# EDGAR Filing Document

**Accession Number:** 0002066337
**File Stem:** 0001999371-25-007032
**Filing Date:** 2025-6
**Character Count:** 1505237
**Document Hash:** fca04de191e6bb3b5e51f40b0731d605
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001999371-25-007032.hdr.sgml**: 20250602

**ACCESSION NUMBER**: 0001999371-25-007032

**CONFORMED SUBMISSION TYPE**: 10-12G

**PUBLIC DOCUMENT COUNT**: 21

**FILED AS OF DATE**: 20250602

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CNL Strategic Residential Credit, Inc.
- **CENTRAL INDEX KEY:** 0002066337

**ORGANIZATION NAME:**
- **EIN:** 333001463
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-12G
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56755
- **FILM NUMBER:** 251016222

**BUSINESS ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVE
- **STREET 2:** SUITE 1400
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801
- **BUSINESS PHONE:** 4076501000

**MAIL ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVE
- **STREET 2:** SUITE 1400
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

 **Washington, D.C. 20549** 

**FORM 10**

**GENERAL FORM FOR REGISTRATION OF SECURITIES**

**PURSUANT TO SECTION 12(b) OR 12(g) OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

**CNL Strategic Residential CREDIT, INC.** 

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Maryland**<br> (State or other jurisdiction of<br> incorporation or organization) | &nbsp;&nbsp;**33-3001463**<br> (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;**CNL Center at City Commons** <br> **450 South Orange Avenue, Suite 1400**<br> **Orlando, Florida** <br> (Address of principal executive offices) | &nbsp;&nbsp;**32801**<br> (Zip Code) |

---

Registrant's telephone number including area code **(407) 650-1000**

***with copies to***

**Jason D. Myers, Esq.**

**Tae Ho Cho, Esq.**

**Clifford Chance US LLP**

**Two Manhattan West**

**375 9<sup>th</sup> Avenue**

**New York, New York 10001**

Securities to be registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Title of each class to be so registered** | &nbsp;&nbsp;**Name of each exchange on which each**<br> **class is to be registered** |

---

Securities to be registered pursuant to Section 12(g) of the Act:

**<u>Common stock, $0.001 par value</u>**

(Title of class)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [EXPLANATORY NOTE](#cnlrcred1012ga001) | 1 |
| [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#cnlrcred1012ga002) | 3 |
| [ITEM 1. BUSINESS](#cnlrcred1012ga003) | 7 |
| [ITEM 1A. RISK FACTORS](#cnlrcred1012ga004) | 57 |
| [ITEM 2. FINANCIAL INFORMATION](#cnlrcred1012ga005) | 102 |
| [ITEM 3. PROPERTIES](#cnlrcred1012ga006) | 106 |
| [ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#cnlrcred1012ga007) | 107 |
| [ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS](#cnlrcred1012ga008) | 108 |
| [ITEM 6. EXECUTIVE COMPENSATION](#cnlrcred1012ga009) | 112 |
| [ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE](#cnlrcred1012ga010) | 113 |
| [ITEM 8. LEGAL PROCEEDINGS](#cnlrcred1012ga011) | 120 |
| [ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS](#cnlrcred1012ga012) | 121 |
| [ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES](#cnlrcred1012ga013) | 126 |
| [ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED](#cnlrcred1012ga014) | 127 |
| [ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS](#cnlrcred1012ga015) | 141 |
| [ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#cnlrcred1012ga016) | 143 |
| [ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES](#cnlrcred1012ga017) | 144 |
| [ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS](#cnlrcred1012ga018) | 145 |

---

**EXPLANATORY NOTE**

CNL Strategic Residential Credit, Inc. is filing this Registration Statement on Form 10 (this "**Registration Statement**") with the Securities and Exchange Commission (the "**SEC**") under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), to register under Section 12(g) of the Exchange Act and comply with applicable requirements thereunder.

We have filed this Registration Statement with the SEC under the Exchange Act on a voluntary basis to provide current information to holders of our shares.

When used in this Registration Statement, the following terms shall have the meanings set forth below, except where the context suggests otherwise:

● "**we**," "**us**," "**our**" and our "**company**" refer to CNL Strategic Residential Credit, Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise;

● "**Advisor**" refers to CNL Residential Credit Manager, LLC, a Delaware limited liability company;

● "**Advisors**" refers to the Advisor and the Sub-Advisor, collectively;

● "**Balbec**" refers to Balbec Capital, L.P., a Delaware limited partnership;

● "**CNL**" refers to CNL Financial Group, LLC;

● "**founder shares**" refer to the Class FA shares;

● "**Managing Dealer**" refers to CNL Securities Corp., a Florida corporation;

● "**non-founder shares**" refers to, collectively, Class T shares, Class D shares, Class I shares and Class A shares;

● "**Other Balbec Accounts**" refers to investment funds, partnerships, joint ventures, real estate investment trusts ()"**REITs** "), vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by Balbec or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with Balbec or its affiliates side-by-side or additional general partner investments with respect thereto);

● "**Other CNL Accounts**" refers to investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by CNL or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with CNL or its affiliates side-by-side or additional general partner investments with respect thereto);

● "**shares**" refers to shares of our common stock, currently classified as Class T common stock, $0.001 par value per share (the "**Class T shares** "), Class D common stock, $0.001 par value per share (the "**Class D shares** "), Class I common stock, $0.001 par value per share (the "**Class I shares** "), Class A common stock, $0.001 par value per share (the "**Class A shares** "), Class FA common stock, $0.001 par value per share (the "**Class FA shares**") and Class E common stock, $0.001 par value per share (the "**Class E shares** "); and

● "**Sub-Advisor**" refers to Balbec Capital Management, L.P., a Delaware limited partnership.

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the "**JOBS Act**").

This Registration Statement does not constitute an offer of securities of our company or any other CNL entity or Balbec entity. Once this Registration Statement has been deemed effective, we will be subject to the requirements of Section 13(a) of the Exchange Act, including the rules and regulations promulgated thereunder, which will require us, among other things, to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act. Additionally, we will be subject to the proxy rules in Section 14 of the Exchange Act and we, directors, executive officers, and principal stockholders will be subject to the reporting requirements of Sections 13 and 16 of the Exchange Act.

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Some of the statements in this Registration Statement constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Registration Statement may include statements as to:

● our future operating results;

● our business prospects and the prospects of the assets in which we may invest;

● the impact of the investments that we expect to make;

● our ability to raise sufficient capital to execute our investment strategy;

● our ability to source adequate investment opportunities to efficiently deploy capital;

● our expected financing arrangements;

● the effect of global and national economic and market conditions generally upon our operating results, including, but not limited to, changes with respect to inflation, interest rate changes and supply chain disruptions, and changes in government rules, tax policy, government agencies, regulations and fiscal and trade policies;

● the adequacy of our cash resources, financing sources and working capital;

● the timing and amount of cash flows, distributions and dividends, if any, from our investments;

● our contractual arrangements and relationships with third parties;

● actual and potential conflicts of interest with the Advisor, the Sub-Advisor or any of their respective affiliates;

● the dependence of our future success on the general economy and its effect on the assets in which we may invest;

● our use of financial leverage;

● the ability of the Advisor and the Sub-Advisor to locate suitable investments for us and to manage and administer our investments;

● the ability of the Advisor, the Sub-Advisor or their respective affiliates to attract and retain highly talented professionals;

● our ability to structure investments in a tax-efficient manner and the effect of changes to tax legislation and our tax position; and

● the tax status of the assets in which we may invest.

In addition, words such as "may," "will," "should," "target," "project," "estimate," "continue," "anticipate," "believe," "expect" or "intend" or the negatives thereof or other variations thereon or comparable terminology indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Registration Statement involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "*Item 1A. Risk Factors*" and elsewhere in this Registration Statement. Other factors that could cause actual results to differ materially include:

● changes in the economy, particularly those affecting the real estate industry;

● risks associated with possible disruption in our operations or the economy generally due to terrorism, war and military conflicts, natural disasters and climate-related risks, epidemics, pandemics, other public health crises or other events having a broad impact on the economy;

● adverse conditions in the areas where our investments or the properties underlying such investments are located and local real estate conditions;

● our portfolio may be concentrated in real estate credit assets and certain geographies, and, as a consequence, our aggregate return may be substantially affected by adverse economic or business conditions affecting that particular type of asset or geography;

● limitations on our business and our ability to satisfy requirements to maintain our exclusion from registration under the Investment Company Act of 1940, as amended (the "**Investment Company Act** "), or to maintain our qualification as a REIT for U.S. federal income tax purposes;

● since there is no public trading market for our shares, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides stockholders with the opportunity to request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of our shares that have been requested to be repurchased in any particular calendar quarter in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may make exceptions to, modify and suspend our share repurchase plan if, in its reasonable determination, it deems such action to be in our best interest. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid;

● distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds, the sale of our assets, cash resulting from expense support from the Advisor and the Sub-Advisor and repayments of our real estate debt investments, and we have no limits on the amounts we may fund from such sources;

● the purchase and repurchase prices for our shares are generally based on our prior month's net asset value ()"**NAV**") and are not based on any public trading market;

● our ability to raise additional funds to enable us to make additional investments and diversify the risk profile of our portfolio;

● our ability to capitalize on potential investment opportunities on attractive terms;

● adverse changes in the real estate and real estate capital markets could negatively impact our performance by making it more difficult for borrowers of our mortgage loans to satisfy their debt payment obligations, which could result in losses on our loan investments and/or make it more difficult for us to generate consistent or attractive risk-adjusted returns;

● our ability to accurately identify or adequately evaluate potential risks in volatile investing environments with limited market liquidity or price transparency;

● increased competition from entities engaged in mortgage lending and/or investing in assets similar to ours may limit our ability to acquire desirable loans and investments or dispose of investments, and could also affect the yields of these investments and have a material adverse effect on our business, financial condition and results of operations;

● future changes in laws or regulations and conditions in our operating areas;

● the incurrence of contingent liabilities as a result of our investments, including our assumption of default risk or other third-party risks;

● our ability to profitably execute securitization transactions;

● our use of financing arrangements, seller financing, secured and unsecured leveraged and other one-off financing solutions, could subject us to financial covenants and other covenants that could restrict our operations;

● our ability to forecast correlations between the value of our portfolio and the direction of exchange rates, interest rates and the price of securities in order to effectively or appropriately mitigate risks associated with our investments;

● risks associated with our hedging program, including our use of options and forward trading;

● defaults by borrowers in paying debt service on outstanding indebtedness;

● certain risks associated with limitations on our remedies under bankruptcy laws;

● system failures and cybersecurity breaches;

● substantial compliance costs that may be required to meet the constantly evolving legal and regulatory landscape for data protection and privacy;

● potential misconduct and unauthorized conduct from third-party providers;

● our ability to maintain our qualification as a REIT requires us to annually distribute at least 90% of our taxable income, and therefore, we may not be able to fund future capital needs, including financing for acquisitions, from our operating cash flow, and may need to rely on third-party sources for capital;

● compliance with state and local laws, statutes, regulations and ordinances relating to pollution, the protection of the environment and human health and safety;

● risks associated with joint ventures;

● risks associated with our relationship with the Advisor and the Sub-Advisor and their respective affiliates; and

● changes to U.S. federal income tax laws.

Although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Registration Statement should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this Registration Statement. Moreover, we assume no duty and do not undertake to update the forward-looking statements.

**SUMMARY RISK FACTORS**

The following is only a summary of the principal risks that may adversely affect our business, financial conditions and results of operations and cash flows. The following should be read in conjunction with the complete discussion of risk factors we face, which are set forth below under "*Item 1A. Risk Factors*."

Some of the more significant risks relating to our business, our private offering and investment in shares of our common stock include:

● We have no prior operating history or experience operating as a REIT and there is no assurance that we will achieve our investment objectives.

● Since there is no public trading market for our shares, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan will provide stockholders with the opportunity to request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may modify or suspend our share repurchase plan if it deems such action to be in our best interests and the best interest of our stockholders. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid.

● While we intend to comply with the REIT distribution requirement, we cannot guarantee that we will make distributions, and if we do, we may fund such distributions from sources other than cash flow from operations, including, without limitation, from borrowings, the sale of or repayment under our assets or expense support from the Advisor and the Sub-Advisor, and we have no limits on the amounts we may pay from such sources.

● Beginning in the first full calendar month following the initial closing of Class FA shares, the purchase and repurchase price for Class FA shares, Class A shares, Class T shares, Class D shares, Class I shares and Class E shares will generally be based on our prior month's NAV and will not be based on any public trading market. While there will be independent valuations of our residential mortgage loans and other assets by our independent valuation advisor, the overall valuation of our investments is inherently subjective, and our NAV may not accurately reflect the actual price at which our assets could be liquidated on any given day.

● We have no employees and are dependent on the Advisor and the Sub-Advisor (subject to the oversight of our board of directors and the Advisor) to conduct our operations.

● The Advisors will face conflicts of interest as a result of, among other things, the allocation of investment opportunities, the allocation of time of their investment professionals and the substantial fees that we will pay to the Advisors and their affiliates.

● Our shares will not be listed on an exchange or quoted through a national quotation system for the foreseeable future, if ever. Therefore, if you purchase our shares, you will have limited liquidity and may not receive a full return of your invested capital if you sell your shares.

● Our private offering is a "blind pool" offering and thus investors will not have the opportunity to evaluate our investments before we make them.

● Our private offering is a "best efforts" offering. If we are not able to raise a substantial amount of capital in the near term, our ability to achieve our investment objectives could be adversely affected.

● There are limits on the ownership and transferability of our shares. See *"Item 11. Description of Registrant's Securities to be Registered—Restrictions on Ownership and Transfer."* 

● If we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease.

**ITEM 1. BUSINESS.**

**Our Company**

We are a newly formed real estate finance company. Our investment strategy is to acquire, finance and manage a diversified portfolio of primarily U.S. performing and re-performing whole mortgage loans, mortgage servicing rights (**"MSRs**") and residential mortgage-backed securities ("**RMBS**"). Our overall objective is to generate attractive risk-adjusted returns with high current income for our stockholders, through cash distributions and capital appreciation, across interest rate and credit cycles.

We were formed as a Maryland corporation on January 21, 2025. We intend to conduct a continuous private offering of our shares in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the "**Securities Act**"), to investors who are accredited investors (as defined in Regulation D under the Securities Act) (our "**private offering**").

We intend to elect and qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "**Internal Revenue Code**") for U.S. federal income tax purposes and generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute our net taxable income to our stockholders and maintain our qualification as a REIT. We also operate our business in a manner intended to allow us to remain excluded from registration as an investment company under the Investment Company Act. Our principal office is located at 450 South Orange Avenue, Suite 1400, Orlando, Florida, 32801.

**The Advisor and the Sub-Advisor**

We are externally managed by the Advisor under an advisory agreement (as amended or restated from time to time, the "**Advisory Agreement**"), pursuant to which the Advisor is responsible for the overall management of our activities. The Advisor is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "**Advisers Act**"). The Advisor is controlled by CNL, a private investment management firm specializing in alternative investment products. Anchored by over 50 years of investing in relationships, CNL or its affiliates have formed or acquired companies with more than $36 billion in assets. Performance-driven, CNL strives to achieve investment returns by identifying emerging trends, accessing capital through its national distribution channels, and investing shareholder capital in a variety of real estate, credit and private capital investment products. Over its history, CNL has invested through various market cycles in a broad range of industries, asset classes and geographies. Its sponsorship and management of a wide range of investment programs have fostered experience investing in and lending to companies operating in the retail, restaurant, health care, hotel, leisure, recreation, financial services and insurance industries. CNL's disciplined investment approach concentrates on underserved, undercapitalized markets. By championing a long-term perspective that concentrates on building partnerships that extend beyond one transaction or one idea, CNL has developed a broad network of business relationships, which we will have access to and from which we will benefit. CNL partners with prominent investment organizations to provide shareholders access to a distinctive platform of products.

The Advisor has engaged the Sub-Advisor under a sub-advisory agreement (as amended or restated from time to time, the "**Sub-Advisory Agreement**"), pursuant to which the Sub-Advisor is responsible for the day-to-day management of our assets. The Sub-Advisor is registered as an investment adviser under the Advisers Act. The Sub-Advisor is an affiliate of Balbec, a global private investment firm with deep experience in sourcing, acquiring and managing credit investments. Since its founding in 2010, Balbec has deployed over $23 billion globally through its funds and investment vehicles, seeking to deliver consistent, risk-adjusted returns to investors and long-term partners across asset-based credit strategies. Balbec is a direct investor in residential and commercial mortgage loans at all stages of performance, MSRs, and select consumer and alternative credit assets. Leveraging its proprietary technology and transaction management platform, Balbec efficiently executes highly granular transactions, enabling the firm to serve a broader range of counterparties and generate returns for investors by applying institutional execution standards to inefficient, underserved or fragmented markets. The Sub-Advisor is managed by Charles Rusbasan, Philip Daniels, Jeff Padden, Peter J. Troisi and Christina Houghton (collectively, the "**Balbec Management Team**").

We believe we will benefit from the Advisor's and the Sub-Advisor's combined business and industry-specific knowledge and the Sub-Advisor's transaction expertise and acquisition capabilities. The Sub-Advisor is responsible for implementing our investment strategy, including the day-to-day monitoring and management of our assets, identifying potential opportunities for investments and exercising investment discretion with respect to the origination, acquisition and disposition of our investments or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by us or any of our subsidiaries consistent with our business objectives and policies and in connection with any borrowings proposed to be undertaken by us. The Sub-Advisor is also responsible for analyzing and conducting due diligence on prospective assets and selecting investments for acquisition and disposition consistent with our investment guidelines. To facilitate communication and coordination, the Advisor and the Sub-Advisor intend to hold regular meetings to plan and discuss our business strategy, current market developments and strategic goals. Our board of directors, including a majority of our independent directors, oversees and monitors the performance of our business. See "*—The Advisory Agreement*" and "*—The Sub-Advisor and Sub-Advisory Agreement*" and "*—The Administrative Services Agreement*" for additional information relating to the Advisory Agreement, the Sub-Advisory Agreement and the Administrative Services Agreement, respectively.

**Investment Objectives**

Our investment objectives are to construct a diversified residential credit portfolio that will enable us to:

● provide current income in the form of regular, stable cash distributions to achieve an attractive distribution yield;

● preserve and protect invested capital by focusing on residential credit assets that are primarily amortizing and thus provide current cash-flow; and

● mitigate downside risk through conservative loan-to-value ()"**LTV**") ratios and effectively manage any interest rate and credit sensitivities.

We cannot assure you that we will achieve our investment objectives. See "*Item 1A. Risk Factors*."

**Investment Strategy**

Our specific investment strategy focuses on residential credit assets, which include residential whole mortgage loans, MSRs and RMBS. We intend to acquire, finance and manage a diversified portfolio consisting primarily of residential credit assets, including single-family whole mortgage loans that are considered non-qualifying mortgages ("**Non-QM**"), "scratch and dent," re-performing mortgage loans, debt service coverage ratio ("**DSCR**") mortgage loans, and other residential whole mortgage loans, as well as MSRs, RMBS, and other ancillary residential credit products. Our residential credit assets are expected to be located across the United States. Our investments may be in the form of whole mortgage loan purchases, joint ventures or co-investments, including co-investments with affiliates of Balbec or third parties, purchases of securities, trust certificates, financing and/or participation agreements, forward contracts, securitization vehicles, or loan originations and/or refinancings.

Subject to maintaining our qualification as a REIT under the Internal Revenue Code and maintaining our exclusion from regulation as an investment company under the Investment Company Act, we also expect to utilize various derivative instruments and other hedging instruments to mitigate interest rate risk. For example, we may enter into hedging transactions with respect to interest rate exposure on one or more of our assets or liabilities. Any such hedging transactions could take a variety of forms, including the use of derivative instruments such as interest rate swap contracts, index swap contracts, interest rate cap or floor contracts, futures or forward contracts.

We believe that our structure as a perpetual-life REIT will allow us to originate, acquire, finance and manage our portfolio of assets in an active and flexible manner. We believe the structure is advantageous to our stockholders, as we are not limited by a pre-determined operational period and the need to liquidate assets, potentially in an unfavorable market, to satisfy a liquidity event at the end of that period.

We believe that pursuing residential credit assets that have collateral backing each asset comprised of income generating single asset or pools of diversified credit assets, often residential mortgages, provides us a potential advantage over other alternative credit vehicles with more speculative or overleveraged collateral. Furthermore, we believe our ability to regularly acquire assets at a discount to their intrinsic value due to an extracted illiquidity premium by aggregating small positions provides us a potential competitive advantage over other alternative credit vehicles who invest without an identified discount. We also believe that residential mortgages, as self-liquidating and amortizing assets, provide an attractive path for an eventual exit of an asset. Finally, we believe the intensive diligence processes required for our investment strategy (such as the processes performed by the Sub-Advisor to underwrite assets as discussed below) creates a barrier to entry for competitors who do not have sufficient experience or expertise.

**Target Assets**

We intend to invest in, purchase, lend against, or otherwise gain economic exposure to the types of assets described below that are presently cash flowing or expected to achieve cash flow levels that the Sub-Advisor believes will meet our investment return targets and time horizons. These assets will likely be purchased or contracted with banks, non-bank mortgage originators and other financial institutions, investment funds and government-sponsored entities ("**GSEs**").

Our target assets will include, but not limited to, the following types of residential credit assets:

●  ***Residential whole mortgage loans*** that are considered:

○ *Non-QM*. A Non-QM loan is a mortgage loan that does not meet the standards set by the U.S. Consumer Financial Protection Bureau (the "**CFPB**") for "qualified mortgages" ()"**QM**") that comply with the Ability-to-Repay rules under the Truth-in-Lending Act (the "**ATR rules**") and related guidelines of the CFPB. These Non-QM loans are designed to offer flexibility for borrowers who may not meet traditional mortgage criteria, such as those with self-employment income, variable incomes, or past credit challenges. We expect our focus on Non-QM loans to be on first lien residential mortgage loans with average FICO scores above 700 and average LTV less than 80%.

○ *"Scratch and dent."* A "scratch and dent" loan is a mortgage loan that was originally underwritten with the intent of being delivered to a GSE, such as the Federal Home Loan Mortgage Corporation ()"**Freddie Mac**") or the Federal National Mortgage Association ()"**Fannie Mae**") but is deemed non-conforming or otherwise undeliverable to the GSE due to an underwriting exception or other factor. We expect our focus on "scratch & dent" loans to be on first lien residential mortgage loans with average FICO scores above 700 and average LTV less than 80%.

○ *Re-performing mortgage loans*. A re-performing mortgage loan is a mortgage loan that experienced a delinquency in the past but has resumed payments either organically or through a loan modification.

○ *DSCR mortgage loans*. A DSCR mortgage loan is a form of Non-QM loan that is typically utilized by investment property investors whereby the underwriting is primarily based on the property's rental income and resulting debt service coverage ratio to afford their mortgage payments.

○ We may invest opportunistically in select other residential whole mortgage loans.

●  ***MSRs*** . MSRs represent rights to service mortgage loans, which involves activities such as collecting mortgage payments, escrowing, and paying taxes and insurance premiums and forwarding principal and interest payments to the mortgage lender. In return for providing these services, the holder of an MSR is entitled to receive a servicing fee, typically specified as a percentage (expressed in basis points) of the serviced loan's unpaid principal balance. An MSR is comprised of two components: a base fee and an "**excess MSR**." The base fee is the amount of compensation for the performance of servicing duties (including advance obligations), and the excess MSR is the amount that exceeds the base fee. We anticipate investing in both base fee and excess MSR components. Such investments can also serve as a hedge against rising interest rates.

●  ***RMBS*** . RMBS means mortgage-backed securities that are secured by interests in a pool of mortgage loans secured by residential properties. RMBS may be senior, subordinate, interest-only, principal-only, investment-grade, non-investment grade, or unrated. We expect our focus in RMBS to be on "**non-Agency RMBS**," or RMBS issued by private issuers rather than a GSE.

The allocation among our target assets will depend on prevailing market conditions at the time we invest and may change over time in response to changing market conditions, including with respect to interest rates and general economic and credit market conditions. We may, but do not presently intend to, make investments other than as described in this Registration Statement, but all within the real estate credit asset class. At all times, we intend to make investments in such a manner consistent with maintaining our qualification as a REIT under the Internal Revenue Code and maintaining our exclusion from registration under the Investment Company Act.

**Market Opportunity**

There are various key drivers that the Sub-Advisor believes create a compelling opportunity for its residential credit business and our investment strategy over the next several years, including:

● The Sub-Advisor has a substantial recurring pipeline of investment opportunities which it believes to be highly actionable for us;

● We believe that elevated interest rates provide an attractive entry point to source portfolios of below-par mortgage loans that will provide upside optionality should interest rates decrease;

● The Sub-Advisor is a highly seasoned and regular investor in the U.S. residential credit market and it believes it is one of the largest and most frequent issuers of RMBS affording significant investment opportunities and stature in the U.S. residential credit market;

● The U.S. residential mortgage market is substantial, with over $12.5 trillion in outstanding debt as of December 31, 2024 according to the Federal Reserve Bank of New York, which we believe provides substantial investment opportunities for us;

● While developed, the U.S. residential mortgage market is highly fragmented and dominated by non-bank lenders, which comprise a substantial portion of the Sub-Advisor's trading counterparties; and

● There are substantial barriers to entry to investing in our target assets. We believe the Sub-Advisor's internal capabilities will generate competitive advantages in the sourcing, due diligence, financing, and asset management of our target assets.

**Potential Competitive Strengths**

We believe that one of our primary potential competitive strength is our engagement of the Sub-Advisor and its affiliation with Balbec. As described below, we believe we will benefit from the Sub-Advisor's industry-specific knowledge and transaction expertise and acquisition capabilities:

● *Balbec's Seasoned Investment Team*. The Balbec Management Team is a group of seasoned investment professionals, who have worked together for many years, with most of them working together for over 16 years.

● *Captive Infrastructure.* Our target assets are considered to have high-barrier to entry and are due diligence intensive and asset management intensive. The Sub-Advisor has a captive master servicing team to aid in effecting our investment strategy, along with a Freddie-Mac approved MSR investment platform that is licensed to do business in all fifty states. The Sub-Advisor's MSR investment platform also has a pending application with Fannie Mae; however, there can be no assurance such application will be granted. We believe this captive infrastructure provides significant captive competitive advantages for us.

● *Flexible Investment Mandate*. We intend to pursue an opportunistic investment strategy which allows the Sub-Advisor to allocate capital in a manner that seeks to generate attractive risk-adjusted returns. Further, we expect to benefit from the Sub-Advisor's focus on smaller investment opportunities that are typically too small for many institutional investors.

● *Significant Experience with our Target Assets.* By virtue of its members' long-term position, reputation and relationships in the U.S. residential credit market (including with asset sellers and servicers), the Balbec Management Team's sourcing, acquisition, operating experience, and proprietary analytics represent important core competencies that are very difficult to replicate and can set the Balbec Management Team apart from other purchasers of our target assets.

● *Strong Relationship with Servicers and Counterparties*. The Sub-Advisor is expected to benefit from the Balbec Management Team's long-standing relationships and broad experience, in overseeing the sourcing, acquisition and servicing of our target assets while working with a wide variety of third-party servicers and partners, including work that can be leveraged to implement procedures and customized approaches that will optimize the efficiency of the servicing process for our benefit. We believe these activities can produce significant economies of scale and administrative efficiencies.

● *Complex and Creative Situations*. The Sub-Advisor believes that, because of its experience in the U.S. residential credit market, the Balbec Management Team has or can obtain the market data and knowledge needed to develop creative solutions for sellers and to incorporate various safeguards into purchase contracts.

● *Proprietary Technology and Analytics*. The Sub-Advisor has developed proprietary applications, databases, and valuation models which have been refined through years of experience investing in our target assets. As such, the Sub-Advisor intends to use a variety of internally developed due diligence applications and valuation and underwriting models depending on the asset type. These applications and valuation models use a combination of information provided by the seller of the asset, data licensed from third-party data providers and the Sub-Advisor's own empirical data sets, and these models are updated frequently.

**Balbec's Investment Approach and Investment Process**

***Investment Sourcing***

Balbec has invested in the residential mortgage market since 2013, has traded with over 500 counterparties and maintains strong relationships with non-bank mortgage originators and servicers, the GSEs, money center banks, regional and smaller banks, other investment managers, and portfolio sale advisors. The breadth of Balbec's strategies (*e.g.*, various types of residential whole mortgage loans, MSRs and RMBS) and ability to do both small and large transactions make Balbec a valued counterparty across seller-types. Balbec values its reputation as a dependable liquidity provider in the non-agency mortgage market and is proud to have completed multiple trades with 93% of its trading relationships as of March 31, 2025. We believe the Sub-Advisor will benefit from Balbec's overall experience and capabilities in sourcing, underwriting, and monitoring investments on our behalf.

***Investment Underwriting***

When evaluating a potential investment, Balbec models future cash flows using a proprietary loan-level model driven by expectations of borrower prepayments, delinquencies, defaults, and recoveries on defaults. Those expectations stem from loan-level attributes and Balbec's empirical data and analytics as well as third-party market data. On whole mortgage loan pools, Balbec also runs internally developed software that gathers third-party alternative data to identify further asset-level risks beyond seller-provided underwriting data, including property-specific data, to assess property condition. This microdata is used to avoid perceived portfolio risks and to adjust assumptions around default and default recovery.

As both the macroeconomy and borrower performance is not deterministic, Balbec runs multiple scenarios through its unlevered model by stress-testing several key variables, primarily borrower defaults, housing prices, interest rates, and credit spreads. Balbec seeks to minimize portfolio interest rate risk through investing in MSRs or taking negative duration positions in interest rate derivatives such as interest rate swaps or U.S. Treasury futures. In situations where it expects to partially monetize its investment through a future sale, Balbec undertakes a discounted cash flow analysis where forward cash flows are discounted by forward U.S. Treasury or swap rates plus a credit spread.

These sets of loan-level unlevered cash flows are then run through any applicable financing structures, including securitizations or repurchase agreements, to calculate levered cash flows and returns. As the sale of securitization bonds is subject to market pricing, Balbec will review historical RMBS pricing on its securitization shelf as well as others to make a best judgement on what the expected cost of debt will be and then add a credit spread cushion as protection against any market volatility between purchase of loans and their eventual securitization.

Balbec will then review the set of projected returns against the estimated probability of their occurrence and evaluate the investment's projected impact on the existing portfolio and whether its risk, return, and liquidity profiles are appropriate for us. Return streams that are more robust under a range of economic and borrower outcomes will be favored over less resilient alternatives.

***Pre-Close Due Diligence***

After initially underwriting a whole mortgage loan investment or MSR, the Sub-Advisor will seek to perform extensive due diligence prior to closing.

*Whole Mortgage Loans.* The Sub-Advisor intends to perform loan-level due diligence on all mortgages acquired on our behalf. Loan-level due diligence could include one or more of the following actions:

● Tax and title searches are run to confirm the mortgage lien position and the absence of any delinquent taxes or municipal items;

● Compliance with local and federal lending laws, loan file pay history, and servicing comments are reviewed by third-party diligence firms that are typically approved by the relevant rating agencies for our target assets;

● Unless the loan was originated with a recent appraisal, broker price opinions and supplemental property inspections will be obtained to confirm the value and condition of the underlying collateral;

● Loan collateral files are checked by a document custodian to ensure the mortgage is enforceable; and

● Balbec's asset management team will review all third-party findings and will order additional diligence vendor services as necessary.

*MSRs.* The Sub-Advisor intends to perform MSR due diligence across the entire portfolio prior to acquisition. MSR due diligence could include one or more of the following actions:

● Key servicing metrics such as delinquency rates, roll rates, loss mitigation activity, and call center performance are reviewed to assess historical servicing quality and borrower engagement;

● Third-party MSR valuation firms are engaged to provide independent cash flow modeling and stratified performance analysis, with inputs benchmarked against prevailing market assumptions;

● Servicing agreements and sub-servicer oversight protocols are examined for compliance with GSE guidelines and investor requirements;

● Data tapes are reconciled with servicing system extracts to validate loan-level accuracy, while escrow administration, remittance history, and default resolution timelines are reviewed to identify operational risk; and

● Balbec's asset management team will assess all diligence findings and coordinate additional reviews, including onsite servicing audits if material concerns arise.

***Post-Close Asset Management & Monitoring***

Balbec also has a captive asset management team of over 20 professionals that monitors investment performance, and, in the case of whole mortgage loan investments and MSRs, will perform servicing oversight and employ loss mitigation strategies to achieve better outcomes on non-performing loans. Balbec's asset management team reviews daily data from the portfolio's subservicers through proprietary asset management software, which is used to triage loans that pose greatest risk of loss. The asset management team has extensive experience with underwriting modifications, deferral agreements, repayment plans, and short sales to achieve better outcomes for both borrowers and investors.

***Diligence***

In sourcing potential assets for us, the Sub-Advisor expects to utilize various methodologies for valuing and otherwise evaluating the different types of assets it recommends to us, including the following:

● *Asset-level underwriting of mortgage loans or hard assets*. When purchasing mortgage loans secured by real estate, the Sub-Advisor will typically underwrite each mortgage and evaluate the expected cash flow to be derived from such mortgage loan as well as underwrite the value of the property and the borrower's ability to make timely payments on the mortgage loan. The Balbec Management Team will typically seek to purchase such mortgage loans at a discount to its projected recovery or a discount to its intrinsic value and use various methods and analytics in determining pricing and valuing the mortgage loans. Balbec will use its proprietary models to value collateral and identify attractive assets. Balbec will seek to capitalize on opportunistic transactions arising from its relationships in the U.S. residential credit market in order to leverage its execution and experience, which may include select opportunities in recently originated mortgage loans, re-performing mortgage loans, and "scratch and dent" mortgage loans. Upon an accepted bid, Balbec will generally engage third-party diligence providers to provide full reviews of the mortgage loans' origination, servicing compliance, tax and title review, review of loan collateral and mortgage loan, and property valuation.

● *Underwriting of asset-backed securities and MSRs*. The underwriting of MSR portfolios and other asset-backed securities entails levels of statistical analysis along with constructing constant pre-payment rate and constant default rate analysis which relies on Balbec's empirical data as well as inferred third-party data sources. Balbec expects to evaluate the seller's asset valuation and collateral and undertake an independent valuation of the asset through reputable third parties.

**Leverage**

We intend to regularly employ direct or indirect leverage in a variety of forms through borrowings, derivatives and other financial instruments. The greater our total leverage relative to our equity capital base, the greater magnitude of loss and gain due to market fluctuations in the values of our investments. Leverage can result in the total loss of capital. After we have raised substantial proceeds in our private offering and acquired a diversified portfolio of investments (the "**Ramp-Up Period**"), we expect our target leverage ratio to range between 75% and 85%, which will be dependent on the mix of assets in the portfolio.

If we conduct a public offering of our shares, our charter will preclude us from borrowing in excess of 300% of the value of our net assets, which is generally expected to approximate 75% of the aggregate cost of our investments before deducting loan loss reserves, other non-cash reserves and depreciation. However, we may exceed this limit if our board of directors, including a majority of our independent directors, approves each borrowing in excess of the limit and we disclose the justification for doing so to our stockholders. Our board of directors reviews our aggregate borrowings at least quarterly to ensure the amount remains reasonable in relation to our net assets and may from time to time modify our leverage policy in light of then-current economic conditions, relative costs of debt and equity capital, fair value of our assets, growth and acquisition opportunities or other factors they deem appropriate.

We expect the majority of our borrowings to be through repurchase facilities on a non-recourse and non-daily mark to market basis to facilitate the purchase of residential mortgage loans, with the ultimate objective of programmatically converting such borrowings into term financings through securitization. We believe that Balbec's PRPM securitization issuance shelf is one of the largest and most frequent issuers of RMBS in the United States, with over 70 securitizations issued since 2015. The securitizations provide off-balance sheet term funding on a fixed rate, non-recourse, and non-mark to market basis.

We may in the future obtain a credit facility in order to finance investments or pay expenses with borrowings. Financings may take various forms and may be entered into with lenders retained by us. In addition, we may directly or indirectly utilize seller financing when making investments and may be assigned existing indebtedness that is not prepayable.

