Exhibit 10.3


 





EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
(this “Agreement”) by and among Jernigan Capital, Inc., a Maryland corporation (the “REIT”),
Jernigan Capital Operating Company LLC, a Delaware limited liability company, the operating company subsidiary of the REIT (the
“Operating Company”), and the Operating Company’s subsidiary, JCAP Management LLC, a Delaware limited
liability company (the “REIT Operator” and, together with the REIT and the Operating Company, the “Company”),
and Jonathan L. Perry (“Executive”) is dated as of the Effective Date.


 


WHEREAS, REIT Operator desires to employ
Executive and Executive desires to be employed by REIT Operator to provide services for the Company on the terms contained herein.


 


NOW, THEREFORE, in consideration of the
mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


 


1.            Term of Employment.


 


(a)           Subject
to the terms and conditions of this Agreement, REIT Operator hereby employs Executive, and Executive hereby accepts employment
with REIT Operator, in the positions and with the duties and responsibilities as set forth in Section 2 hereof for the Term of
Employment (as defined below). The REIT and the Operating Company agree to be jointly and severally liable for all obligations
of REIT Operator under this Agreement, including payment obligations.


 


(b)           The
term of employment under this Agreement will commence on the date of the Closing (as defined in that certain Asset Purchase Agreement
by and among the REIT, the Operating Company, JCap Advisors, LLC and the other parties thereto, dated as of December 16, 2019)
(the “Effective Date”) and continue for an initial term through the third anniversary of the Effective Date
(the “Initial Term”), unless the Agreement is terminated sooner in accordance with Section 4 below. Commencing
on the last day of the Initial Term and on each subsequent anniversary of such date, the term of this Agreement shall automatically
be extended for successive one-year periods (each such extension, a “Renewal Term”); provided, however, that
either the Company or Executive may elect not to extend the Term of Employment by giving written notice to the other party at
least sixty (60) days prior to any such anniversary date (a “Non-Renewal”). The period commencing on the Effective
Date and ending at the end of the Initial Term or any Renewal Term (or earlier termination of Executive’s employment hereunder)
shall hereinafter be referred to as the “Term of Employment.” If the Closing (as defined in that certain Asset
Purchase Agreement by and among the REIT, the Operating Company, JCap Advisors, LLC and the other parties thereto, dated as of
December 16, 2019) does not occur within ninety (90) days after the date of the stockholder vote regarding the transactions contemplated
by such agreement, this Agreement will automatically terminate and be of no force or effect. For the avoidance of doubt, no payments
or other benefits shall accrue to the Executive hereunder prior to the Effective Date.


 


2.            Position; Duties and Responsibilities.


 


(a)           During the Term of Employment, Executive will be employed full time by REIT Operator and will serve as the President and
Chief Investment Officer of the REIT, reporting directly to the Chief Executive Officer. In this capacity, Executive shall have
the duties, authorities and responsibilities as are required by Executive’s position commensurate with the duties, authorities
and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities
as may reasonably be assigned to Executive as the Chief Executive Officer shall designate from time to time that are not inconsistent
with Executive’s position and that are consistent with the bylaws of the REIT and the limited liability company agreements
of the Operating Company and the REIT Operator, each as may be amended from time to time, including, but not limited to, managing
the affairs of the Company.


 






    


     


    

 


(b)           During
the Term of Employment, Executive will, without additional compensation, also serve on the board of directors of, serve as an
officer of, and/or perform such executive and consulting services for, or on behalf of, the REIT and such Subsidiaries of the
REIT as the Chief Executive Officer may, from time to time, reasonably request.


 


(c)           During
the Term of Employment, Executive will serve the Company faithfully, diligently, and to the best of his ability and will devote
substantially all of his business time and attention to the performance of his duties hereunder, and shall have no other employment
(unless approved by the Board of Directors of the REIT (the “Board”)); provided, however, that nothing contained
herein shall prohibit Executive from (i) participating in trade associations or industry organizations in furtherance of the Company’s
interests, (ii) engaging in charitable, civic, educational or political activities, (iii) engaging in passive personal investment
activities for himself and his family or (iv) accepting directorships or similar positions (together, the “Personal Activities”),
in each case so long as the Personal Activities do not unreasonably interfere, individually or in the aggregate, with the performance
of Executive’s duties to the Company under this Agreement or the restrictive covenants set forth in Section 9 of this Agreement.
For the avoidance of doubt, participation in any active manner, whether or not during work hours, in a Jernigan Family Business
described in Section 9, including, without limitation, sourcing, modeling, underwriting, and seeking financing for or with respect
to any self-storage facility, during the Executive’s Term of Employment shall not be a permitted Personal Activity.


 


(d)           During the Term of Employment, Executive shall perform the services required by this Agreement in Philadelphia, Pennsylvania
(the “Principal Location”), except for travel to other locations as may be necessary to fulfill Executive’s
duties and responsibilities hereunder.


 


3.            Compensation
and Benefits.


 


(a)           Base Salary. During the Term of Employment, Executive will be entitled to receive an annualized base salary (the
“Base Salary”) of not less than $400,000. The Base Salary shall be paid in accordance with REIT Operator’s
normal payroll practices, but no less often than semi-monthly.


 


(b)           Incentive Compensation. In addition to the Base Salary, Executive shall be entitled to participate in any short-term
and long-term incentive programs (including without limitation equity compensation plans) established by the Company, including
for its senior level executives. Without limitation, during the Term of Employment, and subject to subsection (e) below, in each
calendar year of the Term of Employment, Executive shall be eligible to receive an annual bonus (the “Annual Bonus”)
payable in cash, pursuant to the performance criteria and targets established and administered by the Board (or a committee of
directors to whom such responsibility has been delegated by the Board), with a target Annual Bonus of at least 85% of Executive’s
Base Salary (the “Target Annual Bonus). The Annual Bonus payable to Executive shall be determined and payable as soon
as practicable after year-end for such year (but no later than March 15th). To be entitled to receive any Annual Bonus,
except as otherwise provided in Section 4(c), Executive must remain employed through the last day of the calendar year to which
the Annual Bonus relates. Executive will also be eligible to receive equity and other long-term incentive awards (including long-term
incentive units in the Operating Company) under any applicable plan or program adopted by the Company during the Employment Term.
Executive’s entitlement to any equity and other long-term incentives will be in the discretion of the Board (or a committee
of directors to whom such responsibility has been delegated by the Board).


