Second Amendment to Expense Support and Restricted Stock Agreement



 Exhibit 10.4 

SECOND AMENDMENT TO EXPENSE SUPPORT 

AND RESTRICTED STOCK AGREEMENT 

THIS SECOND AMENDMENT TO EXPENSE SUPPORT AND RESTRICTED STOCK AGREEMENT (this “Second Amendment to Expense Support
Agreement”), is effective as of April 3, 2014 (the “Effective Date”), by and between CNL Healthcare Properties, Inc. (the “Company”) and CNL Healthcare Corp. (the
“Advisor”). The Company and the Advisor are each sometimes individually referred to as, a “Party” and collectively as, the “Parties.” 

R E C I T A L S: 
 WHEREAS, the
Parties entered into that certain Advisory Agreement dated as of June 8, 2011, as amended by a First Amendment to Advisory Agreement dated as of October 5, 2011, and as further amended by a Second Amendment to Advisory Agreement dated as
of March 20, 2013 (collectively, the “Advisory Agreement”); 
 WHEREAS, the Parties entered into that certain
Expense Support and Restricted Stock Agreement dated effective as of April 1, 2013, as amended by a First Amendment to Expense Support Agreement dated November 7, 2013 (collectively, the “Expense Support
Agreement”); and 
 WHEREAS, pursuant to paragraph 13 of the Expense Support Agreement the Parties may amend the Expense
Support Agreement by a writing executed by all of the Parties; and 
 WHEREAS, the Parties desire to amend and restate
Section 3, Section 4, and Section 5 of the Expense Support Agreement, which said changes shall supersede such certain provisions of said agreement. 

NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledge, the Parties, intending to be legally bound, do hereby agree as follows: 

1.      Recitals; Certain Definitions. 

 

	 	(a)	The foregoing recitals are true and correct in all material respects, and are by this reference incorporated herein and made a part hereof. 


 

	 	(b)	As used herein, the following capitalized terms shall have the following meanings: 


Board – shall have the meaning ascribed to such term in the Advisory Agreement. 

Cause – shall have the meaning ascribed to such term in the Advisory Agreement. 

Common Shares – shall have the meaning ascribed to such term in the Advisory Agreement. 

Distributions – shall have the meaning ascribed to such term in the Advisory Agreement; provided, however, that for
purposes of Section 3 only of this Second Amendment to Expense Support Agreement the term shall exclude any Distributions made on Restricted Stock and any other Common Shares held by the Advisor. 







 Exit Event – shall mean a Liquidity Event, or a Sale of all or substantially
all of the assets of the Company in a single or series of transactions. 
 Exit Event Consideration – shall mean the Net
Sales Proceeds or other consideration to be received or received by the Stockholders in connection with an Exit Event, which may consist in whole or in part of money or other property, including shares of stock in, and/or other securities of, any
other corporation or other entity. 
 Good Reason – shall have the meaning ascribed to such term in the Advisory
Agreement. 
 Invested Capital – shall have the meaning ascribed to such term in the Advisory Agreement; provided,
however, that for purposes of this Second Amendment to Expense Support Agreement the term shall exclude Invested Capital, if any, relating to Restricted Stock and any other Common Shares held by the Advisor. 

Liquidity Event– shall have the meaning ascribed to such term in the Advisory Agreement. 

Net Sales Proceeds – shall have the meaning ascribed to such term in the Advisory Agreement. 

Priority Return– shall have the meaning ascribed to such term in the Advisory Agreement; and for avoidance of doubt, does
not included shares of Restricted Stock or any other Common Shares held by the Advisor. 
 Restricted Stock – shall have
the meaning ascribed to such term in the Expense Support Agreement. 
 Sale – shall have the meaning ascribed to such
term in the Advisory Agreement. 
 Stockholders – shall have the meaning ascribed to such term in the Advisory Agreement;
provided, however, that for purposes of this Second Amendment to Expense Support Agreement the term shall exclude the Advisor. 

2.       Amendment to Section 3 of the Expense Support Agreement. The Parties hereby amend and
restate Section 3 of the Expense Support Agreement in its entirety; and Section 3 as amended and restated shall henceforth read as follows: 
  

	 	“3)	Vesting; Forfeiture. 