**Temporary Investment Strategies**

During the Ramp-Up Period and/or during periods in which the Advisors determine that economic or market conditions are unfavorable to investors and a defensive strategy would benefit us, we may temporarily depart from our investment strategy. During these periods, subject to compliance with the Investment Company Act and our intended qualification as a REIT, we may expand or change our investment strategy and target assets, including by investing all or any portion of our assets in money market instruments; cash and other cash equivalents (such as high-quality short-term debt instruments, including commercial paper, certificates of deposit, bankers' acceptances, repurchase agreements, interest- bearing time deposits and credit rated corporate debt securities); U.S. government or government agency securities; and investment grade-rated corporate debt or asset-backed securities of U.S. or foreign entities, or investment grade rated debt securities of foreign governments or multi-national organizations. During these periods, we may also determine to pay down certain of our borrowings and have indebtedness below our target leverage ratio or we may borrow more to provide for additional liquidity causing us to exceed our target leverage ratio. It is impossible to predict when, or for how long, the Advisors will use these alternative strategies and such strategies may not be successful.

**Operating and Regulatory Structure**

***Our REIT Qualification***

To qualify for REIT status, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute at least 90% of our REIT taxable income, determined without regard for any deduction for dividends paid and excluding any net capital gain, to our stockholders. If we qualify as a REIT, we generally will not be subject to U.S. federal income tax on the REIT taxable income we distribute to our stockholders. Even if we qualify as a REIT, we may still be subject to some federal, state and local taxes on a certain portion of our income or property. If we fail to qualify as a REIT in any taxable year, including the current year, we will be subject to U.S. federal income tax at regular corporate rates and will not be eligible to elect to be treated as a REIT for the subsequent four years unless we qualify for certain relief provisions.

***Investment Company Act Considerations***

We intend to engage primarily in the business of investing in real estate and to conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act. Under the Investment Company Act, in relevant part, a company is an "investment company" if:

● under Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or

● under Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns, or proposes to acquire, "investment securities" having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the "40% test." The term "investment securities" generally includes all securities except U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exemption from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We intend to conduct our operations so that we and most of our wholly and majority-owned subsidiaries will comply with the 40% test. We will continuously monitor our holdings on an ongoing basis to determine compliance with this test. We expect that most, if not all, of our wholly owned and majority-owned subsidiaries will not be relying on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act. Consequently, interests in these subsidiaries (which are expected to constitute a substantial majority of our assets) generally will not constitute "investment securities." Accordingly, we believe that we and most, if not all, of our wholly and majority-owned subsidiaries will not be considered investment companies under Section 3(a)(1)(C) of the Investment Company Act.

In addition, we believe that we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we will not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we will be primarily engaged in non-investment company businesses related to real estate. We and our subsidiaries expect to be able to conduct their respective operations such that none of them will be required to register as an investment company under the Investment Company Act.

We will determine whether an entity is a majority-owned subsidiary of our company. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. The Investment Company Act defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We treat entities in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested that the SEC or its staff approve our treatment of any entity as a majority-owned subsidiary, and neither has done so. If the SEC or its staff was to disagree with our treatment of one or more subsidiary entities as majority-owned subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any adjustment in our strategy could have a material adverse effect on us.

If we or any of our wholly or majority-owned subsidiaries would fall within one of the definitions of "investment company," we intend to rely on the exemption provided by Section 3(c)(5)(C) of the Investment Company Act, which is available for entities "primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate." The SEC staff has taken the position that this exemption, in addition to prohibiting the issuance of certain types of securities, generally requires that at least 55% of an entity's assets must be comprised of mortgages and other liens on and interests in real estate, also known as "qualifying assets," and at least another 25% of the entity's assets must be comprised of additional qualifying assets or a broader category of assets that we refer to as "real estate-related assets" under the Investment Company Act (and no more than 20% of the entity's assets may be comprised of miscellaneous assets).

We will classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are based on specific factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than twenty years ago. No assurance can be given that the SEC or its staff will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exemption from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.

For purposes of determining whether we satisfy the 55%/25% test, based on the no-action letters issued by the SEC staff, we will treat our investments in joint ventures, which in turn invest in qualifying assets, as qualifying assets only if we have the right to approve major decisions by the joint venture; otherwise, they will be classified as real estate-related assets. We will not participate in joint ventures in which we do not have or share control to the extent that we believe such participation would potentially threaten our status as a non-investment company exempt from regulation under the Investment Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that are suitable for both us and one or more affiliates of the Advisor and the Sub-Advisor.

Qualifying for an exemption from registration under the Investment Company Act will limit our ability to make certain investments. For example, these restrictions may limit our and our subsidiaries' ability to invest directly in mortgage-backed securities that represent less than the entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed securities, non-controlling equity interests in real estate companies or in assets not related to real estate, however, we and our subsidiaries may invest in such securities to a certain extent.

Although we intend to monitor our portfolio, there can be no assurance that we will be able to maintain this exemption from registration.

A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the Section 3(c)(5)(C) exemption, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.

To the extent that the SEC or its staff provide more specific guidance regarding any of the matters bearing upon the definition of investment company and the exemptions to that definition, we may be required to adjust our strategy accordingly. If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act) and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan.

***Operating and Ownership Structure***

A privately placed, non-listed, perpetual-life REIT is a REIT whose shares are not listed for trading on a stock exchange or other securities market. We use the term "perpetual-life REIT" to describe an investment vehicle of indefinite duration, whose shares of common stock are intended to be sold by the REIT monthly on a continuous basis at a price generally equal to the REIT's prior month's NAV per share. The NAV of a perpetual-life REIT may be subject to volatility related to the value of its underlying assets.

In our perpetual-life structure, investors may request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in our discretion. While we may consider a liquidity event at any time in the future, we are not obligated by our charter or otherwise to effect a liquidity event at any time.

The following chart shows our current ownership structure and our relationship with the Advisor, Sub-Advisor and the Managing Dealer for our private offering as of the date of this Registration Statement.

![](cnlrcred1012g001.jpg)

**Our Board of Directors**

We operate under the direction of our board of directors. Our board of directors is currently comprised of five directors, three of whom are independent directors (as defined in our charter). Our board of directors has retained the Advisor and the Sub-Advisor to manage the origination, acquisition and dispositions of our investments, subject to our board of directors' supervision.

Each director will serve until his or her resignation, removal, death, or adjudication of legal incompetence or the election and qualification of his or her successor. Although the number of directors may be increased or decreased, a decrease may not shorten the term of any incumbent director. Any director may resign at any time or may be removed by the stockholders upon the affirmative vote of stockholders entitled to cast at least a majority of all the votes entitled to be cast generally in the election of directors. Unless there are no directors, in which case a vacancy on our board of directors may be filled by the stockholders, a vacancy on our board of directors resulting from any reason other than an increase in the number of directors may be filled by a vote of a majority of the remaining directors, even if such majority is less than a quorum. A vacancy on our board of directors resulting from an increase in the number of directors may be filled by a vote of a majority of the entire board of directors. A vacancy on our board of directors resulting from removal of a director by the stockholders may be filled by a vote of a majority of the remaining directors.

Our board of directors will generally meet quarterly or more frequently if necessary. Our directors are not required to devote all of their time to our business and are only required to devote the time to our business as their duties may require. Consequently, in the exercise of their duties as directors, our directors will rely heavily on the Advisor and the Sub-Advisor and on information provided by the Advisor and the Sub-Advisor. As part of our directors' duties, our board of directors will supervise the relationship between us, on the one hand, and the Advisor and the Sub-Advisor, on the other hand. Our board of directors is empowered to approve the payment of compensation to directors for services rendered to us.

Our board of directors has adopted written guidelines on investments and borrowings, the general terms of which are set forth in this Registration Statement. Our board of directors may revise these guidelines or establish further written guidelines on investments and borrowings and will monitor our administrative procedures, investment operations and performance. Our board of directors will periodically review our investment guidelines to determine that they are in our best interest.

**The Advisory Agreement**

Our board of directors at all times has oversight and policy-making authority, including responsibility for governance, financial controls, compliance and disclosure with respect to our company. Pursuant to the Advisory Agreement, our board of directors has delegated to the Advisor the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, strategy and guidelines, policies and limitations, subject to oversight by our board of directors. We believe that the Advisor has sufficient staff and resources as of the date of this Registration Statement so as to be capable of fulfilling the duties set forth in the Advisory Agreement.

***Services***

Pursuant to the terms of the Advisory Agreement, the Advisor is responsible for, among other things:

● serving as an advisor to us with respect to the establishment and periodic review of our investment guidelines and our investments, financing activities and operations;

● investigating, selecting and engaging such persons as the Advisor deems necessary to the proper performance of its obligations under the Advisory Agreement, including but not limited to consultants, accountants, correspondents, lenders, technical advisers, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, securities investment advisors, mortgagors, mortgage servicing companies, any and all agents for any of the foregoing, or other persons (including affiliates of the Advisor) acting in any capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services, including but not limited to entering into contracts in the name of us with any of the foregoing;

● consulting with our officers and our board of directors and assisting our board of directors in the formulation and implementation of our financial policies, and, as necessary, furnishing our board of directors with advice and recommendations with respect to the origination, acquisition and disposition of investments or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by us or any of our subsidiaries consistent with our business objectives and policies and in connection with any borrowings proposed to be undertaken by us;

● participating in the fair valuation process for investments pursuant to our valuation policy, including making supportable recommendations of fair values to us for all investments for which publicly observable prices are not available; and

● subject to the Advisory Agreement, on behalf of us, identifying potential opportunities for investments consistent with our investment objectives and policies, including but not limited to: (i) locating, analyzing, performing due diligence on and selecting potential investments; (ii) structuring and negotiating the terms and conditions of transactions pursuant to which originations, acquisitions and dispositions of investments will be made including, without limitation, the formation and qualification of wholly owned subsidiaries, securitizations of investments, joint ventures, and special purpose vehicles; (iii) arranging for financing and refinancing and making other changes in the investments or capital structure of, and disposing of, reinvesting the proceeds from the sale of, or otherwise dealing with originations, acquisitions or securitizations of investments; (iv) coordinating and managing operations of any co-investment interests held by us and conducting matters with co-investment partners; and (v) determining the composition of the investments, the nature and timing of the changes therein and the manner of implementing such changes.

The above summary is provided to illustrate the material functions which the Advisor will perform for us and it is not intended to include all of the services which may be provided to us by the Advisor or third parties.

***Term and Termination Rights***

The Advisory Agreement has a one-year term expiring March 10, 2026, subject to renewals by our board of directors for an unlimited number of successive one-year periods upon approval of a majority of our board of directors. The Advisory Agreement may be terminated:

● at the option of the Advisor immediately upon a Change of Control of our company;

● immediately by us for cause or upon the bankruptcy of the Advisor;

● upon 60 days' written notice without cause or penalty by a majority vote of our directors;

● in the event that we become regulated as an "investment company" under the Investment Company Act, with such termination deemed to have occurred immediately prior to such event; or

● upon 60 days' written notice by the Advisor.

"Change of Control" is defined in the Advisory Agreement and the Sub-Advisory Agreement to mean any event (including, without limitation, issue, transfer or other disposition of shares of our capital stock, merger, share exchange or consolidation) after which any "person" (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of our securities representing greater than 50% or more of the combined voting power of our then-outstanding securities; provided, that, a Change of Control shall not be deemed to occur as a result of any widely distributed public offering of our shares. "Cause" is defined in the Advisory Agreement to mean, if the termination or non-renewal of the Advisory Agreement is the result of (a) a member of the senior management team of the Advisor being convicted in a final, non-appealable determination by a court of competent jurisdiction or a government body or entering a plea of guilt or *nolo contendere* of any felony or a material violation of any federal or state securities laws, (b) willful breach of fiduciary duty by the Advisor as determined by a final, non-appealable decision by a court of competent jurisdiction, (c) a material breach of the Advisory Agreement which breach is not cured within 90 days of written notice given to the Advisor specifying in reasonable detail the nature of the alleged breach, or (d) an assignment of the Advisory Agreement (or deemed assignment under the Advisers Act) by the Advisor occurring and a majority of our independent directors not providing their consent to the assignment.

In the event the Advisory Agreement is terminated or its term expires without renewal, the Advisor will be entitled to receive each of its prorated management fee and total return incentive fee (the "**total return incentive fee**") through the date of termination. Such pro ration will take into account the number of days of any partial calendar month or calendar year for which the Advisory Agreement was in effect. In addition, upon the termination or expiration of the Advisory Agreement, the Advisor will cooperate with us and take all reasonable steps requested to assist our board of directors in making an orderly transition of the advisory function.

***Management Fee, Total Return Incentive Fee and Expense Reimbursements***

***Management Fee***. As compensation for its services provided pursuant to the Advisory Agreement, we will pay the Advisor a management fee that shall be calculated for each share class at an annual rate of (i) 1.25% of NAV for Class A shares, Class I shares, Class D shares and Class T shares (collectively, the "**non-founder shares**"), and (ii) 1.0% of NAV for the Class FA shares (the "**founder shares**") in each case, per annum and payable monthly in arrears and before giving effect to any accruals for the management fee, distribution and stockholder servicing fees and total return incentive fee. No management fee will be payable with respect to Class E shares. The management fee for a certain month shall be calculated on a class-by-class basis based on the NAV for each applicable Share class at the end of that month and shall be due and payable no later than 30 calendar days following the end of the applicable month.

***Total Return Incentive Fee****.* We will pay the Advisor the total return incentive fee that will be based on the Total Return to Stockholders for each share class of our company in any calendar year, payable annually in arrears. The total return incentive fee will be calculated and will accrue on a quarterly basis, to the extent that it is earned. We will perform a final reconciliation of the total return incentive fee calculation at the completion of each calendar year and the total return incentive fee will be due and payable to the Advisor no later than 90 calendar days following the end of the applicable calendar year. The total return incentive fee for each Share class is calculated as follows:

***Annual Preferred Return*.** No total return incentive fee will be payable with respect to a particular share class for any calendar year in which the Total Return to Stockholders of such share class for such calendar year does not exceed 6%, which is referred to as the "**Annual Preferred Return**." No total return incentive fee will be payable with respect to Class E shares.

<u>Non-Founder Shares</u>*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) 100% of the Total Return to Stockholders payable with respect to the non-founder shares, calculated for each share class based on the Total Return to Stockholders on non-founder shares, if any, that exceeds the Annual Preferred Return, but is less than or equal to 7.06% (the "**non-founder breakpoint**") in any calendar year. This portion of the total return incentive fee is referred to as the "**non-founder catch up**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) 15% of the Total Return to Stockholders with respect to each particular share class of non-founder shares, calculated for each share class based on the Total Return to Stockholders on non-founder shares, if any, that exceeds the non-founder breakpoint.

<u>Founder Shares</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) 100% of the Total Return to Stockholders payable with respect to the founder shares, calculated for each share class based on the Total Return to Stockholders on founder shares, if any, that exceeds the Annual Preferred Return, but is less than or equal to 6.86% (the "**founder breakpoint**") in any calendar year. This portion of the total return incentive fee is referred to as the "**founder catch up**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) 12.5% of the Total Return to Stockholders with respect to the founder shares, calculated for each share class based on the Total Return to Stockholders on founder shares, if any, that exceeds the founder breakpoint.

*Total Return to Stockholders*. For purposes of calculating the total return incentive fee, the Total Return to Stockholders means the investment return provided to stockholders, which will be calculated independently for each share class, and equals to, for all such shares outstanding during such applicable period, the sum of (i) the declared distributions per share over such applicable period plus (ii) change in NAV per share over the calendar year (or such other applicable period).

*High Water Mark*. For the purposes of calculating each Total Return to Stockholders, the change in NAV is subject to a High Water Mark. For purposes of this Agreement, the "High Water Mark" is equal to the highest asset value, for each share class of our company since inception, adjusted to account for any stock dividend, stock split, recapitalization or any other similar change in our capital structure or for any special distributions, provided such adjustment is approved by our board of directors. If, as of each calendar year end, the NAV for the applicable share class is (A) above the High Water Mark, then, for such calendar year, the Total Return to Stockholders calculation will include the increase in NAV for such share class in excess of the High Water Mark, and (B) below the High Water Mark, for such calendar year, (i) any increase in the per share NAV will be disregarded in the calculation of Total Return to Stockholders for such share class while (ii) any decrease in the per share NAV will be included in the calculation of Total Return to Stockholders for such share class. For the year ending December 31, 2025, the High Water Marks which will apply to the incentive fee calculation will be $24.75 for Class FA shares, $24.75 for Class A shares, $24.75 for Class T shares, $24.75 for Class D shares, and $24.75 for Class I shares.

*Expense Reimbursement*. Under the Advisory Agreement, subject to any reduction or deferral of such amounts required to be reimbursed pursuant to an Expense Support and Conditional Reimbursement Agreement (the "**Expense Support and Conditional Reimbursement Agreement**") with the Advisor and the Sub-Advisor, the Advisor is entitled to reimbursement of all costs and expenses incurred by it or its affiliates on our behalf, including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance with respect to such personnel, provided that the Advisor is responsible for the expenses related to any and all personnel of the Advisor who provide investment advisory services to us pursuant to the Advisory Agreement. We do not reimburse the Advisor for compensation it pays to our executive officers or other "Advisor Expenses" as defined in the Advisory Agreement. Without limiting the generality of the foregoing, costs eligible for reimbursement include for out-of-pocket costs and expenses the Advisor incurs in connection with the services it provides to us related to (1) legal, tax (including expenses related to tax advice), accounting, printing, mailing, distributing and subscription processing fees and other expenses attributable to our organization and preparation of this Registration Statement incurred by the Advisor (as described further below), (2) the actual cost of goods and services used by us and obtained from third parties, including fees paid to administrators, consultants, attorneys, technology providers and other services providers, and brokerage fees paid in connection with the origination, acquisition and/or sale of investments and securities, (3) expenses of acquiring, originating, managing and operating our investments, whether payable to an affiliate of the Advisor or a non-affiliated person, and (4) out-of-pocket expenses in connection with the selection, evaluation, structuring, acquisition, origination, financing and development of any assets, whether or not such investments are acquired. Such out-of-pocket costs and expenses will include expenses relating to compliance-related matters and regulatory filings relating to our activities (including, without limitation, expenses relating to the preparation and filing of reports to be filed with the U.S. Commodity Futures Trading Commission (the "**CFTC**") (if applicable), reports, disclosures, and/or other regulatory filings of the Advisor and its affiliates relating to our activities) and any expenses incurred outside of the ordinary course of business, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding and indemnification expenses as provided for in our organizational documents. Nothing contained herein shall be construed to restrict our right to hire our own employees or to contract for services to be performed by third parties.

We reimburse the Advisor and the Sub-Advisor, or their respective affiliates, for any organization and offering expenses associated with the offering of our shares that they incur on our behalf (including legal, accounting, printing, engraving, mailing and distribution costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including design and website expenses and the costs related to investor and broker-dealer sales meetings), reasonable bona fide due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, expense reimbursements for actual costs incurred by employees of a dealer manager in the performance of wholesaling activities, technology or financial technology services charges, charges of transfer agents, registrars, trustees, subscription processing, escrow holders, depositories and experts, and fees, expenses and taxes related to the filing, registration and qualification of the sale of the shares under federal and state laws but excluding upfront selling commissions, Managing Dealer fees and the distribution and stockholder servicing fee) as and when incurred.

Notwithstanding the foregoing, our reimbursement of any organization and offering expenses of the Advisor and the Sub-Advisor, or their respective affiliates, will be limited to 1.5% of the cumulative gross offering proceeds from our offerings. The Advisor and the Sub-Advisor will jointly and equally be responsible for the payment of the organization and offering expenses without recourse against or reimbursement by us unless and until, over time, the total organization and offering expenses paid to the Advisor and the Sub-Advisor and their respective affiliates do not exceed the 1.5% limit.

In addition to the management fees, the total return incentive fees and expense reimbursements, we have agreed to indemnify and hold harmless the Advisor and its affiliates performing services for us from specific claims and liabilities arising out of the performance of their obligations under the Advisory Agreement, subject to certain limitations.

**The Sub-Advisor and Sub-Advisory Agreement**

We and the Advisor have engaged the Sub-Advisor under the Sub-Advisory Agreement, pursuant to which the Sub-Advisor, subject to the Advisor's oversight, will be responsible for fulfilling certain of the services the Advisor is obligated to provide us under the Advisory Agreement. Specifically, the Sub-Advisor is responsible for implementing our investment strategy, including the day-to-day monitoring and management of our assets, identifying potential opportunities for investments and exercising investment discretion with respect to the origination, acquisition and disposition of our investments or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by us or any of our subsidiaries consistent with our business objectives and policies and in connection with any borrowings proposed to be undertaken by us. The Sub-Advisor is also responsible for investigating, selecting and engaging such persons as the Sub-Advisor deems necessary to the proper performance of its obligations under the Sub-Advisory Agreement. The Advisor retains ultimate responsibility for the performance of all of the matters entrusted to it under the Advisory Agreement. Pursuant to the Sub-Advisory Agreement, we will pay the Sub-Advisor 50% of the management fees and total return incentive fees earned under the Advisory Agreement. The Sub-Advisor can instruct us to pay its portion of the management fees or the total return incentive fees to the Sub-Advisor or to one of its designated affiliates. The term of the Sub-Advisory Agreement will continue so long as the Advisor remains our advisor pursuant to the Advisory Agreement and it may automatically be extended concurrently with the Advisory Agreement and upon approval of our board of directors. The Sub-Advisory Agreement may be terminated immediately (i) at the option of the Sub-Advisor upon a Change of Control of our company or termination of the Advisory Agreement; (ii) by the Advisor for "cause" on 60 days' written notice; or (iii) by the Sub-Advisor for a material breach of the agreement which remains uncured after 15 days' written notice, the bankruptcy of the Advisor, or upon 60 days' written notice by the Sub-Advisor. In the event the Sub-Advisory Agreement is terminated, the Sub-Advisor will be paid all accrued and unpaid fees and expense reimbursements payable to the Sub-Advisor prior to termination of the Sub-Advisory Agreement.

Under the Sub-Advisory Agreement, we are required to reimburse the Sub-Advisor for expenses reasonably incurred by the Sub-Advisor at the request of or on behalf of us or the Advisor, to the same extent as such expenses would be reimbursable to the Advisor under the Advisory Agreement had such expenses been incurred by the Advisor.

**The Administrative Services Agreement**

We have entered into an administrative services agreement (the "**Administrative Services Agreement**") with the Advisor, as the administrator (the "**Administrator**"). Under the terms of the Administrative Services Agreement, the Administrator performs or oversees on our behalf the performance of various administrative services that we require. The Administrator will be subject to review and oversight of our board of directors. Without limiting the generality of the foregoing, the Administrator will:

● provide administrative services to us, including but not limited to all services provided for in the Approved Budget (as defined in the Administrative Services Agreement);

● provide us with office facilities and equipment, and provide clerical, bookkeeping, general ledger accounting, fund accounting and recordkeeping services, legal services, investor services and shall provide all such other services, except investment advisory services, as the Administrator, subject to review by our board of directors, shall from time to time determine to be necessary or useful to perform its obligations under the Administrative Services Agreement;

● on our behalf, enter into agreements and/or conduct relations with custodians, depositories, transfer agents, sub-transfer agent services, distribution disbursing agents, the dividend reinvestment plan administrator, stockholder servicing agents, accountants, auditors, tax consultants, advisers and experts, investment advisers, compliance officers, escrow agents, attorneys, underwriters, managing dealer, brokers and dealers, investor custody and share transaction clearing platforms, financial technology platforms and service providers, marketing, sales and advertising materials contractors, public relations firms, investor account services, investor communication agents, printers, insurers, banks, independent valuers, and such other persons in any such other capacity deemed to be necessary or desirable by the Administrator and us, including engagement of CNL Capital Markets, LLC, an affiliate of the Administrator, to provide investor and capital markets operational services on our behalf;

● furnish advice and recommendations with respect to such other aspects of our business and affairs as the Administrator reasonably shall determine to be desirable; provided that nothing in the Administrative Services Agreement shall be construed to require the Administrator to, and the Administrator shall not pursuant to the Administrative Services Agreement, provide any advice or recommendation relating to the assets that we should acquire or dispose of or any other investment advisory services to us;

● assist us in the preparation of the financial and other records that we will maintain and the preparation, printing and dissemination of reports that we will furnish to stockholders, and, if any, reports and other materials filed with the SEC, and states and jurisdictions where any offering of the shares is registered and there is a duty to file information with one or more states on an ongoing basis;

● assist us in maintaining the registration of the shares under federal and state securities laws, as applicable, with respect to any offering and complying with all federal, state and local regulatory requirements applicable to us with respect to any offering and to our business activities (including the Sarbanes-Oxley Act of 2002, as amended (the "**Sarbanes-Oxley Act** ")), including with respect to any offering, preparing or causing to be prepared all supplements to any offering memorandum and financial statements and all reports and documents, if any, required under the Securities Act and the Exchange Act;

● advise and assist us, if applicable, with respect to the Sarbanes-Oxley Act compliance for us and our subsidiaries;

● assist us in calculating and publishing our NAV, oversee and administer programs for investor relations and communications, the preparation and filing of our tax forms and any necessary regulatory filings, and generally oversee and monitor the payment of our expenses and ensure that costs and expenses are within any applicable limitations set forth in our charter;

● from time to time, or at any time reasonably requested by our board of directors, make reports to our board of directors regarding the Administrator's performance of services to us under the terms of the Administrative Services Agreement;

● manage stockholder and/or marketing communications and meetings; and

● oversee the performance of sub-administrative and other professional services rendered to us by others.

For providing these services, facilities and personnel, we may pay third parties directly or reimburse the Administrator the costs and expenses of third parties for services provided to us. The Administrator will not be reimbursed for administrative services performed by it for our benefit. The Administrator has a fiduciary responsibility to us pursuant to the Administrative Services Agreement.

The Administrative Services Agreement shall remain in effect for one year, and thereafter shall continue automatically for successive annual periods; provided that such continuance is specifically approved at least annually by the vote of a majority of our independent directors. The Administrative Services Agreement shall automatically terminate upon termination of the Advisory Agreement. The Administrative Services Agreement may be terminated without the payment of any penalty, by either party upon 60 days' written notice. The decision to terminate or not renew the Administrative Services Agreement by us must be made by our board of directors. If the Administrative Services Agreement is terminated, we will pay the Administrator unpaid expense reimbursements, incurred prior to termination or non-renewal of the Administrative Services Agreement within 90 days after the effective date of such termination or non-renewal.

We will pay the Administrator an administrative services fee that shall be calculated at an annual rate of 0.25% per annum of the NAV for each share class. The administrative services fee is calculated and payable monthly in arrears and is calculated before giving effect to any accruals for the applicable management fees, distribution and stockholder servicing fees and/or total return incentive fees for such month.

We have agreed to indemnify and hold harmless the Administrator, any sub-administrator and their affiliates from and against all damages, liabilities, costs and expenses incurred by such parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding arising out of the performance of their obligations under the Administrative Services Agreement, subject to certain limitations.

**The Expense Support and Conditional Reimbursement Agreement** 

We have entered into the Expense Support and Conditional Reimbursement Agreement with the Advisor and the Sub-Advisor, pursuant to which each of the Advisor and the Sub-Advisor agrees to reduce the payment of management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Advisor and the Sub-Advisor under the Advisory Agreement and the Sub-Advisory Agreement, as applicable, to the extent that our annual regular cash distributions exceed our annual net operating income (with certain adjustments). The waiver of such fees and expenses that would otherwise be due to the Advisor and the Sub-Advisor reduces our related third-party expenses and allows us to use the income available to fund distributions from investment income or cash flow from operations from future periods.

The amount of such expense support is equal to the annual (calendar year) excess, if any, of (a) the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and paid (net of our distribution reinvestment plan) to stockholders minus (b) the available operating funds (the "**Expense Support Amount**"). "**Available operating funds**" means net operating income, as determined under GAAP, including realized capital gains and realized capital losses, but excluding all Conditional Waiver Amounts, Expense Support Amounts, any non-cash income items or expenses and any distribution and stockholder servicing fees. The Expense Support Amount will be borne equally by the Advisor and the Sub-Advisor and will be calculated as of the last business day of the calendar year. The Expense Support Amount with respect to a period will in no event exceed the total of management fees and total return incentive fees and reimbursable expenses incurred for such period. Beginning on the date on which we commence operations and continuing until the Expense Support and Conditional Reimbursement Agreement is terminated, within 15 business days from the last business day of each full calendar month (and not any partial months) (each, an "**Applicable Calendar Month**"), we will deliver to the Advisor and the Sub-Advisor a notice specifying, on a per share class basis for each share class, the Conditional Waiver Amount (as defined below) for such Applicable Calendar Month.

Unless the Advisor or the Sub-Advisor, as applicable, within five business days from receipt of the notice, objects to the Conditional Waiver Amount included in such notice, the Advisor and the Sub-Advisor shall equally conditionally reduce the payment of fees and reimbursements of reimbursable expenses in an amount equal to the Conditional Waiver Amount; provided, however, that the Advisor and the Sub-Advisor shall not reduce management fees, total return incentive fees and reimbursements of reimbursable expenses to the extent that such reductions are estimated to cause the annualized (based on a 365-day year) aggregate amount of Conditional Waiver Amounts to exceed the Expense Support Amount for the calendar year in which the Applicable Calendar Month occurs. For purposes of the Expense Support and Conditional Reimbursement Agreement, the **"Conditional Waiver Amount**" means the aggregate estimated amount of per share class expense support required by us for the Applicable Calendar Month, but in no event will exceed the excess of (a) the sum of the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and payable to stockholders of each share class over (b) the sum of the available operating funds attributable to each share class, in each case, for such Applicable Calendar Month. The initial term of the agreement is three years and automatically renews for successive one year terms, subject to the right of the Advisor and the Sub-Advisor, acting jointly, to terminate it upon written notice, except that once effective, the Advisor and the Sub-Advisor may not terminate their expense support obligations unless any party provides 120 days prior written notice to the other parties.

If, on the last business day of the calendar year, the annual (calendar year) year-to-date available operating funds exceeds the sum of the annual (calendar year) year-to-date distributions paid per share class (the "**Excess Operating Funds**"), we will pay to the Advisors an amount equal to the lesser of (a) such Excess Operating Funds and (b) the outstanding unreimbursed Expense Support Amounts, subject to certain conditions (the "**Conditional Reimbursements**"). We are obligated to make Conditional Reimbursements to the Advisor and the Sub-Advisor only when we have additional investment income or cash flow from operations after paying distributions, thus the Expense Support and Conditional Reimbursement Agreement serves as a mechanism for us to fund distributions with cash flow from operations from future periods. Our obligation to make Conditional Reimbursements is subject to the following conditions and limitations: (a) we are required to make Conditional Reimbursements attributable to a particular share class only to the extent that such Conditional Reimbursements do not cause such share class's other operating expenses (which means operating expenses we incur excluding management fees, master servicing fees, total return incentive fees, administrative services fee, interest costs, financing fees and financing costs, any distribution and stockholder servicing fees, any organizational and offering expenses, Expense Support Amounts, investment-related costs to diligence, invest, monitor or finance investments and brokerage commissions) (on an annualized basis (based on a 365-day year), and net of any Conditional Waiver Amounts reduced by the Advisor and the Sub-Advisor for our benefit during the calendar year) to exceed 1.75% of the NAV attributable to such shares (on an annualized basis (based on a 365-day year)) after taking the Expense Support Amount attributable to such shares into account; (b) notwithstanding anything to the contrary in the Expense Support and Conditional Reimbursement Agreement, no Conditional Reimbursements shall be made if the per share class operating expense ratio (which is calculated by dividing the per share class operating expenses, less organizational and offering expenses, management and total return incentive fees owed to the Advisor and the Sub-Advisor, and interest expense, by the per share class net assets) at the time of such reimbursement payment is less than or equal to the per share class operating expense ratio at the time the Expense Support Amount was reduced by the Advisor and the Sub-Advisor, and to which such Conditional Reimbursement relates; (c) notwithstanding anything to the contrary in the Expense Support and Conditional Reimbursement Agreement, no Conditional Reimbursements of the Expense Support Amount allocable to a share class shall be made with respect to such share class if the effective distributions per share declared by us allocable to such share class at the time of such Conditional Reimbursements is less than the effective distributions per share allocable to such share class at the time the Expense Support Amount was made to which such Conditional Reimbursement relates; and (d) our obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three (3) years following the date which the Expense Support Amount was provided and to which such Conditional Reimbursement relates. Any such Conditional Reimbursements will be applied to the earlier Expense Support Amount provided by us, provided, however, that Conditional Reimbursements shall be applied first to unreimbursed Expense Support Amounts attributable to reimbursable expenses and next to unreimbursed Expense Support Amounts attributable to management fee and total return incentive fee. We will make such payments to the Advisor and the Sub-Advisor in cash (or, if sufficient cash is not available, other immediately available funds) as promptly as possible after the last business day of the calendar year, but in any event no later than 90 calendar days after the last day of such calendar year.

**Allocation of Investment Opportunities**

Generally, the Sub-Advisor allocates U.S. residential mortgage loan investment opportunities on a pro rata basis to us and Other Balbec Accounts for whom the investment is suitable to the extent of the desired commitments or, if the investment opportunity is constrained, according to the available capital of us and such Other Balbec Accounts. If the available capital of an allocation party is less than $5 million, then the Sub-Advisor has the discretion not to allocate opportunities to such party, regardless of suitability. With respect to Other Balbec Accounts with investment objectives or guidelines that overlap with ours, we have adopted an allocation policy to ensure that investment opportunities are allocated among us and one or more Other Balbec Accounts in accordance with the Sub-Advisor's prevailing policies and procedures on a basis that we believe to be fair and equitable over time. Balbec seeks to allocate RMBS opportunities on a pro rata or pre-agreed upon basis between us and Other Balbec Accounts that have mandates to acquire RMBS and where the projected returns are consistent with our or such Other Balbec Account's mandate, capacity, target returns, and timelines; however, we or Other Balbec Accounts that have issued a securitization have a right of first refusal to acquire any RMBS issued by affiliates or subsidiaries of such vehicle. Balbec seeks to allocate MSR opportunities equitably between us and Other Balbec Accounts that have mandates to acquire MSRs where the projected returns are consistent with our or such Other Balbec Account's mandate, capacity, hedging needs, target returns, and timelines. During times of material market dislocation, the Sub-Advisor's allocation process may be adjusted to consider, among other factors, the risk and projected returns of the investment opportunity and the mandate, target returns, capacity and timeline of us or such Other Balbec Accounts. The Sub-Advisor can depart from the allocation processes described herein and establish alternative allocations for valid business reasons, provided that we and Other Balbec Accounts receive, in the Sub-Advisor's reasonable judgment, fair and equitable treatment and the alternative allocation is documented, approved in advance by Balbec's Chief Investment Officer and Chief Compliance Officer or his designees, in line with the Sub-Advisor's fiduciary duty. In such instances, the Sub-Advisor will provide documentation and rationale of any such instances to the Advisor and to our board of directors.

The Sub-Advisor considers a number of factors when determining whether a U.S. residential mortgage loan opportunity is suitable for us or Other Balbec Account, including the following: (i) our or Other Balbec Account's investment objectives and guidelines (including any strategies; restrictions and limitations); (ii) the expected gross underwritten internal rate of return applicable to an investment; (iii) the type and performance characteristics of the investment; (iv) the state of the market; (v) the risk profile of the investment; (vi) the availability of financing and the terms of such financing; (vii) the holding period for an investment and the investment cycle of us or Other Balbec Account; (viii) the size of the investment; (ix) our or Other Balbec Account's available commitment; (x) our or Other Balbec Account's appetite or willingness to accommodate structural, timing and other aspects of investing in the investment; (xi) portfolio diversification and risk management strategies and parameters; (xii) tax consequences; (xiii) cash flow considerations; (xiv) portfolio liquidity; (xv) whether we or Other Balbec Account wishes to utilize financing; (xvi) the Sub-Advisor's discretionary authority; (xvii) legal, contractual, regulatory and other considerations deemed relevant by the Sub-Advisor; (xviii) target securitization composition; and (xix) tax structuring, including whether an alternative investment vehicle is used. The relevance of each factor will vary among us and Other Balbec Accounts and the available U.S. residential mortgage loan opportunities, will be highly fact-intensive, and no single factor will consistently outweigh the others.

The Sub-Advisor advises Other Balbec Accounts which are focused on the acquisition of U.S. performing and re-performing whole mortgage loans, MSRs and RMBS. These existing Other Balbec Accounts may in the future be subject to upsizes, recycling of investment proceeds, restructures and/or refinances which could increase the amount of capital available for investment from time to time. Additionally, the Sub-Advisor sponsors Other Balbec Accounts focused on investing in debt strategies through lending on (as opposed to the acquisition of) residential mortgage loans.