 



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(c)           Employee
Benefit Programs; Expense Reimbursements; Auto Allowance. During the Term of Employment, Executive will be eligible to participate
in all employee benefit programs of the Company made available to the Company’s senior level executives generally, as such
programs may be in effect from time to time; provided that nothing herein shall prevent the Company from amending or terminating
any such programs pursuant to the terms thereof. REIT Operator will reimburse Executive for any and all necessary, customary and
usual business expenses incurred and paid by Executive in connection with his employment upon presentation to the Company of reasonable
substantiation and documentation, and in accordance with, and subject to the terms and conditions of, applicable Company policies.
During the Term of Employment, Executive shall be entitled to paid vacation and, if applicable, paid time off, per year of the
Term of Employment (as pro-rated for any stub employment period) in accordance with the Company’s policy on accrual and
use applicable to employees as in effect from time to time, but in no event shall Executive accrue less than four (4) weeks
of vacation per calendar year (pro-rated for any stub employment period). Additionally, during the Term of Employment, Executive
will receive a monthly auto allowance equal to $1,500, which shall be paid on or before the tenth (10th) day of the
month.


 


(d)           Insurance; Indemnification. Executive shall be covered by such comprehensive directors’ and officers’
liability insurance and errors and omissions liability insurance as the Company shall have established and maintained in respect
of its directors and officers generally and at its expense, and the Company shall cause such insurance policies to be maintained
in a manner reasonably acceptable to Executive both during and, in accordance with Section 4(h) below, after Executive’s
employment with the Company. Executive shall also be entitled to indemnification rights, benefits and related expense advances
and reimbursements to the same extent as any other director or officer of the Company or the REIT and to the maximum extent permitted
under applicable law pursuant to an indemnification agreement, including “tail” coverage following termination of service.
It is acknowledged and agreed that Executive is a party to an indemnification agreement with the REIT, which agreement shall continue
in full force and effect notwithstanding the effectiveness of this Employment Agreement.


 


(e)           Annual
Review. The Compensation Committee of the Board (the “Compensation Committee”) will undertake a formal
review of the amounts payable and potentially payable to Executive pursuant to this Section 3 (the “Compensation and
Benefits”) no less frequently than annually. The Compensation Committee shall be entitled to make all determinations
relating to this Section 3(e) in its sole discretion; provided, however, that neither the Compensation Committee nor the Company
shall be entitled to decrease Executive’s Base Salary or Target Annual Bonus.


 


(f)            Clawback/Recoupment.
Notwithstanding any other provisions in this Agreement to the contrary, any compensation provided to, or gain realized by, Executive
pursuant to this Agreement or any other agreement or arrangement with the Company shall be subject to repayment and/or forfeiture
by Executive to the Company if and to the extent any such compensation or gain is or becomes subject to (i) a “clawback”
policy adopted by the Company that is applicable to Executive and other similarly situated executives, or (ii) any law, rule,
requirement or regulation which imposes mandatory recoupment or forfeiture, under circumstances set forth in such law, rule, requirement
or regulation.


 






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4.            Termination
of Employment.


 


(a)           Termination
Due to Disability. The REIT Operator may terminate Executive’s employment if Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, actually receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the Company (“Disability”). Any questions
as to the existence of the Executive’s Disability as to which the Executive and the REIT Operator cannot agree shall be
determined in writing by a qualified independent medical practitioner mutually acceptable to Executive and the REIT Operator.
If Executive’s employment is terminated under this Section 4(a) for Disability, (A) the Company shall pay to Executive the
Accrued Benefits pursuant to Section 4(h) below and any earned but unpaid Annual Bonus relating to the calendar year prior to
the year of termination, and (B) subject to Executive’s execution of a general release of claims in favor of the Company
in substantially the form attached hereto as Exhibit A, after termination of Executive’s employment, and the expiration
of any applicable or legally required revocation period, all within sixty (60) days after the effective date of termination (the
“Release Requirement”) and further subject to Executive’s compliance with the obligations in Sections
7, 8 and 9, if Executive is entitled to elect continuation of coverage under any Company group health plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, or other applicable law (“COBRA”), and Executive timely
elects such coverage, the Company shall directly pay, or reimburse Executive for, the COBRA premiums, less the amount Executive
would have had to pay to receive such group health coverage for Executive and his covered dependents based on the cost sharing
levels in effect on the date of termination, during the period commencing on the date of termination and ending upon the earliest
of (x) the date eighteen (18) months after the date Executive’s employment terminates, (y) the date Executive and, if applicable,
Executive’s covered dependents become no longer eligible for COBRA and (z) the date Executive becomes eligible to receive
healthcare coverage from a subsequent employer (as applicable, the “COBRA Continuation Period”); provided,
however, that if Executive is not eligible to elect COBRA continuation coverage or the Company determines that it cannot provide
the foregoing benefit under its group health plan or without potentially violating applicable law or triggering adverse tax consequences
to the Company or Executive, the Company shall in lieu thereof provide to Executive a taxable monthly payment during the COBRA
Continuation Period in an amount equal to the monthly premium that the Company would have contributed to Executive’s and
Executive’s covered dependents’ group health coverage in effect on the date of termination (which amount shall be
based on the premiums in effect on the date of termination), less the amount the Executive would have had to pay to receive such
group health coverage for Executive and his covered dependents based on the cost sharing levels in effect on the date of termination
(as applicable, the “Continued Health Care Coverage Benefit”). Subject to Section 28, the Continued Health
Care Coverage Benefits will commence within sixty (60) days following the date of termination (with the first payment to include
any installment payments that would have been made during such sixty (60) day period if payments had commenced on the date of
termination).


 


(b)           Termination Due to Death. Executive’s employment shall terminate automatically upon Executive’s death
during the Term of Employment. If Executive’s employment is terminated because of Executive’s death, the Company shall
pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, the Accrued Benefits
pursuant to Section 4(i) below and any earned but unpaid Annual Bonus relating to the calendar year prior to the year of termination.


 


(c)           Termination
by the Company Without Cause or by Executive for Good Reason. The REIT Operator may terminate Executive’s employment
at any time without Cause (as provided in Section 6) and Executive may terminate his employment for Good Reason (as provided in
Section 6) upon not less than sixty (60) days’ prior written notice of such resignation to the Company. If the Company exercises
its right of Non-Renewal under Section 1(b) hereof, then termination of the Executive’s employment by reason of such Non-Renewal
will be deemed a Termination by the Company without Cause. Upon any such termination of Executive’s employment without Cause
or for Good Reason during the Term of Employment, Executive shall be entitled to receive the following:


 


(i)           The
Accrued Benefits pursuant to Section 4(h) below and any earned but unpaid Annual Bonus relating to the calendar year prior to
the year of termination; and


 


(ii)          subject
to Executive’s satisfaction of the Release Requirement and compliance with the obligations in Sections 7, 8 and 9:


 



