operating Partnership Agreement, the Advisor
shall, either directly or by engaging any such Person, including an Affiliate,
that it deems qualified:

(a)    serve as the Company’s and the Operating Partnership’s investment and
financial advisor and provide research and economic and statistical data in
connection with the Company’s and the Operating Partnership’s Assets and
investment policies;

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

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

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

(e)    subject to the provisions of Sections 3(g) and 4 hereof (i) locate,
analyze and select potential investments; (ii) structure and negotiate the terms
and conditions of transactions pursuant to which investments will be made;
(iii) make investments on behalf of the Company and the Operating Partnership in
compliance with the investment objectives and policies of the Company;
(iv) arrange for financing and refinancing and make other changes in the asset
or capital structure of, and dispose of, reinvest the proceeds from the sale of,
or otherwise deal with the investments; (v) enter into leases and service
contracts for Real Property; (vi) perform all other operational functions for
the maintenance and administration of Company Property; and (vii) make
dispositions of any portion of a Real Property to any Person other than the
Advisor, a Director or their Affiliates without obtaining the prior approval of
the Board, provided such portion of a Real Property is sold, transferred or
conveyed for a purchase price in an amount not to exceed One Million and No/100
Dollars ($1,000,000);

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

(g)    obtain the prior approval of the Board , any particular Directors
specified by the Board or any committee of the Board, as the case may be, for
any and all investments in and dispositions of Real Properties (except, with
respect to dispositions, as expressly permitted in 3(e)(vii) above);

(h)    make investments in and dispositions of Real Estate Related Securities,
Loans and Permitted Investments within the discretionary limits and authority as
granted by the Board;

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

 

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(j)    obtain reports (which may, but are not required to, be prepared by the
Advisor or its Affiliates), where appropriate, concerning the value of
investments or contemplated investments of the Company and/or the Operating
Partnership in Real Properties, Real Estate Related Securities, Loans and
Permitted Investments;

(k)    from time to time, or at any time reasonably requested by the Directors,
make reports to the Directors of its performance of services to the Company and
the Operating Partnership under this Agreement;

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

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

(n)    deliver to or maintain on behalf of the Company copies of all appraisals
obtained in connection with the investments in and valuations of Real
Properties, Real Estate Related Securities, Loans and Permitted Investments as
may be required to be obtained by the Board;

(o)    effect any private placement of OP Units, tenancy-in-common or other
interests in Real Properties as may be approved by the Board;

(p)    make necessary regulatory filings, including filing tax returns, on
behalf of the Company and the Operating Partnership;

(q)    prepare or oversee third parties in preparing all financial reports,
statements or analysis required by regulatory authorities or the Board;

(r)    provide investor relations services to the Company;

(s)    advise and assist the Company with respect to Sarbanes-Oxley Act of 2002
compliance for the Company, the Operating Partnership and their respective
subsidiaries;

(t)    advise and assist the Company with respect to tax compliance for the
Company, the Operating Partnership and their respective subsidiaries;

(u)    provide foreign currency management (including foreign currency hedging);

(v)    oversee property managers and other Persons who perform services for the
Company;

(w)    undertake accounting and other record keeping functions at the Real
Property level; and

(x)    notify the Board of all proposed transactions not otherwise described
above, the value of which exceeds an amount which may be designated by the Board
from time to time, before they are completed.

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

 

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(4)    Authority of the Advisor.

(a)    Pursuant to the terms of this Agreement (including the restrictions
included in this Section 4 and in Section 7), and subject to the continuing and
exclusive authority of the Directors over the management of the Company, the
Board hereby delegates to the Advisor the authority to take those actions set
forth in Section 3.

(b)    Notwithstanding the foregoing, any investment in a Real Property, Real
Estate Related Security, Loan or Permitted Investment, including any acquisition
or disposition of Real Property by the Company or the Operating Partnership
(including any financing of such acquisition), will require the prior approval
of the Directors, any particular Directors specified by the Board or any
committee of the Board, or otherwise come within the authority delegated by the
Board to the Advisor, as the case may be.