While the Advisor and the Sub-Advisor will seek to manage potential conflicts of interest in a fair and reasonable manner, the portfolio strategies employed by the Sub-Advisor in managing the Other Balbec Accounts could conflict with the strategies employed by the Sub-Advisor in managing our business and may adversely affect the marketability, exit strategy, prices and availability of the properties, securities and instruments in which we invest. The Sub-Advisor or their affiliates may also give advice to the Other Balbec Accounts that may differ from advice given to us by the Sub-Advisor even though their investment objectives or guidelines may be the same or similar to ours.

For additional information, see "*Item 7 Certain Relationships And Related Transactions And Director Independence—Potential Conflicts of Interest—Allocation of Investment Opportunities*."

**Term**

We have been established, and are expected to continue, for an indefinite period of time. As part of our indefinite term structure, investors may request the repurchase of their shares of common stock on a quarterly basis (as further discussed below). See "*—Share Repurchase Plan*" below for more information regarding repurchases.

**Government Regulations**

Our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (i) regulate credit-granting activities; (ii) establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern secured transactions; and (v) set collection, foreclosure, repossession and claims-handling procedures and other trade practices. We are also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans. We intend to conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act.

In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years, legislators in the United States and in other countries have said that greater regulation of financial services firms is needed, particularly in areas such as risk management, leverage, and disclosure. While we expect that additional new regulations in these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, or results of operations or prospects.

**Competition**

We face competition from various entities for investment opportunities, including other REITs, insurance companies, investment funds, broker-dealers, companies, and, partnerships. In addition to third-party competitors, other programs sponsored by the Advisor, the Sub-Advisor and their affiliates, particularly those with investment strategies that overlap with ours, will seek investment opportunities under the applicable prevailing policies and procedures.

In the face of this competition, we have access to the Advisor's and the Sub-Advisor's professionals and their industry expertise and relationships, which we believe provide us with a competitive advantage and help us source, evaluate and compete for potential investments. We believe these relationships will enable us to compete more effectively for attractive investment opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face.

**Implications of Being an Emerging Growth Company and Smaller Reporting Company**

We are an "emerging growth company," as defined in the JOBS Act and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. We may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act.

We could remain an "emerging growth company" until the earliest of (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement, (2) the last day of the fiscal year in which our annual gross revenues exceed $1.235 billion, (3) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (4) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

We are also a "smaller reporting company" as defined in the Exchange Act, and may elect to take advantage of certain of the scaled disclosures available to smaller reporting companies. We may be a smaller reporting company even after we are no longer an "emerging growth company."

**Distribution Reinvestment Plan**

We have adopted a distribution reinvestment plan whereby stockholders will have their cash distributions automatically reinvested in additional shares unless they opt-out or terminate their participation; provided that, stockholders who are clients of certain participating broker-dealers that do not permit automatic enrollment must opt-in to participate. If you participate in our distribution reinvestment plan, the cash distributions attributable to the share class that you own will be automatically invested in additional shares of the same class. The purchase price for shares purchased under our distribution reinvestment plan will be equal to the transaction price for such shares at the time the distribution is payable, which will generally be the most recently determined and published net asset value per share of the applicable class of shares, and not based on the price at which you initially purchased your shares. Stockholders will not pay upfront selling commissions or Managing Dealer fees when purchasing shares under our distribution reinvestment plan; however, all outstanding Class T shares and Class D shares, including those purchased under our distribution reinvestment plan, will be subject to ongoing distribution and stockholder servicing fees. Participants may terminate their participation in our distribution reinvestment plan at any time by written instructions to that effect to the reinvestment agent. To be effective on a distribution payment date, the notice of termination must be received by the reinvestment agent at least 15 days before the record date fixed by our board of directors for that distribution payment date; otherwise, such termination will be effective with respect to any subsequent distribution payment date. See "*Item 11. Description of Registrant's Securities to be Registered—Distribution Reinvestment Plan*" for more information regarding the reinvestment of distributions investors may receive from us.

**Share Repurchase Plan**

Beginning in the first full calendar quarter following the initial closing of Class FA shares, we intend to conduct quarterly share repurchases pursuant to our share repurchase plan to allow our stockholders to sell all or a portion of their shares back to us at a price equal to the NAV per share as of the last date of the month immediately prior to the repurchase date. The repurchase date is generally the last business day of the month of a calendar quarter end. We are not obligated to repurchase shares under our share repurchase plan. If we determine to repurchase shares, our share repurchase plan also limits the total amount of aggregate repurchases of Class FA shares, Class A shares, Class T shares, Class D shares, Class I shares and Class E shares to up to 2.5% of our aggregate NAV per calendar quarter (based on the aggregate NAV as of the last date of the month immediately prior to the repurchase date) and up to 10.0% of our aggregate NAV per year (based on the average aggregate NAV as of the end of each of our trailing four quarters). Our share repurchase plan also includes certain restrictions on the timing, amount and terms of our repurchases intended to ensure our ability to qualify as a REIT for U.S. federal income tax purposes.

Our board of directors has the right to amend, suspend, or terminate our share repurchase plan or waive any of its specific conditions to the extent it determines that it is in our best interest to do so, such as when repurchase requests would place an undue burden on our liquidity, adversely affect our operations, risk having an adverse impact on us that would outweigh the benefit of repurchasing our shares or risk our ability to qualify as a REIT for U.S. federal income tax purposes, upon 30 days' prior notice to our stockholders. Continued suspension of our share repurchase plan would only be permitted under the plan if our board of directors determines that the continued suspension of our share repurchase plan is in our best interest and the best interest of our stockholders. Our board of directors must affirmatively authorize the recommencement of the plan before stockholder requests will be considered again. We may provide notice by including such information in a current report on Form 8-K or in our annual or quarterly reports. Moreover, our share repurchase plan will terminate, and we no longer will accept shares for repurchase, if and when our shares are listed on a national securities exchange, are included for quotation in a national securities market or, in the sole determination of our board of directors, a secondary trading market for the shares otherwise develops. All shares to be repurchased under our share repurchase plan must be (i) fully transferable and not be subject to any liens or other encumbrances and (ii) free from any restrictions on transfer. We will not repurchase shares that are subject to liens or other encumbrances until the lienholder or stockholder presents evidence that the liens or encumbrances have been removed. If any shares subject to a lien are inadvertently repurchased or we are otherwise required to pay to any other party all or any amount in respect of the value of the repurchased shares, then the recipient of such amounts will repay us the amount paid for such repurchase up to the amount it is required to pay to such other party.

The aggregate amount of funds under our share repurchase plan is determined on a quarterly basis at the sole discretion of our board of directors. At the sole discretion of our board of directors, we may use sources, including, but not limited to, offering proceeds and borrowings to repurchase shares.

To the extent that the number of shares submitted to us for repurchase exceeds the number of shares that we are able to purchase, we will repurchase shares on a pro rata basis, from among the requests for repurchase received by us based upon the total number of shares for which repurchase was requested and the order of priority described in our share repurchase plan. Shares that have not been outstanding for at least one year, as further described in our share repurchase plan, will not be repurchased, provided that such minimum holding requirement and the pro rata repurchase requirement may be waived by us in the case of documented death, qualifying disability, or bankruptcy of a stockholder or other exigent circumstances, as further described in our share repurchase plan. If we determine to permit any such repurchase for exigent circumstances, we in our sole discretion may repurchase such shares prior to the repurchase of any other shares. We may repurchase shares including fractional shares, computed to three decimal places.

**Our Private Offering**

We intend to conduct our private offering on a "best efforts" basis. In our private offering, we intend to initially offer our Class FA shares. Subscriptions for Class FA shares will initially be made through a capital commitment payable upon the initial closing. Upon satisfaction of a minimum offering requirement for our Class FA shares (the "**minimum offering requirement**"), we can choose to have an initial closing of our Class FA shares. If we do not obtain capital commitments for at least the minimum offering requirement by a specified date, our private offering will terminate.

Once we have met the minimum offering requirement and completed the initial closing of our Class FA shares, we will continue to offer up to the remaining amount from a maximum offering amount of our Class FA shares in our private offering and, in our sole discretion, may begin to offer any combination of the Class A shares, Class I shares, Class T shares, and Class D shares up to the remaining maximum offering amount of our private offering, through monthly closings on share subscriptions received and accepted by us where the entire purchase price of shares subscribed for by an investor will be payable upon subscription. The monthly closing date on which we will accept subscriptions is expected to be the last business day of each month.

The shares in our private offering will be offered for sale only to persons that are "accredited investors," as that term is defined under the Securities Act and Regulation D promulgated thereunder. We intend to conduct our private offering until the earlier of: (i) the date we have sold the maximum offering amount of our private offering and (ii) two years from the start of our private offering; provided, however, that we, in our sole discretion, may extend our private offering on a perpetual basis. At any time, we reserve the right to terminate our private offering altogether or with respect to one or more of our share classes. We may, in our sole discretion, decrease the initial minimum purchase amount, increase the maximum offering amount of our private offering, conduct contemporaneous or additional offerings, and/or extend the outside date of our private offering, in our sole discretion.

The offering prices of our shares will generally be based on our prior month's NAV. Beginning in the first full calendar month following the initial closing of our Class FA shares, our board of directors will determine the NAV for each class of our shares on a monthly basis, which will generally be the transaction price for the then-current month for such share class. We expect that this determination will ordinarily be made within 15 business days after each month. An investor will have at least five business days after the adjusted offering price becomes available and prior to a monthly closing to consider whether to withdraw their subscription request before they are committed to purchase shares upon our acceptance. Subscribers are not committed to purchase shares at the time their subscription orders are submitted and any subscription may be withdrawn at any time before the time it has been accepted by us. Our NAV may vary significantly from one month to the next. In cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month, we may elect not to hold a monthly closing, or we may update the offering prices per share to a price that we believe reflects the NAV per share more appropriately than the prior month's NAV per share. In the event we adjust the offering price one or more times after an investor submits their subscription agreement and before the date we accept such subscription, such investor will not be provided with direct notice by us of the adjusted offering price but will need to check the adjusted offering price prior to the closing date of their subscription. If the offering price is adjusted after an investor submits their subscription agreement and before the date we accept such subscription, the number of shares that an investor ultimately receives may vary.

As of the date of this Registration Statement, we had not issued or sold any shares to investors in our private offering. See "*Item 10. Recent Sales of Unregistered Securities*" for additional information regarding the sale of securities in connection with our private offering.

**Reporting Obligations**

We will file our annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to be appropriate or as may be required by law. We are filing this Registration Statement with the SEC under the Exchange Act to register under Section 12(g) of the Exchange Act and comply with applicable requirements thereunder.

We intend to make available on our website, when available, our annual reports on Form 10-K, quarterly reports on Form 10-Q and our current reports on Form 8-K. The SEC also maintains a website (www.sec.gov) that contains such information. Our website will contain additional information about our business, but the contents of the website are not incorporated by reference in or otherwise a part of this Registration Statement.

**Certain U.S. Tax Considerations**

The following is a summary of the material U.S. federal income tax considerations relating to our qualification and taxation as a REIT and the acquisition, holding, and disposition of our common stock. For purposes of this section, references to "we," "our," "us" or "our company" mean only CNL Strategic Residential Capital, Inc., and not our subsidiaries or other lower-tier entities, except as otherwise indicated. You are urged to review the following discussion and to consult with your tax advisor to determine the effects of ownership and disposition of our shares on your individual tax situation, including any state, local or non-U.S. tax consequences. This summary is based upon the Internal Revenue Code, the regulations promulgated by the U.S. Treasury Department (the "**Treasury regulations**"), current administrative interpretations and practices of the IRS (including administrative interpretations and practices expressed in private letter rulings which are binding on the IRS only with respect to the particular taxpayers who requested and received those rulings) and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. No advance ruling has been or will be sought from the IRS regarding any matter discussed in this summary. The summary is also based upon the assumption that the operation of our company, and of its subsidiaries and other lower-tier and affiliated entities will, in each case, be in accordance with its applicable organizational documents. This summary does not discuss the impact that U.S. state and local taxes and taxes imposed by non-U.S. jurisdictions could have on the matters discussed in this summary. This summary is for general information only, and does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular stockholder in light of its investment or tax circumstances or to stockholders subject to special tax rules, such as:

● U.S. expatriates;

● persons who mark-to-market our common stock;

● subchapter S corporations;

● U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar;

● financial institutions;

● insurance companies;

● broker-dealers;

● regulated investment companies ()"**RICs** ");

● trusts and estates;

● holders who receive our common stock through the exercise of employee stock options or otherwise as compensation;

● persons holding our common stock as part of a "straddle," "hedge," "conversion transaction," "synthetic security" or other integrated investment;

● persons subject to the alternative minimum tax provisions of the Internal Revenue Code;

● persons holding their interest through a partnership or similar pass-through entity;

● persons holding a 10% or more (by vote or value) beneficial interest in us; and

● except to the extent discussed below, tax-exempt organizations and non-U.S. stockholders (as defined below).

This summary assumes that stockholders will hold our common stock as capital assets, which generally means as property held for investment.

THE U.S. FEDERAL INCOME TAX TREATMENT OF US AS A REIT AND HOLDERS OF OUR COMMON STOCK DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF HOLDING AND DISPOSING OF OUR COMMON STOCK TO ANY PARTICULAR STOCKHOLDER WILL DEPEND ON THE STOCKHOLDER'S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF OUR COMMON STOCK.

**Taxation of Our Company—General** 

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing with our taxable year ending December 31, 2025. We believe that we have been organized and operated in a manner that will enable us to qualify for taxation as a REIT under the Internal Revenue Code, and we intend to continue to be organized and to operate in a manner that will allow us to continue to qualify for taxation as a REIT under the Internal Revenue Code

Qualification and taxation as a REIT depends on our ability to meet, on a continuing basis, through actual results of operations, distribution levels, diversity of share ownership and various qualification requirements imposed upon REITs by the Internal Revenue Code. In addition, our ability to qualify as a REIT may depend in part upon the operating results, organizational structure and entity classification for U.S. federal income tax purposes of certain entities in which we invest, which could include entities that have made elections to be taxed as REITs. Our ability to qualify as a REIT also requires that we satisfy certain asset and income tests, some of which depend upon the fair market values of assets directly or indirectly owned by us or which serve as security for loans made by us. Such values may not be susceptible to a precise determination. In addition, to the extent we make certain investments, such as investments in residential mortgage loan securitizations, our ability to qualify as a REIT will also depend on the accuracy of certain opinions rendered to us in connection with such transactions. Accordingly, no assurance can be given that the actual results of our operations for any taxable year will satisfy the requirements for qualification and taxation as a REIT.

**Taxation of REITs in General** 

As indicated above, qualification and taxation as a REIT depends upon our ability to meet, on a continuing basis, various qualification requirements imposed upon REITs by the Internal Revenue Code. The material qualification requirements are summarized below, under "—*Requirements for Qualification as a REIT*." While we believe that we have operated and intend to continue to operate so that we qualify as a REIT, no assurance can be given that the IRS will not challenge our qualification as a REIT or that we will be able to operate in accordance with the REIT requirements in the future. See "*—Failure to Qualify*."

Provided that we qualify as a REIT, we will generally be entitled to a deduction for dividends that we pay to our stockholders and, therefore, will not be subject to U.S. federal corporate income tax on our taxable income that is currently distributed to our stockholders. This treatment substantially eliminates the "double taxation" at the corporate and stockholder levels that results generally from investment in a corporation. Rather, income generated by a REIT generally is taxed only at the stockholder level, upon a distribution of dividends by the REIT.

Individual U.S. stockholders (as defined below) are generally taxed on corporate dividends at a maximum rate of 20% (the same as long-term capital gains), thereby substantially reducing, though not completely eliminating, the double taxation that has historically applied to corporate dividends. With limited exceptions, however, dividends received by individual U.S. stockholders from us or from other entities that are taxed as REITs are not eligible for the reduced qualified dividend rate. However, for taxable years beginning after December 31, 2017 and before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain qualified business income, including "qualified REIT dividends" (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Net operating losses, foreign tax credits and other tax attributes of a REIT generally do not pass through to the stockholders of the REIT, subject to special rules for certain items, such as capital gains, recognized by REITs. See "*—Taxation of Taxable U.S. Stockholders*."

Even if we qualify for taxation as a REIT, we will be subject to U.S. federal income taxation as follows:

● We will be taxed at regular U.S. federal corporate rates (currently 21%) on any undistributed income, including undistributed net capital gains.

● If we have net income from prohibited transactions, which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See "*—Prohibited Transactions*" and "*—Foreclosure Property*" below.

● If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or from certain leasehold terminations as "foreclosure property," we may thereby avoid (a) the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction) and (b) the inclusion of any income from such property not qualifying for purposes of the REIT gross income tests discussed below, but the income from the sale or operation of the property may be subject to U.S. federal corporate income tax at the highest applicable rate (currently 21%).

● If we fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below, but nonetheless maintain our qualification as a REIT because other requirements are met, we will be subject to a 100% tax on an amount equal to (a) the greater of (1) the amount by which we fail the 75% gross income test or (2) the amount by which we fail the 95% gross income test, as the case may be, multiplied by (b) a fraction intended to reflect our profitability.

● If we fail to satisfy any of the REIT asset tests, as described below, other than a failure of the 5% or 10% REIT asset test that does not exceed a statutory de minimis amount as described more fully below, but our failure is due to reasonable cause and not due to willful neglect and we nonetheless maintain our REIT qualification because of specified cure provisions, we will be required to pay a tax equal to the greater of $50,000 or the highest corporate tax rate (currently 21%) of the net income generated by the nonqualifying assets during the period in which we failed to satisfy the asset tests.

● If we fail to satisfy any provision of the Internal Revenue Code that would result in our failure to qualify as a REIT (other than a gross income or asset test requirement) and the violation is due to reasonable cause and not due to willful neglect, we may retain our REIT qualification but we will be required to pay a penalty of $50,000 for each such failure.

● If we fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain net income for such year and (c) any undistributed taxable income from prior periods (the "**required distribution** "), we will be subject to a 4% non-deductible excise tax on the excess of the required distribution over the sum of (1) the amounts actually distributed (taking into account excess distributions from prior years), plus (2) retained amounts on which income tax is paid at the corporate level.

● We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of our stockholders, as described below in "*—Requirements for Qualification as a REIT*."

● A 100% excise tax may be imposed on some items of income and expense that are directly or constructively paid between us, our tenants (if any) and/or any taxable REIT subsidiaries ()"**TRSs** "), we may own if and to the extent that the IRS successfully adjusts the reported amounts of these items.

● If we acquire appreciated assets from a subchapter C corporation (generally, a corporation that is not a REIT, a RIC, or an S corporation) in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the subchapter C corporation, we will be subject to tax on any gain from the disposition of such assets to the extent of the excess of the fair market value of the assets on the date they were acquired by us over the basis of such assets on such date at the highest U.S. federal corporate income tax rate then applicable if we subsequently recognize gain on a disposition of any such assets during the five-year period following their acquisition from the subchapter C corporation. The results described in this paragraph assume that the subchapter C corporation will not elect, in lieu of this treatment, to be subject to an immediate tax when the asset is acquired by us. Any gain from the sale of property acquired by us in an exchange under Section 1031 (a like kind exchange) or 1033 (an involuntary conversion) of the Internal Revenue Code is excluded from the application of this built-in gains tax.

● We will be subject to a 100% tax on any "redetermined rents," "redetermined TRS service income," "redetermined deductions" or "excess interest" that are directly or constructively paid between us, our tenants and/or any TRS of our company if and to the extent that the IRS successfully adjusts the reported amounts of these items. In general, redetermined rents are rents from real property that are overstated as a result of services furnished by a TRS of our company to any of our tenants. Redetermined TRS service income is the gross income of our TRS attributable to services rendered to us or on our behalf (less deductions properly allocable thereto) to the extent such income (less such deduction) is increased by the IRS to an amount that would reflect the amount of such income based on an arm's-length negotiation with an unrelated party. Redetermined deductions and excess interest represent amounts that are deducted by our TRS for amounts paid to us that are in excess of the amounts that would have been deducted based on arm's-length negotiations.

● We will generally be subject to tax on the portion of any "excess inclusion income" derived from an investment in residual interests in certain mortgage loan securitization structures (i.e., a "taxable mortgage pool" or a residual interest in a real estate mortgage investment conduit ()"**REMIC** ")) to the extent that our common stock is held by specified types of tax-exempt organizations known as "disqualified organizations" that are not subject to tax on unrelated business taxable income. To the extent that we own a REMIC residual interest or a taxable mortgage pool through a TRS, we will not be subject to this tax. See "*—Effect of Subsidiary Entities—Taxable Mortgage Pools*" and "*—Excess Inclusion Income*."

● We may elect to retain and pay U.S. federal income tax on our net long-term capital gain. In that case, a stockholder would include its proportionate share of our undistributed long-term capital gain (to the extent we make a timely designation of such gain to the stockholder) in its income, would be deemed to have paid the tax that we paid on such gain, and would be allowed a credit for its proportionate share of the tax deemed to have been paid, and an adjustment would be made to increase the stockholder's basis in our common stock. Stockholders that are U.S. corporations will also appropriately adjust their earnings and profits for the retained capital gains in accordance with Treasury regulations to be promulgated.

● We may have subsidiaries or own interests in other lower-tier entities that are subchapter C corporations, the earnings of which could be subject to U.S. federal corporate income tax.

In addition, we may be subject to a variety of taxes other than U.S. federal income tax, including state, local, and foreign income, franchise property and other taxes. We could also be subject to tax in situations and on transactions not presently contemplated.

**Requirements for Qualification as a REIT** 

The Internal Revenue Code defines a REIT as a corporation, trust or association:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) that
is managed by one or more trustees or directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the
 beneficial ownership of which is evidenced by transferable shares or by transferable
 certificates of beneficial interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) that
 would be taxable as a domestic corporation but for the special Internal Revenue Code
 provisions applicable to REITs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) that
 is neither a financial institution nor an insurance company subject to specific provisions
 of the Internal Revenue Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the
beneficial ownership of which is held by 100 or more persons;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) in
 which, during the last half of each taxable year, not more than 50% in value of the outstanding
 stock is owned, directly or indirectly, by five or fewer "individuals" (as
 defined in the Internal Revenue Code to include specified entities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) that
 makes an election to be a REIT for the current taxable year or has made such an election
 for a previous taxable year that has not been terminated or revoked;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) that
uses a calendar year for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) that
 has no earnings and profits from any non-REIT taxable year at the close of any taxable
 year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) which
 meets other tests, and satisfies all of the relevant filing and other administrative
 requirements established by the IRS that must be met to elect and maintain REIT qualification
 described below, including with respect to the nature of its income and assets and the
 amount of its distributions.

The Internal Revenue Code provides that conditions (1) through (4) must be met during the entire taxable year, that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year, and that conditions (5) and (6) do not need to be satisfied for the first taxable year for which an election to become a REIT has been made. We believe that we will issue common stock with sufficient diversity of ownership to satisfy the requirements described in conditions (5) and (6) above. Our charter provides restrictions regarding the ownership and transfer of our shares, which are intended, among other purposes, to assist us in satisfying the share ownership requirements described in conditions (5) and (6) above. For purposes of condition (6), an "individual" generally includes a supplemental unemployment compensation benefit plan, a private foundation or a portion of a trust permanently set aside or used exclusively for charitable purposes, but does not include a qualified pension plan or profit sharing trust.

To monitor compliance with the share ownership requirements, we are generally required to maintain records regarding the actual ownership of shares of our stock. To do so, we must demand written statements each year from the record holders of significant percentages of shares of our stock, in which the record holders are to disclose the actual owners of the shares (i.e., the persons required to include in gross income the dividends paid by us). A list of those persons failing or refusing to comply with this demand must be maintained as part of our records. Failure by us to comply with these record-keeping requirements could subject us to monetary penalties. If we satisfy these requirements and after exercising reasonable diligence would not have known that condition (6) is not satisfied, we will be deemed to have satisfied such condition. A stockholder that fails or refuses to comply with the demand is required by Treasury regulations to submit a statement with its tax return disclosing the actual ownership of the shares and other information.

For purposes of condition (8), we have adopted December 31 as our year end, and thereby satisfy this requirement.

**Effect of Subsidiary Entities** 

***Ownership of Partnership Interests***

In the case of a REIT that is a partner in a partnership (references herein to "partnership" include limited liability companies that are classified as partnerships for U.S. federal income tax purposes), Treasury regulations provide that the REIT is deemed to own its proportionate share of the partnership's assets and to earn its proportionate share of the partnership's gross income based on its pro rata share of capital interests in the partnership for purposes of the asset and gross income tests applicable to REITs, as described below. However, solely for purposes of the 10% value test, described below, the determination of a REIT's interest in partnership assets will be based on the REIT's proportionate interest in any securities issued by the partnership, excluding for these purposes, certain excluded securities as described in the Internal Revenue Code. In addition, the assets and gross income of the partnership generally are deemed to retain the same character in the hands of the REIT. Thus, our proportionate share of the assets and items of income of partnerships in which we own an equity interest (including equity interests in any lower tier partnerships) will be treated as assets and items of income of our company for purposes of applying the REIT requirements described below. Consequently, to the extent that we directly or indirectly hold a preferred or other equity interest in a partnership, the partnership's assets and operations may affect our ability to qualify as a REIT, even though we may have no control or only limited influence over the partnership.

***Partnership Audits***

Under the Bipartisan Budget Act of 2015, Congress revised the rules applicable to U.S. federal income tax audits of partnerships and the collection of any tax resulting from any such audits or other tax proceedings, generally for taxable years beginning after December 31, 2017. Under these rules, the partnership itself may be liable for a hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of the partnership tax items on audit, regardless of changes in the composition of the partners (or their relative ownership) between the year under audit and the year of the adjustment. These rules also include an elective alternative method under which the additional taxes resulting from the adjustment are assessed for the affected partners, subject to a higher rate of interest than otherwise would apply. These changes could increase the U.S. federal income tax, interest, and/or penalties otherwise borne by us in the event of a U.S. federal tax audit of a subsidiary partnership.

***Disregarded Subsidiaries***

If a REIT owns a corporate subsidiary that is a "qualified REIT subsidiary," that subsidiary is disregarded for U.S. federal income tax purposes, and all assets, liabilities and items of income, deduction and credit of the subsidiary are treated as assets, liabilities and items of income, deduction and credit of the REIT itself, including for purposes of the gross income and asset tests applicable to REITs, as summarized below. A qualified REIT subsidiary is any corporation, other than a TRS, as described below under *"—Taxable REIT Subsidiaries*," that is wholly-owned by a REIT, by other disregarded subsidiaries of the REIT or by a combination of the two. Single member limited liability companies that are wholly-owned by a REIT that have not elected to be taxed as corporations for U.S. federal income tax purposes are also generally disregarded as separate entities for U.S. federal income tax purposes, including for purposes of the REIT gross income and asset tests. Disregarded subsidiaries, along with partnerships in which we hold an equity interest, are sometimes referred to herein as "pass-through subsidiaries."

In the event that a disregarded subsidiary ceases to be wholly-owned by us (for example, if any equity interest in the subsidiary is acquired by a person other than us or another disregarded subsidiary of us), the subsidiary's separate existence would no longer be disregarded for U.S. federal income tax purposes. Instead, it would have multiple owners and would be treated as either a partnership or a taxable corporation. Such an event could, depending on the circumstances, adversely affect our ability to satisfy the various asset and gross income tests applicable to REITs, including the requirement that REITs generally may not own, directly or indirectly, more than 10% of the value or voting power of the outstanding securities of another corporation. See *"—Asset Tests*" and "—*Gross Income Tests*."

***Taxable REIT Subsidiaries***

A REIT, in general, may jointly elect with a subsidiary corporation, whether or not wholly-owned, to treat the subsidiary corporation as a TRS. We generally may not own more than 10% of the securities of a taxable corporation, as measured by voting power or value, unless we and such corporation elect to treat such corporation as a TRS. The separate existence of a TRS or other taxable corporation, unlike a disregarded subsidiary as discussed above, is not ignored for U.S. federal income tax purposes. Accordingly, a TRS would generally be subject to U.S. federal corporate income tax and any applicable state and local taxes on its earnings, which may reduce the cash flow generated by us and our subsidiaries in the aggregate and our ability to make distributions to our stockholders.

A REIT is not treated as holding the assets of a TRS or other taxable subsidiary corporation or as receiving any income that the subsidiary earns. Rather, the stock issued by the subsidiary is an asset in the hands of the REIT, and the REIT generally recognizes as income the dividends, if any, that it receives from the subsidiary. This treatment can affect the gross income and asset test calculations that apply to the REIT, as described below. Because a parent REIT does not include the assets and income of such subsidiary corporations in determining the parent's compliance with the REIT requirements, such entities may be used by the parent REIT to undertake indirectly activities that the REIT rules might otherwise preclude it from doing directly or through pass-through subsidiaries or render commercially unfeasible (for example, activities that give rise to certain categories of income such as non-qualifying hedging income or inventory sales). We may hold a significant number of assets in one or more TRSs, subject to the limitation that securities in TRSs may not represent more than 20% of our total assets. To the extent that we acquire loans with an intention of selling such loans in a manner that might expose us to a 100% tax on "prohibited transactions," such loans will be acquired by a TRS. If dividends are paid to us by one or more domestic TRSs we own, then a portion of the dividends that we distribute to stockholders who are taxed at individual rates generally will be eligible for taxation at preferential qualified dividend income tax rates rather than at ordinary income rates. See "*—Taxation of Taxable U.S. Stockholders*" and "*—Annual Distribution Requirements*."

In order to satisfy the restriction that TRS securities must constitute no more than 20% of the value of our gross assets, we may cause dividends to be distributed by one or more TRSs to us at times when it may not be beneficial to do so. We may, in turn, distribute all or a portion of such dividends to our stockholders at times when we might not otherwise wish to declare and pay such dividends. See "*—Annual Distribution Requirements*" below. These dividends when received by non-corporate U.S. stockholders generally will be eligible for taxation at preferential qualified dividend income tax rates rather than at ordinary income rates. See "*—Taxation of Taxable U.S. Stockholders*" and "*—Annual Distribution Requirements*." TRS distributions classified as dividends, however, will generally constitute qualifying income for purposes of the 95% gross income test but not qualifying income for purposes of the 75% gross income test. It is possible that we may wish to distribute a dividend from a TRS to us in order to reduce the value of our TRS securities below 20% of our assets but be unable to do so without violating the requirement that 75% of our gross income in the taxable year be derived from real estate assets. Although there are other measures we can take in such circumstances in order to remain in compliance, there can be no assurance that we will be able to comply with both of these tests in all market conditions.

Finally, we may use a TRS to the extent that it conducts servicing or other activities that give rise to fees or other similar income, the receipt of which, beyond certain limits, would be inconsistent with our continued qualification as a REIT. In that event, such income less the expenses associated with the business that produced it would be subject to U.S. federal income tax at the regular corporate rate.

Certain restrictions imposed on TRSs are intended to ensure that such entities will be subject to appropriate levels of U.S. federal income taxation. If amounts are paid to a REIT or a TRS or deducted by a TRS due to transactions between a REIT, its tenants, and/or the TRS, that exceed the amount that would be paid to or deducted by a party in an arm's-length transaction, the REIT generally will be subject to an excise tax equal to 100% of such excess. We intend to monitor our transactions with any of our subsidiaries that are treated as TRSs in an effort to ensure that we will not become subject to this excise tax; however, we cannot assure you that we will be successful in avoiding this excise tax. We may make loans to certain of our TRSs. Deductions for interest paid on any such loan by a TRS may be limited to the sum of (i) the interest income of the TRS for the taxable year, and (ii) 30% of the adjusted taxable income of the TRS for the taxable year.

***Taxable Mortgage Pools***

An entity, or a portion of an entity, may be classified as a taxable mortgage pool ("**TMP**"), under the Internal Revenue Code if:

● substantially all of its assets consist of debt obligations or interests in debt obligations;

● more than 50% of those debt obligations are real estate mortgages or interests in real estate mortgages as of specified testing dates;

● the entity has issued debt obligations that have two or more maturities; and

● the payments required to be made by the entity on its debt obligations "bear a relationship" to the payments to be received by the entity on the debt obligations that it holds as assets.

Under Treasury regulations, if less than 80% of the assets of an entity (or a portion of an entity) consist of debt obligations, these debt obligations are considered not to comprise "substantially all" of its assets, and therefore the entity would not be treated as a TMP. We may enter into financing and securitization arrangements that give rise to TMPs.

A TMP generally is treated as a corporation for U.S. federal income tax purposes. However, special rules apply to a REIT, a portion of a REIT, or a qualified REIT subsidiary that is a TMP. If a REIT owns directly, or indirectly through one or more qualified REIT subsidiaries or other entities that are disregarded as a separate entity for U.S. federal income tax purposes, 100% of the equity interests in the TMP, the TMP will be a qualified REIT subsidiary and, therefore, ignored as an entity separate from the REIT for U.S. federal income tax purposes and would not generally affect the tax qualification of the REIT. Rather, the consequences of the TMP classification would generally, except as described below, be limited to the REIT's stockholders. See "*—Excess Inclusion Income*." If we form in the future any subsidiary REIT that owns less than 100% of the ownership interests in a subsidiary that is a taxable mortgage pool, the foregoing rules would not apply. Rather, the subsidiary would be treated as a corporation for U.S. federal income tax purposes, and would be subject to corporate income tax. In addition, this characterization would alter the REIT income and asset test calculations of such a subsidiary REIT and could adversely affect such REIT's compliance with those requirements, which, in turn, could affect our compliance with the REIT requirements. We do not expect that we, or any subsidiary REIT that we form in the future, would form any subsidiary that would become a taxable mortgage pool, in which we own some, but less than all, of the ownership interests, and we intend to monitor the structure of any taxable mortgage pools in which we have an interest to ensure that they will not adversely affect our qualification as a REIT. However, no assurance can be provided that the IRS could not successfully challenge our ownership of 100% of the equity in such taxable mortgage pool, which would adversely impact the ability of our subsidiary REIT to qualify as a REIT and would adversely impact our REIT qualification.

***Subsidiary REITs***

We may hold certain assets through a subsidiary REIT, and may establish one or more additional subsidiary REITs to hold certain assets and conduct certain activities. Each such subsidiary REIT would be treated as a separate entity for U.S. federal income tax purposes, and we would not be treated as owning the assets of such subsidiary REIT or recognizing the income recognized by such subsidiary REIT. Each such subsidiary REIT generally would be subject to U.S. federal income tax in the same manner as us and would be subject to the same gross income tests, asset tests and other REIT qualification requirements and considerations as are applicable to us.

The stock of any subsidiary REIT we may form is a qualifying asset to us for the purpose of the 75% asset test so long as the subsidiary REIT continues to qualify as a REIT for U.S. federal income tax purposes. See "*—Asset Tests*." Dividends we receive from a subsidiary REIT are qualifying income to us for purposes of both the 75% and 95% gross income tests. See "*—Gross Income Tests—Dividend Income*." We may capitalize a subsidiary REIT with debt in addition to equity. Such debt (which is issued by non-publicly offered REITs) will generally not be a qualifying asset for purposes of the 75% asset test. See "*—Asset Tests*." Interest paid to us on such debt will generally be qualifying income for purposes of the 95% gross income test but not the 75% gross income test. See "*—Gross Income Tests—Interest Income*."

**Gross Income Tests** 

In order to maintain our qualification as a REIT, we annually must satisfy two gross income tests. First, at least 75% of our gross income for each taxable year, excluding gross income from sales of inventory or dealer property in "prohibited transactions" and certain hedging and foreign currency transactions, must be derived from investments relating to real property or mortgages on real property, including "rents from real property," dividends received from and gains from the disposition of other shares of other REITs, interest income derived from mortgage loans secured by real property (including certain types of mortgage-backed securities), and gains from the sale of real estate assets (other than income or gains with respect to debt instruments issued by public REITs that are not otherwise secured by real property), as well as income from certain kinds of temporary investments. Second, at least 95% of our gross income in each taxable year, excluding gross income from prohibited transactions and certain hedging and foreign currency transactions, must be derived from some combination of income that qualifies under the 75% income test described above, as well as other dividends, interest, gain from the sale or disposition of stock or securities, and other income that the IRS determines to be qualified income for this purpose, which need not have any relation to real property. We intend to monitor the amount of our non-qualifying income and manage our portfolio of assets to comply with the gross income tests, but we cannot assure you that we will be successful in this effort.

For purposes of the 75% and 95% gross income tests, a REIT is deemed to have earned a proportionate share of the income earned by any entity or arrangement treated as a partnership for U.S. federal income tax purposes in which it owns an interest, which share is determined by reference to its capital interest in such entity, and is deemed to have earned the income earned by any qualified REIT subsidiary.