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(1)       the Company shall pay Executive cash severance (the “Severance Amount”) equal to the Severance Multiple
times the sum of (A) Executive’s then-current Base Salary (disregarding any reduction in Base Salary not approved by Executive)
and (B) the average of the Annual Bonuses earned by Executive in accordance with Section 3(b) hereof (and/or, if applicable, annual
bonuses earned by Executive as an employee of JCap Advisors, LLC) for the two (2) calendar years preceding the year of termination.
If the termination described in this Section 4(c) does not occur during the Change in Control Period (as defined in Section 6),
subject to Section 28, the Severance Amount will be paid in equal installments in accordance with the normal payroll practice of
REIT Operator over the twenty-four (24) month period following the date of termination, with such installment payments beginning
within sixty (60) days following the date of termination (with the first payment to include any installment payments that would
have been made during such sixty (60) day period if payments had commenced on the date of termination). If the termination described
in this Section 4(c) occurs during the Change in Control Period (as defined in Section 6), subject to Section 28, the Severance
Amount will be paid in a lump sum within sixty (60) days following the date of termination;


 


(2)       within sixty (60) days following the effective date of termination, the Company shall pay Executive an amount equal to Executive’s
Target Bonus for the then-current calendar year of Executive’s employment (annualized if the termination occurs in 2020),
pro-rated for the number of days in such calendar year ending on the effective date of Executive’s termination of employment;


 


(3)       Executive’s outstanding equity awards that are subject solely to time-based vesting conditions will become fully vested
as of the effective date of Executive’s termination and Executive’s outstanding equity awards that are subject to performance-based
vesting conditions will vest if and to the extent the applicable performance-based vesting conditions are satisfied in the ordinary
course, determined as if Executive’s employment had not terminated; provided, however, that any such performance-based award
that vests pursuant to this Section 4(c)(ii)(3) will be pro-rated for the actual number of days in the applicable vesting period
preceding the effective date of Executive’s termination of employment; and


 


(4)       the
Continued Health Care Coverage Benefit described in Section 4(a) with such benefits commencing within sixty (60) days following
the date of termination (with the first payment to include any installment payments that would have been made during such sixty
(60) day period if payments had commenced on the date of termination).


 


(d)           Termination by the Company for Cause. The REIT Operator may terminate Executive’s employment at any time for
Cause pursuant to the provisions of Section 6(a) below, in which event as of the effective date of such termination all payments
and benefits under this Agreement shall cease and all then unvested awards or benefits shall be forfeited, except for the continuing
obligation to pay Executive his Accrued Benefits.


 


(e)           Voluntary Termination by Executive without Good Reason. Executive may voluntarily terminate his employment without
Good Reason upon sixty (60) days’ prior written notice. In any such event, after the effective date of such termination,
no further payments or benefits shall be due under this Agreement and all then unvested awards or benefits shall be forfeited,
except for the obligation to pay Executive after the effective date of such termination his Accrued Benefits and any earned but
unpaid Annual Bonus relating to the calendar year prior to the year of termination. For the avoidance of doubt, Non-Renewal by
Executive shall constitute a voluntary termination without Good Reason.


 


(f)            Notice of Termination. Any termination of Executive’s employment shall be communicated by a written notice
of termination to the other party hereto given in accordance with Section 18 and shall specify the termination date in accordance
with the requirements of this Agreement.


 






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(g)           Resignation of All Other Positions. Upon termination of Executive’s employment for any reason, Executive shall
be deemed to have resigned from all positions that Executive holds as an officer of the Company or any affiliate of the Company,
and from all positions that he holds as a member of the Board (or a committee thereof) or the board of directors (or a committee
thereof) of any Subsidiary of the REIT, unless otherwise mutually agreed with the Board, and shall take all actions reasonably
requested by the Company to effectuate the foregoing.


 


(h)           General
Provisions. (1) Upon any termination of Executive’s employment, Executive shall be entitled to receive the following:
(A) any unpaid Base Salary and accrued but unused vacation and/or paid time off (determined in accordance with Company policy)
through the date of termination (paid in cash within thirty (30) days, or such shorter period required by applicable law, following
the effective date of termination), (B) reimbursement for all necessary, customary and usual business expenses and fees incurred
and paid by Executive prior to the effective date of termination, in accordance with Section 3(c) above (payable in accordance
with the Company’s expense reimbursement policy), and (C) vested benefits, if any, to which Executive may be entitled under
the Company’s employee benefit plans, including those as provided in Section 3(c) above (payable in accordance with the
applicable employee benefit plan), and directors and officers liability coverage pursuant to Section 3(d) for actions and inactions
occurring during the Term of Employment, and continued coverage for any actions or inactions by Executive while providing cooperation
under this Agreement (collectively, “Accrued Benefits”).


 


(2)   During any notice period required under Section 4 or Section 6, as applicable, (A) Executive shall remain employed by the Company
and shall continue to be bound by all the terms of this Agreement and any other applicable duties and obligations to the Company,
(B) the Company may direct Executive not to report to work, and (C) Executive shall only undertake such actions on behalf of the
Company, consistent with his position, as expressly directed by the Board.


 


5.            Code
Section 280G.


 


(a)           Treatment
of Payments. Notwithstanding anything in this Agreement or any other plan, arrangement or agreement to the contrary, in the
event that an independent, nationally recognized, accounting firm which shall be designated by the Company with Executive’s
written consent (which consent shall not be unreasonably withheld) (the “Accounting Firm”) shall determine
that any payment or benefit received or to be received by Executive from the Company or any of its affiliates or from any person
who effectuates a change in control or effective control of the Company or any of such person’s affiliates (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, the “Total
Payments”) would fail to be deductible under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
or otherwise would be subject (in whole or part) to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”)
then the payments or benefits to be received by Executive that are subject to Section 280G or 4999 of the Code shall be reduced
to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax, but such reduction shall occur
if and only to the extent that the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal,
state and local income taxes, and employment, Social Security and Medicare taxes on such reduced Total Payments), is greater than
or equal to the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state
and local income taxes and employment, Social Security and Medicare taxes on such Total Payments and the amount of Excise Tax
(or any other excise tax) to which Executive would be subject in respect of such unreduced Total Payments). For purposes of this
Section 5(a), the above tax amounts shall be determined by the Accounting Firm, applying the highest marginal rate under Section
1 of the Code and under state and local laws which applied (or is likely to apply) to Executive’s taxable income for the
tax year in which the transaction which causes the application of Section 280G or 4999 of the Code occurs, or such other rate(s)
as the Accounting Firm determines to be likely to apply to Executive in the relevant tax year(s) in which any of the Total Payments
is expected to be made. If the Accounting Firm determines that Executive would not retain a larger amount on an after-tax basis
if the Total Payments were so reduced, then Executive shall retain all of the Total Payments.


 






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(b)           Ordering of Reduction. In the case of a reduction in the Total Payments pursuant to Section 5(a), the Total Payments
will be reduced in the following order: (A) payments that are payable in cash that are valued at full value under Treasury
Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced
first; (B) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1,
Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1,
Q&A 24) will next be reduced; (C) payments that are payable in cash that are valued at less than full value under Treasury
Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (D) payments
and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24,
with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will
next be reduced; and (E) all other cash or non-cash benefits not otherwise described in above will be next reduced pro-rata.