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

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

The Directors may, at any time upon the giving of notice to the Advisor, modify
or revoke the authority set forth in this Section 4. If and to the extent the
Directors so modify or revoke the authority contained herein, the Advisor shall
henceforth submit to the Directors for prior approval such proposed transactions
involving investments in Real Properties, Real Estate Related Securities, Loans
or Permitted Investments as thereafter require prior approval, provided,
however, that such modification or revocation shall be effective upon receipt by
the Advisor and shall not be applicable to investment transactions to which the
Advisor has committed the Company prior to the date of receipt by the Advisor of
such notification.

(5)    Bank Accounts. The Advisor may establish and maintain one or more bank
accounts in the name of the Company and the Operating Partnership and may
collect and deposit into any such account or accounts, and disburse from any
such account or accounts, any money on behalf of the Company and/or the
Operating Partnership, under such terms and conditions as the Directors may
approve, provided that no funds shall be commingled with the funds of the
Advisor. The Advisor shall from time to time render appropriate accountings of
such collections and payments to the Directors and to the auditors of the
Company. Notwithstanding the foregoing, the Advisor may delegate its duties
under this Section 5 to any Person, including an Affiliate, so long as the
Advisor remains responsible for the performance of its duties under this
Section 5.

(6)    Records; Access. The Advisor shall maintain appropriate records of all
its activities hereunder and make such records available for inspection by the
Directors and by counsel, auditors and authorized agents of the Company and the
Operating Partnership, at any time and from time to time during normal business
hours. The Advisor shall at all reasonable times have access to the books and
records of the Company and the Operating Partnership as necessary to perform its
duties pursuant to this Agreement.

(7)    Limitations on Activities. Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT; (b) subject the Company to regulation under the
Investment Company Act of 1940, as amended; or (c) violate any law, rule,
regulation or statement of policy of any governmental body or agency having
jurisdiction over the Company and its Securities, or otherwise would not be
permitted by the Articles of Incorporation or Bylaws of the Company, except if
such action shall be ordered by the Directors, in which case the Advisor shall
notify promptly the Directors of the Advisor’s judgment of the potential impact
of such action and shall refrain from taking such action until it receives
further clarification or instructions from the Directors. In such event the
Advisor shall have no liability for acting in accordance with the specific
instructions of the Directors so

 

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given. Notwithstanding the foregoing, neither the Advisor nor any subadvisor,
nor any of their respective directors, officers, employees, agents, members,
stockholders or other Affiliates shall be liable to the Company, the Directors
or the Stockholders for any act or omission by the Advisor or any subadvisor, or
any of their respective directors, officers, employees, agents, members,
stockholders or other Affiliates taken or omitted to be taken in the performance
of their duties under this Agreement, except as provided in Section 20 of this
Agreement, and such parties shall be intended third party beneficiaries of this
Section 7.

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

(9)    Fees.

(a)    Asset Management Fee. The Company or the Operating Partnership shall pay
to the Advisor a monthly fee of an amount equal to 1/12th of 0.4% of the monthly
average of the sum of the Company’s and the Operating Partnership’s respective
daily Real Estate Asset Value (without duplication), plus the outstanding
principal amount of any Loans made, plus the amount invested in Permitted
Investments (the “Asset Management Fee”). The Asset Management Fee shall be
payable monthly on the first business day following the last day of such month.
The Asset Management Fee shall not exceed fees which are competitive for similar
services in the same geographic area, and may or may not be taken, in whole or
in part as to any year, in the sole discretion of the Advisor. All or any
portion of the Asset Management Fee not taken as to any fiscal year shall be
deferred without interest and may be taken in such other fiscal year as the
Advisor shall determine. Notwithstanding the foregoing, effective April 1, 2019,
the Asset Management Fee payable to the Advisor hereunder shall be subject and
subordinate to the Excess Amount (as defined in and calculated pursuant to
Section 13) paid by the Company to the Advisor in an Expense Year (as defined in
Section 13) only to the extent any such Excess Amount exceeds the applicable
amount set forth on Exhibit A attached hereto and by this reference incorporated
herein (the “Subordinated Fee Threshold”). For purpose of clarity, if any Excess
Amount paid to the Advisor in an Expense Year, as calculated in a fiscal quarter
test, exceeds the Subordinated Fee Threshold, then the Advisor shall waive and
not be paid its Asset Management Fee for the months comprising such fiscal
quarter; provided, however, if an Incentive Fee payable to the Advisor is earned
hereunder such that total Distributions paid to the holders of Common Shares
result in a Priority Return, then, in addition to any such Incentive Fee paid to
the Advisor, the Advisor shall have a right to collect any Asset Management Fee
previously subordinated and waived per the terms of this Section 9(a).

