Exhibit 10.1


 





INDEMNIFICATION AGREEMENT


 


THIS INDEMNIFICATION
AGREEMENT is made and entered into this _______ day of September 2014 (“Agreement”), by and between Summit Healthcare
REIT, Inc., a Maryland corporation (the “Company”), and (“Indemnitee”).


 


WHEREAS, at the request
of the Company, Indemnitee currently serves as a director or officer of the Company and may, therefore, be subjected to claims,
suits or proceedings arising as a result of his or her service (occurring before or after the execution of this Agreement); and


 


WHEREAS, in recognition
of Indemnitee’s need for (i) substantial protection against personal liability based on Indemnitee’s reliance on the
Second Articles of Amendment and Restatement of Articles of Incorporation (the “Articles”) and Bylaws, as amended (“Bylaws”)
(ii) specific contractual assurance that the protection promised by the Articles and Bylaws will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of the Articles and Bylaws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the Company), and (iii) an inducement to provide effective services to
the Company as an officer, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses
to Indemnitee to the fullest extent (whether partial or complete) permitted under Maryland law and as set forth in this Agreement,
and, to the extent insurance is maintained, to provide for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.


 


WHEREAS, as an inducement
to Indemnitee to continue to serve as such director or officer, the Company has agreed to indemnify and to advance expenses and
costs incurred by Indemnitee in connection with any such claims, suits or proceedings, subject to certain limitations set forth
herein; and


 


WHEREAS, the parties
by this Agreement desire to set forth their agreement regarding indemnification and advancement of expenses;


 


NOW, THEREFORE, in
consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:


 


Section 1. Definitions.
For purposes of this Agreement


 


(a) “Change in
Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s
then outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds
of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest;
(ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved
by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board
of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were
directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as
of the Effective Date or whose election for nomination for election was previously so approved.


 


(b) “Corporate
Status” means the status of a person as a present or former director, officer, employee, consultant or agent of the Company
or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee, consultant or agent of any other foreign
or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the
circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at
the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by
the Company or (ii) the management of which is controlled directly or indirectly by the Company.






    	 



    	 



    

 


(c) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
and/or advance of Expenses is sought by Indemnitee.


 


(d) “Effective
Date” means the date of this Agreement.


 


(e) “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in
a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including,
without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond
or its equivalent.


 


(f) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification
agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification
or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.


 


(g) “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a
civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature,
including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically
agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate
in the institution of a Proceeding, such situation shall also be considered a Proceeding.


 


Section 2. Services
by Indemnitee. Indemnitee will serve as a director or officer of the Company. However, this Agreement shall not impose any
independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall
not be deemed an employment contract between the Company (or any other entity) and Indemnitee.


 


Section 3. Indemnification
— General. Subject to the limitations in Section 7, the Company shall indemnify, and advance Expenses to, Indemnitee
(a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and
as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits
available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 7,
the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections
of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation
Law (the “MGCL”).


 


In the event Indemnitee
was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant
in, a Proceeding by reason of (or arising in part out of) an indemnifiable event, the Company shall indemnify Indemnitee from and
against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted
(but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the
Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement
shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification
provided by the Certificate of Incorporation, Bylaws, vote of its shareholders or disinterested directors, or applicable law.


 






    	 



    	 



    

 


Section 4. Rights
to Indemnification. Subject to the limitations in Section 7, if, by reason of Indemnitee’s Corporate Status, Indemnitee
is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties,
fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with any such Proceeding unless it is established by clear and convincing evidence that (i) an intentional act
or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property
or services or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct
was unlawful.


 


Section 5. Court-Ordered
Indemnification. Subject to the limitations in Section 7(a) and (b), a court of appropriate jurisdiction, upon application
of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee in the following circumstances:


 


(a) Section 2-418(d)(1)
of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing
such reimbursement; or


 


(b) if such court determines
that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged
liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification
as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in
which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to
Expenses.