 


(c)           Certain Determinations. For purposes of determining whether and the extent to which the Total Payments will be subject
to the Excise Tax: (A) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such
time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be
taken into account; (B) no portion of the Total Payments will be taken into account which, in the opinion of the Accounting
Firm, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken
into account which, in the opinion of the Accounting Firm, constitutes reasonable compensation for services actually rendered,
within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3)
of the Code) that is allocable to such reasonable compensation; and (C) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments will be determined by the Accounting Firm in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. Executive and the Company shall furnish such documentation and documents as may be necessary
for the Accounting Firm to perform the requisite calculations and analysis under this Section 5 (and shall cooperate to the extent
necessary for any of the determinations in this Section 5(c) to be made), and the Accounting Firm shall provide a written report
of its determinations hereunder, including detailed supporting calculations. If the Accounting Firm determines that aggregate Total
Payments should be reduced as described above, it shall promptly notify Executive and the Company to that effect. In the absence
of manifest error, all determinations by the Accounting Firm under this Section 5 shall be binding on Executive and the Company
and shall be made as soon as reasonably practicable following the later of Executive’s date of termination of employment
or the date of the transaction which causes the application of Section 280G of the Code. The Company shall bear all costs, fees
and expenses of the Accounting Firm and any legal counsel retained by the Accounting Firm.


 


(d)           Additional Payments. If Executive receives reduced payments and benefits by reason of this Section 5 and it is established
pursuant to a determination of a court of competent jurisdiction which is not subject to review or as to which the time to appeal
has expired, or pursuant to an Internal Revenue Service proceeding, that Executive could have received a greater amount without
resulting in any Excise Tax, then the Company shall thereafter pay Executive the aggregate additional amount which could have been
paid without resulting in any Excise Tax as soon as reasonably practicable following such determination.


 






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6.            Definitions.


 


(a)           “Cause” shall mean any of the following:


 


(i)           Executive’s conviction of, or plea of guilty or nolo contendere to, a felony (excluding traffic-related felonies),
or any financial crime involving the Company or any subsidiary of the REIT (including, but not limited to, fraud, embezzlement
or misappropriation of Company assets);


 


(ii)          Executive’s
willful and gross misconduct in the performance of his duties (other than by reason of his incapacity or disability), it being
expressly understood that the Company’s dissatisfaction with Executive’s performance that is not willful and gross
misconduct in the performance of Executive’s duties shall not constitute Cause under this clause (ii);


 


(iii)         Executive’s
continuous, willful and material breach of this Agreement after written notice of such breach has been given by the Board in its
reasonable discretion exercised in good faith; provided that, in no event shall any action or omission in subsection (ii) or (iii)
constitute “Cause” unless (1) the Company gives notice to Executive stating that Executive will be terminated for
Cause, specifying the particulars thereof in reasonable detail and the effective date of termination (which shall be no less than
twenty (20) business days following the date on which such written notice is received by Executive) (the “Cause Termination
Notice”), (2) the Company provides Executive and his counsel with an opportunity to appear before the Board to rebut
or dispute the alleged reason for termination on a specified date that is at least ten (10) business days following the date on
which the Cause Termination Notice is given, and (3) a majority of the Board (calculated without regard to Executive, if applicable)
determines that Executive has failed to materially cure or cease such misconduct or breach within twenty (20) business days after
the Cause Termination Notice is given to him. For purposes of the foregoing sentence, no act, or failure to act, on Executive’s
part shall be considered willful unless done or omitted to be done, by him not in good faith and without reasonable belief that
his action or omission was in the best interest of the Company, and any act or omission by Executive pursuant to the authority
given pursuant to a resolution duly adopted by the Board or on the written advice of counsel to the Company will be deemed made
in good faith and in the best interest of the Company.


 


(b)           “Change in Control” means the occurrence of any of the following after the Effective Date: (i) the direct
or indirect sale, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially
all of the properties or assets of the REIT and its Subsidiaries, taken as a whole, to any Exchange Act Person; (ii) the following
individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who,
as of the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is
in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to
the election of directors of the REIT) whose appointment or election by the Board or nomination for election by the REIT’s
shareholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were
directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended;
(iii) an Exchange Act Person becomes the “beneficial owner” (as used in Rule 13d-3 under the Exchange Act) of 50% or
more of the total voting power of the stock of the REIT; or (iv) the consummation of a reorganization, merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the REIT if, immediately after the consummation of such transaction,
the shareholders of the REIT immediately prior thereto do not own, directly or indirectly, either outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such transaction
or more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such transaction.
Notwithstanding the foregoing, (A) a Change in Control shall not be deemed to have occurred by virtue of any transaction or series
of integrated transactions immediately following which the shareholders of the REIT immediately prior to such transaction or series
of transactions continue to have substantially the same proportionate ownership in a Person that owns all or substantially all
of the voting securities or assets of the REIT immediately following such transaction or series of transactions, and (B) if the
severance payable under Section 4(d) constitutes deferred compensation under Section 409A of the Code, a Change in Control shall
be deemed to have occurred for purposes of this Agreement only if a change in the ownership or effective control of the Company
or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section
409A of the Code.


 






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(c)           “Change in Control Period” means the period beginning on the date of a Change in Control and ending on
the twelve (12) month anniversary of the date of the Change in Control.


 


(d)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.


 


(e)           “Exchange Act Person” means any Person or group (as defined in Section 13(d)(3) of the Exchange Act),
except that “Exchange Act Person” will not include (i) the REIT or any Subsidiary of the REIT, (ii) any employee benefit
plan of the REIT or any Subsidiary of the REIT or any trustee or other fiduciary holding securities under an employee benefit plan
of the REIT or any Subsidiary of the REIT, (iii) an underwriter temporarily holding securities pursuant to a registered public
offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of the REIT in substantially the
same proportions as their ownership of shares of the REIT or (v) any Person that, as of immediately prior to the transaction or
series of transactions, is the owner, directly or indirectly, of securities of the REIT representing more than 50% of the combined
voting power of the REIT’s then outstanding securities.


 


(f)            “Good
Reason” shall mean, without Executive’s consent:


 


(i)           the assignment to Executive of duties or responsibilities substantially inconsistent with Executive’s title at the
Company or a material diminution in Executive’s title, authority or responsibilities;


 


(ii)          a material reduction in Executive’s Base Salary or Target Annual Bonus opportunity during the Term;


 


(iii)         a
continuous, willful and material breach by the Company of this Agreement; or


 


(iv)         the relocation (without the written consent of Executive) of Executive’s principal place of employment by more than
thirty-five (35) miles from the Principal Location.


 


Notwithstanding
the foregoing, (1) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination
date of at least sixty (60) days but no more than ninety (90) days from the date of such notice) is given no later than ninety
(90) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises and (2)
if there exists an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date notice
of such termination is received to cure such event or condition and, if the Company does so, such event or condition shall not
constitute Good Reason hereunder; provided, however, that the Company’s right to cure such event or condition shall not apply
if there have been repeated breaches by the Company.