(b)    Subordinated Share of Net Sales Proceeds. The Subordinated Share of Net
Sales Proceeds shall be payable to the Advisor in an amount equal to 15% of the
amount by which (i) the sum of (A) Net Sales Proceeds from Sales, and (B) the
total Distributions paid to holders of Common Shares from the Company’s
inception through the measurement date, and (C) the total of any Incentive Fees
paid from inception through the measurement date exceeds (ii) the sum of (A)
100% of Invested Capital and (B) the total Distributions required to pay the
holders of Common Shares a Priority Return from the Company’s inception until
the measurement date, including those paid prior to the date of payment. Such
amount shall be calculated on the sooner of (X) the day the Sale generating Net
Sales Proceeds closes, or (Y) as applicable, the date of the determination of
Market Value (to the extent that the Company elects to pay the Subordinated
Share of Net Sales Proceeds in Listed equity Securities as contemplated herein),
and paid no later than 30 days thereafter; provided that any amount that may be
payable shall be reduced by all prior Incentive Fees paid. Following Listing of
the Common Shares of the Company, no Subordinated Share of Net Sales Proceeds
will be paid to the Advisor. The Company shall have the option to pay such fee
in the form of cash, Listed equity Securities received by Stockholders in
connection with the Sale generating Net Sales Proceeds priced at Market Value
(exclusive of the amount of any cash consideration included in the

 

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calculation thereof), if applicable, or non-Listed equity Securities received by
Stockholders in connection with the Sale generating Net Sales Proceeds, if
applicable. Upon or after a Termination Event, the Subordinated Share of Net
Sales Proceeds may still be payable pursuant to Section 19(b) of this Agreement.

(c)    Subordinated Incentive Fee. Following a Liquidity Event, and within 30
days of the calculation of Market Value as set forth herein, the Subordinated
Incentive Fee shall be calculated and paid to the Advisor in an amount equal to
15% of the amount by which (i) the sum of (A) the Market Value, (B) the total
Distributions declared (and payable with respect to a record date prior to the
effective date of the applicable Liquidity Event and a payment date after the
date of such Liquidity Event) or paid to holders of Common Shares from the
Company’s inception until the effective date of the Liquidity Event, and (C) the
total of any Incentive Fees paid from inception through the effective date of
the Liquidity Event exceeds (ii) the sum of (A) 100% of Invested Capital and
(B) the total Distributions required to pay the holders of Common Shares a
Priority Return from the Company’s inception through the effective date of the
Liquidity Event, including those paid prior to such date of determination. Such
amount shall be reduced by all prior Incentive Fees paid. The Company shall have
the option to pay such fee in the form of cash or Listed Equity Shares (subject
to reasonable and customary lock-up provisions) or any combination of the
foregoing. Upon or after a Termination Event, the Subordinated Incentive Fee may
still be payable pursuant to Section 19(b) of this Agreement.

(d)    No Duplication of Incentive Fees. Notwithstanding the foregoing,
Incentive Fees may be calculated and paid with respect to multiple transactions
or events if there is not a single transaction or event that constitutes a
Liquidity Event for all of the Company’s assets or all of the Equity Shares.
However, in no event will there be any duplication in the payment of Incentive
Fees with respect to any particular assets or Equity Shares of the Company.

(10)    Intentionally deleted.