 


Section 6. Indemnification
for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 7, to the extent
that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any
Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, he or she shall be indemnified for
all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall nevertheless indemnify Indemnitee under this Section 6 for all Expenses
actually and reasonably incurred by him or her or on his or her behalf in connection with the entire Proceeding.


 


Section 7. Limitations
on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 5), Indemnitee shall not
be entitled to:


 


(a) indemnification
for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that
the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting
on behalf of or performing services for the Company; and (iii) such indemnification is recoverable only out of the Company’s
net assets and not from the Company’s stockholders, investors or stakeholders;


 


(b) indemnification
for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following
conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities
law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee
and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any
state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations
of securities laws;


 






    	 



    	 



    

 


(c) indemnification
hereunder if the Proceeding was won by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;


 


(d) indemnification
hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging
improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or


 


(e) indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this
Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a
party expressly provide otherwise.


 


Section 8. Advance
of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be,
made a party (including as a witness or other participant) to any Proceeding, the Company shall, without requiring a preliminary
determination of Indemnitee’s ultimate entitlement to indemnification hereunder and except as set forth in the following
sentence, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding within ten
days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. The Company may not advance Expenses incurred by or on behalf of Indemnitee
in connection with a Proceeding unless (a) such Proceeding is initiated by a third party who is not a stockholder of the Company
or, if such Proceeding is initiated by a stockholder of the Company acting in his or her capacity as such, a court of competent
jurisdiction specifically approves such advancement, and (b) such Proceeding relates to acts or omissions with respect to
the performance of duties or services on behalf of the Company. The statement or statements requesting advance or advances shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation
by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company
as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially
the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect
at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, relating to claims, issues
or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard
of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 6 of this
Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding
as determined by a judicial proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking
required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without
reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security
therefor.


 


Section 9. Indemnification
and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 7, to the extent that
Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in
any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall
be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such
advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee.


 


Section 10. Procedure
for Determination of Entitlement to Indemnification.


 


(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee
is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee
deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee
shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.


 






    	 



    	 



    

 


(b) Upon written request
by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect
to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee,
which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii)
of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by
the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained,
then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested
Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii)
of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written
opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of
the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with
the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination
in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b).
Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne
by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall
indemnify and hold Indemnitee harmless therefrom.


 


(c) The Company shall
pay the reasonable fees and expenses of Independent Counsel, if one is appointed.


 


Section 11. Presumptions
and Effect of Certain Proceedings.


 


(a) In making any determination
with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption.


 


(b) The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo
contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that
Indemnitee did not meet the requisite standard of conduct described herein for indemnification.


 


(c) The knowledge and/or
actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes
of determining any other right to indemnification under this Agreement.


 


Section 12. Remedies
of Indemnitee.


 


(a) If (i) a determination
is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement,
(ii) advance of Expenses is not timely made pursuant to Section 8 or 9 of this Agreement, (iii) no determination
of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt
by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 6
or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification
pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of his or her entitlement to such indemnification
or advance of Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence
a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first
has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall
not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 6 of this Agreement. Except as
set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration.
The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.


 






    	 



    	 



    

 


(b) In any judicial
proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification
or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant
to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.


 


(c) If a determination
shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent an
intentional misstatement by Indemnitee of a material fact, or an intentional omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification


 


(d) In the event that
Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from
the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in
such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee
in connection with such judicial adjudication or arbitration shall be appropriately prorated.


 


Notwithstanding the foregoing, the Company
shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or
under applicable law or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to indemnification
for indemnifiable Events, and/or (ii) recovery under directors’ and officers’ liability insurance policies maintained
by the Company, but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification or insurance
recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to
Indemnitee, subject to and in accordance with Section 4.


 


(e) Interest shall
be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings
Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing
with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Section 8
or 9 of this Agreement or the 60 th day after the date on which the Company was requested to make the determination
of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment
is made to Indemnitee by the Company.


 


Section 13. Defense
of the Underlying Proceeding.


 






    	 



    	 



    

 


(a) Indemnitee shall
notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or
other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.
The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend
in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.