 


(g)           “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof.


 


(h)           “Severance
Multiple” means (i) two (2.0) pursuant to Section 4(c) if the Severance Amount is payable under Section 4(c)
on account of termination that does not occur during the Change in Control Period and (ii) three (3.0) Severance Amount is payable
under Section 4(c) on account of a termination that occurs during the Change in Control Period.


 






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(i)            “Subsidiary” or “Subsidiaries” means, with respect to any Person, as of any date of
determination, any other Person or Persons as to which such first Person owns or otherwise controls, directly or indirectly, 50%
or more of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest
of such other Person or Persons.


 


7.            Confidentiality/Non-Disclosure. Executive acknowledges that, in the course of his employment with the Company, he
has become and/or will become acquainted and trusted with (a) certain confidential information and trade secrets, which confidential
information includes, but is not limited to, proprietary software, customer lists and information, information concerning the Company’s
finances, business practices, long-term and strategic plans and similar matters, information concerning the Company’s formulas,
designs, methods of business, trade secrets, technology, business operations, business records and files, and any other information
that is not generally known to the public or within the industry or trade in which the Company competes and was not known to Executive
prior to his employment with the Company, and (b) information of third parties that the Company is under a duty to maintain as
confidential (collectively, “Confidential Information”). Except in furtherance of his duties hereunder, Executive
agrees that he will not cause any Confidential Information to be disclosed to third parties without the prior written consent of
the Company and that he will not, without the prior written consent of the Company, divulge or make any use of such Confidential
Information, except as may be required by law and/or to fulfill his obligations hereunder. Upon the termination of Executive’s
employment for whatever reason, or at any time the Company may request, Executive shall immediately deliver to the Company all
of the Company’s property in Executive’s possession or under Executive’s control, including but not limited to
all originals and copies of memoranda, notes, plans, records, reports, computer files, disks and tapes, thumb drives, printouts,
worksheets, source code, software, programming work, and all documents, forms, records or other information, in whatever form it
may exist, regarding the Company’s business, clients, products or services. Confidential Information does not include information
that: (i) becomes generally known to the public subsequent to disclosure to Executive through no wrongful act of Executive or any
representative of Executive; (ii) was known to the public prior to its disclosure to Executive; or (iii) Executive is required
to disclose by applicable law, regulation or legal process. Additionally, the parties acknowledge and agree that the obligations
of this Section 7 shall be in addition to and shall not diminish any obligations that Executive may have to Company or any customer
of Company under any separate Non-Disclosure and Confidentiality Agreement that Executive may execute during his employment with
the Company.


 


8.            Intellectual Property, Inventions and Patents. Executive acknowledges that all discoveries, concepts, ideas, inventions,
innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work
and mask work (whether or not including any Confidential Information) and all registrations or applications related thereto, all
other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s
actual or anticipated business, research and development or existing or future products or services and which were or are conceived,
developed, contributed to or made or reduced to practice by Executive (whether alone or jointly with others) while employed by
the Company, whether before or after the date of this Agreement (“Work Product”), belong to the Company. Executive
shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested
by the Board (whether during or after the Term of Employment) to establish and confirm such ownership (including assignments, consents,
powers of attorney and other instruments). Executive acknowledges that all copyrightable Work Product shall be deemed to constitute
“works made for hire” under the U.S. Copyright Act of 1976, as amended, and that the Company shall own all rights therein.
To the extent that any such copyrightable work is not a “work made for hire,” Executive hereby assigns and agrees to
assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work. The foregoing provisions
of this Section 8 shall not apply to any invention that Executive developed entirely on Executive’s own time without using
the Company’s equipment, supplies, facilities or trade secret information, except for those inventions that (i) relate to
the Company’s business or actual or demonstrably anticipated research or development, or (ii) result from any work performed
by Executive for the Company.


 






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9.            Restrictive
Covenants.


 


(a)           Notification of New Employer. During Executive’s employment and for a period of twelve (12) months immediately
following the termination of his employment with the Company for any reason, Executive will advise the Company of any new employer
of his, or any other person or entity for whom he may perform services, within ten (10) days after commencing to work for such
employer or other person or entity. Executive hereby agrees to notify, and grant consent to notification by the Company to, any
new employer, or other person or entity for whom he may perform services, of his obligations under this Agreement.


 


(b)           Solicitation of Employees. Executive agrees that during his employment and for a period of twelve (12) months immediately
following the termination of his employment with the Company for any reason, whether with or without cause, he will not directly
or indirectly, for himself or any other person or entity:


 


(i)           solicit, induce, recruit or encourage any of the Company’s employees, exclusive consultants or exclusive independent
contractors or any person who provides services to the Company to terminate or reduce their employment or other relationship with
the Company;


 


(ii)          hire any individual who is (or was, within the six (6) month period immediately preceding such hiring) an employee, exclusive
consultant, or exclusive independent contractor of the Company; or


 


(iii)         attempt to do any of the foregoing.


 


Notwithstanding
the foregoing, the provisions of this Section 9(b) shall not be violated by (A) general advertising or solicitation not specifically
targeted at Company-related persons or entities or hiring a respondent to such advertising or solicitation or (B) actions taken
by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter
and has not identified such Company-related person or entity for soliciting or hiring.


 


(c)           Solicitation
of Customers. Executive agrees that during his employment and for a period of twelve (12) months immediately following the
termination of his employment with the Company for any reason, whether with or without cause, he will not directly or indirectly,
(i) solicit, entice, or induce any Customer for the purpose of providing, or provide, products or services that are competitive
with the products or services provided by the Company, or (ii) solicit, entice, or induce any Customer to terminate or reduce
its business with (or refrain from increasing its business with) the Company. Notwithstanding the foregoing, nothing in this subsection
9(c) shall prohibit Executive from accepting a business relationship with a Customer that is not solicited within the meaning
of this subsection 9(c) so long as the Executive is not acting in violation of the provisions of Section 9(d) below.


 


As
used in this Section 9(c), “Customer” means any person or entity to which the Company provided products or services
(or was invested in products offered by the Company), and with which Executive had contact on behalf of the Company, within the
last twelve (12) months of his employment with the Company; provided, however, that notwithstanding the foregoing, the term “Customer”
shall not include any person or entity whose relationship with the Company shall have consisted solely of renting one or more self-storage
units from the Company or at any self-storage facility in which the Company has an equity or debt investment.