(11)    Other Expenses.

(a)    In addition to the compensation paid to the Advisor pursuant to Section 9
hereof, the Company or the Operating Partnership shall reimburse the Advisor for
all of the other expenses paid or incurred by the Advisor and its Affiliates or
subadvisors, if applicable, in connection with the services provided by the
Advisor (or on behalf of the Advisor by its Affiliates or subadvisors, if
applicable) to the Company and the Operating Partnership pursuant to this
Agreement, including, but not limited to:

(i)    the Company’s Organization and Offering Expenses relating to Offerings
that commence after the completion of the primary portion of the Company’s
Initial Public Offering; provided, however, that the aggregate of the
Organizational and Offering Expenses paid by the Company with respect to an
Offering shall not exceed 15% of Gross Proceeds of such Offering, and within 60
days after the end of the month in which the Offering terminates, the Advisor
shall reimburse the Company or the Operating Partnership for any Organizational
and Offering Expenses to the extent that any reimbursement received by the
Advisor pursuant to this Section 11(a)(i) exceeds the maximum amount permitted
or, at the option of the Company or the Operating Partnership, such excess shall
be subtracted from the next reimbursement of expenses to be made by the Company
or the Operating Partnership pursuant to this Section 11(a)(i).

(ii)    Acquisition Expenses incurred in connection with the selection,
acquisition, development or construction of Assets;

(iii)    the actual cost of goods and services used by the Company and the
Operating Partnership and obtained from entities not Affiliated with the
Advisor, other than Acquisition Expenses, including brokerage fees paid in
connection with the purchase and sale of Real Estate Related Securities;

 

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

(v)    taxes and assessments on income of the Company, the Operating Partnership
or its Subsidiaries or in connection with any Assets;

(vi)    all costs and insurance premiums required in connection with the
business of the Company and the Operating Partnership, including providing
directors and officers insurance to the Directors;

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

(viii)    payments and expense reimbursements to the Directors and costs of
meetings of the Directors and Stockholders;

(ix)    expenses associated with a Listing, if applicable, or with the issuance
and distribution of Equity Shares and Securities, such as sales commissions and
fees, advertising expenses, taxes, legal and accounting fees and Listing and
registration fees and costs;

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

(xi)    expenses associated with organizing, revising, amending, converting,
modifying or terminating the Company, the Operating Partnership, the Articles of
Incorporation or the Operating Partnership Agreement;

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

(xiii)    personnel costs and related overhead costs of personnel of the Advisor
or its Affiliates, effective April 1, 2019, which costs will be capped for the
remainder of 2019 at Two Hundred Forty Thousand and no/100 Dollars
($240,000.00);

(xiv)    internal or external audit, accounting, tax, and legal fees and
compliance costs (including personnel costs, and related overhead, of personnel
of the Advisor or its Affiliates);

(xv)    expenses related to making regulatory filings, including tax returns on
behalf of the Company and the Operating Partnership;

(xvi)    expenses in connection with the preparation of financial reports,
statements or analysis required by regulatory authorities or the Board;

(xvii)    expenses relating to Sarbanes-Oxley Act of 2002 compliance for the
Company, the Operating Partnership and their respective subsidiaries;

(xviii)    expenses related to tax compliance for the Company, the Operating
Partnership and their respective subsidiaries; and

(xix)    expenses related to accounting and other record keeping at the Real
Property level.

 

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(b)    Expenses incurred by the Advisor on behalf of the Company and the
Operating Partnership and payable pursuant to this Section 11 shall be
reimbursed no less than monthly to the Advisor. The Advisor shall prepare a
statement documenting the reimbursable expenses of the Company and the Operating
Partnership and the calculation of the Asset Management Fee, and shall deliver
such statement to the Company and the Operating Partnership within 20 days after
the end of each month.