 (a) Exit Event. Except as otherwise
provided in Section 3(b), below, the Restricted Stock shall vest immediately prior to or upon the occurrence of an Exit Event in which, and only to the extent by which, (A) the sum of (i) the
Exit Event Consideration, or other value attributable to the Common Shares of the Stockholders as a result of the Exit Event, plus (ii) total Distributions declared from the Company’s inception through the effective date of
the Exit Event, exceeds (B) the sum of (i) Invested Capital, plus (ii) the total Distributions required to pay a Priority Return to the Stockholders from the Company’s inception
through the effective date of the Exit Event. All issued and outstanding shares of Restricted Stock that do not so vest in connection with an Exit Event shall be immediately and permanently forfeited. 

(b) Termination of the Advisory Agreement. 

  
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 (1)      Without Cause. In the event the Advisory Agreement
is terminated or not renewed by the Company without Cause prior to an Exit Event, the Restricted Stock will immediately vest as of the effective date of such termination (an “Undue Termination”), provided that, and only to
the extent by which, (A) the sum of (i) Board’s most recent determination of net asset value per share of the Common Shares multiplied by the number of Common Shares issued and outstanding and held of
record by the Stockholders, plus (ii) total Distributions declared from the Company’s inception through the effective date of the Undue Termination, exceeds (B) the sum of
(i) Invested Capital, plus (ii) the total Distributions required to pay a Priority Return to the Stockholders from the Company’s inception through the effective date of the Undue Termination. All issued and
outstanding shares of Restricted Stock that do not so vest in connection with an Undue Termination of the Advisor shall be immediately and permanently forfeited. 

(2)      For Cause. In the event the Advisory Agreement is terminated or not renewed by the Company for
Cause prior to an Exit Event, all of the issued and outstanding shares of the Restricted Stock shall be immediately and permanently forfeited. 

(3)      Without Good Reason. In the event the Advisory Agreement is terminated or not renewed by the
Advisor without Good Reason prior to an Exit Event, all of the issued and outstanding shares of the Restricted Stock shall be immediately and permanently forfeited. 

(c)      The Board’s good faith determination of the excess amount over the thresholds, and
the vesting or forfeiture of the Restricted Stock, in whole or in part, pursuant to Section 3(a) or Section 3(b)(1), above, shall be final and binding upon the Parties. 

3.      Deletion of Section 4 of the Expense Support Agreement. The provisions of
Section 4 of the Expense Support Agreement have been amended and restated and incorporated into the amendment and restatement of Section 3, as above, and accordingly, Section 4 of the Expenses Support Agreement is
hereby deleted in its entirety; and shall hereafter read as follows: 
 “4)      [RESERVED]” 

4.      Amendment to Section 5 of the Expense Support Agreement. The Parties hereby amend and restate
Section 5 of the Expense Support Agreement in its entirety; and Section 5 as amended and restated shall henceforth read as follows:: 

“5)      Certain Restrictions Prior to Vesting. Prior to the vesting of the
Restricted Stock pursuant to Section 3, the Advisor shall not assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or any of the rights relating thereto; and any such transfer or encumbrance or
any attempt to transfer or encumber the Restricted Stock or the rights relating thereto shall be wholly ineffective and void ab initio.” 

  
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 5.      Terms. All other terms and conditions as contained
in the Expense Support Agreement shall remain unchanged and will continue to bind the Parties with respect to the transaction as contemplated therein. 

Signature Page Follows. 

  
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 IN WITNESS WHEREOF, the Parties have caused this Second Amendment to Expense
Support Agreement to be signed by their respective officers thereunto duly authorized, as of the day and year first above written. 
  

			
	CNL HEALTHCARE PROPERTIES, INC.
		
	 By:
	 	/s/ Stephen H. Mauldin
	Name:	 	Stephen H. Mauldin
	Title:	 	Chief Executive Officer


  

			
	CNL HEALTHCARE CORP.
		
	 By:
	 	/s/ Holly J. Greer
	Name:	 	Holly J. Greer
	Title:	 	Senior Vice President



  
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