***Interest Income***

Interest income constitutes qualifying mortgage interest for purposes of the 75% gross income test to the extent that the obligation is secured by a mortgage on real property. If we receive interest income with respect to a mortgage loan that is secured by both real property and other property and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property on the date of our binding commitment to make or purchase the mortgage loan, then, subject to the exception described below, the interest income will be apportioned between the real property and the other property, and our income from the loan will qualify for purposes of the 75% gross income test only to the extent that the interest is allocable to the real property. If a loan is secured by both real property and personal property and the fair market value of the personal property does not exceed 15% of the fair market value of all real and personal property securing the loan, the loan is treated as secured solely by the real property for purposes of these rules. Even if a loan is not secured by real property or is undersecured, the income that it generates may nonetheless qualify for purposes of the 95% gross income test.

In the event that we invest in a mortgage loan that is not fully secured by real property, that is secured by personal property and if the fair market value of the personal property securing the loan exceeds 15% of the fair market value of the real and personal property securing the loan, we would be required to apportion our annual interest income to the real property security based on a fraction, the numerator of which is the value of the real property securing the loan, determined when we commit to acquire the loan, and the denominator of which is the highest "principal amount" of the loan during the year. The IRS has issued Revenue Procedure 2014-51 addressing a REIT's investment in distressed debt (the "**Distressed Debt Revenue Procedure**"). The Distressed Debt Revenue Procedure interprets the "principal amount" of the loan to be the face amount of the loan, despite the Internal Revenue Code requiring taxpayers to treat gain attributable to any market discount, that is the difference between the purchase price of the loan and its face amount, for all purposes (other than certain withholding and information reporting purposes) as interest. Any mortgage loan that we invest in that is not fully secured by real property, is secured in part by personal property and is secured by personal property the fair market value of which exceeds 15% of the fair market value of all real and personal property securing the mortgage loan will therefore be subject to the interest apportionment rules and the position taken in the Distressed Debt Revenue Procedure, as described above. If a loan is secured by both real property and personal property and the fair market value of the personal property does not exceed 15% of the fair market value of all real and personal property securing the loan, the loan is treated as secured solely by real property for purposes of these rules.

In addition, if we modify a distressed debt investment by an agreement with the borrower, and if the modification is treated as a "significant modification" under the applicable Treasury regulations, the modified debt will be considered to have been reissued to us in a debt-for-debt exchange with the borrower. In that event, we may generally be required to reapportion the interest income to the real property security based on the value of the real property at the time of the modification, which may have reduced considerably. In Revenue Procedure 2014-51, the IRS provided a safe harbor under which a REIT is not required to reapportion the interest income on a mortgage loan upon a modification of the loan if the modification was occasioned by a default or would present a substantially reduced risk of default, and certain other requirements are met. Revenue Procedure 2014-51 may therefore allow us to modify certain of our distressed debt investments without adversely affecting the qualification of interest income from such debt investments for purposes of the 75% gross income test. However, we may enter into modifications of distressed debt investments that do not qualify for the safe harbor provided in Revenue Procedure 2014-51, which could adversely affect our ability to satisfy the 75% gross income test.

To the extent that we derive interest income from a loan where all or a portion of the amount of interest payable is contingent, such income generally will qualify for purposes of the gross income tests only if it is based upon the gross receipts or sales and not the net income or profits of any person. This limitation does not apply, however, to a mortgage loan where the borrower derives substantially all of its income from the property from the leasing of substantially all of its interest in the property to tenants, to the extent that the rental income derived by the borrower would qualify as rents from real property had it been earned directly by us.

To the extent that the terms of a loan provide for contingent interest that is based on the cash proceeds realized upon the sale of the property securing the loan (or a shared appreciation provision), income attributable to the participation feature will be treated as gain from sale of the underlying property, which generally will be qualifying income for purposes of both the 75% and 95% gross income tests, provided that the property is not inventory or dealer property in the hands of the borrower or if held by us.

Any amount includible in our gross income with respect to a regular or residual interest in a REMIC generally is treated as interest on an obligation secured by a mortgage on real property. If, however, less than 95% of the assets of a REMIC consists of real estate assets (determined as if we held such assets), we will be treated as receiving directly our proportionate share of the income of the REMIC for purposes of determining the amount that is treated as interest on an obligation secured by a mortgage on real property.

We believe that the interest income that we receive from our mortgage-related investments and securities generally will be qualifying income for purposes of both the 75% and 95% gross income tests. However, to the extent we own non-REMIC collateralized mortgage obligations or other debt instruments secured by mortgage loans (rather than by real property) or secured by non-real estate assets, or debt securities that are not secured by mortgages on real property or interests in real property, the interest income received with respect to such securities generally will be qualifying income for purposes of the 95% gross income test, but not the 75% gross income test. In addition, the loan amount of a mortgage loan that we own may exceed the value of the real property securing the loan. In the case of a mortgage loan that is not fully secured, income from the loan will be qualifying income for purposes of the 95% gross income test, but the interest attributable to the amount of the loan that exceeds the value of the real property securing the loan will not be qualifying income for purposes of the 75% gross income test.

We expect any RMBS that we invest in will be treated either as interests in a grantor trust or as interests in a REMIC for U.S. federal income tax purposes and that all interest income, original issue discount and market discount from such RMBS will be qualifying income for the 95% gross income test. In the case of RMBS treated as interests in grantor trusts, we would be treated as owning an undivided beneficial ownership interest in the mortgage loans held by the grantor trust. The interest, original issue discount and market discount on such mortgage loans would be qualifying income for purposes of the 75% gross income test to the extent that the obligation is secured by real property, as discussed above. In the case of RMBS treated as interests in a REMIC, income derived from REMIC interests will generally be treated as qualifying income for purposes of the 75% and 95% gross income tests. As discussed above, if less than 95% of the assets of the REMIC are real estate assets, however, then only a proportionate part of our income derived from the REMIC interest will qualify for purposes of the 75% gross income test. In addition, some REMIC securitizations include imbedded interest swap or cap contracts or other derivative instruments that potentially could produce non-qualifying income for the holder of the related REMIC securities. We expect that substantially all of our income from RMBS will be qualifying income for purposes of the REIT gross income tests.

We may also hold excess MSRs, which means the portion of an MSR that exceeds the arm's-length fee for services performed by the mortgage servicer. In certain private letter rulings, the IRS ruled that interest received by a REIT from excess MSRs meeting certain requirements will be considered interest on obligations secured by mortgages on real property for purposes of the 75% REIT gross income test. A private letter ruling may be relied upon only by the taxpayer to whom it is issued, and the IRS may revoke a private letter ruling. Consistent with the analysis adopted by the IRS in that private letter ruling and based on advice of counsel, we intend to treat income from any excess MSRs that meet the requirements provided in the private letter ruling as qualifying income for purposes of the 75% and 95% gross income tests. Notwithstanding the IRS's determination in the private letter ruling described above, it is possible that the IRS could successfully assert that such income does not qualify for purposes of the 75% and/or 95% gross income tests, which, if such income together with other income we earn that does not qualify for the 75% or 95% gross income test, as applicable, exceeded 25% or 5% of our gross income, could cause us to be subject to a penalty tax and could impact our ability to qualify as a REIT. See "*—Gross Income Tests—Failure to Satisfy the Gross Income Tests*" and "*—Failure to Qualify as a REIT*." We may hold MSRs other than excess MSRs in a TRS in order to avoid recognizing non-qualifying income for purposes of the REIT gross income tests.

***Phantom Income***

Due to the nature of the assets in which we will invest, we may be required to recognize taxable income from certain of our assets in advance of our receipt of cash flow on or proceeds from disposition of such assets, which we refer to as "phantom income," and we may be required to report taxable income in early periods that exceeds the economic income ultimately realized on such assets.

We may acquire debt instruments, including mortgage loans and RMBS, in the secondary market for less than their face amount. The discount at which such debt instruments are acquired may reflect doubts about their ultimate collectability rather than current market interest rates. The amount of such discount will nevertheless generally be treated as "market discount" for U.S. federal income tax purposes. We expect to accrue market discount on a constant yield to maturity of the debt instrument, based generally on the assumption that all future payments on the debt instrument will be made. Accrued market discount is reported as income when, and to the extent that, any payment of principal on the debt instrument is received, unless we elect to include accrued market discount in incomes as it accrues. Principal payments on certain loans are made monthly, and consequently accrued market discount may have to be included in income each month as if the debt instrument would ultimately be collected in full. If we collect less on the debt instrument than our purchase price plus any market discount we had previously reported as income, we may not be able to benefit from any offsetting loss deductions in subsequent years. In certain cases, we may be able to cease accruing interest income with respect to a debt instrument, to the extent there is reasonable doubt as to our ability to collect such interest income. However, if we recognize insufficient interest income, and the IRS were to successfully assert that we did not accrue the appropriate amount of income with respect to such a debt instrument in a given taxable year, we may be required to increase our taxable income with respect to such year, which could cause us to be required to pay a deficiency dividend or a tax on undistributed income, or fail to qualify as a REIT.

Some of the MBS and other debt instruments that we purchase will likely have been issued with OID. We will be required to accrue OID based on a constant yield method and income will accrue on the debt instruments based on the assumption that all future payments on such debt instruments will be made. If such debt instruments turn out not to be fully collectible, an offsetting loss will only become available in a later year when uncollectibility is provable. Moreover, such loss will likely be treated as a capital loss in our hands, and the utility of that deduction would therefore depend on our having capital gain in that later year or thereafter. In addition, we may also acquire distressed debt investments that are subsequently modified by agreement with the borrower. If the amendments to the outstanding debt are "significant modifications" under the applicable Treasury Regulations, the modified debt may be considered to have been reissued to us at a gain in a debt-for-debt exchange with the borrower, with gain recognized by us to the extent that the principal amount of the modified debt exceeds our cost of purchasing it prior to modification. To the extent that such modifications are made with respect to a debt instrument held by a TRS treated as a dealer for U.S. federal income tax purposes, such TRS would be required at the end of each taxable year, including the taxable year in which any such modification were made, to mark the modified debt obligation to its fair market value as if the debt obligation were sold. In that case, such TRS would recognize a loss at the end of the taxable year in which the modification were made to the extent the fair market value of such debt obligation were less than its principal amount after the modification. We may also be required under the terms of the indebtedness that we incur to use cash received from interest payments to make principal payment on that indebtedness, with the effect that we will recognize income but will not have a corresponding amount of cash available for distribution to our stockholders.

We also may hold excess MSRs directly or indirectly. Based on IRS guidance concerning the classification of MSRs, we intend to treat such excess MSRs as ownership interests in the interest payments made on the underlying mortgage loans, akin to an "interest only" strip. Under this treatment, for purposes of determining the amount and timing of taxable income, each excess MSR is treated as a bond that was issued with OID on the date we acquired such excess MSR. In general, we are required to accrue OID based on the constant yield to maturity of each excess MSR, and to treat such OID as taxable income in accordance with the applicable U.S. federal income tax rules. The constant yield of an excess MSR is determined, and is taxed, based on a prepayment assumption regarding future payments due on the mortgage loans underlying the excess MSR. If the mortgage loans underlying an excess MSR prepay at a rate different than that under the prepayment assumption, our recognition of OID will be either increased or decreased depending on the circumstances. Thus, in a particular taxable year, we may be required to accrue an amount of income in respect of an excess MSR that exceeds the amount of cash collected in respect of that excess MSR. Furthermore, it is possible that, over the life of the investment in an excess MSR, the total amount we pay for, and accrue with respect to, the excess MSR may exceed the total amount we collect on such excess MSR. No assurance can be given that we will be entitled to a deduction for such excess, meaning that we may be required to recognize phantom income over the life of an excess MSR.

In addition to the rules described above, we are generally required to include certain amounts in income no later than the time that the amounts are reflected on our financial statements, subject to an exception for MSRs and certain other exceptions. This rule could cause us to be required to take income into account earlier than under the general tax principles otherwise discussed herein.

Due to each of these potential differences between income recognition or expense deduction and related cash receipts or disbursements, there is a significant risk that we may have substantial taxable income in excess of cash available for distribution. In that event, we may need to borrow funds or take other actions to satisfy the REIT distribution requirements for the taxable year in which this "phantom income" is recognized. See "*—Annual Distribution Requirements*."

***Fee Income***

We may receive various fees in connection with our operations. The fees generally will be qualifying income for purposes of both the 75% and 95% gross income tests if they are received in consideration for entering into an agreement to make a loan secured by real property and the fees are not determined by income or profits. Other fees are not qualifying income for purposes of either the 75% or 95% gross income test. Any fees earned by a TRS are not included for purposes of the gross income tests.

***Dividend Income***

We may receive distributions from TRSs or other corporations that are not REITs or qualified REIT subsidiaries. These distributions are generally classified as dividend income to the extent of the earnings and profits of the distributing corporation. Such distributions generally constitute qualifying income for purposes of the 95% gross income test, but not the 75% gross income test. Any dividends received by us from a REIT will be qualifying income in our hands for purposes of both the 95% and 75% gross income tests.

Income inclusions from equity investments in certain foreign corporations, are technically neither dividends nor any of the other enumerated categories of income specified in the 95% gross income test for U.S. federal income tax purposes. However, under IRS guidance, such income inclusions generally will constitute qualifying income for purposes of the REIT 95% gross income test.

Income inclusions under the Internal Revenue Code rules relating to "controlled foreign corporations" and "passive foreign investment companies" with respect to certain equity investments in a foreign TRS or other non-U.S. corporation in which we may hold an equity interest are technically neither dividends nor any of the other enumerated categories of income specified in the 95% gross income test for U.S. federal income tax purposes. In Revenue Procedure 2018-48, the IRS stated that such income inclusions will be treated as qualifying income for purposes of the 95% gross income test and that certain foreign currency gains related thereto would be disregarded in applying the 95% gross income test.

***Hedging Transactions***

We may enter into hedging transactions with respect to one or more of our assets or liabilities. Hedging transactions could take a variety of forms, including hedging instruments such as interest rate swap agreements, interest rate cap agreements, interest rate floor or collar agreements, interest only strips, options, futures contracts, forward rate agreements, swaptions, similar financial instruments or other financial instruments that we deem appropriate. Except to the extent provided by Treasury regulations, any income from a hedging transaction we enter into (1) in the normal course of our business primarily to manage risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets, which is clearly identified as specified in Treasury regulations before the close of the day on which it was acquired, originated, or entered into, including gain from the sale or disposition of such a transaction, (2) primarily to manage risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income tests which is clearly identified as such before the close of the day on which it was acquired, originated, or entered into, and (3) primarily to manage risk with respect to a hedging transaction described in clause (1) or (2) after the extinguishment of such borrowings or disposal of the asset producing such income that is hedged by the hedging transaction, provided, in each case, that the hedging transaction is clearly identified as such before the close of the day on which it was acquired, originated or entered into, will not constitute gross income for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of the 75% and 95% gross income tests. We intend to structure any hedging transactions in a manner that does not jeopardize our qualification as a REIT but there can be no assurances we will be successful in this regard.

***Rents from Real Property***

To the extent that we own real property or interests therein, rents we receive qualify as "rents from real property" in satisfying the gross income tests described above, only if several conditions are met, including the following. If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under any particular lease, then all of the rent attributable to such personal property will not qualify as rents from real property. The determination of whether an item of personal property constitutes real or personal property under the REIT provisions of the Internal Revenue Code is subject to both legal and factual considerations and is therefore subject to different interpretations. We intend to structure any leases so that the rent payable thereunder will qualify as "rents from real property," but there can be no assurance we will be successful in this regard.

In addition, in order for rents received by us to qualify as "rents from real property," the rent must not be based in whole or in part on the income or profits of any person. However, an amount will not be excluded from rents from real property solely by being based on a fixed percentage or percentages of sales or if it is based on the net income of a tenant which derives substantially all of its income with respect to such property from subleasing of substantially all of such property, to the extent that the rents paid by the subtenants would qualify as rents from real property, if earned directly by us. Moreover, for rents received to qualify as "rents from real property," we generally must not operate or manage the property or furnish or render certain services to the tenants of such property, other than through an "independent contractor" who is adequately compensated and from which we derive no income or through a TRS. We are permitted, however, to perform services that are "usually or customarily rendered" in connection with the rental of space for occupancy only and are not otherwise considered rendered to the occupant of the property. In addition, we may directly or indirectly provide non-customary services to tenants of our properties without disqualifying all of the rent from the property if the greater of 150% of our direct cost in furnishing or rendering the services or the payment for such services does not exceed 1% of the total gross income from the property for the relevant taxable year. In such a case, only the amounts for non-customary services are not treated as rents from real property and the provision of the services does not otherwise disqualify the related rent.

Rental income will qualify as rents from real property only to the extent that we do not directly or constructively own, (1) in the case of any tenant which is a corporation, stock possessing 10% or more of the total combined voting power of all classes of stock entitled to vote, or 10% or more of the total value of shares of all classes of stock of such tenant, or (2) in the case of any tenant which is not a corporation, an interest of 10% or more in the assets or net profits of such tenant.

***Failure to Satisfy the Gross Income Tests***

We intend to monitor our sources of income, including any non-qualifying income received by us, and manage our assets so as to ensure our compliance with the gross income tests. We cannot assure you, however, that we will be able to satisfy the gross income tests. If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may still qualify as a REIT for the year if we are entitled to relief under applicable provisions of the Internal Revenue Code. These relief provisions will generally be available if our failure to meet these tests was due to reasonable cause and not due to willful neglect and, following the identification of such failure, we set forth a description of each item of our gross income that satisfies the gross income tests in a schedule for the taxable year filed in accordance with the Treasury regulation. It is not possible to state whether we would be entitled to the benefit of these relief provisions in all circumstances. If these relief provisions are inapplicable to a particular set of circumstances involving our failure to satisfy the gross income tests, we will not qualify as a REIT. As discussed above under "—*Taxation of REITs in General*," even where these relief provisions apply, a tax would be imposed upon the profit attributable to the amount by which we fail to satisfy the particular gross income test, which could be a significant amount.

**Asset Tests** 

At the close of each calendar quarter we must also satisfy five tests relating to the nature of our assets. First, at least 75% of the value of our total assets must be represented by some combination of "real estate assets," cash, cash items, U.S. government securities and, under some circumstances, stock or debt instruments purchased with new capital. For this purpose, real estate assets include interests in real property, such as land, buildings, leasehold interests in real property, stock of other corporations that qualify as REITs, interests in mortgages secured by real property or interests in real property, and certain kinds of RMBS and mortgage loans, and debt instruments issued by publicly offered REITs, interests in obligations secured by both real property and personal property if the fair market value of the personal property does not exceed 15% of the total fair market value securing such mortgage, and personal property to the extent income from such personal property is treated as "rents from real property" because the personal property is rented in connection with a rental of real property and constitutes less than 15% of the aggregate property rented. Regular or residual interests in REMICs are generally treated as a real estate asset. If, however, less than 95% of the assets of a REMIC consists of real estate assets (determined as if we held such assets), we will be treated as owning our proportionate share of the assets of the REMIC. Assets that do not qualify for purposes of the 75% test are subject to the additional asset tests described below. Second, the value of any one issuer's securities owned by us may not exceed 5% of the value of our total assets. Third, we may not own more than 10% of any one issuer's outstanding securities, as measured by either (A) voting power or (B) value (the "**10% value test**"). Fourth, the aggregate value of all securities of TRSs held by us may not exceed 20% of the value of our total assets. Fifth, the aggregate value of debt instruments issued by publicly offered REITs held by us that are not otherwise secured by real property may not exceed 25% of the value of our total assets.

The 5% and 10% asset tests described above do not apply to securities of TRSs, qualified REIT subsidiaries, or securities that are "real estate assets" for purposes of the 75% gross asset test described above. The 10% value test does not apply to certain "straight debt" and other excluded securities described in the Internal Revenue Code including, but not limited to, any loan to an individual or an estate, any obligation to pay rents from real property and any security issued by a REIT. In addition, for purposes of the 10% value test (a) a REIT's interest as a partner in a partnership is not considered a security; (b) any debt instrument issued by a partnership (other than straight debt or other excluded security) will not be considered a security issued by the partnership if at least 75% of the partnership's gross income is derived from sources that would qualify for the 75% REIT gross income test; and (c) any debt instrument issued by a partnership (other than straight debt or other excluded security) will not be considered a security issued by the partnership to the extent of the REIT's interest as a partner in the partnership.

For purposes of the 10% value test, "straight debt" means a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, (ii) the interest rate and interest payment dates are not contingent on profits, the borrower's discretion, or similar factors other than certain contingencies relating to the timing and amount of principal and interest payments, as described in the Internal Revenue Code and (iii) in the case of an issuer that is a corporation or a partnership, securities that otherwise would be considered straight debt will not be so considered if we, and any of our "controlled taxable REIT subsidiaries" as defined in the Internal Revenue Code, hold any securities of the corporate or partnership issuer which (a) are not straight debt or other excluded securities (prior to the application of this rule), and (b) have an aggregate value greater than 1% of the issuer's outstanding securities (including, for purposes of a partnership issuer, our interest as a partner in the partnership).

In addition, we may have to enter into repurchase agreements under which we nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase the sold assets. We believe that we will be treated for U.S. federal income tax purposes as the owner of the assets that are the subject of any such agreements notwithstanding that we may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could assert that we did not own the assets during the term of the repurchase agreement, in which case we could fail to qualify as a REIT.

A real estate mortgage loan that we own generally will be treated as a real estate asset for purposes of the 75% REIT asset test if, on the date that we acquire or originate the mortgage loan, the value of the real property securing the loan (which includes for these purposes personal property securing the loan if such personal property does not exceed 15% of the total fair market value of all of the property securing such loan) is equal to or greater than the principal amount of the loan or the loan either is secured only by real property or in the case of a loan secured by real and personal property, the value of the personal property securing the loan does not exceed 15% of the value of all property securing the loan. In the event that we invest in a mortgage loan that is secured by both real property and personal property the value of which is more than 15% of the value of all property securing the loan (and the fair market value of the other property securing the loan exceeds 15% of the total fair market value of all of the property securing such loan), Revenue Procedure 2014-51, may apply to determine what portion of the mortgage loan will be treated as a real estate asset for purposes of the 75% asset test. Pursuant to Revenue Procedure 2014-51, the IRS has announced that it will not challenge a REIT's treatment of a loan as a real estate asset if the REIT treats the loan as a real estate asset in an amount equal to the lesser of (1) the value of the loan or (2) the greater of (i) the current value of the real property securing the loan or (ii) the value of the real property securing the loan at the relevant testing date (generally, the date the REIT commits to make the loan or to purchase the loan, as the case may be). This safe harbor, if it applied to us, would help us comply with the REIT asset tests following the acquisition of distressed debt if the value of the real property securing the loan were to subsequently decline.

In addition, if we modify a distressed debt investment of ours by an agreement with the borrower, and if the modification is treated as a "significant modification" under the applicable Treasury regulations, the modified debt may be considered to have been reissued to us in a debt-for-debt exchange with the borrower. In that event, we may generally be required to redetermine the portion of the loan that is treated as a real estate asset for purposes of the REIT asset tests. In Revenue Procedure 2014-51, the IRS has provided a safe harbor under which a REIT is not required to redetermine the value of real property securing a mortgage loan for purposes of the REIT asset tests in the event of a significant modification of the loan if the modification meets certain requirements. See "*—Income Tests—Interest Income*." However, we may enter into modifications of distressed debt investments that do not qualify for the safe harbor provided in Revenue Procedure 2014-51, which could adversely affect our ability to satisfy the REIT asset tests. Accordingly, there can be no assurance that the IRS will not contend that our interests in mortgage loans cause a violation of the REIT asset tests. The Internal Revenue Code provides that a regular or a residual interest in a REMIC is generally treated as a real estate asset for the purposes of the REIT asset tests, and any amount includible in our gross income with respect to such an interest is generally treated as interest on an obligation secured by a mortgage on real property for the purposes of the REIT gross income tests. If, however, less than 95% of the assets of a REMIC in which we hold an interest consist of real estate assets (determined as if we held such assets), we will be treated as holding our proportionate share of the assets of the REMIC for the purpose of the REIT asset tests and receiving directly our proportionate share of the income of the REMIC for the purpose of determining the amount of income from the REMIC that is treated as interest on an obligation secured by a mortgage on real property.

***Failure to Satisfy the Asset Tests***

After initially meeting the asset tests at the close of any quarter, we will not lose our qualification as a REIT for failure to satisfy the asset tests at the end of a later quarter solely by reason of changes in asset values. If we fail to satisfy the asset tests because we acquire or increase our ownership interest in securities during a quarter, we can cure this failure by disposing of sufficient non-qualifying assets within 30 days after the close of that quarter. If we fail the 5% asset test, or the 10% vote or value asset tests at the end of any quarter and such failure is not cured within 30 days thereafter, we may dispose of sufficient assets (generally within six months after the last day of the quarter in which our identification of the failure to satisfy these asset tests occurred) to cure such a violation that does not exceed the lesser of 1% of our assets at the end of the relevant quarter or $10,000,000. If we fail any of the other asset tests or our failure of the 5% and 10% asset tests is in excess of the de minimis amount described above, as long as such failure was due to reasonable cause and not willful neglect, we are permitted to avoid disqualification as a REIT, after the 30 day cure period, by taking steps including the disposition of sufficient assets to meet the asset test (generally within six months after the last day of the quarter in which our identification of the failure to satisfy the REIT asset test occurred) and paying a tax equal to the greater of $50,000 or the highest U.S. federal corporate income tax rate (currently 21%) of the net income generated by the non-qualifying assets during the period in which we failed to satisfy the asset test.

We expect that the assets comprising our mortgage-related investments and securities that we will own generally will be qualifying assets for purposes of the 75% asset test, and we intend to monitor our compliance on an ongoing basis. There can be no assurance, however, that we will continue to be successful in this effort. We do not expect to obtain independent appraisals to support our conclusions as to the total value of our assets or the value of any particular security or other asset. Moreover, values of some assets including our interests in our TRSs or other non-publicly traded investments may not be susceptible to a precise determination and are subject to change in the future. Furthermore, the proper classification of an instrument as debt or equity for U.S. federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT asset tests. Accordingly, there can be no assurance that the IRS will not contend that our interests in subsidiaries or in the securities of other issuers cause a violation of the REIT asset tests.

***Annual Distribution Requirements***

In order to qualify as a REIT, we are required to distribute dividends, other than capital gain dividends, to our stockholders in an amount at least equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
sum of:

● 90% of our "REIT taxable income" (computed without regard to our deduction for dividends paid and our net capital gains); and

● 90% of the net income (after tax), if any, from foreclosure property (as described below) and recognized built-in gain (as discussed above); minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
sum of specified items of non-cash income that exceeds a percentage of our income.

These distributions must be paid in the taxable year to which they relate or in the following taxable year if such distributions are declared in October, November or December of the taxable year, are payable to stockholders of record on a specified date in any such month and are actually paid before the end of January of the following year. Such distributions are treated as both paid by us and received by each stockholder on December 31 of the year in which they are declared. In addition, at our election, a distribution for a taxable year may be declared before we timely file our tax return for the year and be paid with or before the first regular dividend payment after such declaration, provided that such payment is made during the 12-month period following the close of such taxable year. These distributions are taxable to our stockholders in the year in which paid, even though the distributions relate to our prior taxable year for purposes of the 90% distribution requirement.

In order for distributions to be counted toward our distribution requirement, and to give rise to a tax deduction to us, they cannot be "preferential dividends." A dividend is not a preferential dividend if it is pro rata among all outstanding shares of stock within a particular class, and is in accordance with the preferences among our different classes of stock as set forth in our organizational documents. These preferential dividend limitations will not apply to us during any period that we are treated as a publicly offered REIT, which generally includes a REIT required to file annual and periodic reports with the SEC.

To the extent that we distribute at least 90%, but less than 100%, of our "REIT taxable income," as adjusted, we will be subject to tax at ordinary U.S. federal corporate tax rates on the retained portion. In addition, we may elect to retain, rather than distribute, our net long-term capital gains and pay tax on such gains. In this case, we could elect to have our stockholders include their proportionate share of such undistributed long-term capital gains in income and receive a corresponding credit or refund, as the case may be, for their proportionate share of the tax paid by us. Our stockholders would then increase the adjusted basis of their stock in us by the difference between the designated amounts included in their long-term capital gains and the tax deemed paid with respect to their proportionate shares. Stockholders that are U.S. corporations would also appropriately adjust their earnings and profits for the retained capital gains in accordance with Treasury regulations to be promulgated.

If we fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain net income for such year and (c) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of such required distribution over the sum of (x) the amounts actually distributed (taking into account excess distributions from prior periods) and (y) the amounts of income retained on which we have paid U.S. federal corporate income tax. We intend to make timely distributions so that we are not subject to the 4% excise tax.

It is possible that we, from time to time, may not have sufficient cash to meet the distribution requirements due to timing differences between (a) the actual receipt of cash, including receipt of distributions from our subsidiaries and (b) the inclusion of items in income by us for U.S. federal income tax purposes. For example, we may acquire debt instruments or notes whose face value may exceed its issue price as determined for U.S. federal income tax purposes, resulting in original issue discount, such that we will be required to include in our income a portion of the original issue discount each year that the instrument is held before we receive any corresponding cash. Furthermore, we may invest in assets that accrue market discount, which may require us to defer a portion of the interest deduction for interest paid on debt incurred to acquire or carry such assets. In addition, we generally are required to include certain amounts in income no later than the time that the amounts are reflected on our financial statements, which could cause us to be required to take income into account earlier than under general tax principals, resulting in "phantom income." In the event that such timing differences occur, in order to meet the distribution requirements, it might be necessary to arrange for short-term, or possibly long-term, borrowings, to use cash reserves, to liquidate non cash assets at rates or times we regard as unfavorable, or to pay dividends in the form of taxable in-kind distributions of property including taxable stock dividends. In the case of a taxable stock dividend, stockholders would be required to include the dividend as income and would be required to satisfy the tax liability associated with the distribution with cash from other sources including sales of our common stock. We may be able to rectify a failure to meet the distribution requirements for a year by paying "deficiency dividends" to stockholders in a later year, which may be included in our deduction for dividends paid for the earlier year. In this case, we may be able to avoid losing our qualification as a REIT or being taxed on amounts distributed as deficiency dividends. However, we will be required to pay interest and a penalty based on the amount of any deduction taken for deficiency dividends.

**Penalty Tax**

Any redetermined rents, redetermined deductions, excess interest, or redetermined TRS service income that we or a TRS generates will be subject to a 100% penalty tax. In general, redetermined rents are rents from real property that are overstated as a result of any services furnished to any of our tenants by a TRS, redetermined deductions and excess interest represent any amounts that are deducted by a TRS for amounts paid to us that are in excess of the amounts that would have been deducted based on arm's-length negotiations, and redetermined TRS service income is income of a TRS attributable to services provided to, or on behalf of, us (other than services furnished or rendered to a customer of ours) to the extent such income is lower than the income the TRS would have earned based on arm's-length negotiations. Rents that we receive will not constitute redetermined rents if they qualify for certain safe harbor provisions contained in the Code.

This determination of whether any amount is arm's-length is inherently factual, and the IRS may assert that any such amounts paid or received by a TRS of ours do not represent arm's-length amounts. If the IRS successfully made such an assertion, we would be required to pay a 100% penalty tax on the excess of an arm's-length fee for tenant services over the amount actually paid.

**Recordkeeping Requirements** 

We are required to maintain records and request on an annual basis information from specified stockholders. These requirements are designed to assist us in determining the actual ownership of our outstanding stock and maintaining our qualification as a REIT.

**Excess Inclusion Income** 

A portion of our income may come from a TMP arrangement, which might be non-cash accrued income, could be treated as "excess inclusion income." While we generally intend to structure any securitizations we enter into in a manner that is intended to avoid generating excess inclusion income, there can be no assurance that we will be able to do so. A REIT's excess inclusion income, including any excess inclusion income from a residual interest in a REMIC, must be allocated among its stockholders in proportion to dividends paid. We are required to notify stockholders of the amount of "excess inclusion income" allocated to them. A stockholder's share of excess inclusion income:

● cannot be offset by any net operating losses otherwise available to the stockholder;

● in the case of a stockholder that is a REIT, a RIC, or a common trust fund or other pass-through entity, is considered excess inclusion income of such entity;

● is subject to tax as unrelated business taxable income in the hands of most types of stockholders that are otherwise generally exempt from U.S. federal income tax;

● results in the application of U.S. federal income tax withholding at the maximum rate (30%), without reduction for any otherwise applicable income tax treaty or other exemption, to the extent allocable to most types of non-U.S. stockholders; and

● is taxable (at the highest U.S. federal corporate tax rate, currently 21%) to the REIT, rather than its stockholders, to the extent allocable to the REIT's stock held in record name by disqualified organizations (generally, tax-exempt entities not subject to unrelated business income tax, including governmental organizations).

The manner in which excess inclusion income is calculated, or would be allocated to stockholders, including allocations among shares of different classes of stock, is not clear under current law. As required by IRS guidance, if we were required to recognize excess inclusion income, we intend to make such determinations using a reasonable method.

Tax-exempt investors, RIC or REIT investors, non-U.S. investors and taxpayers with net operating losses should carefully consider the tax consequences described above, and are urged to consult their tax advisors with respect to the U.S. federal income tax consequences of an investment in our securities.

If a subsidiary partnership of ours that we do not wholly-own, directly or through one or more disregarded entities, were a TMP, the foregoing rules would not apply. Rather, the partnership that is a TMP would be treated as a corporation for U.S. federal income tax purposes, and potentially would be subject to U.S. federal corporate income tax or withholding tax. In addition, this characterization would alter our income and asset test calculations, and could adversely affect our compliance with those requirements. We intend to monitor the structure of any TMPs in which we will have an interest to ensure that they will not adversely affect our qualification as a REIT.

**Prohibited Transactions** 

Net income we derive from a prohibited transaction is subject to a 100% tax. The term "prohibited transaction" generally includes a sale or other disposition of property (other than foreclosure property) that is held as inventory or primarily for sale to customers, in the ordinary course of a trade or business by a REIT, by a lower-tier partnership in which the REIT holds an equity interest or by a borrower that has issued a shared appreciation mortgage or similar debt instrument to the REIT. We intend to conduct our operations so that no asset owned by us or our pass-through subsidiaries will be held as inventory or primarily for sale to customers, and that a sale of any assets owned by us directly or through a pass-through subsidiary will not be in the ordinary course of business. However, whether property is held as inventory or "primarily for sale to customers in the ordinary course of a trade or business" depends on the particular facts and circumstances. No assurance can be given that any particular asset in which we hold a direct or indirect interest will not be treated as property held as inventory or primarily for sale to customers or that certain safe harbor provisions of the Internal Revenue Code that prevent such treatment will apply. The 100% tax will not apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such income will be subject to tax in the hands of the corporation at regular U.S. federal corporate income tax rates (currently 21%).

**Foreclosure Property** 

Foreclosure property is real property and any personal property incident to such real property (1) that is acquired by a REIT as a result of the REIT having bid on the property at foreclosure or having otherwise reduced the property to ownership or possession by agreement or process of law after there was a default (or default was imminent) on a lease of the property or a mortgage loan held by the REIT and secured by the property, (2) for which the related loan or lease was acquired by the REIT at a time when default was not imminent or anticipated and (3) for which such REIT makes a proper election to treat the property as foreclosure property. REITs generally are subject to tax at the maximum U.S. federal corporate tax rate (currently 21%) on any net income from foreclosure property, including any gain from the disposition of the foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75% gross income test. Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions described above, even if the property would otherwise constitute inventory or dealer property in the hands of the selling REIT. We do not anticipate that we will receive any income from foreclosure property that is not qualifying income for purposes of the 75% gross income test, but, if we do receive any such income, we intend to elect to treat the related property as foreclosure property.

**Failure to Qualify** 

In the event that we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a REIT, we may nevertheless continue to qualify as a REIT under specified relief provisions that will be available to us to avoid such disqualification if (1) the violation is due to reasonable cause and not due to willful neglect, (2) we pay a penalty of $50,000 for each failure to satisfy a requirement for qualification as a REIT and (3) the violation does not include a violation under the gross income or asset tests described above (for which other specified relief provisions are available). This cure provision reduces the instances that could lead to our disqualification as a REIT for violations due to reasonable cause. If we fail to qualify for taxation as a REIT in any taxable year and none of the relief provisions of the Internal Revenue Code apply, we will be subject to tax on our taxable income at regular corporate rates. Distributions to our stockholders in any year in which we are not a REIT will not be deductible by us, nor will they be required to be made. In this situation, to the extent of current and accumulated earnings and profits, and, subject to limitations of the Internal Revenue Code, distributions to our stockholders will generally be taxable in the case of our stockholders who are individual U.S. stockholders (as defined below), at a maximum rate of 20%, and dividends in the hands of our corporate U.S. stockholders may be eligible for the dividends received deduction. Unless we are entitled to relief under the specific statutory provisions, we will also be disqualified from re-electing to be taxed as a REIT for the four taxable years following a year during which qualification was lost. It is not possible to state whether, in all circumstances, we will be entitled to statutory relief.