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

(13)    Limitation on Reimbursement to the Advisor. Notwithstanding Section 11,
upon the earlier to occur of four fiscal quarters after (i) the Company’s making
of its first investment or (ii) six months after commencement of the Initial
Public Offering, the following limitation on Total Operating Expenses shall
apply: The Company shall not reimburse the Advisor at the end of any fiscal
quarter for Total Operating Expenses that in the four consecutive fiscal
quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the
greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25%
Guidelines”) for such year unless the Independent Directors determine that such
Excess Amount was justified, based on unusual and non-recurring factors that the
Independent Directors deem sufficient. If the Independent Directors do not
approve such Excess Amount as being so justified, any Excess Amount paid to the
Advisor during a fiscal quarter shall be repaid to the Company. If the
Independent Directors determine such Excess Amount was justified, then, within
60 days after the end of any fiscal quarter of the Company for which total
reimbursed Total Operating Expenses for the Expense Year exceed the 2%/25%
Guidelines, the Advisor, at the direction of the Independent Directors, shall
cause such fact to be disclosed to the Stockholders in writing (or the Company
shall disclose such fact to the Stockholders in the next quarterly report of the
Company or by filing a Current Report on Form 8-K with the SEC within 60 days of
such quarter end), together with an explanation of the factors the Independent
Directors considered in determining that such Excess Amount was justified. The
Company will ensure that such determination will be reflected in the minutes of
the meetings of the Board. All figures used in the foregoing computation shall
be determined in accordance with GAAP applied on a consistent basis. All figures
used in the foregoing computation shall be determined in accordance with GAAP
applied on a consistent basis.

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

The Advisor shall be required to use commercially reasonable efforts to present
a continuing and suitable investment program to the Company and the Operating
Partnership that is consistent with their investment policies and objectives,
but neither the Advisor nor any Affiliate of the Advisor shall be obligated
generally to present any particular investment opportunity to the Company and
the Operating Partnership even if the opportunity is of a character which, if
presented to the Company and the Operating Partnership, could be taken by them.

 

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(15)    Term; Termination of Agreement. This Agreement shall continue in force
for a period of one year from the date hereof, subject to an unlimited number of
successive one-year renewals upon mutual consent of the parties.

(16)    Termination by the Parties. This Agreement may be terminated
(i) immediately by the Company and/or the Operating Partnership for Cause or
upon the bankruptcy of the Advisor; (ii) upon 60 days’ prior written notice
without Cause and without penalty by a majority of the Independent Directors of
the Company; (iii) upon 60 days’ prior written notice without Good Reason and
without penalty by the Advisor; or (iv) immediately by the Advisor for Good
Reason or upon the bankruptcy of the Company. Sections 9(b), 9(c), 19, 20, 21,
and 31 shall survive any termination of this Agreement.

(17)    Assignment to an Affiliate. This Agreement shall not be assigned by the
Company or the Operating Partnership without the consent of the Advisor, except
in the case of an assignment by the Company or the Operating Partnership to a
corporation, limited partnership or other organization which is a successor to
all of the assets, rights and obligations of the Company or the Operating
Partnership, in which case such successor organization shall be bound hereunder
and by the terms of said assignment in the same manner as the Company and the
Operating Partnership are bound by this Agreement.

(18)    Subcontracts with Affiliates. The Advisor may subcontract with any
Person it deems qualified, including an Affiliate, for a portion of the services
and duties to be performed under this Agreement without obtaining the approval
of the Directors. The Advisor may further subcontract any rights to receive fees
or other payments for such services or duties under this Agreement without
obtaining the approval of the Directors. Notwithstanding the foregoing, in the
event of any such subcontracting by the Advisor of the services or duties to be
performed by it under this Agreement, the Advisor shall remain responsible for
the completion and performance of all such services and duties.

(19)    Payments to and Duties of Advisor Upon Termination. Payments to the
Advisor of unpaid expense reimbursements pursuant to this Section 19 shall be
subject to Section 13 to the extent applicable.