 






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(d)           Noncompetition.
Executive agrees that during his employment and for a period of twelve (12) months immediately following the termination of his
employment with the Company in connection with which Executive is entitled to severance under Section 4(d) he will not directly
or indirectly:


 


(i)           have
any ownership interest in a Competitor other than a passive investment of no more than 5% of the outstanding equity or debt securities
of a Competitor; or


 


(ii)          engage
in or perform services other than Personal Activities (whether as an employee, consultant, proprietor, partner, director or otherwise)
for any Competitor, if such services either (1) are the same as or similar to (individually or in the aggregate) the services
Executive performed for the Company during his employment with the Company, or (2) are performed with respect to products or services
of the Competitor that are competitive with the products or services provided by the Company with which Executive was involved
during his employment with the Company or about which he received Confidential Information during his employment with the Company.


 


As
used in this section, “Competitor” means: (i) any private or publicly traded real estate investment trust, fund
or other investment vehicle or program whose principal place of business is in the United States and whose business strategy is
based on investing in, acquiring or developing self-storage properties, whether directly or indirectly through joint ventures,
or (ii) any entity whose principal place of business is in the United States and that advises (including any external advisor)
such investment vehicles or programs. Notwithstanding anything to the contrary in this Agreement, following Executive’s termination
of employment, Executive’s ownership of, and/or devoting time as he determines in good faith to be necessary or appropriate
to fulfill his duties to, Jernigan Family Business, shall not constitute a violation of this Section 9(d). For purposes of this
Agreement, the term “Jernigan Family Business” shall have the meaning set forth in the Asset Purchase Agreement dated
as of December 16, 2019 among the REIT, the Operating Company, JCap Advisors, LLC and the other parties thereto, including Executive.


 


The
scope of the covenant set forth in Section 9(d) will be within or with respect to the United States.


 


(e)           Non-Disparagement.
The Company and Executive each acknowledge that any disparaging comments by either party against the other are likely to substantially
depreciate the business reputation of the other party. The Executive further agrees that he will not, and the Company agrees that
it will direct its officers and directors to not directly or indirectly defame, disparage, or publicly criticize the services,
business, integrity, veracity or reputation of the other party, including but not limited to, the Company or its owners, officers,
directors, or employees in any forum or through any medium of communication. Nothing in this Agreement will preclude Executive
or the Company from supplying truthful information to any governmental authority or in response to any lawful subpoena or other
legal process.


 


(f)            Executive acknowledges and agrees that during his employment with Company he will owe the Company duties of good faith,
loyalty and non-disclosure and such statutory duties that are applicable to an officer of the Company under the laws of the State
of Tennessee.


 


10.          Remedies. Executive acknowledges and agrees that the restrictions set forth in this Agreement are critical and necessary
to protect the Company’s legitimate business interests; are reasonably drawn to this end with respect to duration, scope,
and otherwise; are not unduly burdensome; are not injurious to the public interest; and are supported by adequate consideration.
Executive agrees that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach
of the restrictions set forth herein. Accordingly, Executives agrees that if he breaches or threatens to breach any of such restrictions,
the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court
of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this
Agreement. Executive further agrees that no bond or other security will be required in obtaining such equitable relief and he hereby
consents to the issuance of such injunction and to the ordering of specific performance. Executive further acknowledges and agrees
that (a) any claim he may have against the Company, whether under this Agreement or otherwise, will not be a defense to enforcement
of the restrictions set forth in this Agreement, (b) the circumstances of his termination of employment with the Company will have
no impact on his obligations under this Agreement, and (c) this Agreement is enforceable by the Company and its respective Subsidiaries,
affiliates, successors and permitted assigns.


 






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11.         Additional
Acknowledgments.


 


(a)            Executive
and the Company each agree and intend that Executive’s obligations under this Agreement (to the extent not perpetual) be
tolled during any period that Executive is in breach of any of the obligations under this Agreement, so that the Company is provided
with the full benefit of the restrictive periods set forth herein.


 


(b)           Executive
also agrees that, in addition to any other remedies available to the Company and notwithstanding any provision of this Agreement
to the contrary, in the event Executive breaches in any material respect any of his obligations under Sections 7, 8 or 9 and any
applicable cure period under this Employment Agreement with respect to such breach shall have lapsed, the Company shall be entitled
to immediately cease all payments and benefits (including vesting of equity-based awards) under Section 4 and will have no further
obligations thereunder.


 


(c)           Executive
and the Company further agree that, in the event that any provision of Section 9 is determined by a court of competent jurisdiction
to be unenforceable by reason of its being extended over too great a time, too large a geographic scope or too great a range of
activities, that provision will be deemed to be modified to permit its enforcement to the maximum extent permitted by law. Each
of Executive and the Company acknowledges and agrees that the Company will suffer irreparable harm from a breach by Executive
of any of the covenants or agreements contained in Sections 7, 8, or 9. Executive further acknowledges that the restrictive covenants
set forth in those Sections are of a special, unique, and extraordinary character, the loss of which cannot be adequately compensated
by monetary damages. Executive agrees that the terms and provisions of Sections 7, 8, or 9 are fair and reasonable and are reasonably
required for the protection of the Company in whose favor such restrictions operate. Executive acknowledges that, but for Executive’s
agreements to be bound by the restrictive covenants set forth in Sections 7, 8, or 9, the Company would not have entered into
this Agreement. In the event of an alleged or threatened breach by Executive of any of the provisions of Sections 7, 8, or 9,
the Company or its successors or assigns may, in addition to all other rights and remedies existing in its or their favor, apply
to any court of competent jurisdiction for specific performance and/or injunctive or other equitable relief in order to enforce
or prevent any violations of the provisions hereof (including, without limitation, the extension of the noncompetition period
or nonsolicitation period, as applicable, by a period equal to the duration of the violation).


 


(d)           Executive and the Company further agree that REIT Operator is the employer of Executive for all U.S. federal income tax
and employment tax purposes. In accordance with such status, to the extent that any provision herein permits the Company to control,
supervise, or otherwise determine the rights, responsibilities, or obligations of Executive hereunder; to remunerate, reimburse,
or otherwise provide any economic benefit to Executive hereunder (or to determine the amount of such payments or benefits); or
to otherwise initiate, terminate, or otherwise alter the terms of Executive’s employment with REIT Operator hereunder, it
is acknowledged and agreed by all parties hereto that such actions are taken on behalf of REIT Operator, which hereby grants all
necessary power and authority to the Company to take such actions on behalf of REIT Operator.