**Taxation of Taxable U.S. Stockholders** 

This section summarizes the taxation of U.S. stockholders that are not tax-exempt organizations. For these purposes, a U.S. stockholder is a beneficial owner of our common stock that for U.S. federal income tax purposes is:

● an individual who is a citizen or resident of the United States;

● a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or of a political subdivision thereof (including the District of Columbia);

● an estate whose income is subject to U.S. federal income taxation regardless of its source; or

● any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our stock, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding our common stock should consult its own tax advisor regarding the U.S. federal income tax consequences to the partner of the acquisition, ownership and disposition of our stock by the partnership.

***Distributions***

Provided that we qualify as a REIT, distributions made to our taxable U.S. stockholders out of our current and accumulated earnings and profits, and not designated as capital gain dividends, will generally be taken into account by them as ordinary dividend income and will not be eligible for the dividends received deduction for corporations. In determining the extent to which a distribution with respect to our common stock constitutes a dividend for U.S. federal income tax purposes, our earnings and profits will be allocated first to distributions with respect to our preferred stock, if any, and then to our common stock. Dividends received from REITs are generally not eligible to be taxed at the preferential qualified dividend income rates applicable to non-corporate U.S. stockholders who receive dividends from taxable subchapter C corporations. However, for taxable years beginning after December 31, 2017 and before January 1, 2026, pursuant to Section 199A of the Internal Revenue Code, non-corporate taxpayers may deduct up to 20% of certain qualified business income, including "qualified REIT dividends" (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Pursuant to Treasury regulations, in order for a dividend paid by a REIT to be eligible to be treated as a "qualified REIT dividend," the U.S. stockholder must meet two holding period-related requirements. First, the U.S. stockholder must hold the REIT stock for a minimum of 46 days during the 91-day period that begins 45 days before the date on which the REIT stock becomes ex-dividend with respect to the dividend. Second, the qualifying portion of the REIT dividend is reduced to the extent that the U.S. stockholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. In addition, Treasury regulations provide that shareholders of RICs are also entitled to the 20% deduction with respect to certain "Section 199A dividends" that are attributable to qualified REIT dividends received by such RICs, provided that the applicable stockholder satisfies the holding period requirements discussed above with respect to the stockholder's RIC stock. Prospective investors should consult their tax advisors concerning the applicability of these rules and any limitations on the ability to deduct all or a portion of dividends received on our securities.

In addition, distributions from us that are designated as capital gain dividends will be taxed to U.S. stockholders as long-term capital gains, to the extent that they do not exceed the actual net capital gain of our company for the taxable year, without regard to the period for which the U.S. stockholder has held its stock. To the extent that we elect under the applicable provisions of the Internal Revenue Code to retain our net capital gains, U.S. stockholders will be treated as having received, for U.S. federal income tax purposes, our undistributed capital gains as well as a corresponding credit or refund, as the case may be, for taxes paid by us on such retained capital gains. U.S. stockholders will increase their adjusted tax basis in our common stock by the difference between their allocable share of such retained capital gain and their share of the tax paid by us. Corporate U.S. stockholders may be required to treat up to 20% of some capital gain dividends as ordinary income. Long-term capital gains are generally taxable at maximum U.S. federal tax rates of 20% in the case of U.S. stockholders who are individuals, and 21% for corporations. Capital gains attributable to the sale of depreciable real property held for more than 12 months are subject to a 25% maximum U.S. federal income tax rate for U.S. non-corporate stockholders, to the extent of previously claimed depreciation deductions.

Distributions in excess of our current and accumulated earnings and profits will not be taxable to a U.S. stockholder to the extent that they do not exceed the adjusted tax basis of the U.S. stockholder's shares of our common stock in respect of which the distributions were made, but rather will reduce the adjusted tax basis of these shares. To the extent that such distributions exceed the adjusted tax basis of a U.S. stockholder's shares of our common stock, they will be included in income as long-term capital gain, or short-term capital gain if the shares have been held for one year or less. In addition, any dividend declared by us in October, November or December and payable to a U.S. stockholder of record on a specified date in any such month will be treated as both paid by us and received by the U.S. stockholder on December 31 of such year, provided that the dividend is actually paid by us before the end of January of the following calendar year.

With respect to U.S. stockholders who are taxed at the rates applicable to individuals, we may elect to designate a portion of our distributions paid to such U.S. stockholders as "qualified dividend income." A portion of a distribution that is properly designated as qualified dividend income is taxable to non-corporate U.S. stockholders as capital gain, provided that the U.S. stockholder has held our common stock with respect to which the distribution is made for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which such common stock became ex-dividend with respect to the relevant distribution. The maximum amount of our distributions eligible to be designated as qualified dividend income for a taxable year is equal to the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 qualified dividend income received by us during such taxable year from subchapter C corporations
 (including any domestic TRS in which we may own an interest);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 excess of any "undistributed" REIT taxable income recognized during the immediately
 preceding year over the U.S. federal income tax paid by us with respect to such undistributed
 REIT taxable income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 excess of any income recognized during the immediately preceding year attributable to
 the sale of a built-in-gain asset that was acquired in a carry-over basis transaction
 from a subchapter C corporation over the U.S. federal income tax paid by us with respect
 to such built-in gain;

provided that, in no case may the amount we designate as qualified dividend income exceed the amount we distribute to our stockholders as dividends with respect to the taxable year.

Generally, dividends that we receive will be treated as qualified dividend income for purposes of (a) above if the dividends are received from a domestic C corporation (other than a REIT or a RIC), any domestic TRS we may form, or a "qualified foreign corporation" and specified holding period requirements and other requirements are met.

To the extent that we have available net operating losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that must be made in order to comply with the REIT distribution requirements. Any net operating losses generated will be able to offset 80% of our net taxable income (determined without regard to the dividends paid deduction). Such losses, however, are not passed through to U.S. stockholders and do not offset income of U.S. stockholders from other sources, nor do they affect the character of any distributions that are actually made by us, which are generally subject to tax in the hands of U.S. stockholders to the extent that we have current or accumulated earnings and profits.

If excess inclusion income from a TMP or REMIC residual interest is allocated to any stockholder, that income will be taxable in the hands of the stockholder and would not be offset by any net operating losses of the stockholder that would otherwise be available. See "—*Effect of Subsidiary Entities—Taxable Mortgage Pools*" and "*—Excess Inclusion Income*." As required by IRS guidance, we intend to notify our stockholders if a portion of a dividend paid by us is attributable to excess inclusion income.

***Dispositions of Our Common Stock***

In general, a U.S. stockholder will realize gain or loss upon the sale, redemption or other taxable disposition of our common stock in an amount equal to the difference between the sum of the fair market value of any property and the amount of cash received in such disposition and the U.S. stockholder's adjusted tax basis in our common stock at the time of the disposition. In general, a U.S. stockholder's adjusted tax basis will equal the U.S. stockholder's acquisition cost, increased by the excess of net capital gains deemed distributed to the U.S. stockholder (discussed above) less tax deemed paid on it and reduced by returns of capital. In general, capital gains recognized by individuals and other non-corporate U.S. stockholders upon the sale or disposition of shares of our common stock will be subject to a maximum U.S. federal income tax rate of 20%, if our common stock is held for more than 12 months, and will be taxed at ordinary income rates of up to 37% (for taxable years beginning after December 31, 2017 and before January 1, 2026) if our common stock is held for 12 months or less. Gains recognized by U.S. stockholders that are corporations are subject to U.S. federal income tax at a maximum rate of 21%, whether or not classified as long-term capital gains. The IRS has the authority to prescribe, but has not yet prescribed, regulations that would apply a capital gain tax rate of 25% (which is generally higher than the long-term capital gain tax rates for non-corporate holders) to a portion of capital gain realized by a non-corporate holder on the sale of REIT stock or depositary shares that would correspond to the REIT's "unrecaptured Section 1250 gain."

Holders are advised to consult with their tax advisors with respect to their capital gain tax liability. Capital losses recognized by a U.S. stockholder upon the disposition of our common stock held for more than one year at the time of disposition will be considered long-term capital losses, and are generally available only to offset capital gain income of the U.S. stockholder but not ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year). In addition, any loss upon a sale or exchange of shares of our common stock by a U.S. stockholder who has held the shares for six months or less, after applying holding period rules, will be treated as a long-term capital loss to the extent of distributions received from us that were required to be treated by the U.S. stockholder as long-term capital gain.

U.S. federal income tax information reporting rules may apply to certain transactions in our stock. Where such rules apply, the "cost basis" calculated for the stock involved will be reported to the IRS and to a holder of such stock. Generally these rules apply to all shares purchased including those purchased through our distribution reinvestment plan. For "cost basis" reporting purposes, a holder may identify by lot the shares that the holder transfers or that are redeemed, but if the holder does not timely notify us of the holder's election, we will identify the shares that are transferred or redeemed on a "first in/first out" basis. The shares in our distribution reinvestment plan are also eligible for the "average cost" basis method, should a holder so elect. Information reporting (transfer statements) on other transactions may also be required under these rules. Generally, these reports are made for certain transactions. Transfer statements are issued between "brokers" and are not issued to the IRS or to a holder of stock directly.

***Passive Activity Losses and Investment Interest Limitations***

Distributions made by us and gain arising from the sale or exchange by a U.S. stockholder of our common stock will not be treated as passive activity income. As a result, U.S. stockholders will not be able to apply any "passive losses" against income or gain relating to our common stock. Distributions made by us, to the extent they do not constitute a return of capital, generally will be treated as investment income for purposes of computing the investment interest limitation. A U.S. stockholder that elects to treat capital gain dividends, capital gains from the disposition of stock or qualified dividend income as investment income for purposes of the investment interest limitation will be taxed at ordinary income rates on such amounts.

***Medicare Tax on Unearned Income***

Certain U.S. stockholders that are individuals, estates or trusts must pay an additional 3.8% tax on, among other things, dividends on and capital gains from the sale or other disposition of stock. The temporary 20% deduction currently allowed by Section 199A of the Internal Revenue Code, with respect to ordinary REIT dividends received by non-corporate taxpayers is allowed only for Chapter 1 of the Internal Revenue Code and this is not allowed as a deduction allocable to such dividends for purposes of determining the amount of net investment income subject to the 3.8% Medicare tax, which is imposed under Section 2A of the Internal Revenue Code. U.S. stockholders should consult their tax advisors regarding this tax on net investment income.

***Foreign Accounts***

Dividends to "foreign financial institutions" in respect of accounts of U.S. stockholders at such financial institutions may be subject to withholding at a rate of 30%. U.S. stockholders should consult their tax advisors regarding the effect, if any, of these withholding rules on their ownership and disposition of our securities. See *"—Foreign Accounts*" below.

***Taxation of Tax-Exempt U.S. Stockholders***

U.S. tax-exempt entities, including qualified employee pension and profit-sharing trusts and individual retirement accounts, generally are exempt from U.S. federal income taxation. However, they are subject to taxation on their unrelated business taxable income, which we refer to in this Registration Statement as UBTI. While many investments in real estate may generate UBTI, the IRS has ruled that dividend distributions from a REIT to a tax-exempt entity do not constitute UBTI. Based on that ruling, and provided that (1) a tax-exempt U.S. stockholder has not held our common stock as "debt financed property" within the meaning of the Internal Revenue Code (i.e., where the acquisition or holding of the property is financed through a borrowing by the tax-exempt stockholder) and (2) we do not hold an asset that gives rise to "excess inclusion income" (see "*—Effect of Subsidiary Entities*" and "*—Excess Inclusion Income*"), distributions from us and income from the sale of our common stock generally should not give rise to UBTI to a tax-exempt U.S. stockholder. As previously noted, we may engage in transactions that would result in a portion of our dividend income being considered "excess inclusion income," and accordingly, it is possible that a portion of our dividends received by a tax-exempt stockholder will be treated as UBTI.

Tax-exempt U.S. stockholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans exempt from U.S. federal income taxation under Sections 501(c)(7), (c)(9) and (c)(17) of the Internal Revenue Code, respectively, are subject to different UBTI rules, which generally will require them to characterize distributions from us as UBTI, unless they are able to properly exclude certain amounts set aside or placed in reserve for specific purposes so as to offset the income generated by its investment in our common stock. These prospective investors should consult their tax advisors concerning these "set aside" and reserve requirements.

In certain circumstances, a pension trust (1) that is described in Section 401(a) of the Internal Revenue Code, (2) that is tax exempt under Section 501(a) of the Internal Revenue Code, and (3) that owns more than 10% of our stock could be required to treat a percentage of the dividends from us as UBTI if we are a "pension-held REIT." We will not be a pension-held REIT unless (1) either (A) one pension trust owns more than 25% of the value of our stock, or (B) a group of pension trusts, each individually holding more than 10% of the value of our stock, collectively owns more than 50% of such stock; and (2) we would not have qualified as a REIT but for the fact that Section 856(h)(3) of the Internal Revenue Code provides that stock owned by such trusts shall be treated, for purposes of the requirement that not more than 50% of the value of the outstanding stock of a REIT is owned, directly or indirectly, by five or fewer "individuals" (as defined in the Internal Revenue Code to include certain entities), as owned by the beneficiaries of such trusts. Although we do not anticipate that we will be treated as a pension-held REIT, there can be no assurance that this will be the case. Prospective stockholders who are tax-exempt organizations should consult with their tax advisors regarding the tax consequences of investing in our securities. Certain restrictions on ownership and transfer of our stock should generally prevent a tax-exempt entity from owning more than 10% of the value of our stock, or us from becoming a pension-held REIT.

Tax-exempt U.S. stockholders are urged to consult their tax advisors regarding the U.S. federal, state, local and foreign tax consequences of owning our stock.

***Taxation of Non-U.S. Stockholders***

The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock applicable to non-U.S. stockholders of our common stock. For purposes of this summary, a non-U.S. stockholder is a beneficial owner of our common stock that is neither a U.S. stockholder nor an entity that is treated as a partnership for U.S. federal income tax purposes. The discussion is based on current law and is for general information only. It addresses only selective and not all aspects of U.S. federal income taxation.

Non-U.S. stockholders should consult their tax advisors concerning the U.S. federal, state, local and foreign tax, and any estate tax consequences of ownership of our common stock.

***Ordinary Dividends***

The portion of dividends received by non-U.S. stockholders payable out of our earnings and profits that are not attributable to gains from sales or exchanges of U.S. real property interests and which are not effectively connected with a U.S. trade or business of the non-U.S. stockholder will generally be subject to U.S. federal withholding tax at the rate of 30%, unless reduced or eliminated by an applicable income tax treaty. Under some treaties, however, lower rates generally applicable to dividends do not apply to dividends from REITs. In addition, any portion of the dividends paid to non-U.S. stockholders that are treated as excess inclusion income will not be eligible for exemption from the 30% withholding tax or a reduced treaty rate. As previously noted, we may engage in transactions that would result in a portion of our dividends being considered excess inclusion income, and accordingly, it is possible that a portion of our dividend income will not be eligible for exemption from the 30% withholding rate or a reduced treaty rate. In the case of a taxable stock dividend with respect to which any withholding tax is imposed on a non-U.S. stockholder, we may have to withhold or dispose of part of the shares otherwise distributable in such dividend and use such withheld shares or the proceeds of such disposition to satisfy the withholding tax imposed.

In general, non-U.S. stockholders will not be considered to be engaged in a U.S. trade or business solely as a result of their ownership of our stock. In cases where the dividend income from a non-U.S. stockholder's investment in our common stock is, or is treated as, effectively connected with the non-U.S. stockholder's conduct of a U.S. trade or business, the non-U.S. stockholder generally will be subject to U.S. federal income tax at graduated rates, in the same manner as U.S. stockholders are taxed with respect to such dividends, and may also be subject to the 30% branch profits tax (unless reduced or eliminated by a treaty) on the income after the application of the income tax in the case of a non-U.S. stockholder that is a corporation.

***Non-Dividend Distributions***

Unless (A) our common stock constitutes a U.S. real property interest ("**USRPI**"), or (B) either (1) the non-U.S. stockholder's investment in our common stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder (in which case the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain and, in the case of a non-U.S. stockholder that is a corporation, may also be subject to the 30% branch profits tax on such gain after the application of the income tax) or (2) the non-U.S. stockholder is a non-resident alien individual who was present in the U.S. for 183 days or more during the taxable year and has a "tax home" in the U.S. (in which case the non-U.S. stockholder will be subject to a 30% tax on the individual's net capital gain for the year), distributions by us which are not dividends out of our earnings and profits will not be subject to U.S. federal income tax. If it cannot be determined at the time at which a distribution is made whether or not the distribution will exceed current and accumulated earnings and profits, the distribution will be subject to withholding at the rate applicable to dividends. However, the non-U.S. stockholder may seek a refund from the IRS of any amounts withheld if it is subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits.

If our common stock constitutes a USRPI, as described below under "*—Dispositions of our Common Stock*," distributions by us in excess of the sum of (1) a non-U.S. stockholder's proportionate share of our earnings and profits plus (2) the non-U.S. stockholder's adjusted tax basis in our common stock will be taxed under the Foreign Investment in Real Property Tax Act of 1980 ("**FIRPTA**"), at the rate of tax, including any applicable capital gains rates, that would apply to a U.S. stockholder of the same type (e.g., an individual or a corporation, as the case may be), and the collection of the tax will be enforced by a refundable withholding at a rate of 15% of the amount by which the distribution exceeds the stockholder's share of our earnings and profits. As described below, we do not expect shares of our common stock to constitute USRPIs.

***Capital Gain Dividends***

Under FIRPTA, a distribution made by us to a non-U.S. stockholder, to the extent attributable to gains from dispositions of USRPIs held by us directly or through pass-through subsidiaries ("**USRPI capital gains**") will be considered effectively connected with a U.S. trade or business of the non-U.S. stockholder and will be subject to U.S. federal income tax at the rates applicable to U.S. stockholders, without regard to whether the distribution is designated as a capital gain dividend. In addition, we will be required to withhold tax equal to 21% of the amount of capital gain dividends to the extent the dividends constitute USRPI capital gains. Distributions subject to FIRPTA may also be subject to a 30% branch profits tax (unless reduced or eliminated by a treaty) in the hands of a non-U.S. stockholder that is a corporation. However, the 21% withholding tax will not apply to any capital gain dividend (i) with respect to any class of our stock which is regularly traded on an established securities market located in the U.S. if the non-U.S. stockholder did not own more than 10% of such class of stock at any time during the one-year period ending on the date of such dividend or (ii) received by certain non-U.S. publicly traded investment vehicles meeting certain requirements. Instead, any capital gain dividend received by such a stockholder will be treated as a distribution subject to the rules discussed above under "*—Taxation of Non-U.S. Stockholders—Ordinary Dividends*." Also, the branch profits tax will not apply to such a distribution. Furthermore, distributions to "qualified foreign pension funds" or an entity all of the interests of which are held by a "qualified foreign pension fund" are exempt from FIRPTA. Non-U.S. stockholders should consult their tax advisors regarding the application of these rules. A distribution is not a USRPI capital gain if we held the underlying asset solely as a creditor, although the holding of a shared appreciation mortgage loan would not be solely as a creditor. Capital gain dividends received by a non-U.S. stockholder from a REIT that are not USRPI capital gains are generally not subject to U.S. federal income or withholding tax, unless either (1) the non-U.S. stockholder's investment in our common stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder (in which case the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain and, in the case of a non-U.S. stockholder that is a corporation, may also be subject to the 30% branch profits tax on such gain after the application of the income tax) or (2) the non-U.S. stockholder is a non-resident alien individual who was present in the U.S. for 183 days or more during the taxable year and has a "tax home" in the U.S. (in which case the non-U.S. stockholder will be subject to a 30% tax on the individual's net capital gain for the year). We do not anticipate that a material portion of our assets will constitute USRPIs.

***Dispositions of Our Common Stock***

Unless our common stock constitutes a USRPI, a sale of the stock by a non-U.S. stockholder generally will not be subject to U.S. federal income taxation under FIRPTA. Generally, with respect to any particular stockholder, our common stock will constitute a USRPI only if each of the following three statements is true:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) we
 are not a "United Sates real property holding corporation" during a specified
 testing period and certain procedural requirements are satisfied. A "United States
 real property holding corporation" is a U.S. corporation that at any time during
 the applicable testing period owned U.S. real property interests that exceeded in value
 50% of the value of the corporation's U.S. real property interests, interests in
 real property located outside the United States and other assets used in the corporation's
 trade or business. We do not expect that 50% or more of our assets will consist of U.S.
 real property interests and therefore we do not expect that we will be a United States
 real property holding corporation, although no assurance can be provided in this regard;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) we
 are not a "domestically-controlled REIT." A domestically-controlled REIT
 includes a REIT, less than 50% of value of which is held directly or indirectly by non-U.S.
 persons at all times during a specified testing period. Certain look-through and presumption
 rules will apply to any of our securities held by a RIC or another REIT. Although we
 believe that we are a domestically-controlled REIT, we cannot make any assurance that
 we will remain a domestically-controlled REIT; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) either
 (i) our common stock is not "regularly traded," as defined by applicable
 Treasury regulations, on an established securities market; or (ii) our common stock is
 "regularly traded" on an established securities market and the selling non-U.S.
 stockholder has actually or constructively held over 10% of our outstanding common stock
 any time during the shorter of the five-year period ending on the date of the sale or
 the period such selling non-U.S. stockholder held our common stock. We do not expect
 our stock to be treated as regularly traded for this purpose.

Furthermore, dispositions of our common stock by "qualified foreign pension funds" or entities all of the interests of which are held by "qualified foreign pension funds" are exempt from FIRPTA. Non-U.S. stockholders should consult their tax advisors regarding the application of these rules.

Specific wash sales rules applicable to sales of stock in a domestically-controlled REIT could result in gain recognition, taxable under FIRPTA, upon the sale of our common stock even if we are a domestically-controlled REIT. These rules would apply if a non-U.S. stockholder (a) disposes of our common stock within a 30-day period preceding the ex-dividend date of a distribution, any portion of which, but for the disposition, would have been taxable to such non-U.S. stockholder as gain from the sale or exchange of a USRPI, and (b) acquires, or enters into a contract or option to acquire, other shares of our common stock during the 61-day period that begins 30 days prior to such ex-dividend date.

If gain on the sale of our common stock were subject to taxation under FIRPTA, the non-U.S. stockholder would be subject to the same treatment as a U.S. stockholder with respect to such gain, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of non-resident alien individuals, and the purchaser of the stock could be required to withhold 15% of the purchase price and remit such amount to the IRS.

Gain from the sale of our common stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. stockholder in two cases: (a) if the non-U.S. stockholder's investment in our common stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder, the non-U.S. stockholder will be subject to the same treatment as a U.S. stockholder with respect to such gain, and, in the case of a non-U.S. stockholder that is a corporation, may also be subject to the 30% branch profits tax on such gain after the application of the income tax, or (b) if the non-U.S. stockholder is a non-resident alien individual who was present in the U.S. for 183 days or more during the taxable year and has a "tax home" in the U.S., the non-resident alien individual will be subject to a 30% tax on the individual's net capital gain.

**Backup Withholding and Information Reporting** 

We report to our U.S. stockholders and the IRS the amount of dividends paid during each calendar year and the amount of any tax withheld. Under the backup withholding rules, a U.S. stockholder may be subject to backup withholding with respect to dividends paid unless the holder comes within an exempt category and, when required, demonstrates this fact or provides a taxpayer identification number or social security number, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A U.S. stockholder that does not provide his or her correct taxpayer identification number or social security number may also be subject to penalties imposed by the IRS. Backup withholding is not an additional tax. In addition, we may be required to withhold a portion of capital gain distribution to any U.S. stockholder who fails to certify their non-foreign status.

We must report annually to the IRS and to each non-U.S. stockholder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. stockholder resides under the provisions of an applicable income tax treaty. A non-U.S. stockholder may be subject to backup withholding unless applicable certification requirements are met.

Payment of the proceeds of a sale of our common stock within the U.S. is subject to both backup withholding and information reporting unless the beneficial owner certifies under penalties of perjury that it is a non-U.S. stockholder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a U.S. person) or the holder otherwise establishes an exemption. Payment of the proceeds of a sale of our common stock conducted through certain U.S. related financial intermediaries is subject to information reporting (but not backup withholding) unless the financial intermediary has documentary evidence in its records that the beneficial owner is a non-U.S. stockholder and specified conditions are met or an exemption is otherwise established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against such holder's U.S. federal income tax liability provided the required information is timely furnished to the IRS.

**Foreign Accounts** 

Federal legislation may impose withholding taxes on certain types of payments made to "foreign financial institutions" and certain other non-U.S. entities. Under this legislation, the failure to comply with additional certification, information reporting and other specified requirements could result in withholding tax being imposed on payments of dividends to U.S. stockholders who own shares of our common stock through foreign accounts or foreign intermediaries and certain non-U.S. stockholders. Under Treasury regulations, a 30% withholding tax is imposed on payments made with respect to dividends on our common stock paid to a foreign financial institution or to a foreign entity other than a financial institution, unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign entity that is not a financial institution either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner. If the payee is a foreign financial institution (that is not otherwise exempt), it must either enter into an agreement with the U.S. Treasury Department requiring, among other things, that it undertake to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements, or in the case of a foreign financial institution that is resident in a jurisdiction that has entered into an intergovernmental agreement to implement this legislation comply with the revised diligence and reporting obligations of such intergovernmental agreement. Prospective investors should consult their tax advisors regarding this legislation.

**State, Local and Foreign Taxes** 

We and our stockholders may be subject to state, local or foreign taxation in various jurisdictions, including those in which it or they transact business, own property or reside. The state, local or foreign tax treatment of our company and our stockholders may not conform to the U.S. federal income tax treatment discussed above. Any foreign taxes incurred by us would not pass through to stockholders as a credit against their U.S. federal income tax liability. Prospective stockholders should consult their tax advisors regarding the application and effect of state, local and foreign income and other tax laws on an investment in our company's common stock.

**Legislative or Other Actions Affecting REITs** 

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, U.S. federal income tax laws applicable to us and our stockholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal income tax laws could adversely affect an investment in shares of our common stock.

Prospective investors are urged to consult with their tax advisors regarding the potential effects of legislative, regulatory, or administrative developments on an investment in our securities.

**ITEM 1A. RISK FACTORS.**

*An investment in our shares involves risks. You should specifically consider the following material risks in addition to the other information contained in this Registration Statement. The occurrence of any of the following risks might cause you to lose a significant part of your investment. The risks and uncertainties discussed below are not the only ones we face, but do represent those risks and uncertainties that we believe are most significant to our business, operating results, financial condition, prospects and forward-looking statements.*

**Risks Related to Our Organizational Structure**

***We have no operating history or experience operating as a REIT and there is no assurance that we will be able to successfully achieve our investment objectives.***

We are a newly formed entity with no operating history and may not be able to achieve our investment objectives. As of the date of this Registration Statement, we have not made any investments in real estate debt or otherwise or have any operations or financing from sources other than from the Advisor, the Sub-Advisor or their affiliates. We cannot assure you that the past experiences of affiliates of the Advisor or the Sub-Advisor will be sufficient to allow us to successfully achieve our investment objectives. As a result, an investment in our shares may entail more risk than the shares of common stock of a REIT with a substantial operating history.

***The Sub-Advisor, subject to the oversight of the Advisor, manages our portfolio pursuant to very broad investment guidelines and generally is not required to seek the approval of our board of directors for each investment, financing or asset allocation decision made by it, which may result in our making riskier investments and which could adversely affect our results of operations and financial condition.***

The Advisor is responsible for the overall management of our activities and the Sub-Advisor is responsible for the day-to-day management of our investments. The Sub-Advisor is primarily responsible for analyzing, conducting due diligence on, and selecting prospective investments. Our board of directors approved very broad investment guidelines that delegate to the Sub-Advisor, subject to the oversight of the Advisor, the authority to execute acquisitions and dispositions of real estate debt on our behalf, in each case so long as such investments are consistent with the investment guidelines or our charter. The Sub-Advisor will implement on our behalf the strategies and discretionary approaches it believes from time to time may be best suited to prevailing market conditions in furtherance of that purpose, subject to the limitations under our investment guidelines or our charter. There can be no assurance that the Sub-Advisor will be successful in implementing any particular strategy or discretionary approach to our investment activities. Our board of directors reviews our investment guidelines on an annual basis (or more often as it deems appropriate) and reviews our investment portfolio periodically. The prior approval of our board of directors will be required only for the acquisition or disposition of assets that are not in accordance with our investment guidelines. In addition, in conducting periodic reviews, our directors rely primarily on information provided to them by the Advisor and the Sub-Advisor. Furthermore, transactions entered into on our behalf by the Sub-Advisor may be costly, difficult or impossible to unwind when they are subsequently reviewed by our board of directors.

***There is no public trading market for our shares; therefore, your ability to dispose of your shares will likely be limited to repurchase by us. If you do sell your shares to us, you may receive less than the price you paid.***

There is no current public trading market for our shares, and we do not expect that such a market will ever develop. Therefore, repurchase of shares by us will likely be the only way for you to dispose of your shares. We expect to repurchase shares at a price equal to the transaction price of the class of shares being repurchased on the date of repurchase (which will generally be equal to our prior month's NAV per share) and not based on the price at which you initially purchased your shares. As a result, you may receive less than the price you paid for your shares when you sell them to us pursuant to our share repurchase plan.

***Your ability to have your shares repurchased through our share repurchase plan is limited. We may choose to repurchase fewer shares than have been requested to be repurchased, in our discretion at any time, and the number of shares we may repurchase is subject to caps. Further, our board of directors may make exceptions to, modify or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders.***

We may choose to repurchase fewer shares than have been requested in any particular quarter to be repurchased under our share repurchase plan, or none at all, in our discretion at any time. We may repurchase fewer shares than have been requested to be repurchased due to lack of readily available funds because of adverse market conditions beyond our control, the need to maintain liquidity for our operations or because we have determined that investing in real estate debt or other illiquid investments is a better use of our capital than repurchasing our shares. In addition, the aggregate NAV of total repurchases (including repurchases at any investor access funds that may be created primarily to hold our shares) is limited, in any calendar quarter, to no more than 2.5% of our aggregate NAV (based on the aggregate NAV as of the last date of the month immediately prior to the repurchase date) and, in any calendar year, to shares whose aggregate value is no more than 10.0% of our aggregate NAV (based on the average aggregate NAV as of the end of each of our trailing four quarters). Additionally, shares that have not been outstanding for at least one year, as further described in our share repurchase plan, will not be repurchased, provided that such minimum holding requirement and the pro rata repurchase requirement may be waived by us in the case of documented death, qualifying disability, or bankruptcy of a stockholder or other exigent circumstances, as further described in our share repurchase plan. Further, our board of directors may amend, suspend or terminate our share repurchase plan or waive any of its specific conditions if it deems such action to be in our best interests. If the total amount of all shares requested to be repurchased in any given quarter is not repurchased, funds will be allocated pro rata based on the total number of shares being repurchased without regard to class and subject to the volume limitation. All unsatisfied repurchase requests must be resubmitted after the start of the next quarter, or upon the recommencement of our share repurchase plan, as applicable.

Our assets will primarily consist of real estate debt that cannot generally be readily liquidated without impacting our ability to realize full value upon their disposition. Therefore, we may not always have a sufficient amount of cash to immediately satisfy repurchase requests. Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole, or should we otherwise determine that investing our liquid assets in real estate debt or other illiquid investments rather than repurchasing our shares is in our best interests as a whole, then we may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Because we are not required to authorize the recommencement of our share repurchase plan within any specified period of time, we may effectively terminate the plan by suspending it indefinitely. As a result, your ability to have your shares repurchased by us may be limited and at times you may not be able to liquidate your investment. See "*Item 1. Business—Share Repurchase Plan*."

***The shares will not be listed on an exchange or quoted through a national quotation system for the foreseeable future, if ever. Therefore, you will have limited liquidity and may not receive a full return of your invested capital if you sell your shares.***

The shares are illiquid assets for which there is not expected to be any secondary market, nor is it expected that any will develop in the future. Your ability to transfer your shares is limited. See *"Item 11. Description of Registrant's Securities to be Registered—Restrictions on Ownership and Transfer."* In an effort to provide our stockholders with liquidity in respect of their investment in our shares, we have adopted a share repurchase plan whereby, subject to certain limitations, stockholders may request on a quarterly basis that we repurchase all or any portion of their shares. However, we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in our discretion. If you are able to sell your shares, you may only be able to sell them at a substantial discount for the price you paid. Investor suitability standards imposed by certain states may also make it more difficult to sell your shares to someone in those states. The shares should be purchased as a long-term investment only.

***Economic events that may cause our stockholders to request that we repurchase their shares may materially adversely affect our cash flow and our results of operations and financial condition.***

Economic events affecting the U.S. economy, such as the general negative performance of the real estate sector, could cause our stockholders to seek to sell their shares to us pursuant to our share repurchase plan at a time when such events are adversely affecting the performance of our assets. Even if we decide to satisfy all resulting repurchase requests, our cash flow could be materially adversely affected. In addition, if we determine to sell assets to satisfy repurchase requests, we may not be able to realize the return on such assets that we may have been able to achieve had we sold at a more favorable time, and our results of operations and financial condition, including, without limitation, breadth of our portfolio by property type and location, could be materially adversely affected.

***We face risks associated with the deployment of our capital.***

In light of the nature of our continuous private offering in relation to our investment strategy and the need to be able to deploy potentially large amounts of capital quickly to capitalize on potential investment opportunities, if we have difficulty identifying and purchasing suitable assets on attractive terms, there could be a delay between the time we receive net proceeds from the sale of our shares in our private offering and the time we invest the net proceeds. We may also from time to time hold cash pending deployment into investments or have less than our targeted leverage, which cash or shortfall in target leverage may at times be significant, particularly at times when we are receiving high amounts of offering proceeds and/or times when there are few attractive investment opportunities. Such cash may be held in an account for the benefit of our stockholders that may be invested in money market accounts or other similar temporary investments, each of which are subject to management fees.

In the event we are unable to find suitable investments such cash may be maintained for longer periods which would be dilutive to overall investment returns. This could cause a substantial delay in the time it takes for your investment to realize its full potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to you. It is not anticipated that the temporary investment of such cash into money market accounts or other similar temporary investments pending deployment into investments will generate significant interest, and investors should understand that such low interest payments on the temporarily invested cash may adversely affect overall returns. In the event we fail to timely invest the net proceeds of sales of our common stock or do not deploy sufficient capital to meet our targeted leverage, our results of operations and financial condition may be adversely affected.

***The amount and source of distributions we may make to our stockholders are uncertain, and we may be unable to generate sufficient cash flows from our operations to make distributions to our stockholders at any time in the future.***

Our ability to make distributions to our stockholders may be adversely affected by a number of factors, including the risk factors described in this Registration Statement. Because we have no assets and have not identified any assets to acquire with the proceeds of our private offering as of the date of this Registration Statement, we may not generate sufficient income to make distributions to our stockholders. Our board of directors (or a committee of our board of directors) will make determinations regarding distributions based upon, among other factors, our financial performance, debt service obligations, debt covenants, REIT qualification and tax requirements and capital expenditure requirements. Among the factors that could impair our ability to make distributions to our stockholders are:

● the limited size of our portfolio in the early stages of our development;

● our inability to invest the proceeds from sales of our shares on a timely basis in income-producing assets;

● high levels of repurchase requests under our share repurchase plan for a prolonged period of time, which could lead to the disposition of investments to generate liquidity to satisfy repurchase requests.

● our inability to realize attractive risk-adjusted returns on our investments;

● high levels of expenses or reduced revenues that reduce our cash flow or non-cash earnings; and

● defaults in our investment portfolio or decreases in the value of our investments.

As a result, we may not be able to make distributions to our stockholders at any time in the future, and the level of any distributions we do make to our stockholders may not increase or even be maintained over time, any of which could materially and adversely affect the value of your investment.