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

(b)    Upon or after a Termination Event, the Advisor may be entitled to payment
of the Subordinated Share of Net Sales Proceeds or the Subordinated Incentive
Fee, as follows. The applicable Incentive Fee shall be calculated upon a
Liquidity Event or Sale following such Termination Event and (i) in the event of
a Liquidity Event, the Incentive Fee shall be calculated and paid in the manner
of the Subordinated Incentive Fee and (ii) in the case of one or more Sales, the
Incentive Fee shall be calculated and paid in the manner of the Subordinated
Share of Net Sales Proceeds; provided, however, that the amount of the Incentive
Fee paid to the Advisor shall be equal to the amount as calculated above
multiplied by the quotient of (A) the number of days elapsed from the initial
effective date of the Agreement with CHP II Advisors, LLC (the “Initial
Effective Date”) to the effective date of the Termination Event, divided by
(B) the number of days elapsed from the Initial Effective Date through the date
of the Liquidity Event or the Sale, as applicable. The Company shall have the
option to pay the Incentive Fee in cash, Listed Equity Shares priced at the
Market Value (exclusive of the amount of any cash consideration included in the
calculation thereof) or Listed equity Securities received by Stockholders in
exchange for their Common Shares priced at Market Value (exclusive of the amount
of any cash consideration included in the calculation thereof), such fee to be
payable within thirty (30) days following final determination of the Incentive
Fee. If the Subordinated Incentive Fee or the Subordinated Share of Net Sales
Proceeds is payable to the Advisor in connection with a Liquidity Event or Sale,
then the Advisor shall not receive an Incentive Fee under this Section 19(b).

(c)    The Advisor shall be entitled to receive all accrued but unpaid
compensation and expense reimbursements in cash, Listed Equity Shares or Listed
equity Securities received by Stockholders in exchange for their Common Shares
within 30 days of the Termination Date or within 30 days of the determination of
the Market Value, as applicable.

 

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(d)    The Advisor shall promptly upon termination:

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

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

(iii)    deliver to the Directors all Assets, including Real Properties and Real
Estate Related Securities, and documents of the Company and the Operating
Partnership then in the custody of the Advisor; and

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

(20)    Indemnification by the Company and the Operating Partnership. The
Company and the Operating Partnership shall indemnify and hold harmless the
Advisor and its Affiliates, including their respective officers, managers,
directors, partners, employees, agents and advisors, from all liability, claims,
damages, taxes or losses arising in the performance of their duties hereunder,
and related expenses, including reasonable attorneys’ fees and costs, to the
extent such liability, claims, damages, taxes or losses and related expenses are
not fully reimbursed by insurance, subject to any limitations imposed by the
Articles of Incorporation of the Company. Any indemnification of the Advisor may
be made only out of the net assets of the Company and the Operating Partnership
and not from Stockholders.

(21)    Indemnification by Advisor. The Advisor shall indemnify and hold
harmless the Company and the Operating Partnership from all liability, claims,
damages, taxes or losses and related expenses, including reasonable attorneys’
fees and taxes, to the extent that such liability, claims, damages, taxes or
losses and related expenses are not fully reimbursed by insurance and are
incurred by reason of the Advisor’s bad faith, fraud, misconduct, or gross
negligence, but the Advisor shall not be held responsible for any action of the
Board of Directors in following or declining to follow any advice or
recommendation given by the Advisor.

(22)    Notices. Any notice, report or other communication required or permitted
to be given hereunder shall be in writing unless some other method of giving
such notice, report or other communication is required by the Articles of
Incorporation or the Bylaws or is accepted by the party to whom it is given, and
shall be given deemed given and received by being delivered by hand or on the
second (2nd) business day after mailing by registered or certified United States
mail, postage prepaid and return receipt requested, to the other party at the
address set forth below:

 

To the Directors and to the Company:   

CNL Healthcare Properties II, Inc.

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attn: Chief Financial Officer and General Counsel

To the Operating Partnership:   

CHP II Partners, LP

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attn: Chief Financial Officer and General Counsel

 

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To the Advisor:   

CHP II Advisors, LLC

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attn: Chief Financial Officer and General Counsel

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

(23)    Amendment or Modification. This Agreement shall not be amended, changed,
modified or discharged, in whole or in part, except by an instrument in writing
signed by the parties hereto, or their respective successors or permitted
assignees.