 






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12.         Executive’s
Cooperation. During the Term of Employment and, to the extent that the Company pays Executive’s actual, reasonable and
documented legal fees for legal counsel, also for a reasonable period thereafter, Executive shall reasonably cooperate with the
Company in any internal investigation, any administrative, regulatory or judicial investigation or proceeding or any dispute with
a third party as reasonably requested by the Company to the extent that such investigation, proceeding or dispute may relate to
matters in which Executive has knowledge as a result of Executive’s employment with the Company or Executive’s serving
as an officer or director of the Company (including Executive being available to the Company upon reasonable notice for interviews
and factual investigations, appearing at the Company’s request, after reasonable notice, to give testimony without requiring
service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company
all relevant documents which are or may come into Executive’s possession, all at times and on schedules that are reasonably
consistent with Executive’s other permitted activities and commitments). Without limiting the generality of the foregoing,
to the extent that the Company seeks such assistance, the Company shall use reasonable business efforts, whenever possible, to
provide Executive with reasonable advance notice of its need for Executive’s assistance and will attempt to coordinate with
Executive the time and place at which Executive’s assistance will be provided with the goal of minimizing the impact of
such assistance on any other material pre-scheduled business commitment that Executive may have. In the event the Company requires
Executive’s reasonable assistance or cooperation in accordance with this Section 12, the Company shall reimburse Executive
solely for reasonable travel expenses (including lodging and meals) upon submission of receipts and, for cooperation following
the Term of Employment, Executive’s actual, reasonable and documented legal fees. In addition, Company shall pay Executive
compensation at the rate of two hundred ($200) dollars per hour worked in providing the services constituting the cooperation
requested. Nothing in this Section 12 shall abrogate in any respect the obligation (contractual or otherwise) of the REIT, the
Operating Company, the REIT Operator or any affiliate of any of the foregoing to indemnify the Executive for any acts or omissions
during the Term of Employment or any period prior thereto.


 


13.         Executive’s Representations. Executive hereby represents and warrants to the Company that (a) the execution,
delivery and performance of this Agreement by Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which Executive is bound,
(b) Executive is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any
other person or entity and (c) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid
and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that
Executive has consulted with independent legal counsel regarding Executive’s rights and obligations under this Agreement
and that Executive fully understands the terms and conditions contained herein.


 


14.         Corporate Opportunity. Executive agrees that during his Term of Employment he will not use opportunities discovered
in the course of his employment hereunder for his own personal gain or benefit without the written consent of the Company. For
example, if in any capacity described in Section 2 of this Agreement, Executive is approached about or otherwise becomes aware
of a potential investment or other business transaction that may be appropriate for the Company, Executive will not take that opportunity
for himself, or share or disclose it to any third party, but rather Executive will bring it to the attention of the Chief Executive
Officer or the Board.


 


15.         Insurance for Company’s Own Behalf. The Company may, at its discretion, apply for and procure in its own name
and for its own benefit life and/or disability insurance on Executive in any amount or amounts considered advisable. Executive
agrees to cooperate in any medical or other examination, supply any information and execute and deliver any applications or other
instruments in writing as may be reasonably necessary to obtain and constitute such insurance.


 






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16.         Withholding.
The Company shall be entitled to deduct or withhold from any amounts owing from the Company to Executive any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes that it reasonably determines are required to be imposed with
respect to Executive’s compensation or other payments or benefits from the Company or Executive’s ownership interest
in the Company (including wages, bonuses, the receipt or exercise of equity options and/or the receipt or vesting of restricted
equity).


 


17.         Survival.
The rights and obligations of the parties under this Agreement shall survive as provided herein or if necessary or desirable to
accomplish the purposes of other surviving provisions following the termination of Executive’s employment with the Company,
regardless of the manner of or reasons for such termination.


 


18.         Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or mailed by prepaid first class certified mail, return receipt
requested, or mailed by overnight courier prepaid, to (a) Executive at the address on file with the Company, and (b) Company at
the following address:


 


JCAP
Management LLC


c/o
Jernigan Capital, Inc.


6410
Poplar Ave. Ste. 650


Memphis,
TN 38119


 


Attention:
Chair of the Board


 


All such
notices, requests and other communications will (i) if delivered personally to the address as provided in this Section 18, be deemed
given on the day so delivered, or, if delivered after 5:00 p.m. local time or on a day other than a Saturday, Sunday or any day
on which banks located in the State of Tennessee are authorized or obligated to close (a “Business Day”), then
on the next proceeding Business Day, (ii) if delivered by certified mail in the manner described above to the address as provided
in this Section 18, be deemed given on the earlier of the third Business Day following mailing or upon receipt and (iii) if delivered
by overnight courier to the address as provided for in this Section 18, be deemed given on the earlier of the first Business Day
following the date sent by such overnight courier or upon receipt, in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 18. Any
party hereto from time to time may change its address or other information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.


 


19.         Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.


 


20.         Entire
Agreement. Except as otherwise stated here, this Agreement constitutes the entire agreement among the parties pertaining to
the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written,
of the parties. For the avoidance of doubt, Executive shall not be eligible to participate in any severance plan or program during
the Term of Employment to the extent such participation would result in a duplication of benefits.


 






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21.         No
Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied against any party.


 


22.         Counterparts.
This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.


 


23.         Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective heirs, successors and assigns, except that Executive may not assign Executive’s rights or
delegate Executive’s duties or obligations hereunder without the prior written consent of the Company. The Company may only
assign this Agreement to a successor to all or substantially all of the business and/or assets of the Company. As used in this
Agreement, “Company” shall mean the Company and any successor to its business and/or assets, which assumes and agrees
to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.


 


24.         Choice
of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Tennessee,
without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Tennessee or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Tennessee.


 


25.         Amendment
and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company (as
approved by the Board) and Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in
enforcing or exercising any of the provisions of this Agreement (including the Company’s right to terminate the Executive’s
employment for Cause) shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied
waiver of any provision of this Agreement.


 


26.         Consent
to Jurisdiction. EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE OF TENNESSEE FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF
ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PARTY’S RESPECTIVE ADDRESS
SET FORTH ABOVE SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING IN THE STATE OF TENNESSEE WITH RESPECT
TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS SECTION 25. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF TENNESSEE, AND HEREBY
AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION,
SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 


27.         Waiver
of Jury Trial. AS A SPECIFICALLY BARGAINED-FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER
HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT
OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.


 






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28.         Section
409A.


 


(a)           Interpretation.
Notwithstanding any provision to the contrary in this Agreement, this Agreement is intended to comply with the requirements
of Section 409A of the Code and regulations thereunder (“Section 409A”) or any exemption thereunder, to the
extent applicable, and this Agreement shall be interpreted accordingly. If any provisions of this Agreement (or of any award of
compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section
409A of the Code, the REIT Operator shall, after consulting with and receiving the approval of Executive, reform such provision
in a manner intended to avoid the incurrence by Executive of any such additional tax or interest; provided that the REIT Operator
agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to Executive of the applicable
provision without violating the provisions of Section 409A of the Code. For purposes of Section 409A, each payment made under
this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar
year of any payment that constitutes deferred compensation for purposes of Section 409A. To the extent any payment or benefit
provided under this Agreement is contingent upon Executive’s execution of the general release of claims described in Sections
4(a) or 4(d)(ii), if such payment or benefit constitutes deferred compensation for purposes of Section 409A and the 60-day period
described in such sections spans calendar years, such payment and/or benefit shall be paid or commence, as applicable, in the
latter calendar year. Executive will be deemed to have a termination of employment for purposes of determining the timing of any
payments or benefits hereunder that constitute deferred compensation for purposes of Section 409A only upon a “separation
from service” within the meaning of Section 409A.