***We may pay distributions from sources other than our cash flow from operations, including, without limitation, from borrowings or the sale of or repayment under our assets, expense support from the Advisor and the Sub-Advisor, or proceeds from our private offering, and we have no limits on the amounts we may pay from such sources.***

We may not generate sufficient cash flow from operations to fully fund distributions to stockholders, particularly during the early stages of our operation. Therefore, particularly in the earlier part of our private offering, we may fund distributions to our stockholders from sources other than cash flow from operations, including, without limitation, from borrowings, expense support from the Advisor and the Sub-Advisor, or the sale of or repayment under our assets. We may also fund our distributions with proceeds from our private offering. The extent to which we pay distributions from sources other than cash flow from operations will depend on various factors, including the level of participation in our distribution reinvestment plan, how quickly we invest the proceeds from our private offering and the performance of our investments, including our real estate debt portfolio. Funding distributions from borrowings or the sale of or repayment under our assets will result in us having less funds available to acquire real estate debt or other real estate-related investments. As a result, the return you realize on your investment may be reduced. Doing so may also negatively impact our ability to generate cash flows. Likewise, funding distributions from the sale of additional securities may impact the NAV of shares and the value of your investment. We may be required to continue to fund our regular distributions from a combination of some of these sources if our investments fail to perform, if expenses are greater than our revenues or due to numerous other factors. We have not established a limit on the amount of our distributions that may be paid from any of these sources.

To the extent we borrow funds to pay distributions, we would incur borrowing costs and these borrowings would require a future repayment. The use of these sources for distributions and the ultimate repayment of any liabilities incurred could adversely impact our ability to pay distributions in future periods, decrease our NAV, decrease the amount of cash we have available for operations and new investments and adversely impact the value of your investment.

We may also defer operating expenses or pay expenses (including the fees of the Advisor and the Sub-Advisor) with our shares in order to preserve cash flow for the payment of distributions. The ultimate repayment of these deferred expenses could adversely affect our operations and reduce the future return on your investment. We may repurchase shares from the Advisor or the Sub-Advisor shortly after issuing such shares as compensation. The payment of expenses in our shares will dilute your ownership interest in our portfolio of assets. There is no guarantee any of our operating expenses will be deferred and neither the Advisor nor the Sub-Advisor is under any obligation to receive future fees or distributions in our shares and may elect to receive such amounts in cash.

***Purchases and repurchases of our shares are not made based on the current NAV per share.***

Generally, our offering price per share with respect to our Class T shares, Class I shares, Class D shares, Class A shares, Class FA shares and Class E shares and the price at which we make repurchases of our shares will equal the NAV per share of the applicable class as of the last calendar day of the month immediately prior to the purchase date or the repurchase date, respectively, plus, in the case of our offering price, applicable upfront selling commissions and Managing Dealer fees. The NAV per share, if calculated as of the date on which you make your subscription request or repurchase request, may be significantly different than the transaction price you pay or the repurchase price you receive. Certain of our investments or liabilities are subject to high levels of volatility from time to time and could change in value significantly between the end of the prior month as of which our NAV is determined and the date that you acquire or we repurchase our shares; however, the prior month's NAV per share will generally continue to be used as the transaction price per share and repurchase price per share. In exceptional circumstances, we may in our sole discretion, but are not obligated to, offer and repurchase shares at a different price that we believe reflects the NAV per share of such stock more appropriately than the prior month's NAV per share, including by updating a previously disclosed transaction price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month and we believe an updated price is appropriate. In such exceptional cases, the transaction price and the repurchase price will not equal our NAV per share as of any time.

***Valuations of our assets are estimates of fair value and may not necessarily correspond to realizable value.***

Our board of directors, including a majority of our independent directors, has adopted a valuation policy that contains a comprehensive set of guidelines to be used in connection with estimating the values of our assets and liabilities for purposes of our NAV calculation. The Advisor will initially determine the fair value of our assets in accordance with our valuation policy based on the recommendation of the Sub-Advisor and with the assistance of the independent valuation advisor. The ultimate determination of the fair value of our assets for which market quotations are not readily available will be made by our board of directors. Our board of directors has also delegated the calculation of our NAV to the Administrator; however, our board of directors is ultimately responsible for the determination of our NAV. Because these fair value calculations involve significant professional judgment in the application of both observable and unobservable attributes, the calculated fair value of our assets may differ from their actual realizable value or future fair value.

Residential whole mortgage loans acquired by us will initially be valued at cost (plus capitalized costs and fees in accordance with generally accepted accounting principles in the United States ("**GAAP**")). Investments in other securities with readily available market quotations will be valued monthly at fair market value. We will also report our derivative assets and liabilities at fair value based on price quotes from at least one independent pricing service. Additionally, the Advisor and Sub-Advisor may, in their discretion, consider material market data and other information that becomes available after the end of the applicable month in valuing our assets and liabilities and calculating our NAV for a particular month. When the Advisor and Sub-Advisor deem it necessary or advisable, investments may be valued based on proprietary pricing models used by the Advisor, the Sub-Advisor or independent service providers. Investments that are listed on a national securities exchange (including such investments when traded in the after-hours market) will be valued at their last sales prices on the date of determination on the largest securities exchange (by trading volume in such investment) on which such investments will have traded on such date. If no such sales of such investments occurred on the date of determination, such investments will be valued at the midpoint between the "bid" and the "asked" price for long positions and at the "asked" price for short positions on the largest securities exchange (by trading volume in such investment) on which such investments are traded, on the date of determination. Investments that are not listed on an exchange but are traded over-the-counter will be valued at the representative "bid" quotations if held long and at representative "asked" quotations if held short. Investments that are not listed on an exchange and are not traded over-the-counter but for which external pricing or valuation sources are available will be valued in accordance with such external pricing or valuation sources; *provided*, *however*, that such valuations may be adjusted by the Advisor to account for recent trading activity or other information that may not have been reflected in pricing obtained from external sources. For more information regarding our valuation process, see "*Item 9. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters—Calculation and Valuation of Net Asset Value.*"

Within the parameters of our valuation policy, the valuation methodologies used to value our investments will involve subjective judgments and projections and may not be accurate. Valuation methodologies will also involve assumptions and opinions about future events, which may or may not turn out to be correct. Valuations of our investments will be only estimates of fair value. Ultimate realization of the value of an asset depends to a great extent on economic, market and other conditions beyond our control and the control of the Advisor and our independent valuation advisor. Further, valuations do not necessarily represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation between a willing buyer and seller. As such, the carrying value of an asset may not reflect the price at which the asset could be sold in the market, and the difference between carrying value and the ultimate sales price could be material. In addition, accurate valuations are more difficult to obtain in times of low transaction volume because there are fewer market transactions that can be considered in the context of the valuation. There will be no retroactive adjustment in the valuation of such assets, the offering price of our shares, the price we paid to repurchase our shares or NAV-based fees we paid to the Advisor, the Sub-Advisor and the Managing Dealer to the extent such valuations prove to not accurately reflect the realizable value of our assets. Because the price you will pay for our shares in our private offering, and the price at which your shares may be repurchased by us pursuant to our share repurchase plan are generally based on our prior month's NAV per share, you may pay more than realizable value or receive less than realizable value for your investment.

***Our NAV per share amounts may change materially if the valuations of our assets materially change from prior valuations or the actual operating results for a particular month differ from what we originally budgeted for that month.***

In connection with the monthly NAV process, the valuations of our assets will be conducted monthly. When these valuations are considered by the Advisor for purposes of valuing the relevant asset, there may be a material change in our NAV per share amounts for each class of our shares from those previously reported. These changes in an asset's value may be as a result of asset-specific events or as a result of more general changes to real estate values resulting from local, national or global economic changes. In addition, actual operating results for a given month may differ from what we originally budgeted for that month, which may cause a material increase or decrease in the NAV per share amounts. We will not retroactively adjust the NAV per share of each class reported for the previous month. Therefore, because a new monthly valuation may differ materially from the prior valuation or the actual results from operations may be better or worse than what we previously budgeted for a particular month, the adjustment to take into consideration the new valuation or actual operating results may cause the NAV per share for each class of our shares to increase or decrease, and such increase or decrease will occur in the month the adjustment is made.

***It may be difficult to reflect, fully and accurately, material events that may impact our monthly NAV.***

The Advisor's determination of our monthly NAV per share will be based in part on monthly valuations of our real estate debt and other securities for which market prices are not readily available reviewed by our independent valuation advisor, each in accordance with valuation policy approved by our board of directors. As a result, our published NAV per share in any given month may not fully reflect any or all changes in value that may have occurred since the most recent valuation. The Advisor and Sub-Advisor will review valuation reports and monitor our real estate debt, and are responsible for notifying the independent valuation advisor of the occurrence of any market-driven event they believe may cause a material valuation change in the real estate debt valuation, but it may be difficult to reflect fully and accurately rapidly changing market conditions or material events that may impact the value of our real estate debt or liabilities between valuations, or to obtain complete information regarding any such events in a timely manner. As a result, the NAV per share may not reflect a material event until such time as sufficient information is available and analyzed, and the financial impact is fully evaluated, such that our NAV may be appropriately adjusted in accordance with our valuation policy. Depending on the circumstance, the resulting potential disparity in our NAV may be in favor or to the detriment of either stockholders who repurchase their shares, or stockholders whose shares are repurchased, or existing stockholders.

***NAV calculations are not governed by governmental or independent securities, financial or accounting rules or standards.***

The method for calculating our NAV, including the components used in calculating our NAV, will not be prescribed by rules of the SEC or any other regulatory agency. Further, there are no accounting rules or standards that prescribe which components should be used in calculating NAV, and our NAV is not audited by our independent registered public accounting firm. We will calculate and publish NAV solely for purposes of establishing the price at which we sell and repurchase our shares, and you should not view our NAV as a measure of our historical or future financial condition or performance. The components and methodology used in calculating our NAV may differ from those used by other companies now or in the future.

In addition, calculations of our NAV, to the extent that they incorporate valuations of our assets and liabilities, will not be prepared in accordance with GAAP. These valuations may differ from liquidation values that could be realized in the event that we were forced to sell assets.

Additionally, errors may occur in calculating our NAV, which could impact the price at which we sell and repurchase our shares and the amount of the Advisor's and the Sub-Advisor's management fee and total return incentive fee. You should carefully review the disclosure of our valuation policy and how NAV will be calculated under *"Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters—Calculation and Valuation of Net Asset Value."*

***If we are unable to raise substantial funds, we will be limited in the number and type of investments we make, and the value of your investment in us will be more dependent on the performance of any of the specific assets we acquire.***

Our private offering is being made on a "best efforts" basis, which means that the Managing Dealer is only required to use its best efforts to sell our shares and has no firm commitment or obligation to purchase any shares. As a result, the amount of proceeds we raise in our private offering or otherwise may be substantially less than the amount we would need to achieve a broader portfolio of investments. If we are unable to raise substantial funds, we will make fewer investments, resulting in less breadth in terms of the type, number, geography and size of investments that we make. In that case, the likelihood that any single asset's or market's performance would adversely affect our profitability will increase. There is a greater risk that you will lose money in your investment if we have less breadth in our portfolio. Further, we will have certain fixed operating expenses, including expenses of being a public reporting company, regardless of whether we are able to raise substantial funds. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

***In the event we are able to quickly raise a substantial amount of capital, we may have difficulty investing it in assets.***

If we are able to quickly raise capital during our private offering, we may have difficulty identifying and purchasing suitable investments on attractive terms. Therefore, there could be a delay between the time we receive net proceeds from the sale of our shares in our private offering and the time we invest the net proceeds. This could cause a substantial delay in the time it takes for your investment to realize its full potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to you. If we fail to timely invest the net proceeds of our private offering, our results of operations and financial condition may be adversely affected.

***Our board of directors may, in the future, adopt certain measures under Maryland law without stockholder approval that may have the effect of making it less likely that a stockholder would receive a "control premium" for his, her or its shares.***

Corporations organized under Maryland law with a class of registered securities and at least three independent directors are permitted to elect to be subject, by a charter or bylaw provision or a board of directors resolution and notwithstanding any contrary charter or bylaw provision, to any or all of five provisions:

● staggering the board of directors into three classes;

● requiring a two-thirds vote of stockholders to remove directors;

● providing that only the board of directors can fix the size of the board;

● providing that all vacancies on the board, regardless of how the vacancy was created, may be filled only by the affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; and

● providing for a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

These provisions may discourage an extraordinary transaction, such as a merger, tender offer or sale of all or substantially all of our assets, all of which might provide a premium price for stockholders' shares. In our charter, at such time as we become eligible to make a Subtitle 8 election, we have elected pursuant to Subtitle 8 that vacancies on our board of directors be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through other provisions in our charter and bylaws, we vest in our board of directors the exclusive power to fix the number of directorships, provided that the number is not less than three. We have not elected to be subject to any of the other provisions described above, but our charter does not prohibit our board of directors from opting into any of these provisions in the future.

Further, under the Maryland Business Combination Act, we may not engage in any merger or other business combination with an "interested stockholder" (which is defined as (1) any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding voting stock and (2) an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding stock) or any affiliate of that interested stockholder for a period of five years after the most recent date on which the interested stockholder became an interested stockholder. A person is not an interested stockholder if our board of directors approved in advance the transaction by which such person would otherwise have become an interested stockholder. In approving a transaction, our board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms or conditions determined by our board of directors. After the five-year period ends, any merger or other business combination with the interested stockholder or any affiliate of the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least:

● 80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and

● two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other than those shares owned or held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder unless, among other things, our stockholders receive a minimum payment for their common stock equal to the highest price paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by our board of directors prior to the time the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution exempting any business combination involving us and any person, including CNL, Balbec, the Managing Dealer, the Advisor and the Sub-Advisor, from the provisions of this law, provided that such business combination is first approved by our board of directors.

***Our charter permits our board of directors to issue preferred stock on terms that may be senior to the rights of the holders of our shares or discourage a third party from acquiring us.***

Our board of directors is permitted, subject to certain restrictions set forth in our charter, to authorize the issuance of shares of preferred stock without stockholder approval. Further, our board of directors may classify or reclassify any unissued shares of common or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms or conditions of redemption of the stock and may amend our charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of any class or series of stock that we have authority to issue without stockholder approval. Thus, our board of directors could authorize us to issue shares of preferred stock with terms and conditions that could be senior to the rights of the holders of our shares or have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction such as a merger, tender offer or sale of all or substantially all of our assets, that might provide a premium price for holders of our shares.

***Maryland law limits, in some cases, the ability of a third party to vote shares acquired in a "control share acquisition."***

The Maryland Control Share Acquisition Act provides that "control shares" of a Maryland corporation acquired in a "control share acquisition" have no voting rights except to the extent approved by stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers or by employees who are directors of the corporation, are excluded from shares entitled to vote on the matter. "Control shares" are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A "control share acquisition" means the acquisition of issued and outstanding control shares. The control share acquisition statute does not apply: (1) to shares acquired in a merger, consolidation or share exchange if the Maryland corporation is a party to the transaction; or (2) to acquisitions approved or exempted by the charter or bylaws of the Maryland corporation. Our bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future. For a more detailed discussion on the Maryland laws governing control share acquisitions, see *"Item 11. Description of Registrant's Securities to be Registered—Control Share Acquisitions."*

***Maryland law and our organizational documents limit our rights and the rights of our stockholders to recover claims against our directors and officers, which could reduce your and our recovery against them if they cause us to incur losses.***

Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct. Maryland law and our charter provide that no director or officer shall be liable to us or our stockholders for monetary damages unless the director or officer (1) actually received an improper benefit or profit in money, property or services or (2) was actively and deliberately dishonest as established by a final judgment as material to the cause of action. Moreover, our charter requires us to indemnify and advance expenses to our directors and officers for losses they may incur by reason of their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, they actually received an improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had reasonable cause to believe the act or omission was unlawful. Further, we intend to enter into separate indemnification agreements with each of our officers and directors. Notwithstanding the above, our charter provides that we may not indemnify a director, the Advisors or any of our or the Advisors' affiliates for any liability or loss suffered by any of them, or hold any of them harmless for any loss or liability suffered by us, unless such person has determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests, such person was acting on our behalf or performing services for us, the liability or loss was not the result of negligence or misconduct by any of our non-independent directors, the Advisors or any of our or the Advisors' affiliates or gross negligence or willful misconduct by any of our independent directors, and the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from the stockholders. Nevertheless, you and we may have more limited rights against our directors or officers than might otherwise exist under common law, which could reduce your and our recovery from these persons if they act in a manner that causes us to incur losses. In addition, we are obligated to fund the defense costs incurred by these persons in some cases. See *"Item 12. Indemnification of Directors and Officers."*

***Our charter contains stock ownership limits, which may delay or prevent a change of control.***

In order for us to qualify as a REIT for each taxable year, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals during the last half of any calendar year, and at least 100 persons must beneficially own our capital stock during at least 335 days of a taxable year of 12 months, or during a proportionate portion of a shorter taxable year. "Individuals" for this purpose include natural persons, private foundations, some employee benefit plans and trusts and some charitable trusts. To assist us in complying with these limitations, among other purposes, our charter generally prohibits any person from directly or indirectly owning more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of our capital stock or more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock. These ownership limitations could also have the effect of discouraging a takeover or other transaction in which holders of our common stock might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests.

Our charter's constructive ownership rules are complex and may cause the outstanding shares owned by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of the outstanding shares, determined as described in the preceding paragraph, by an individual or entity could cause that individual or entity to own constructively in excess of 9.8% of the outstanding shares and thus violate the share ownership limits. Our charter also provides that any attempt to own or transfer shares of our common stock or preferred stock (if and when issued) in excess of the stock ownership limits without the consent of our board of directors or in a manner that would cause us to be "closely held" under Section 856(h) of the Internal Revenue Code (without regard to whether the shares are held during the last half of a taxable year) will result in the shares being deemed to be transferred to a trustee for a charitable trust or, if the transfer to the charitable trust is not automatically effective to prevent a violation of the share ownership limits or the restrictions on ownership and transfer of our stock, any such transfer of such shares being null and void. These constructive ownership rules may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.

***Your percentage ownership interest in us will be diluted if we issue additional shares.***

Holders of our shares will not have pre-emptive rights to any shares we issue in the future. Our charter authorizes us to issue a total of 1,100,000,000 shares of capital stock, of which 1,000,000,000 shares are classified as common stock, of which 200,000,000 shares are classified as Class T shares, 200,000,000 shares are classified as Class D shares, 250,000,000 shares are classified as Class I shares, 200,000,000 shares are classified as Class A shares, 100,000,000 are classified as Class FA shares, and 50,000,000 shares are classified as Class E shares and 100,000,000 shares are classified as preferred stock. In addition, our board of directors may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder approval. After you purchase our shares in our private offering, our board of directors may elect, without stockholder approval, to: (1) sell additional shares in our private or future private or public offerings; (2) issue shares upon the exercise of the options we may grant to our directors or future employees; (3) issue shares to the Advisor, the Sub-Advisor or their respective successors or assigns, in payment of an outstanding obligation to pay fees for services rendered to us; or (4) issue equity incentive compensation to certain employees of affiliated service providers or to third parties as satisfaction of obligations under incentive compensation arrangements. To the extent we issue additional shares after your purchase in our private offering, your percentage ownership interest in us will be diluted.

***Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.***

We intend to continue to conduct our operations so that we are not an investment company under the Investment Company Act. However, there can be no assurance that we and our subsidiaries will be able to successfully avoid operating as an investment company. See *"Item 1. Business—Investment Company Act Considerations."*

A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the applicable exemption under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.

If we were required to register as an investment company, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan, which could materially adversely affect our NAV and our ability to pay distributions to our stockholders.

***We depend on the Advisors to develop appropriate systems and procedures to control operational risk.***

Operational risks arising from mistakes made in the confirmation or settlement of transactions, from transactions not being properly booked, evaluated or accounted for or other similar disruption in our operations may cause us to suffer financial losses, the disruption of our business, liability to third parties, regulatory intervention or damage to our reputation. We will depend on the Advisors and their respective affiliates to develop the appropriate systems and procedures to control operational risk. We rely heavily on our financial, accounting and other data processing systems. The ability of our systems to accommodate transactions could also constrain our ability to properly manage our portfolio. The liability of the Advisors for losses incurred due to the occurrence of any such errors may be limited.

We are subject to the risk that our intended investment transactions may not be effected in a timely and efficient manner due to various circumstances, including, without limitation, systems failure or human error. As a result, we could be unable to achieve the market position selected by the Advisors or might incur a loss in liquidating our positions. Since some of the markets in which we may effect transactions are over-the-counter or interdealer markets, the participants in such markets are typically not subject to credit evaluation or regulatory oversight comparable to that which members of exchange-based markets are subject. We are also exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions, thereby causing us to suffer a loss.

**Compliance with the SEC's Regulation Best Interest by participating broker-dealers may negatively impact our ability to raise capital in our private offering, which could harm our ability to achieve our investment objectives.**

Broker-dealers are required to comply with Regulation Best Interest, which, among other requirements, establishes a new standard of conduct for broker-dealers and their associated persons when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. The full impact of Regulation Best Interest on participating broker-dealers cannot be determined at this time, and it may negatively impact whether participating broker-dealers and their associated persons recommend our private offering to certain retail customers. In particular, under SEC guidance concerning Regulation Best Interest, a broker-dealer recommending an investment in our shares should consider a number of factors, including but not limited to cost and complexity of the investment and reasonably available alternatives in determining whether there is a reasonable basis for the recommendation. Broker-dealers may recommend a more costly or complex product as long as they have a reasonable basis to believe is in the best interest of a particular retail customer. However, if broker-dealers instead choose alternatives to our shares, many of which likely exist, our ability to raise capital will be adversely affected. If Regulation Best Interest reduces our ability to raise capital in our private offering, it may harm our ability to achieve our objectives.

***We could be negatively impacted by cybersecurity attacks.***

We, and our businesses, as well as the Advisor and the Sub-Advisor, may use a variety of information technology systems in the ordinary course of business, which are potentially vulnerable to unauthorized access, computer viruses and cyber-attacks, including cyber-attacks to our information technology infrastructure and attempts by others to gain access to our propriety or sensitive information, and ranging from individual attempts to advanced persistent threats. The risk of such a security breach or disruption has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased and will likely continue to increase in the future. The procedures and controls we use to monitor these threats and mitigate our exposure may not be sufficient to prevent cybersecurity incidents. The results of these incidents could include disrupted operations, misstated or unreliable financial data, theft of trade secrets or other intellectual property, liability for disclosure of confidential customer, supplier or employee information, increased costs arising from the implementation of additional security protective measures, regulatory enforcement litigation and reputational damage, which could materially adversely affect our financial condition, business and results of operations. These risks require continuous and likely increasing attention and other resources from us to, among other actions, identify and quantify these risks, upgrade and expand our technologies, systems and processes to adequately address them and provide periodic training for the Advisor's employees to assist them in detecting phishing, malware and other schemes. Such attention diverts time and other resources from other activities and there is no assurance that our efforts will be effective. Additionally, the cost of maintaining and improving such systems and processes, procedures and internal controls may increase from its current level. Potential sources for disruption, damage or failure of our information technology systems include, without limitation, computer viruses, security breaches, human error, cyber-attacks, natural disasters and defects in design. Additionally, due to the size and nature of our company, we rely on third-party service providers for many aspects of our business. We can provide no assurance that the networks and systems that our third-party vendors have established or use will be effective. Even if we, the Advisor or the Sub-Advisor are not targeted directly, cyber-attacks on the U.S. and foreign governments, financial markets, financial institutions, or other businesses, including vendors, software creators, cybersecurity service providers, and other third parties with whom we, the Advisor or the Sub-Advisor do business, may occur, and such events could disrupt our normal business operations and networks in the future.

***We may change our investment and operational policies without stockholder consent.***

We may change our investment and operational policies, including our policies with respect to investments, operations, indebtedness, capitalization and distributions, at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier or more highly leveraged than, the types of investments described in this Registration Statement. Our board of directors also approved very broad investment policy guidelines with which we must comply, but these guidelines provide the Advisor and the Sub-Advisor with broad discretion and can be changed by our board of directors. A change in our investment strategy may, among other things, increase our exposure to real estate market fluctuations, default risk and interest rate risk, all of which could materially affect our results of operations and financial condition.

**General Risks Related to Our Investments**

***Investments in real estate debt are subject to risks including various creditor risks and early redemption features which may materially adversely affect our results of operations and financial condition.***

The real estate debt in which we may invest may not be protected by financial covenants or limitations upon additional indebtedness, may be illiquid or have limited liquidity, and may not be rated by a credit rating agency. Real estate debt is also subject to other creditor risks, including (i) the possible invalidation of an investment transaction as a "fraudulent conveyance" under relevant creditors' rights laws, (ii) so-called lender liability claims by the issuer of the obligation and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. Our investments may be subject to early redemption features, refinancing options, pre-payment options or similar provisions which, in each case, could result in the issuer repaying the principal on an obligation held by us earlier than expected, resulting in a lower return to us than anticipated or reinvesting in a new obligation at a lower return to us.

***Prepayment rates may adversely affect the value of our portfolio.***

Prepayment rates may adversely affect the value of our portfolio. Prepayment rates on our investments, where contractually permitted, are influenced by changes in current interest rates, significant improvement in the performance of underlying real estate assets and a variety of economic, geographic and other factors beyond our control. Consequently, prepayment rates cannot be predicted with certainty and no strategy can completely insulate us from increases in such rates. The conditional prepayment rate ("**CPR**") is a method of expressing the prepayment rate for a mortgage pool that assumes that a constant fraction of the remaining principal is prepaid each month or year. An increase in prepayment rates, as measured by the CPR, will typically accelerate the amortization of our securitized portfolio of loans, thereby reducing the yield or interest income earned on such assets.

In periods of declining interest rates, prepayments on investments generally increase and the proceeds of prepayments received during these periods may be reinvested by us in comparable assets at reduced yields. In addition, the market value of investments subject to prepayment may, because of the risk of prepayment, benefit less than other fixed-income securities from declining interest rates. Conversely, in periods of rising interest rates, prepayments on investments, where contractually permitted, generally decrease, in which case we would not have the prepayment proceeds available to invest in comparable assets at higher yields. Under certain interest rate and prepayment scenarios, we may fail to recoup fully our cost of certain investments.

***Our investments in RMBS may result in losses stemming from prepayments on the underlying asset and changes in interest rates.***

We intend to purchase mortgage loans and bundle such assets and issue securities backed by such assets, including re-performing and performing mortgage loans. RMBS have structural characteristics that distinguish them from other asset backed securities. For example, the rate of interest payable on RMBS may be set or effectively capped at the weighted average net coupon of the underlying mortgage loans themselves. Generally, the return to investors is dependent on the relative timing and rate of delinquencies, defaults and prepayments of mortgage loans, including mortgage loans bearing a higher rate of interest. In general, early prepayments will have a greater impact on the yield to investors. U.S. federal and state law may also affect the return to investors by capping the interest rates payable by certain mortgagors.

Although we may invest in Agency RMBS, a substantial portion of any RMBS in which we invest will not be guaranteed or insured by any governmental agency or instrumentality or by any other person. To the extent the RMBS are not guaranteed or insured by the United States or certain instrumentalities thereof, distributions on RMBS will depend solely upon the amount and timing of payments and other collections on the related underlying mortgage loans, and no other transaction party will be obligated to make payment on the RMBS. Investing in, issuing or holding structured finance securities backed by mortgage loans may entail a variety of unique risks. Among other risks, structured finance securities backed by mortgage loans may be subject to prepayment risks, credit risks, liquidity risks, interest rate risks, operations risks, structural risks and legal risks.

RMBS in general are subject to particular risks because they have yield and maturity characteristics corresponding to their underlying assets. Unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain RMBS include both interest and a partial payment of principal. This partial payment of principal may be comprised of a scheduled principal payment, as well as an unscheduled payment from the voluntary prepayment, refinancing, or foreclosure of the underlying assets. As a result of these unscheduled payments of principal, or prepayments on the underlying assets, the price and yield of RMBS can be adversely affected. For example, during periods of declining interest rates, prepayments can be expected to accelerate, and we may reinvest proceeds at the lower interest rates then available. Prepayments of mortgages that underlie securities purchased at a premium could result in capital losses because the premium may not have been fully amortized at the time the obligation is prepaid. In addition, like other interest-bearing securities, the values of RMBS generally fall when interest rates rise, but when interest rates fall, their potential for capital appreciation may be limited due to the existence of the prepayment feature.

The performance of any RMBS, and the results of hedging arrangements entered into with respect thereto, will be affected by: (1) the rate and timing of principal payments on the underlying assets; and (2) the extent to which such principal payments are applied to reduce, or otherwise result in the reduction of, the principal or notional amount of such RMBS. The rate of principal payments on a pool of RMBS will in turn be affected by the amortization schedules of the assets (which, in the case of assets with an adjustable-rate feature, may change periodically to accommodate adjustments to the mortgage rates thereon) and the rate of principal prepayments thereon (including for this purpose, voluntary prepayments by borrowers and prepayments resulting from liquidations of RMBS due to defaults, casualties, or condemnations affecting the related properties).

The extent of prepayments of principal of the assets underlying RMBS may be affected by a number of factors, including the availability of mortgage credit, the relative economic vitality of the area in which the related properties are located, the servicing of the underlying assets, possible changes in tax laws, other opportunities for investment, homeowner mobility, and other economic, social, geographic, demographic, and legal factors. In general, any factors that increase the attractiveness of selling a mortgaged property or refinancing such property, enhance a borrower's ability to sell or refinance or increase the likelihood of default under an RMBS which would be expected to cause the rate of prepayment in respect of a pool of RMBS to accelerate. In contrast, any factors having an opposite effect would be expected to cause the rate of prepayment of a pool of RMBS to slow.

The rate of prepayment on a pool of RMBS is likely to be affected by prevailing market interest rates for mortgages of a comparable type, term, and risk level. When the prevailing market interest rate is below a mortgage coupon, a borrower generally has an increased incentive to refinance. Even in the case of assets with an adjustable-rate component, as prevailing market interest rates decline, and without regard to whether the mortgage rates on such assets decline in a manner consistent therewith, the related borrowers may have an increased incentive to refinance for purposes of either: (1) converting to a fixed-rate security; or (2) taking advantage of a different index, margin, or rate cap or floor on another adjustable-rate note. Therefore, as prevailing market interest rates decline, prepayment speeds would be expected to accelerate.

Increases in monthly payments on adjustable-rate mortgages due to higher interest rates may result in greater future delinquency rates. Borrowers with adjustable payments may be exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the initial fixed rate or a low introductory rate, as applicable, to the rate computed in accordance with the applicable index and margin. This increase in borrowers' monthly payments, together with any increase in prevailing market interest rates, may result in significantly increased monthly payments for borrowers subject to adjustable rates.

Borrowers seeking to avoid these increased monthly payments by refinancing may no longer be able to find alternatives at comparably low interest rates. A decline in housing prices may also leave borrowers with insufficient equity in their homes to permit them to refinance. Furthermore, borrowers who intend to sell their homes on or before the expiration of the fixed-rate periods may find that they cannot sell their properties for an amount equal to or greater than their unpaid principal balances. These events, alone or in combination, may contribute to higher delinquency rates and therefore potentially higher losses on RMBS.

***Our investments in RMBS may involve structural and legal risks.***

RMBS have structural characteristics that distinguish them from other asset backed securities. For example, the rate of interest payable on RMBS may be set or effectively capped at the weighted average net coupon of the underlying mortgage loans themselves. Generally, our return on these investments is dependent on the relative timing and rate of delinquencies, defaults and prepayments of mortgage loans, including mortgage loans bearing a higher rate of interest. In general, early prepayments will have a greater impact on the yield to investors. U.S. federal and state law may also affect the return to investors by capping the interest rates payable by certain mortgagors.

In addition, structural and legal risks of RMBS include the possibility that, in a bankruptcy or similar proceeding involving the originator or the servicer (often the same entity or affiliates), the assets of the issuer could be treated as never having been truly sold by the originator or other seller to the related issuing entity and could be substantively consolidated with those of such originator or seller, or the transfer of such assets to the issuing entity could be voided as a fraudulent transfer. Challenges based on such doctrines could result also in cash flow delays and losses on the related issue of RMBS. Our target assets for investment include re-performing loans. Given that such loans have a history of non-performance, they are inherently risky, and when compared to loans with no history of non-performance, there is a higher risk that such loans will become non-performing loans again.

It is expected that a substantial portion of the RMBS in which we invest will not be guaranteed or insured by any governmental agency or instrumentality or by any other person, although we are permitted to invest in direct obligations of, or that are fully guaranteed as to principal and interest by, the United States or certain instrumentalities thereof. To the extent the RMBS are not guaranteed or insured by the United States or certain instrumentalities thereof, distributions on RMBS will depend solely upon the amount and timing of payments and other collections on the related underlying mortgage loans, and no other transaction party will be obligated to make payment on the RMBS.

***The market for the U.S. performing and re-performing whole mortgage loans and other residential mortgage loans in which we invest is subject to various layers of regulation and oversight.***

Numerous federal, state and local consumer protection laws in the United States impose substantive requirements upon mortgage lenders and holders of mortgage loans in connection with the origination, servicing and enforcement of the mortgage loans. Applicable federal, state and local laws regulate, among other things, interest rates and other charges, closing practices, compensation and licensing of brokers, lenders, holders and individual loan originators and may require certain disclosures. In addition, other federal, state and local laws, public policy and general principles of equity relating to the protection of consumers, unfair, deceptive and abusive practices, and debt collection practices may be applied to the origination, ownership, servicing and collection of the mortgage loans.

State and federal banking regulatory agencies, state attorneys general offices, the Federal Trade Commission, the U.S. Department of Justice, the U.S. Department of Housing and Urban Development ("**HUD**") and state and local governmental authorities continue to monitor lending practices by some originators, including practices sometimes referred to as "predatory lending" practices, as well as fair lending requirements. Federal, state and local governmental agencies have imposed sanctions on originators for practices including, but not limited to, charging borrowers excessive fees, steering borrowers to loans with higher costs or more onerous terms, imposing higher interest rates than the borrower's credit risk warrants, and failing to adequately disclose the material terms of residential loans to the borrowers.

Additional requirements may be imposed under federal, state or local laws on so-called "high cost mortgage loans" or "higher-priced mortgage loans," which typically are defined as loans secured by a consumer's dwelling that have interest rates or origination costs in excess of prescribed levels. These laws may limit certain loan terms, such as prepayment charges, balloon payments or late fees, or the ability of a creditor to refinance a loan unless it is in the borrower's interest, and may require counselling of borrowers before a loan is originated. In addition, certain of these laws may allow claims against loan brokers or originators, including claims based on fraud or misrepresentations, to be asserted against persons acquiring the loans, such as us.

U.S. state and local governments may require originators, servicers and holders of residential mortgage loans to obtain certain licenses and permits. We have not obtained any licenses or permits in connection with holding the residential mortgage loans and no assurance can be given that a state or local government will not assert that we must obtain a particular license or permit.

In addition to those addressed above, numerous federal laws in the United States apply to the origination, servicing, collection and enforcement of residential mortgage loans. Violations of certain provisions of these federal, state and local laws may limit the ability of the applicable servicer to collect all or part of the principal of, or interest on, the related mortgage loans and in addition could subject us to damages and administrative enforcement (including disgorgement of prior interest and fees paid). In particular, an originator's failure to comply with certain requirements of federal and state laws could subject us (and other assignees of residential mortgage loans) to monetary penalties, and result in the obligors' rescinding the residential mortgage loans against either us or subsequent holders of such residential mortgage loans. It is possible in the future that governmental authorities or attorneys general may take actions against us that could prohibit servicers of such mortgage loans from pursuing foreclosure actions, provide new defenses to foreclosure, or otherwise limit the ability of any servicer, to take actions (such as pursuing foreclosures) that may be essential to preserve the value of such mortgage loan. Any such limitations would adversely affect our ability to realize on residential mortgage loans.

***Reinvestment risk could affect the price for our shares or their overall returns.***

Reinvestment risk is the risk that income from our portfolio will decline if we invest the proceeds from matured, traded or called securities at market interest rates that are below our real estate debt portfolio's current earnings rate. A decline in income could affect the NAV of our shares or their overall returns.