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

(25)    Construction. The provisions of this Agreement and any amendments
thereto shall be construed and interpreted in accordance with the laws of the
State of Florida, and any action brought to enforce the agreements made
hereunder or any action which arises out of the relationship created hereunder
shall be brought exclusively in the federal or state courts for Orange County,
Florida.

(26)    Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

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

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

(29)    Titles Not to Affect Interpretation. The titles of sections and
subsections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

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

 

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(31)    Name. The Advisor has proprietary interests in the name “CNL”.
Accordingly, and in recognition of this right, if at any time the Company ceases
to retain the Advisor or an Affiliate thereof to perform any of the services of
Advisor, the Directors of the Company will, promptly after receipt of written
request from the Advisor, (a) cease to conduct business under or use the name
“CNL” or any diminutive thereof, and (b) change the name of the Company to a
name that does not contain the name “CNL” or any other word or words that might,
in the sole discretion of the Advisor, be susceptible of indication of some form
of relationship between the Company and the Advisor or any Affiliate thereof.
Consistent with the foregoing, it is specifically recognized that the Advisor or
one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having “CNL” as a part of their name, all without the need for any consent (and
without the right to object thereto) by the Company or its Directors. The
Company’s right to use the name “CNL” and any associated trademarks, trade
names, service marks, and other intellectual property is subject to the terms of
the Brand License Agreement among CNL Intellectual Properties, Inc., a Florida
corporation, as licensor, and the Advisor and the Company, as licensee, and the
terms of that agreement shall supersede any inconsistent terms of this
Agreement.

(32)    Independent Contractor. Neither the Company nor the Advisor shall be
construed as joint venturers or owners of each other pursuant to this Agreement,
and neither shall have the power to bind or obligate the other except as set
forth herein. In all respects, the status of the Company to the Advisor under
this Agreement is that of an independent contractor.

(33)    Interpretation. This Agreement shall be deemed to have been drafted
jointly by the parties, and therefore no provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party by reason of
such party having, or being deemed to have, drafted, devised or imposed such
provision.

(34)    Non-Solicitation. During the period commencing on the date hereof and
ending one year following the termination of this Agreement, the Company and the
Operating Partnership shall not, without the Advisor’s prior written consent,
directly or indirectly, (a) solicit or encourage any person to leave the
employment or other service of the Advisor, or (b) hire, on behalf of the
Company, the Operating Partnership or any other person or entity, any person who
has left the employment of the Advisor within the one year period following the
termination of that person’s employment with respect to the Advisor. During the
period commencing on the date hereof through and ending one year following the
termination of this Agreement, neither the Company and the Operating Partnership
will, whether for its own account or for the account of any other person, firm,
corporation, or other business organization, intentionally interfere with the
relationship of the Advisor with, or endeavor to entice away from the Advisor,
any person who during the term of the Agreement is, or during the preceding
one-year period, was a tenant, co-investor, co-developer, joint venturer, or
other customer of the Advisor.

 

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

 

CNL Healthcare Properties II, Inc., a Maryland corporation By:   /s/ Stephen H.
Mauldin

Name:   STEPHEN H. MAULDIN Title:   Chief Executive Officer

CHP II Partners, LP, a Delaware limited partnership By: CHP II GP, LLC, a
Delaware limited liability company, its General Partner

                 By:   CNL Healthcare Properties II, Inc., a Maryland
corporation, its Sole Member   By:  

/s/ Stephen H. Mauldin

                 Name:   STEPHEN H. MAULDIN   Title:   Chief Executive Officer

CHP II Advisors, LLC,

a Delaware limited liability company

By:   /s/ Tammy J. Tipton

Name:   TAMMY J. TIPTON Title:   Chief Financial Officer

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Exhibit A

 

Fiscal quarter test

  

Excess Amount for Expense Year

Quarter ending June 30, 2019    $179,000 Quarter ending September 30, 2019   
$172,000 Quarter ending December 31, 2019    $184,000

 

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