 


(b) Subject to the
provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee
in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee
of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above.
The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent
to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission
of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability
in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) would
impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought
by Indemnitee under Section 12 above.


 


(c) Notwithstanding
the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld, that he or she may have separate defenses or counterclaims to assert with respect to any issue which
may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion
of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest
or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense
of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the
Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny
or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to
retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably
withheld, at the expense of the Company (subject to Section 12(d)), to represent Indemnitee in connection with any such matter.


 


Section 14. Non--Exclusivity;
Survival of Rights; Subrogation; Coordination of Payments.


 


(a) The rights of indemnification
and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may
at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders
entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing
by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status
prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised
prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise,
shall not prohibit the concurrent assertion or employment of any other right or remedy.


 


(b) In the event of
any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery
of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of
such documents as are necessary to enable the Company to bring suit to enforce such rights.


 






    	 



    	 



    

 


(c) The Company shall
not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses
hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.


 


Section 15. Insurance.
The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee
by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company
to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any
other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the
amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements
and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous
sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or
obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery
of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under
any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is
a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.


 


Section 16. Reports
to Stockholders, Investors and Stakeholders. To the extent required by the MGCL, the Company shall report in writing to its
stockholders, investors or stakeholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee
under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of investors
of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.


 


Section 17. Duration
of Agreement; Binding Effect.


 


(a) This Agreement
shall continue until and terminate ten years after the date that Indemnitee’s Corporate Status shall have ceased; provided,
that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending or threatened
in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced
by Indemnitee pursuant to Section 12 of this Agreement relating thereto.


 


(b) The indemnification
and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has
ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving in such capacity at the request of
the Company, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators
and other legal representatives.


 


(c) The Company shall
require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory
to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place.


 


(d) The Company and
Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and
difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree
that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity
of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled
to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that,
in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such
requirement of such a bond or undertaking.


 






    	 



    	 



    

 


Section 18. Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal
or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and
shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed
to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section, paragraph
or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.


 


Section 19. Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.


 


Section 20. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.


 


Section 21. Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.


 


Section 22. Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:


 


	 	(a)	If to Indemnitee, to the address set forth on the signature page hereto.


 


	 	(b)	If to the Company to:


 


Summit Healthcare
REIT, Inc.


2 South
Pointe Dr., Ste. 100


Lake Forest,
CA 92630


Attn: Chief
Executive Officer and Chief Financial Officer


 


or to such other address as may have been
furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


 


Section 23. Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland,
without regard to its conflicts of laws rules.


 


[SIGNATURE PAGE FOLLOWS]


 




    	 



    	 



    

  


 


IN WITNESS WHEREOF,
the parties hereto have executed this Indemnification Agreement on the day and year first above written.


 


	 	 	SUMMIT HEALTHCARE REIT, INC.
	 	 	
         

        By: _______________________

	 	 	Name: ____________________
	 	 	
         

        Title: _____________________

	 	 	 
	 	 	INDEMNITEE:  
	 	 	 
	 	 	_____________________________________
	 	 	 
	 	 	 
	 	 	Address:  
	 	 	 


 




    	 



    	 



    

  


EXHIBIT A


AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES
ADVANCED


 


To: The Board of Directors of Summit Healthcare REIT, Inc.


 


Re: Affirmation and Undertaking


 


Ladies and Gentlemen:


 


This Affirmation and Undertaking is being
provided pursuant to that certain Indemnification Agreement, dated the __ day of _____, 2014, by and between Summit Healthcare
REIT, Inc., a Maryland corporation (the Company”), and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).


 


Terms used herein and not otherwise defined
shall have the meanings specified in the Indemnification Agreement.


 


I am subject to the Proceeding by reason
of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief
that at all times, insofar as I was involved as a director or officer of the Company, in any of the facts or events giving rise
to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper
personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to
believe that any act or omission by me was unlawful.


 


In consideration of the advance of Expenses
by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the
“Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an
act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property
or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was
unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest
thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.


 


IN WITNESS WHEREOF, I have executed this
Affirmation and Undertaking on this        day of       20       .