***Debt-oriented real estate investments face a number of general market-related risks that can affect the creditworthiness of borrowers, and modifications to certain loan structures and market terms make it more difficult to monitor and evaluate investments.***

We will invest in real estate-related debt investments. Any deterioration of real estate fundamentals generally, and in the United States in particular, could negatively impact our performance by making it more difficult for borrowers to satisfy their debt payment obligations, increasing the default risk applicable to borrowers, and/or making it relatively more difficult for us to generate attractive risk-adjusted returns. Changes in general economic conditions will affect the creditworthiness of borrowers and/or real estate collateral relating to our investments and may include economic and/or market fluctuations, changes in environmental and zoning laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand for competing properties in an area (as a result, for instance, of overbuilding), fluctuations in real estate fundamentals, changes in the financial resources of tenants, changes in the availability of debt financing which may render the sale or refinancing of properties difficult or impracticable, changes in building, environmental and other laws, energy and supply shortages, various uninsured or uninsurable risks, natural disasters, political events, trade barriers, currency exchange controls, changes in government regulations (such as rent control), changes in real property tax rates and operating expenses, changes in interest rates, changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, outbreaks of an infectious disease, epidemics/pandemics or other serious public health concerns, negative developments in the economy or political climate that depress travel activity (including restrictions on travel or quarantines imposed), environmental liabilities, contingent liabilities on the disposition of assets, acts of God, terrorist attacks, war, demand and/or real estate values generally and other factors that are beyond the control of the Advisor and Sub-Advisor. Such changes may develop rapidly and it may be difficult to determine the comprehensive impact of such changes on our investments, particularly for investments that may have inherently limited liquidity. These changes may also create significant volatility in the markets for our investments which could cause rapid and large fluctuations in the values of such investments. There can be no assurance that there will be a ready market for the resale of our debt investments because such investments may not be liquid. Illiquidity may result from the absence of an established market for the investments, as well as legal or contractual restrictions on their resale by us.

The Advisor and Sub-Advisor cannot predict whether economic conditions generally, and the conditions for real estate debt investing in particular, will deteriorate in the future. Declines in the performance of the U.S. and global economies or in the real estate debt markets could have a material adverse effect on our investment activities. In addition, market conditions relating to real estate debt investments have evolved since the financial crisis, which has resulted in a modification to certain loan structures and market terms. For example, it has become increasingly difficult for real estate debt investors in certain circumstances to receive full transparency with respect to underlying investments because transactions are often effectuated on an indirect basis through pools or conduit vehicles rather than directly with the borrower. These and other similar changes in loan structures or market terms may make it more difficult for us to monitor and evaluate investments.

***Difficult conditions in the residential mortgage and residential real estate markets as well as general market concerns, including macroeconomic events, may adversely affect the value of residential mortgage loans, including U.S. performing and re-performing whole mortgage loans and other target assets in which we invest.***

Our business is materially affected by conditions in the residential credit market, the residential real estate market, the financial markets, and the economy, including increasing inflation, energy costs, unemployment, geopolitical issues, pandemics, concerns over the creditworthiness of governments worldwide and the stability of the global banking system. In particular, the residential credit market in the United States has experienced, in the past, a variety of difficulties and challenging economic conditions, including defaults, credit losses, and liquidity concerns. Certain commercial banks, investment banks, insurance companies, and mortgage-related investment vehicles (including publicly traded mortgage REITs) incurred extensive losses from exposure to the residential credit market as a result of these difficulties and conditions. Continuing concerns over these factors have contributed to increased volatility and unclear expectations for the economy and markets going forward and continue to impact investor perception of the risks associated with the residential real estate market, residential mortgage loans and various other target assets in which we may invest. As a result, values for residential mortgage loans, including U.S. performing and re-performing whole mortgage loans, and various other target assets in which we invest, have also experienced, and may continue to experience, significant volatility. Any deterioration of the residential credit market and investor perception of the risks associated with residential mortgage loans, including U.S. performing and re-performing whole mortgage loans, and various other of our target assets could have a material adverse effect on us.

***Although obtaining collateral from counterparties is intended to help mitigate our potential exposure to a default by or the insolvency of a counterparty, such risks cannot be completely removed.***

Although obtaining collateral from counterparties and any collateral management system implemented is intended to help mitigate our potential exposure to a default by or the insolvency of a counterparty, such risks cannot be completely removed. The collateral provided may not be sufficient to meet the counterparty's obligations for a number of reasons. In addition, the value of the underlying real estate provided as collateral may not have a live quoted price.

There is no guarantee that the collateral will be correctly and accurately valued. To the extent that the collateral is not correctly valued, we may suffer a loss. Even if the collateral is correctly valued, the collateral may decrease in value between the time of default or insolvency of the counterparty and the time at which title to the collateral is obtained. The risk of a decrease in the value of collateral may be greater for illiquid assets (specifically real estate), due to the length of time it may take to obtain title to such assets, and such assets may comprise all or a significant portion of the collateral provided. While the collateral management process will be monitored by the Sub-Advisor, to the extent that the management process is not correctly adhered to and implemented, we may suffer a loss in the event of default or insolvency of the counterparty.

***Our operating results are dependent upon the Sub-Advisor's ability to source a large volume of U.S. performing and re-performing whole mortgage loans and other target assets for our investments on attractive terms.***

Our operating results are dependent upon the Sub-Advisor's ability to source a large volume of desirable U.S. performing and re-performing whole mortgage loans and other target assets for our investment on attractive terms, and the Sub-Advisor may be unable to do so for many reasons. The Sub-Advisor may be unable to identify originators that are able or willing to originate U.S. performing and re-performing whole mortgage loans and other target assets that meet our standards on favorable terms or at all. General economic factors, such as recession, declining home values, unemployment, and high interest rates, may limit the supply of available U.S. performing and re-performing whole mortgage loans and other target assets. Moreover, competition for U.S. performing and re-performing whole mortgage loans and other target assets may drive down supply or drive up prices, making it uneconomical to purchase such loans or other target assets. For instance, in acquiring U.S. performing and re-performing whole mortgage loans and other target assets from unaffiliated parties, we compete with a broad spectrum of institutional investors. Increased competition for, or a reduction in the available supply of, qualifying investments could result in higher prices for (and thus lower yields on) such investments, which could narrow the yield spread over borrowing costs. Competition may also reduce the number of investment opportunities available to us and may adversely affect the terms upon which investments can be made. We may incur due diligence or other costs on investments which may not be successful or may not be completed at all (otherwise referred to as "broken deal" costs.) As a result, we may incur additional costs to acquire a sufficient volume of U.S. performing and re-performing whole mortgage loans and other target assets or be unable to acquire such loans and other target assets at reasonable prices or at all. There can be no assurance that attractive investments will be available for us or that available investments will meet our strategies. If we cannot source an adequate volume of desirable U.S. performing and re-performing whole mortgage loans and other target assets on attractive terms or at all, we may be materially and adversely affected.

***Although we do not intend to invest in non-performing residential mortgage loans, if we do acquire non-performing loans, this could increase our risk of loss.***

We do not presently intend to invest in non-performing residential mortgage loans and commercial mortgage loans where the borrower has failed to make timely payments of principal and/or interest or where the loan was performing but subsequently could or did become non-performing. These mortgage loans could be considered to be "distressed." However, it is possible we may acquire non-performing loans. Further, the borrowers on non-performing residential mortgage loans may be in economic distress and/or may have become unemployed, bankrupt, or otherwise unable or unwilling to make payments when due. Borrowers of non-performing commercial mortgage loans may be in economic distress due to changes in the general economic climate or local conditions (such as an oversupply of space or a reduction in demand for space), competition based on rental rates, attractiveness and location of the properties, changes in the financial condition of tenants, and changes in operating costs. Distressed assets may entail characteristics that make disposition or liquidation more challenging, including, among other things, severe document deficiencies or underlying real estate located in states with extended foreclosure timelines. Additionally, many of these loans may have LTVs in excess of 100%, meaning the amount owed on the loan exceeds the value of the underlying real estate. Any loss we may incur on such investments may be significant and could materially and adversely affect us.

***Non-QM loans that are underwritten pursuant to less stringent underwriting guidelines, and to the extent we invest in Non-QM loans, we could experience higher rates of delinquencies, defaults and foreclosures than those experienced by loans underwritten to more stringent underwriting guidelines and be subject to increased risks.***

Non-QM loans have flexibility in underwriting guidelines and are subject to credit risk. The underwriting guidelines for Non-QM loans may be permissive as to the borrower's debt-to-income, credit history, and/or income documentation. Loans that are underwritten pursuant to less stringent underwriting guidelines could experience substantially higher rates of delinquencies, defaults and foreclosures than those experienced by loans underwritten to more stringent underwriting guidelines. If our Non-QM loans are underwritten to more flexible guidelines which have increased risk and may cause higher delinquency, default, or foreclosure rates given economic stress, the performance of our investments in our Non-QM loan portfolio could be correspondingly adversely affected, which could materially and adversely affect us. A Non-QM loan is directly exposed to losses resulting from default. Therefore, the value of the underlying property, the creditworthiness and financial position of the borrower, and the priority and enforceability of the lien will significantly impact the value of any such Non-QM loan. In the event of a foreclosure, we may assume direct ownership of the underlying real estate. The liquidation proceeds upon the sale of such real estate may not be sufficient to recover our cost basis in the Non-QM loan, and any costs or delays involved in the foreclosure or liquidation process may increase losses. The value of Non-QM loans is also subject to property damage caused by hazards, such as earthquakes or environmental hazards, not covered by standard property insurance policies and to a reduction in a borrower's mortgage debt by a bankruptcy court. In addition, claims may be assessed against us because of our position as a mortgage holder or property owner, including assignee liability, environmental hazards and other liabilities. In some cases, these claims may lead to losses exceeding the purchase price of the related Non-QM loan or property. Unlike Agency RMBS, Non-QM loans are not guaranteed by the U.S. Government or any GSE.

***The U.S. performing and re-performing whole mortgage loans and other residential mortgage loans in which we invest are subject to a risk of default, among other risks.***

Our strategy is to make credit-sensitive investments primarily in U.S. performing and re-performing whole mortgage loans. We also may invest in other target assets. Further, we may identify and acquire our target assets through the secondary market when market conditions and asset prices are conducive to making attractive purchases. Such acquisitions and investments will subject us to risks which include, among others:

● declines in the value of real estate, and in particular the value of residential real estate;

● risks related to benchmark rates such as the SOFR as reference rates for loans, borrowings and securities;

● risks related to general and local economic conditions, including unemployment rates;

● lack of available mortgage funding for borrowers to refinance or sell their homes or other properties;

● overbuilding and/or housing availability;

● increases in property taxes;

● changes in U.S. federal and state lending laws;

● changes in zoning laws;

● costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems, such as indoor mold;

● casualty or condemnation losses;

● acts of God, terrorism, social unrest, and civil disturbances;

● uninsured damages from floods, earthquakes, or other natural disasters, including those resulting from global climate change;

● limitations on and variations in rents;

● fluctuations in interest rates;

● undetected or unknown fraudulent activity by borrowers, originators, sellers of mortgage loans and/or other third-party service providers;

● undetected deficiencies and/or inaccuracies in underlying mortgage loan documentation and calculations which cause a material diminution in the value of such loan from underwriting; and

● failure of the borrower to adequately maintain the property.

To the extent that assets underlying our investments are concentrated geographically, by property type or in certain other respects, we may be subject to certain of the foregoing risks to a greater extent. Additionally, we may be required to foreclose on a mortgage loan and such actions would subject us to greater concentration of the risks of the real estate markets and risks related to the ownership and management of real property.

***We may face material risks around security arrangements.***

The security arrangements under a loan in which we have invested may not have been properly created or perfected, or may be subject to other legal or regulatory restrictions. While we will invest in secured loans, the security arrangements in relation to such loans will be subject to such security having been correctly created and perfected and any applicable legal or regulatory requirements which may restrict the giving of security by a borrower under a loan, such as, for example, thin capitalization, over-indebtedness, financial assistance and corporate benefit requirements. If the loans in which we invest do not benefit from the expected security arrangements, this may affect the value of such investments. A lender also risks such liability on foreclosure of the mortgage. Any such lien arising with respect to a mortgaged property would adversely affect the value of the mortgaged property and could make impracticable foreclosure on the mortgaged property in the event of a default by the related debtor.

***The operating and financial risks of borrowers may adversely affect our results of operations and financial condition.***

Our investments involve credit or default risk, which is the risk that a borrower will be unable to make principal and interest payments on its outstanding debt when due. We may acquire interests in loans which thereafter may become nonperforming for a variety of reasons. The risk of default and losses on real estate debt instruments will be affected by a number of factors, including global, regional and local economic conditions, interest rates, the commercial real estate market in general and the financial circumstances of the issuer, as well as general economic conditions. Furthermore, the financial performance of one or more borrowers could deteriorate as a result of, among other things, adverse developments in their businesses, changes in the competitive environment or an economic downturn. As a result, underlying properties or borrowers that we expected to be stable may operate, or expect to operate, at a loss or have significant fluctuations in ongoing operating results, may otherwise have a weak financial condition or be experiencing financial distress and subject our investments to additional risk of loss and default.

***We will face risks associated with hedging transactions.***

Subject to maintaining our qualification as a REIT, we may utilize a wide variety of derivative and other hedging instruments for risk management purposes, the use of which is a highly specialized activity that may entail greater than ordinary investment risks. Any such derivatives and other hedging transactions may not be effective in mitigating risk in all market conditions or against all types of risk (including unidentified or unanticipated risks), thereby resulting in losses to us. Engaging in derivatives and other hedging transactions may result in a poorer overall performance for us than if we had not engaged in any such transaction, and the Sub-Advisor may not be able to effectively hedge against, or accurately anticipate, certain risks that may adversely affect our investment portfolio. In addition, our investment portfolio will always be exposed to certain risks that cannot be fully or effectively hedged, such as credit risk relating both to particular securities and counterparties as well as interest rate risks. See *"—We may invest in derivatives, which involve numerous risks"* below.

***We may invest in derivatives, which involve numerous risks.***

Subject to maintaining our status as a REIT and in connection with any financing arrangements we put in place, we may, from time to time, engage in a variety of hedging transactions that seek to mitigate effects of fluctuations in interest rates and their effects on our cash flows. These hedging transactions could take a variety of forms, including interest rate swaps, total return swaps, credit default swaps and indices thereon, short sales (typically related to treasuries), futures, options and similar financial instruments.

The ability to successfully use derivative investments depends on the ability of the Advisor and Sub-Advisor. The skills needed to employ derivatives strategies are different from those needed to select portfolio investments and, in connection with such strategies, the Advisor and Sub-Advisor must make predictions with respect to market conditions, liquidity, market values, interest rates or other applicable factors, which may be inaccurate. The use of derivative investments may require us to sell or purchase portfolio investments at inopportune times or for prices below or above the current market values, may limit the amount of appreciation we can realize on an investment or may cause us to hold a security that we might otherwise want to sell. We will also be subject to credit risk with respect to the counterparties to our derivatives contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter instruments). In addition, the use of derivatives will be subject to additional unique risks associated with such instruments including a lack of sufficient asset correlation, heightened volatility in reference to interest rates or prices of reference instruments and duration/term mismatch, each of which may create additional risk of loss.

***Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial condition.***

Subject to any limitations required to maintain qualification as a REIT, we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest rate cap or collar agreements and interest rate swap agreements. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and that these arrangements may not be effective in reducing our exposure to interest rate changes. These interest rate hedging arrangements may create additional assets or liabilities from time to time that may be held or liquidated separately from the underlying property or loan for which they were originally established. Hedging may reduce the overall returns on our investments. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial condition.

***Failure to obtain and maintain an exemption from being regulated as a commodity pool operator could subject us to additional regulation and compliance requirements that could materially adversely affect our business, results of operations and financial condition.***

Registration with the CFTC as a "commodity pool operator" or any change in our operations necessary to maintain our ability to rely upon the exemption from being regulated as a commodity pool operator could adversely affect our ability to implement our investment program, conduct our operations and/or achieve our objectives and subject us to certain additional costs, expenses and administrative burdens. Furthermore, any determination by us to cease or to limit investing in interests which may be treated as "commodity interests" in order to comply with the regulations of the CFTC may have a material adverse effect on our ability to implement our investment objectives and to hedge risks associated with our operations.

***Political changes may affect the real estate debt markets.***

The current regulatory environment in the United States may be impacted by future legislative developments, such as amendments to key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "**Dodd-Frank Act**"). The U.S. Department of the Treasury has issued a series of recommendations in several reports for streamlining banking regulation and changing key features of the Dodd-Frank Act and other measures taken by regulators following the 2008 financial crisis.

Any significant changes in, among other things, economic policy (including with respect to interest rates and foreign trade), the regulation of the investment management industry, tax law, immigration policy and/or government entitlement programs of the new presidential administration could have a material adverse impact on us and our investments.

***We may need to foreclose on certain of the residential mortgage loans we acquire, which could result in losses that materially and adversely affect us.***

We may find it necessary or desirable to foreclose on certain of the residential mortgage loans we acquire, and the foreclosure process may be lengthy and expensive. There are a variety of factors that may inhibit the ability to foreclose upon a residential mortgage loan and liquidate real property. These factors include, without limitation: (1) extended foreclosure timelines in states that require judicial foreclosure, including states where we may hold high concentrations of residential mortgage loans; (2) significant collateral documentation deficiencies; (3) U.S. federal, state or local laws that are borrower friendly, including legislative action or initiatives designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures and that serve to delay the foreclosure process; (4) programs that require specific procedures to be followed to explore the refinancing of a residential mortgage loan prior to the commencement of a foreclosure proceeding; and (5) declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the judicial and administrative systems. In periods following home price declines, "strategic defaults" (decisions by borrowers to default on their mortgage loans despite having the ability to pay) also may become more prevalent. Even if we are successful in foreclosing on a residential mortgage loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis in the loan, resulting in a loss to us. We will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the residential mortgage loan. Furthermore, any costs or delays involved in the foreclosure of the loan or a liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss. The incurrence of any such losses could materially and adversely affect us.

Additionally, in the event of the bankruptcy of a residential mortgage loan borrower, the residential mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the residential mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. If borrowers default on their residential mortgage loans and we are unable to recover any resulting loss through the foreclosure process, we could be materially and adversely affected.

***We may be affected by deficiencies in foreclosure practices of third parties, as well as related delays in the foreclosure process.***

There continues to be uncertainty regarding the timing and ability of servicers to remove delinquent borrowers from their homes, so that they can liquidate the underlying properties and ultimately pass the liquidation proceeds through to owners of the residential mortgage loans or other assets. Since the 2008 housing crisis, and in response to the well-publicized failures of many servicers to follow proper foreclosure procedures (such as those involving "robo-signing"), mortgage servicers are being held to much higher foreclosure-related documentation standards than they previously were. However, because many mortgages have been transferred and assigned multiple times (and by means of varying assignment procedures), mortgage servicers have historically had difficulty, and may continue to have difficulty, furnishing the requisite documentation to initiate or complete foreclosures. This leads to stalled or suspended foreclosure proceedings and ultimately additional foreclosure-related costs. Foreclosure-related delays also tend to increase ultimate loan loss severities as a result of property deterioration, amplified legal and other costs, and other factors. Many factors delaying foreclosure, such as borrower lawsuits and judicial backlog and scrutiny, are outside a servicer's control and have delayed, and will likely continue to delay, foreclosure processing in both judicial states (where foreclosures require court involvement) and non-judicial states. The concerns about deficiencies in foreclosure practices of servicers and related delays in the foreclosure process may impact our loss assumptions and affect the values of, and our returns on, our investments in residential mortgage loans, including Non-QM loans, and in other target assets. Additionally, a servicer's failure to remove delinquent borrowers from their homes in a timely manner could increase our costs, adversely affect the value of the property and residential mortgage loans, and have a material adverse effect on us.

***Mortgage loan modification programs and future legislative action may adversely affect the value of, and the returns on, our target assets, which could materially and adversely affect us.***

The U.S. Government, through the U.S. Treasury, the Federal Housing Administration, and the Federal Deposit Insurance Corporation, has in the past, and may in the future, implement programs designed to provide homeowners with assistance in avoiding mortgage loan foreclosures. The programs may involve, among other things, the modification of mortgage loans to reduce the principal amount of the loans or the rate of interest payable on the loans or to extend the payment terms of the loans.

Loan modification and refinance programs may adversely affect the performance of our residential mortgage loans and other target assets. A significant number of loan modifications relating to our investments in residential mortgage loans and other target assets, including those related to principal forgiveness and coupon reduction, could negatively impact the realized yields and cash flows on such investments. In addition, it is also likely that loan modifications would result in increased prepayments on our investments. See "—*General Risks Related to Our Investments—Prepayment rates may adversely affect the value of our portfolio*" for information relating to the impact of prepayments on our investments.

The U.S. Congress and various state and local legislatures may pass mortgage-related legislation that would affect our business, including legislation that would allow judicial modification of loan principal in the event of personal bankruptcy. We cannot predict whether or in what form Congress or the various state and local legislatures may enact legislation affecting our business or whether any such legislation will require us to change our practices or make changes in our portfolio in the future. These changes, if required, could materially and adversely affect us, particularly if we make such changes in response to new or amended laws, regulations, or ordinances in any state where we hold a significant portion of our investments.

Existing loan modification programs, together with future legislative or regulatory actions, including possible amendments to the bankruptcy laws, which result in the modification of outstanding residential mortgage loans and/or changes in the requirements necessary to qualify for refinancing of mortgage loans with Fannie Mae, Freddie Mac, or the Government National Mortgage Association ("**Ginnie Mae**"), may adversely affect the value of, and the returns on, our target assets, which could materially and adversely affect us.

***Competition for investment opportunities may reduce our profitability and the return on your investment.***

We face competition from various entities for investment opportunities, including other REITs, pension funds, insurance companies, investment funds and companies, partnerships and developers. In addition to third-party competitors, other programs sponsored by the Advisor, the Sub-Advisor and their respective affiliates, particularly those with investment strategies that overlap with ours (including REITs which are or may be sponsored in the future) may seek investment opportunities in accordance with the Advisor's or the Sub-Advisor's prevailing policies and procedures. Some of these entities may have greater access to capital to acquire assets than we have. Competition from these entities may reduce the number of suitable investment opportunities offered to us or increase the bargaining power of counterparties seeking to sell. Additionally, disruptions and dislocations in the credit markets could have a material impact on the cost and availability of debt to finance asset acquisitions, which is a key component of our acquisition strategy. The lack of available debt on reasonable terms or at all could result in a further reduction of suitable investment opportunities and create a competitive advantage for other entities that have greater financial resources than we do. In addition, over the past several years, a number of real estate funds and publicly traded and non-traded REITs have been formed and others have been consolidated (and many such existing funds have grown in size) for the purpose of investing in real estate debt and real estate-related assets. Additional real estate funds, vehicles and REITs with similar investment objectives are expected to be formed in the future by other unrelated parties and further consolidations may occur (resulting in larger funds and vehicles). Consequently, it is expected that competition for appropriate investment opportunities would reduce the number of investment opportunities available to us and adversely affect the terms, including price, upon which investments can be made. This competition may cause us to acquire real estate debt and other investments at higher prices or by using less- than-ideal capital structures, and in such case our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for such assets. If such events occur, you may experience a lower return on your investment.

***Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations or assumptions could impact our consolidated financial statements.***

Accounting rules for transfers of financial assets, securitization transactions, consolidation of variable interest entities and other aspects of our anticipated operations are highly complex and involve significant judgment and assumptions. These complexities could lead to a delay in preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions could impact our consolidated financial statements and our ability to timely prepare our consolidated financial statements. Our inability to timely prepare our consolidated financial statements in the future would likely materially and adversely affect us.

***If we fail to develop, enhance and implement strategies to adapt to changing conditions in the residential real estate and capital markets, our financial condition and results of operations may be materially and adversely affected.***

The manner in which we compete and the types of assets in which we seek to invest will be affected by changing conditions resulting from sudden changes in our industry, regulatory environment, the role of GSEs, the role of credit rating agencies or their rating criteria or process, or the U.S. and global economies generally. If we do not effectively respond to these changes, or if our strategies to respond to these changes are not successful, we may be materially and adversely affected. In addition, we may not be successful in executing our business strategies and, even if we successfully implement our business strategies, we may not generate revenues or profits.

***We may make joint-venture investments on an opportunistic basis, including with affiliates of the Advisor or the Sub-Advisor. Joint-venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of our joint-venture partners and disputes between us and our joint-venture partners.***

We may, on an opportunistic basis and subject to the requirements in our charter, co-invest in the future with affiliates of the Advisor or the Sub-Advisor or third parties in partnerships or other entities that own assets. We may enter into joint ventures as part of an acquisition with the seller of the assets. We may acquire non-controlling interests or shared control interests in joint ventures. Even if we have some control in a joint venture, we would not be in a position to exercise sole decision-making authority regarding the joint venture. Investments in joint ventures may, under certain circumstances, involve risks not present were another party not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their required capital contributions. Joint venture partners may have economic or other business interests or goals that are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the joint venture partner would have full control over the joint venture. Disputes between us and joint venture partners may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business. Consequently, actions by or disputes with joint venture partners might result in subjecting assets owned by the joint venture to additional risk. In some cases, our joint venture partner may be entitled to asset management fees, promote or other incentive fee payments as part of the arrangement of the joint venture. In addition, we may in certain circumstances be liable for the actions of our joint venture partners.

Furthermore, we may have conflicting fiduciary obligations if we acquire assets with our affiliates or other related entities; as a result, in any such transaction we may not have the benefit of arm's-length negotiations of the type normally conducted between unrelated parties.

***In our due diligence review of potential investments, we may rely on third-party consultants and advisors and representations made by sellers of potential assets, and we may not identify all relevant facts that may be necessary or helpful in evaluating potential investments and such decisions may be made on an expedited basis.***

Before making investments, due diligence will typically be conducted in a manner that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. Due diligence may entail evaluation of important and complex business, financial, tax, accounting, environmental, social and governance ("**ESG**"), legal, and regulatory and macroeconomic trends. Although the Advisors will take into consideration such non-financial investment factors, we should not be considered an ESG investment and should not be relied upon as such. There is no guarantee that ESG considerations will be a factor in making an investment decision and, if considered, there is no assurance that any ESG benefits will be achieved. Outside consultants, legal advisors, appraisers, accountants, investment banks and other third parties, including affiliates of the Advisor and the Sub-Advisor, may be involved in the due diligence process to varying degrees depending on the type of investment, the costs of which will be borne by us. Moreover, investment analyses and decisions by the Sub-Advisor may frequently be required to be undertaken on an expedited basis to take advantage of investment opportunities. In such cases, the information available to the Sub-Advisor at the time of making an investment decision may be limited, and they may not have access to detailed information regarding such investment.

Involvement of third-party advisors or consultants may present a number of risks primarily relating to the Advisor's and the Sub-Advisor's reduced control of the functions that are outsourced. Where affiliates of the Advisor or the Sub-Advisor are utilized, the Advisor's management fee will not be offset for the fees paid or expenses reimbursed to such affiliates. In addition, if the Advisor or the Sub-Advisor is unable to timely engage third-party providers, the ability to evaluate and acquire more complex targets could be adversely affected. In the due diligence process and making an assessment regarding a potential investment, the Advisor and the Sub-Advisor will rely on the resources available to it, including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence investigation carried out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity, particularly for large portfolio investments. Moreover, such an investigation will not necessarily result in the investment being successful. There can be no assurance that attempts to provide downside protection with respect to investments, including pursuant to risk management procedures described in this Registration Statement, will achieve their desired effect, and potential investors should regard an investment in us as being speculative and having a high degree of risk.

***There can be no assurance that the Advisor or the Sub-Advisor will be able to detect or prevent irregular accounting, employee misconduct or other fraudulent practices or material misstatements or omissions during the due diligence phase or during our efforts to monitor and disclose information about the investment on an ongoing basis or that any risk management procedures implemented by us will be adequate.***

When conducting due diligence and making an assessment regarding an investment, the Advisor and the Sub-Advisor will rely on the resources available to it, including information provided or reported by the seller of the investment and, in some circumstances, third-party investigations. The due diligence investigation that the Sub-Advisor carries out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful. Conduct occurring at the portfolio asset, even activities that occurred prior to our investment therein, could have an adverse impact on us.

In the event of fraud by the seller of any asset, we may suffer a partial or total loss of capital invested in that asset. An additional concern is the possibility of material misrepresentation or omission on the part of the seller. Such inaccuracy or incompleteness may adversely affect the value of our investments in such portfolio asset. We will rely upon the accuracy and completeness of representations made by sellers of portfolio assets in the due diligence process to the extent reasonable when we make our investments but cannot guarantee such accuracy or completeness.

In addition, we rely on information, including financial information and non-GAAP metrics, provided by sellers of our investments for disclosure to our investors about potential acquisitions or current assets owned by us. Accordingly, although we believe such information to be accurate, such information cannot be independently verified by the Sub-Advisor, and in some cases such information has not been independently reviewed or audited while under our ownership or control or at all. We cannot assure you that the financial statements or metrics of assets we will acquire would not be materially different if such statements or metrics had been independently audited or reviewed.

Consultants, legal advisors, appraisers, accountants, investment banks and other third parties may be involved in the due diligence process and/or the ongoing operation of our portfolio assets to varying degrees depending on the type of investment. For example, certain asset management and finance functions, such as data entry relating to a portfolio asset, may be outsourced to a third-party service provider whose fees and expenses will be borne by such portfolio asset or us. Such involvement of third-party advisors or consultants may present a number of risks primarily relating to our reduced control of the functions that are outsourced.

***A change to the conservatorship of Fannie Mae and Freddie Mac and related actions, along with any changes in laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the U.S. Government, could materially and adversely affect us.***

Since 2008, Fannie Mae and Freddie Mac have been in conservatorship, with their primary regulator, the Federal Housing Finance Agency, acting as conservator. While Fannie Mae and Freddie Mac currently act as the primary sources of liquidity in the residential mortgage markets, both by purchasing mortgage loans for their own portfolios and by guaranteeing mortgage-backed securities, the U.S. Government may enact structural changes to one or more of the GSEs, including privatization, consolidation and/or a reduction in the ability of GSEs to purchase mortgage loans or guarantee mortgage obligations. We cannot predict if, when or how the conservatorships will end, or what associated changes (if any) may be made to the structure, mandate or overall business practices of either of the GSEs. Accordingly, there continues to be uncertainty regarding the future of the GSEs, including whether they will continue to exist in their current form and whether they will continue to meet their guarantees and other obligations. A substantial reduction in mortgage-purchasing activity by the GSEs could result in increased volatility in the residential housing market.

***Certain actions by the U.S. Federal Reserve could materially and adversely affect us.***

Changing benchmark interest rates, and the U.S. Federal Reserve's actions and statements regarding monetary policy, can affect the fixed-income and mortgage finance markets in ways that could adversely affect the value of, and returns on, our investments, which could materially and adversely affect us. Statements by the U.S. Federal Reserve regarding monetary policy and the actions it takes to set or adjust monetary policy may affect the expectations and outlooks of market participants in ways that adversely affect our investments. Over the past few years, statements made by the Chair and other members of the U.S. Federal Reserve Board and by other U.S. Federal Reserve officials regarding the U.S. economy, future economic growth, the U.S. Federal Reserve's future open market activity and monetary policy had a significant impact on, among other things, benchmark interest rates, the value of residential mortgage loans and, more generally, the fixed-income markets. In addition, recently the U.S. Federal Reserve Board has raised, and may continue to raise, certain benchmark interest rates in an effort to curb inflation. These statements and actions of the U.S. Federal Reserve, and other factors, also significantly impacted many market participants' expectations and outlooks regarding future levels of benchmark interest rates and the expected yields these market participants would require to invest in fixed-income instruments.

To the extent benchmark interest rates rise, one of the immediate potential impacts on our assets would be a reduction in the overall value of our assets and the overall value of the pipeline of mortgage loans that the Sub-Advisor identifies. Rising benchmark interest rates also generally have a negative impact on the overall cost of borrowings we may use to finance our acquisitions and holdings of assets, including as a result of the requirement to post additional margin (or collateral) to lenders to offset any associated decline in value of the assets we finance with the use of leverage. Rising benchmark interest rates may also cause sources of leverage that we may use to finance our investments to be unavailable or more limited in their availability in the future. These and other developments could materially and adversely affect us.

***Secured Overnight Financing Rate ("SOFR") has generally replaced U.S. dollar LIBOR as a reference rate of interest, which subjects us to various risks.***

U.S. dollar London Interbank Offered Rate ("**LIBOR**") has been replaced by rates based on SOFR. SOFR has a limited history, having been first published in April 2018. The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on SOFR's history or otherwise. Future levels of SOFR may bear little or no relation to historical levels of SOFR, LIBOR or other rates. Because SOFR is a financing rate based on overnight secured funding transactions, it differs fundamentally from LIBOR. LIBOR was intended to be an unsecured rate that represented interbank funding costs for different short-term tenors and was a forward-looking rate reflecting expectations regarding interest rates for those tenors. Thus, LIBOR was intended to be sensitive to bank credit risk and to short-term interest rate risk. In contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as collateral. Thus, it is intended to be insensitive to credit risk and to risks related to interest rates other than overnight rates. SOFR has been more volatile than other benchmark or market rates during certain periods.

Like LIBOR, some SOFR-based rates are forward-looking term rates; other SOFR-based rates are intended to resemble rates for term structures through their use of averaging mechanisms applied to rates from overnight transactions, as in the case of "simple average" or "compounded average" SOFR. Different kinds of SOFR-based rates result in different interest rates. Mismatches between SOFR-based rates, and between SOFR-based rates and other rates, may cause economic inefficiencies, particularly if market participants seek to hedge one kind of SOFR-based rate by entering into hedge transactions based on another SOFR-based rate or another rate. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform in the same or a similar way as U.S. dollar LIBOR would have performed at any time, and there is no assurance that SOFR-based rates are suitable substitutes for U.S. dollar LIBOR.

Non-LIBOR floating rate obligations, including SOFR-based obligations, may have returns and values that fluctuate more than those of floating rate obligations that were based on LIBOR or other rates. Also, because SOFR and some alternative floating rates are relatively new market indexes, markets for certain non-LIBOR obligations may never develop or may not be liquid. Market terms for non-LIBOR floating rate obligations, such as the spread over the index reflected in interest rate provisions, may evolve over time, and prices of non-LIBOR floating rate obligations may be different depending on when they are issued and changing views about correct spread levels.

***The ownership of residential mortgage loans could subject us to legal, administrative, regulatory, and other risks, including those arising under U.S. federal consumer protection laws and regulations designed to regulate residential mortgage loan underwriting and originators' lending processes, standards and disclosures to borrowers.***

These laws and regulations include the CFPB's "Know Before You Owe" mortgage disclosure rule, the ATR rules, and qualifying mortgage loan regulations, in addition to various U.S. federal, state, and local laws and regulations intended to discourage predatory lending practices by residential mortgage loan originators. Application of certain standards set forth in the ATR rules is highly subjective and subject to interpretive uncertainties. As a result, a court may determine that a residential mortgage loan did not meet the standard or test even if the originator reasonably believed such standard or test had been satisfied. Failure of residential mortgage loan originators or servicers to comply with these laws and regulations could subject us, as a purchaser or an assignee of these loans (or as an investor in securities backed by these loans), to monetary penalties assessed by the CFPB through its administrative enforcement authority and by mortgagors through a private right of action against lenders or as a defense to foreclosure, including by recoupment or setoff of finance charges and fees collected, and could result in rescission of the affected residential mortgage loans, which could materially and adversely affect us. Such risks may be higher in connection with the acquisition of Non-QM loans, which is currently the focus of our strategy. Borrowers under Non-QM loans may be more likely to challenge the analysis conducted under the ATR rules by lenders. Even if a borrower does not succeed in the challenge, additional costs may be incurred in connection with challenging and defending such claims, which may be more costly in judicial foreclosure jurisdictions than in non-judicial foreclosure jurisdictions, and there may be more of a likelihood such claims are made since the borrower is already exposed to the judicial system to process the foreclosure.

***Increases in interest rates could adversely affect the value of our assets, cause our interest expense to increase, increase the risk of default on our assets and cause a decrease in the volume of certain of our target assets, which could materially and adversely affect us.***

Our operating results depend in large part on the difference between the income from our assets, net of credit losses, and financing costs. We anticipate that, in many cases, the income from our assets will respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, to the extent not offset by our interest rate hedges, may significantly influence our financial results.

Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. For example, recently, there has been a significant rise in inflation and the U.S. Federal Reserve Board has raised, and may continue to raise, interest rates in an effort to curb inflation. These increases in interest rates and inflation have led, and may continue to lead, to economic volatility, increased borrowing costs, price increases and risks of recession.

Fixed income assets typically decline in value if interest rates increase. If long-term interest rates were to increase significantly, not only would the market value of these assets be expected to decline, but these assets could lengthen in duration because, for example, borrowers would be less likely to prepay their mortgages. Further, an increase in short-term interest rates would increase the rate of interest payable on any short-term borrowings used to finance these assets. Subject to maintaining our qualification as a REIT and maintaining our exclusion from regulation as an investment company under the Investment Company Act, we expect to continue to utilize various derivative instruments and other hedging instruments to mitigate interest rate risk, but there can be no assurances that our hedges will be successful or that we will be able to enter into or maintain such hedges. As a result, interest rate fluctuations can cause significant losses, reductions in income, and could materially and adversely affect us.