 


(b)           Payment Delay. Notwithstanding any provision to the contrary in this Agreement, if on the date of Executive’s
termination of employment, Executive is a “specified employee” (as such term is used in Section 409A), then any amounts
payable to Executive that constitute deferred compensation for purposes of Section 409A that are payable due to Executive’s
termination of employment shall be postponed and paid (without interest) to Executive in a lump sum on the first day of the seventh
month after Executive’s “separation from service” (within the meaning of Section 409A) with the Company (or any
successor thereto); provided, however, that if Executive dies during such six-month period and prior to payment of the postponed
cash amounts hereunder, the amounts delayed on account of Section 409A shall be paid to the personal representative of Executive’s
estate on the sixtieth (60th) day after Executive’s death.


 


(c)           Reimbursements.
All reimbursements provided under this Agreement that constitute deferred compensation under Section 409A shall be made or provided
in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii)
the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement
in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable
year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or
exchange for another benefit.


 


[Signature Page Follows]


 






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


 


	 	Jernigan
    Capital, Inc.
	 	 
	 	 
	 	By: 	/s/ John A. Good
	 	Name: John A. Good
	 	Title: Chief Executive Officer
	 	 
	 	 
	 	Jernigan
    Capital Operating Company LLC,
	 	 
	 	By: JERNIGAN CAPITAL,
    INC, its managing member
	 	 
	 	 
	 	By:	/s/ John A. Good
	 	Name: John A. Good
	 	Title: Chief Executive Officer
	 	 
	 	 
	 	JCAP
    MANAGEMENT LLC
	 	 
	 	By: JERNIGAN CAPITAL OPERATING
    COMPANY, LLC, its managing member
	 	 
	 	By: JERNIGAN CAPITAL, INC,
    its managing member
	 	 
	 	 
	 	By: 	/s/ John A. Good
	 	Name: John A. Good
	 	Title: Chief Executive Officer
	 	 
	 	 
	 	EXECUTIVE
	 	 
	 	 
	 	/s/ Jonathan L. Perry
	 	Jonathan L. Perry




 






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Exhibit
A


 


GENERAL RELEASE


 


I,
Jonathan L. Perry, in consideration of and subject to the performance by Jernigan Capital, Inc., a Maryland corporation (the “REIT”),
Jernigan Capital Operating Company LLC, a Delaware limited liability company, the operating company subsidiary of the REIT (the
“Operating Company”), and the Operating Company’s subsidiary, JCAP Management LLC, a Delaware limited
liability company (the “REIT Operator” and, together with the REIT, the Operating Company, and their respective
subsidiaries, the “Company”), of their respective obligations under the Employment Agreement with an Effective
Date as of [DATE] (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company
and its respective affiliates and all present, former and future managers, directors, officers, employees, attorneys, advisors,
successors and assigns of the Company and its affiliates and direct or indirect owners (collectively, the “Released Parties”)
to the extent provided below (this “General Release”). The Released Parties are intended to be third-party beneficiaries
of this General Release, and this General Release may be enforced by each of them in accordance with the terms hereof in respect
of the rights granted to such Released Parties hereunder. Terms used herein but not otherwise defined shall have the meanings given
to them in the Agreement.


 


1.             I understand that any payments or benefits paid or granted to me under Section 4(d) of the Agreement represent, in part,
consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand
and agree that I will not receive certain of the payments and benefits specified in Section 4 of the Agreement unless I execute
this General Release and do not revoke this General Release within the time period permitted hereafter. Such payments and benefits
will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter
established by the Company or its affiliates.


 


2.             Except
as provided in paragraphs 4 and 5 below and except for the provisions of the Agreement which expressly survive the termination
of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release
and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes
of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages,
other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both
past and present (through the date that this General Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators
or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company
(including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers
Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974;
any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other
federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or
under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the
Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for
costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively
referred to herein as the “Claims”).


 






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3.             I represent that I have made no assignment or transfer of any right, claim, demand, cause of action or other matters covered
by paragraph 2 above.


 


4.             I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination
in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation
from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in Employment Act of 1967).


 


5.             I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released
Parties of any kind whatsoever in respect of any Claims, including, without limitation, reinstatement, back pay, front pay, and
any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required
to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative
investigation or proceeding; provided, however, that subject to Section 11 below, I disclaim and waive any right
to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Additionally,
I am not waiving (i) any right to the Accrued Benefits or any severance benefits to which I am entitled under the Agreement, (ii)
any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the
Company’s organizational documents or otherwise, or (iii) my rights as an equity or security holder in the Company or its
affiliates.


 


6.             Defend Trade Secrets Act. I acknowledge that I am hereby notified that under the Defend Trade Secrets Act of 2016: (i) no
individual will be held criminally or civilly liable under federal or state trade secret law for disclosure of a trade secret (as
defined in the Economic Espionage Act) that is: (A) made in confidence to a federal, state, or local government official, either
directly or indirectly, or to any attorney, and made solely for the purpose of reporting or investigating a suspected violation
of law or (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so
that it is not made public; and (ii) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected
violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the
court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade
secret, except as permitted by court order.


 


7.             In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the
Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according
to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding
any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this
waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or
in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General
Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not
aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release.


 


8.             I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed
or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.


 






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9.             I
agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses
of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees.


 


10.           I
agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms
of this General Release or the Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding
the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone.


 


11.           I agree that this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry
Regulatory Authority (FINRA), any other self-regulatory organization or any other governmental entity or federal or state regulatory
authority (collectively, “Government Agencies”). I further understand that this General Release does not limit my ability
to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by
any Government Agency without notice to the Company. This General Release does not limit my right to receive an award for information
provided to any Government Agencies.


 


12.           I hereby acknowledge that Sections 4 through 28 of the Agreement shall survive my execution of this General Release.


 


13.           I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge
that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with
respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering
into this General Release, may have materially affected this General Release and my decision to enter into it.


 


14.           Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or
in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after
the date hereof.


 


15.           Whenever
possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable
law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.


 


BY SIGNING THIS GENERAL RELEASE, I REPRESENT
AND AGREE THAT:


 


		1.	I HAVE READ IT CAREFULLY;



 


		2.	I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT
LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED;



 


		3.	I VOLUNTARILY CONSENT TO EVERYTHING IN IT;



 






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		4.	I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;



 


		5.	I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER
IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE
REQUIRED [21][45]-DAY PERIOD;



 


		6.	I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT
THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;



 


		7.	I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL
RETAINED TO ADVISE ME WITH RESPECT TO IT; AND



 


		8.	I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.



 


 


	SIGNED:	 	 	 	DATED:	 




 



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