In addition, rising interest rates generally reduce the demand for mortgage loans due to the higher cost of borrowing. A reduction in the volume of mortgage loans originated may affect the volume of target assets available to us, which could adversely affect our ability to acquire assets that may satisfy our investment objectives. If rising interest rates cause us to be unable to acquire a sufficient volume of our target assets with a yield that is above our borrowing cost, it could materially and adversely affect us.

An increase in interest rates could also cause financial strain on borrowers with adjustable-rate mortgages, who might then be more likely to default. In addition, we cannot ensure that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. Such future constraints could increase our borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments, which could slow or deter future growth.

***Credit ratings assigned to our investments are or will be subject to ongoing evaluations and revisions, and we cannot assure you that those ratings will not be downgraded.***

Some of our investments, including securities issued in our existing or future securitization transactions for which we would be required to retain a portion of the credit risk, are or may be rated by rating agencies. Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings would not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value and liquidity of our investments could significantly decline, which would adversely affect the value of our portfolio and could result in losses.

***Our investment in lower rated non-Agency RMBS resulting from the securitization of our assets or otherwise exposes us to the first loss on the mortgage assets held by the securitization vehicle. Additionally, the principal and interest payments on non-Agency RMBS are not guaranteed by any entity, including any government entity or GSE, and therefore are subject to increased risks, including credit risk.***

Our portfolio may include non-Agency RMBS which are backed by residential mortgage loans that are not issued or guaranteed by an Agency or a GSE. Within a securitization of residential mortgage loans, various securities are created, each of which has varying degrees of credit risk. Our investments in non-Agency RMBS generally are concentrated in lower-rated and unrated securities in which we are exposed to the first loss on the residential mortgage loans held by the securitization vehicle, which subjects us to the most concentrated credit risk associated with the underlying residential mortgage loans.

Additionally, the principal and interest on non-Agency RMBS, unlike those on Agency RMBS, are not guaranteed by GSEs such as Fannie Mae and Freddie Mac or, in the case of Ginnie Mae, the U.S. Government. Non-Agency RMBS are subject to many of the risks of the respective underlying mortgage loans. A residential mortgage loan is typically secured by a single-family residential property and is subject to risks of delinquency and foreclosure and risk of loss. The ability of a borrower to repay a loan secured by a residential property is dependent upon the income or assets of the borrower. A number of factors, including, but not limited to, a general economic downturn, unemployment, acts of God, terrorism, social unrest, and civil disturbances, may impair the borrower's ability to repay its mortgage loan. In periods following home price declines, "strategic defaults" (decisions by borrowers to default on their mortgage loans despite having the ability to pay) also may become more prevalent. In the event of defaults under residential mortgage loans backing any of our non-Agency RMBS, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the residential mortgage loan.

Additionally, in the event of the bankruptcy of a residential mortgage loan borrower, the residential mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the residential mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a residential mortgage loan can be an expensive and lengthy process which could have a substantial negative effect on our anticipated return on the foreclosed residential mortgage loan. If borrowers default on the residential mortgage loans backing our non-Agency RMBS and we are unable to recover any resulting loss through the foreclosure process, we could be materially and adversely affected.

***We may acquire MSRs or excess MSRs, which would expose us to significant risks.***

We may acquire MSRs or excess MSRs. MSRs would arise from contractual agreements between us and investors (or their agents) in mortgage loans and mortgage securities. The determination of the value of MSRs will require us to make numerous estimates and assumptions. Such estimates and assumptions include, without limitation, estimates of future cash flows associated with MSRs based upon assumptions involving interest rates as well as the prepayment rates, delinquencies, and foreclosure rates of the underlying serviced mortgage loans. The ultimate realization of the fair value of MSRs may be materially different than the values of such MSRs estimated by us. The use of different estimates or assumptions in connection with the valuation of these assets could produce materially different fair values for such assets, which could have a material adverse effect on us.

Changes in interest rates are a key driver of the performance of MSRs. Historically, the fair value of MSRs has increased when interest rates rise and decreased when interest rates decline due to the effect those changes in interest rates have on prepayment estimates. To the extent we do not hedge against changes in the value of MSRs, our investments in MSRs would be more susceptible to volatility due to changes in the value of, or cash flows from, the MSRs as interest rates change.

Prepayment speeds significantly affect MSRs. Prepayment speed is the measurement of how quickly borrowers pay down the unpaid principal balance of their loans or how quickly loans are otherwise brought current, modified, liquidated, or charged off. We may base the price we pay for MSRs and the rate of amortization of those assets on, among other things, projections of the cash flows from the related pool of mortgage loans. The Sub-Advisor's expectation of prepayment speeds is a significant assumption underlying those cash flow projections. If prepayment speed expectations increase significantly, the value of the MSRs could decline. Furthermore, a significant increase in prepayment speeds could materially reduce the ultimate cash flows we receive from MSRs, and we could ultimately receive substantially less return on such assets. Moreover, delinquency rates have a significant impact on the valuation of any MSRs. An increase in delinquencies generally results in lower revenue because typically we would only collect servicing fees for performing loans. The Sub-Advisor's expectation of delinquencies is also a significant assumption underlying projections of potential returns. If delinquencies are significantly greater than expected, the estimated value of the MSRs could be diminished. If the estimated value of MSRs is reduced, we could suffer a loss.

Furthermore, MSRs and the related servicing activities are subject to numerous U.S. federal, state, and local laws and regulations and may be subject to various judicial and administrative decisions imposing various requirements and restrictions on the holders of such investments. Our failure to comply, or the failure of the servicer to comply, with the laws, rules, or regulations to which they are subject by virtue of ownership of MSRs, whether actual or alleged, could expose us to fines, penalties, or potential litigation liabilities, including costs, settlements, and judgments, any of which could have a material adverse effect on us. The Sub-Advisor has a captive master servicing team to aid in effecting our investment strategy, along with a Freddie-Mac approved MSR investment platform that is licensed to do business in all fifty states. The Sub-Advisor's MSR investment platform also has a pending application with Fannie Mae; however, there can be no assurance such application will be granted.

Because excess MSRs are a component of the related MSR, the risks of owning an excess MSR are similar to the risks of owning an MSR. The valuation of excess MSRs is based on many of the same estimates and assumptions used to value MSR assets, thereby creating the same potential for material differences between estimated value and the actual value that is ultimately realized. Also, the performance of excess MSRs is impacted by the same drivers as the performance of MSR assets, including interest rates, prepayment speeds, and delinquency rates.

***We rely on analytical models and other data to analyze potential asset acquisition and disposition opportunities and to manage our portfolio. Such models and other data may be incorrect, misleading, or incomplete, which could cause us to purchase assets that do not meet our expectations or to make asset management decisions that are not in line with our strategy.***

We rely on the analytical models (both proprietary and third-party models) of the Sub-Advisor and information and data supplied by third parties. The proprietary models may rely on the use of artificial intelligence ("A.I.") to review and summarize such data, which may be in the form of satellite and other images. Models and data are used to value assets or potential assets, assess asset acquisition and disposition opportunities, manage our portfolio, and assess the timing and amount of cash flows expected to be collected, and may also be used in connection with any hedging of our investments. Many of the models are based on historical trends. These trends may not be indicative of future results.

Furthermore, the assumptions underlying the models may prove to be inaccurate, causing the models to also be incorrect. In the event models and data prove to be incorrect, faulty, misleading or incomplete, any decisions made in reliance thereon expose us to potential risks. For example, by relying on incorrect models and data, especially valuation or cash flow models, we may be induced to buy certain assets at prices that are too high, to sell certain other assets at prices that are too low, to overestimate or underestimate the timing or amount of cash flows expected to be collected, or to miss favorable opportunities altogether. Similarly, any hedging activities based on faulty models and data may prove to be unsuccessful.

Some of the risks of relying on analytical models and third-party data include the following:

● collateral cash flows and/or liability structures may be incorrectly modeled in all or only certain scenarios or may be modeled based on simplifying assumptions that lead to errors;

● information about assets or the underlying collateral may be incorrect, incomplete, or misleading;

● asset, collateral or RMBS historical performance (historical prepayments, defaults, cash flows, etc.) may be incorrectly reported, or subject to interpretation; and

● asset, collateral or RMBS information may be outdated, in which case the models may contain incorrect assumptions as to what has occurred since the date information was last updated.

Some models, such as prepayment models or default models, may be predictive in nature. The use of predictive models has inherent risks. For example, such models may incorrectly forecast future behavior, leading to potential losses. In addition, the predictive models used by the Sub-Advisor may differ substantially from those models used by other market participants, with the result that valuations based on these predictive models may be substantially higher or lower for certain assets than actual market prices. Furthermore, because predictive models are usually constructed based on historical data supplied by third parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data, and, in the case of predicting performance in scenarios with little or no historical precedent (such as extreme broad-based declines in home prices or deep economic recessions or depressions), such models must employ greater degrees of extrapolation and are therefore more speculative and of more limited reliability. To the extent that a model relies on A.I. to review and summarize data, the A.I. could fail to accurately summarize such data and cause the model to produce incorrect results.

All valuation models rely on correct market data inputs. If incorrect market data is entered into even a well-founded valuation model, the resulting valuations will be incorrect. However, even if market data is input correctly, "model prices" may differ substantially from market prices. If our market data inputs are incorrect or our model prices differ substantially from market prices, we could be materially and adversely affected.

***The lack of liquidity in our assets may have a material adverse effect on us.***

The investments made or to be made by us in our target assets may be or may become illiquid. Market conditions could significantly and negatively impact the liquidity of these investments. Illiquid assets typically experience greater price volatility, as a ready market may not exist, and can be more difficult to value. It may be difficult or impossible to obtain third-party pricing on the assets that we acquire. If third-party pricing is obtained, validating such pricing may be more subjective than it would be for more liquid assets due to the uncertainties inherent in valuing assets for which reliable market quotations are not available. Any illiquidity of our assets may make it difficult for us to sell such assets on favorable terms or at all. If we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the intrinsic value of the assets and/or the value at which we previously recorded such assets.

Assets that are illiquid are more difficult to finance using leverage. When we use leverage to finance assets and such assets subsequently become illiquid, we may lose or be subject to reductions on the financing supporting our leverage. Assets tend to become less liquid during times of financial stress, which is often when liquidity is most needed. As a result, our ability to sell assets or vary our portfolio in response to changes in economic and other conditions may be limited by liquidity constraints, which could have a material adverse effect on us.

Additionally, we intend to continue to engage in securitizations to finance the acquisition and accumulation of mortgage loans or other mortgage-related assets that will be subject to the U.S. Risk Retention Rules. Securitizations for which we act as "sponsor" (as defined in the U.S. Risk Retention Rules), and/or have previously acted as co-sponsor and were selected to be the party obligated to comply with the U.S. Risk Retention Rules, require us (or a "majority-owned affiliate" within the meaning of the U.S. Risk Retention Rules) to retain a 5% interest in the related securitization issuing entity (the "**Risk Retention Securities**"). The Risk Retention Securities are required to be (1) a first loss residual interest in the issuing entity representing 5% of the fair value of the securities and other interests issued as part of the securitization transaction (a "**horizontal slice**"), (2) 5% of each class of the securities and other interests issued as part of the securitization transaction (a "**vertical slice**") or (3) a combination of a horizontal slice and a vertical slice that, in the aggregate, represents 5% of the transaction. Regardless of the form of risk retention selected, we or a majority-owned affiliate will be required to hold the Risk Retention Securities until the end of the time period required under the U.S. Risk Retention Rules (i.e., the respective risk retention holding period). We are or will be, as the case may be, generally prohibited from hedging the credit risk of the Risk Retention Securities or from financing the Risk Retention Securities except on a "full recourse" basis in accordance with the U.S. Risk Retention Rules. Accordingly, some of our securitizations require, or in the case of certain future securitizations, will require us to hold Risk Retention Securities for an extended period and contribute to the lack of liquidity in our assets, which may have a material adverse effect on us.

***We may be exposed to environmental liabilities with respect to properties in which we have an interest.***

In the course of our business, we may take title to real estate, and, if we do take title, we could be subject to environmental liabilities with respect to these properties. In such a circumstance, we may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation, and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, the presence of hazardous substances may adversely affect an owner's ability to sell real estate or borrow using real estate as collateral. To the extent that an owner of an underlying property becomes liable for removal costs, the ability of the owner to make debt payments may be reduced, which in turn may materially adversely affect the value of the relevant mortgage-related assets held by us.

***Insurance proceeds on a property may not cover all losses, which could result in the corresponding non-performance of or loss on our investment related to such property.***

There are certain types of losses, generally of a catastrophic nature, such as acts of God, earthquakes, floods, hurricanes and other weather events, terrorism, or acts of war, which may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations, and other factors, including acts of God, terrorism, or acts of war, also might result in insurance proceeds that are insufficient to repair or replace a property if it is damaged or destroyed. Under these circumstances, the insurance proceeds received with respect to a property relating to one of our investments might not be adequate to restore our economic position with respect to our investment. Any uninsured loss could result in the corresponding non-performance of or loss on our investment related to such property.

**Risks Related to Debt Financing**

***We may encounter adverse changes in the credit markets.***

Any adverse changes in the global credit markets could make it more difficult for us to obtain favorable financing. Our ability to generate attractive investment returns for our stockholders will be adversely affected to the extent we are unable to obtain favorable financing terms. If we are unable to obtain favorable financing terms, we may not be able to adequately leverage our portfolio, may face increased financing expenses or may face increased restrictions on our investment activities, any of which would negatively impact our performance.

***We may use leverage in executing our business strategy, which may materially and adversely affect us.***

We may use leverage in connection with the investment in and holding of mortgage loans and other assets, and we expect to finance a substantial portion of our mortgage loans through securitizations. Leverage will magnify both the gains and the losses on an investment. Leverage will increase our returns as long as we earn a greater return on investments purchased with borrowed funds than our cost of borrowing such funds although there can be no assurance that would be able to earn such a greater return. Moreover, if we use leverage to acquire an asset and the value of the asset decreases, the leverage will increase our losses.

We may be required to post large amounts of cash as collateral or margin to secure our leveraged positions. In the event of a sudden, precipitous drop in the value of our financed assets, we might not be able to liquidate assets quickly enough to repay our borrowings, further magnifying losses. Even a small decrease in the value of a leveraged asset may require us to post additional margin or cash collateral. This may materially and adversely affect us.

***If we seek to obtain and draw on a line of credit or otherwise incur leverage to fund repurchases or for any other reason, our financial leverage ratio could increase beyond our target.***

We may seek to obtain a line of credit in an effort to provide for a ready source of liquidity for any business purpose, including to fund repurchases of shares in the event that repurchase requests exceed our operating cash flow and/or net proceeds from our continuous offering. There can be no assurances that we will be able to obtain a line of credit on financially reasonable terms. In addition, we may not be able to obtain lines of credit of an appropriate size for our business. If we borrow under a line of credit to fund repurchases of shares, our financial leverage will increase and may exceed our target leverage ratio. Our leverage may remain at the higher level until we receive additional net proceeds from our continuous offering or generate sufficient operating cash flow or proceeds from asset sales to repay outstanding indebtedness. In connection with a line of credit, distributions may be subordinated to payments required in connection with any indebtedness contemplated thereby. Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to make distributions to our stockholders.

Interest we pay on our loan obligations will reduce cash available for distributions. We will likely obtain variable rate loans, and as a result, increases in interest rates could increase our interest costs, which could reduce our cash flows and our ability to make distributions to you. In addition, if we need to repay existing loans during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.

***Volatility in the financial markets and challenging economic conditions could adversely affect our ability to secure debt financing on attractive terms and our ability to service or refinance any future indebtedness that we may incur.***

The volatility of the global credit markets could make it more difficult to obtain favorable financing for investments. During periods of volatility, which often occur during economic downturns, generally credit spreads widen, interest rates rise, and investor demand for high-yield debt declines. These trends result in reduced willingness by investment banks and other lenders to finance new investments and deterioration of available terms. If the overall cost of borrowing increases, either by increases in the index rates or by increases in lender spreads, the increased costs may result in future acquisitions generating lower overall economic returns and potentially reducing future cash flow available for distribution. Disruptions in the debt markets negatively impact our ability to borrow monies to finance the purchase of assets. If we are unable to borrow monies on terms and conditions that we find acceptable, we likely will have to reduce the number of assets we can purchase, and the return on the assets we do purchase may be lower. In addition, we may find it difficult, costly or impossible to refinance indebtedness that is maturing. Moreover, to the extent that such marketplace events are not temporary, they could have an adverse impact on the availability of credit to businesses generally and could lead to an overall weakening of the U.S. economy.

***Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.***

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to obtain additional loans. Loan documents we enter into may contain covenants that limit our ability to further mortgage or dispose of the property or discontinue insurance coverage. In addition, loan documents may limit our ability to enter into or terminate certain operating or lease agreements related to the property. Loan documents may also require lender approval of certain actions, and as a result of the lender's failure to grant such approval, we may not be able to take a course of action we deem most profitable. These or other limitations may adversely affect our flexibility and our ability to make distributions to you and the value of your investment.

***Market conditions and other factors may affect our ability to securitize assets, which could increase our financing costs and materially and adversely affect us.***

We expect to continue to use loan financing lines to finance the acquisition and accumulation of mortgage loans or other mortgage-related assets pending their eventual securitization. Upon accumulating an appropriate amount of assets, we expect to continue to finance a substantial portion of our mortgage loans utilizing fixed rate term securitization funding that provides long-term financing for our mortgage loans and locks in our cost of funding, regardless of future interest rate movements, but also exposes us to the risk of first loss. Our ability to continue to obtain permanent non-recourse financing through securitizations is affected by a number of factors, including:

● conditions in the securities markets, generally;

● conditions in the asset-backed securities markets, specifically;

● yields on our portfolio of mortgage loans;

● the credit quality of our portfolio of mortgage loans; and

● our ability to obtain any necessary credit enhancement.

Securitization markets are negatively impacted by any factors which reduce liquidity, increase risk premiums for issuers, reduce investor demand, cause financial distress among financial guaranty insurance providers, or by a general tightening of credit and/or increased regulation. Conditions such as these may from time to time result in a delay in the timing of our securitization of mortgage loans or may reduce or even eliminate our ability to securitize mortgage loans and sell securities in the RMBS market, any of which would increase the cost of funding our mortgage loan portfolio. Our loan financing lines may not be adequate to fund our mortgage loan purchasing activities until such time as disruptions in the securitization markets subside. This would require us to hold the mortgage loans we acquire on our balance sheet, which would significantly delay our ability to fund the acquisition of additional mortgage loans or use equity capital to acquire any other target assets. Disruptions in the securitization market, including any adverse change, delay, or inability to access the securitization market, could therefore materially and adversely affect us.

Low investor demand for asset-backed securities could also force us to hold mortgage loans until investor demand improves, but our capacity to hold such mortgage loans in our portfolio is not unlimited. Additionally, adverse market conditions could result in increased costs and reduced margins earned in connection with our securitization transactions.

Our ability to execute securitizations may be impacted, delayed, limited, or precluded by legislative and regulatory reforms applicable to asset-backed securities and the institutions that sponsor, service, rate, or otherwise participate in, or contribute to, the successful execution of a securitization transaction. With respect to any securitization transaction engaged in by us, these factors could limit, delay, or preclude our ability to execute securitization transactions and could also reduce the returns we would otherwise expect to earn in connection with securitization transactions.

The Dodd-Frank Act imposed significant changes to the legal and regulatory framework applicable to the asset-backed securities markets and securitizations, directing various U.S. federal regulators to engage in rule-making actions aimed at dramatically reforming regulation of U.S. financial markets. Included among those changes were the adoption of several rules by the SEC as part of Regulation Asset-Backed Securities II ("**Regulation AB II**"), which set forth disclosure requirements for securitization transactions, and the joint establishment of the U.S. Risk Retention Rules by a group of U.S. federal regulators, which require that the sponsors of securitizations (or their "majority-owned affiliates," as defined under Credit Risk Retention (Regulation RR)) retain a minimum of 5% of the credit risk of the assets collateralizing any securitization transaction they bring to market, subject to certain exemptions and exclusions. While many of the rule-makings required by the Dodd-Frank Act have been finalized and are either effective or pending effectiveness, others remain to be finalized or even proposed. Further, many of the rules that have been finalized have been subject to modification or interpretation since their effective date, oftentimes in order to clarify ambiguities present in the final rules. Accordingly, it is difficult to predict with certainty how the Dodd-Frank Act and the other regulations that have been proposed, finalized or recently implemented will affect our ability to execute securitizations.

In addition to the Dodd-Frank Act, its related rules and Regulation AB II, other U.S. federal or state laws and regulations that could affect our ability to execute securitization transactions may be proposed, enacted, modified or implemented. In addition, the securitization industry continues to craft changes to securitization practices, including changes to representations and warranties in securitization transaction documents, new underwriting guidelines and disclosure guidelines. These laws and regulations and changes to securitization practices could alter the structure of securitizations in the future, could pose additional risks to our participation in future securitizations or effectively preclude us from executing securitization transactions, could delay our execution of these types of transactions, or could reduce the returns we would otherwise expect to earn from executing securitization transactions.

Additionally, capital and leverage requirements applicable to banks and other regulated financial institutions that traditionally purchase and hold asset-backed securities, could result in less investor demand for securities issued through securitization transactions or increased competition from other institutions that execute securitization transactions.

***We may be unable to profitably execute securitization transactions, which could materially and adversely affect us.***

A number of factors may determine whether a securitization transaction that we execute or participate in is profitable. One such factor is the price at which we acquire the mortgage loans that we intend to securitize, which may be impacted by, among other things, the level of competition in the marketplace or the relative desirability to originators, of retaining mortgage loans as investments versus selling them to third parties such as us. Another factor that impacts the profitability of a securitization transaction is the cost of the short-term debt used to finance our holdings of mortgage loans after acquisition and prior to securitization. This cost may vary depending on the availability of short-term financing, interest rates, the duration of the financing, and the extent to which third parties are willing to provide such financing. Additionally, the value of mortgage loans held by us prior to securitization may vary over the course of the holding period due to changes in interest rates or the credit quality of the mortgage loans. To the extent we seek to hedge against interest rate fluctuations that affect loan value, the cost of any hedging transaction will decrease returns on the respective securitization transaction. The price that investors pay for securities issued in our securitization transactions will also significantly affect our profitability margin. Additionally, in effecting securitization transactions, we may incur transaction costs or may incur or be required to make reserves for any liability in connection with executing a transaction, and such costs can also reduce the profitability of a transaction. Furthermore, in the securitization transactions we participate in, we make certain representations and warranties about the underlying mortgage loans that we intend to securitize and we assume the obligation to repurchase or replace those mortgage loans in certain circumstances if those representations or warranties are untrue. If we are required to repurchase or replace such mortgage loans, it may impact our ability to profitably execute securitizations of mortgage loans. To the extent that we are not able to profitably execute securitizations of mortgage loans, we could be materially and adversely affected.

Rating agencies have historically played a central role in the securitization markets. Many purchasers of asset-backed securities require that a security be rated by the agencies at or above a specific grade before they will consider purchasing it. The rating agencies could adversely affect our ability to execute securitization transactions by deciding not to publish ratings for our securitization transactions or assigning ratings that are below the thresholds investors require. Further, rating agencies could alter their ratings processes or criteria after we have accumulated loans for securitization in a manner that reduces the value of previously acquired loans or that requires us to incur additional costs to comply with those processes and criteria.

***We may use repurchase agreements to finance our securities investments, which may expose us to risks that could result in losses.***

We may use repurchase agreements as a form of leverage to finance our securities investments, and the proceeds from repurchase agreements are generally invested in additional securities. There is a risk that the market value of the securities acquired from the proceeds received in connection with a repurchase agreement may decline below the price of the securities underlying the repurchase agreement that we have sold but remain obligated to repurchase. Repurchase agreements also involve the risk that the counterparty liquidates the securities we delivered to it under the repurchase agreements following the occurrence of an event of default under the applicable repurchase agreement by us. In addition, there is a risk that the market value of the securities we retain may decline. If the buyer of securities under a repurchase agreement were to file for bankruptcy or experiences insolvency, we may be adversely affected. Furthermore, our counterparty may require us to provide additional margin in the form of cash, securities or other forms of collateral under the terms of the derivative contract. Also, in entering into repurchase agreements, we bear the risk of loss to the extent that the proceeds of the repurchase agreement are less than the value of the underlying securities. In addition, the interest costs associated with repurchase agreements transactions may adversely affect our results of operations and financial condition, and, in some cases, we may be worse off than if we had not used such instruments.

**Risks Related to our Relationship with the Advisor, the Sub-Advisor and the Managing Dealer**

***We depend on the Sub-Advisor, under the oversight of the Advisor and our board of directors, to manage our investments and otherwise conduct our business, and any material adverse change in its financial condition or our relationship with the Advisor and the Sub-Advisor could have a material adverse effect on our business and ability to achieve our investment objectives.***

Our stockholders will have no opportunity to control our overall day-to-day operations, including investment and disposition decisions. We will be relying on the experience and knowledge of the Advisor and Sub-Advisor under the oversight of our board of directors. Our success is dependent upon our relationship with, and the performance of, the Advisor and Sub-Advisor in the implementation of our investment strategy and day-to-day management of our investments. The Advisor or the Sub-Advisor may suffer or become distracted by adverse financial or operational problems in connection with either CNL's or Balbec's business and activities unrelated to us and over which we have no control. Should the Advisor or the Sub-Advisor fail to allocate sufficient resources to perform its responsibilities to us for any reason, we may be unable to achieve our investment objectives or to pay distributions to our stockholders.

The prior performance of the Advisor and Sub-Advisor's prior programs or investments are not necessarily indicative of our future results. Stockholders should be aware that investment results cannot be predicted or projected reliably, that the realization of investment results is subject to significant uncertainties and contingencies and that the investment results may change materially in response to changes in one or more of such experiences, and do not constitute a prediction as to future events. Because of the uncertainties and subjective judgments inherent in selecting the assumptions and because future events and circumstances cannot be predicted, the actual investment results may differ, and may differ materially, from previous results achieved by the Advisor and/or Sub-Advisor.

***Each of the Advisor and the Sub-Advisor can resign on 60 days' notice and the Advisor and the Sub-Advisor have separately agreed to resign if the other is terminated for anything other than cause and we may not be able to find suitable replacement(s) within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.***

The Advisor has the right, under the Advisory Agreement, to resign at any time on 60 days written notice, whether we have found a replacement or not. If the Advisor resigns, we may not be able to contract with a new Advisor or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all, in which case our operations are likely to experience a disruption and our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected. In addition, the coordination of our internal management, business activities and supervision of our businesses is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by the Advisor and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our businesses may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations.

The Sub-Advisor also has the right, under the Sub-Advisory Agreement, to resign at any time on 60 days written notice, whether we or the Advisor has found a replacement or not. If the Sub-Advisor resigns, we and the Advisor may not be able to contract with a new sub-advisor. The Advisors and certain of their respective affiliates have also agreed separately that, in the event the Advisor or the Sub-Advisor is terminated or not renewed as an advisor or sub-advisor, other than for cause, the other will also terminate the Advisory Agreement or Sub-Advisory Agreement, as applicable. In such case, our operations are likely to experience a disruption and our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected.

***The Advisor's or the Sub-Advisor's inability to retain the services of key professionals could hurt our performance.***

The Advisor has delegated the authority to make investment decisions to the Sub-Advisor, subject to the oversight of the Advisor. The Sub-Advisor's power to approve the acquisition of a particular investment, finance or refinance any new or existing investment or dispose of an existing investment rests with particular professionals employed by the Sub-Advisor, subject to the oversight of the Advisor. Accordingly, our success depends to a significant degree upon the contributions of certain key real estate professionals employed by the Advisor and the Sub-Advisor, each of whom would be difficult to replace. There is ever increasing competition among alternative asset firms, financial institutions, private equity firms, investment advisors, investment managers, real estate investment companies, real estate investment trusts and other industry participants for hiring and retaining qualified investment professionals and there can be no assurance that such professionals will continue to be associated with us, the Advisor or the Sub-Advisor, particularly in light of our perpetual-life nature, or that replacements will perform well. Neither we nor the Advisor or the Sub-Advisor have employment agreements with these individuals and they may not remain associated with us. If any of these persons were to cease their association with us, our operating results could suffer. Our future success depends, in large part, upon the Advisor's and the Sub-Advisor's ability to attract and retain highly skilled managerial, operational and marketing professionals. If the Advisor or the Sub-Advisor loses or is unable to obtain the services of highly skilled professionals, our ability to implement our investment strategies could be delayed or hindered.

***The fees we will pay in connection with our private offering and the agreements entered into with the Advisor and its affiliates were not determined on an arm's-length basis and therefore may not be on the same terms we could achieve from a third party.***

The compensation paid to the Advisor, the Sub-Advisor, the Managing Dealer and their respective affiliates for services they provide us was not determined on an arm's-length basis. All service agreements, contracts or arrangements between or among the Advisor, the Sub-Advisor, their respective affiliates and us were not negotiated at arm's-length. Such agreements include the Advisory Agreement, the Sub-Advisory Agreement, the Administrative Services Agreement, the Master Servicing Agreement (as such term is defined below), the Managing Dealer Agreement and other agreements we may enter into with affiliates of the Advisor or the Sub-Advisor from time to time.

**Risks Related to Conflicts of Interest**

***Various potential and actual conflicts of interest will arise, and these conflicts may not be identified or resolved in a manner favorable to us.***

Each of CNL and Balbec has conflicts of interest, or conflicting loyalties, as a result of the numerous activities and relationships of CNL, Balbec, the Managing Dealer, the Advisor, the Sub-Advisor and the affiliates, partners, members, shareholders, officers, directors and employees of the foregoing, some of which are described herein. However, not all potential, apparent and actual conflicts of interest are included herein, and additional conflicts of interest could arise as a result of new activities, transactions or relationships commenced in the future. If any matter arises that we and our affiliates (including the Advisor) determine in our good faith judgment constitutes an actual and material conflict of interest, we and our affiliates (including the Advisor) will take such actions as we determine appropriate to mitigate the conflict. Pursuant to the conflicts of interest policy in the Code of Business Conduct and Ethics adopted by our board of directors, transactions between us and CNL, Balbec or their respective affiliates requires approval by our board of directors, including a majority of our independent directors. However, there is no guarantee that the policies and procedures adopted by us, the terms and conditions of the Advisory Agreement or the policies and procedures adopted by the Advisor, CNL, Balbec and their affiliates will enable us to identify, adequately address or mitigate these conflicts of interest and there can be no assurance that our board of directors, CNL or Balbec will identify or resolve all conflicts of interest in a manner that is favorable to us.

***The Advisors face conflicts of interest because the fees they receive for services performed are based in part on our NAV, which the Advisors are ultimately responsible for determining.***

The Advisors are paid management fees for their services based on our NAV, which is calculated by the Administrator, based on valuations provided by the Advisors. The calculation of our NAV includes certain subjective judgments with respect to estimating, for example, the value of our portfolio and our accrued expenses, net portfolio income and liabilities, and, therefore, our NAV may not correspond to realizable value upon a sale of those assets. The Advisors may benefit from us retaining ownership of our assets at times when our stockholders may be better served by the sale or disposition of our assets in order to avoid a reduction in our NAV. If our NAV is calculated in a way that is not reflective of our actual NAV, then the purchase price of our shares or the price paid for the repurchase of your shares on a given date may not accurately reflect the value of our portfolio, and your shares may be worth less than the purchase price or more than the repurchase price. The valuation of our investments will affect the amount of the management fees paid to the Advisors. As a result, there may be circumstances where the Advisors are incentivized to determine valuations that are higher than the actual fair value of our investments.

***The Advisor's and the Sub-Advisor's management fee and total return incentive fee may not create proper incentives or may induce the Advisors or their affiliates to make certain investments, including speculative investments, that increase the risk of our real estate portfolio.***

We will pay the Advisor and the Sub-Advisor a management fee regardless of the performance of our portfolio. The Advisor's and the Sub-Advisor's entitlement to a management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. We would be required to pay the Advisor and the Sub-Advisor a management fee in a particular period even if we experienced a net loss or a decline in the value of our portfolio during that period. We will also be required to reimburse the Advisor and the Sub-Advisor for certain expenses described in the Advisory Agreement.

The existence of the Advisor's and the Sub-Advisor's total return incentive fee, which is based on the investment return provided to Stockholders (the "**total return to stockholders**") for each share class in any calendar year, may create an incentive for the Advisor or the Sub-Advisor to make riskier or more speculative investments on our behalf or cause us to use more leverage than it would otherwise make in the absence of such performance-based compensation. In addition, the change in NAV per share will be based on the value of our investments on the applicable measurement dates and not on realized gains or losses. As a result, the Advisor and the Sub-Advisor may receive the total return incentive fee based on unrealized gains in certain assets at the time of such fees and such gains may not be realized when those assets are eventually disposed of.

Because the management fee and total return incentive fee are based on our NAV, the Advisor may also be motivated to accelerate acquisitions in order to increase NAV or, similarly, delay or curtail repurchases to maintain a higher NAV, which would, in each case, increase amounts payable to the Advisor and the Sub-Advisor, but may make it more difficult for us to efficiently deploy new capital. If our interests and those of the Advisor and the Sub-Advisor are not aligned, the execution of our business plan and our results of operations could be adversely affected, which could adversely affect our results of operations and financial condition. The Advisor, the Sub-Advisor and their respective affiliates, including certain of our officers and some of our directors, will face conflicts of interest including conflicts that may result from compensation arrangements. The Advisor compensates the members of its management team with incentive-based compensation, asset-based compensation and/or bonuses and awards which will vary based on the Advisor's performance.

***CNL and Balbec personnel work on other projects, and conflicts may arise in the allocation of personnel between us and other projects.***

The Advisor, the Sub-Advisor and their affiliates will devote such time as they determine to be necessary to conduct our business affairs in an appropriate manner. However, CNL and Balbec personnel, including members of the investment committee, will work on other projects, serve on other committees (including boards of directors) and source potential investments for and otherwise assist the investment programs of other investment vehicles and their portfolio entities, including other investment programs to be developed in the future, including other REITs. Time spent on these other initiatives diverts attention from our activities, which could negatively impact us. Furthermore, CNL, Balbec and their respective personnel derive financial benefit from these other activities, including fees and performance-based compensation. Our sponsors' personnel share in the fees and performance-based compensation generated by other investment vehicles. These and other factors create conflicts of interest in the allocation of time by such personnel.

***We do not have a policy that expressly prohibits our directors, officers, or affiliates from engaging for their own account in business activities of the types conducted by us.***

We do not have a policy that expressly prohibits our directors, officers, or affiliates from engaging for their own account in business activities of the types conducted by us. However, the Code of Business Conduct and Ethics adopted by our board of directors contains a conflicts of interest policy that prohibits our directors and executive officers from engaging in any transaction that involves an actual conflict of interest with us. Notwithstanding the prohibitions in the Code of Business Conduct and Ethics adopted by our board of directors, after considering the relevant facts and circumstances of any actual conflict of interest, a majority of our directors may, on a case-by-case basis and in their sole discretion, waive such conflict of interest. In addition, the Advisory Agreement and the Sub-Advisory Agreement do not prevent the Advisor, the Sub-Advisor and their respective affiliates, subject to an exclusivity agreement between the Advisor and the Sub-Advisor, from engaging in additional business opportunities, some of which could compete with us, except as agreed to by the Advisor and the Sub-Advisor.

***We may source, sell and/or purchase assets either to or from the Advisors and their affiliates, and such transactions may cause conflicts of interest.***

Subject to our charter and the restrictions in our investment policy, we may directly or indirectly source, sell and/or purchase all or any portion of an asset (or portfolio of assets/investments) to or from the Advisor, the Sub-Advisor and their respective affiliates, their respective related parties or investment vehicles or accounts sponsored, managed or advised by any of the foregoing, including parties which such affiliates or related parties own or have invested in. Where financing of such a transaction is sourced by such affiliate, such affiliate may receive a portion of the origination fee payable to the third-party financier. Pursuant to the conflicts of interest policy in the Code of Business Conduct and Ethics adopted by our board of directors, such transactions will be subject to the approval of a majority of directors not otherwise interested in the transaction. Subject to our charter and the restrictions in our investment policy, we may also source, sell to and/or purchase from third parties interests in or assets issued by affiliates of the Advisor, the Sub-Advisor, their respective related parties or investment vehicles or account sponsored, managed or advised by any of the foregoing and such transactions would not require approval by our directors or an offset of any fees we otherwise owe to the Advisor or its affiliates. The transactions referred to in this paragraph involve conflicts of interest, as our sponsors and their respective affiliates may receive fees and other benefits, directly or indirectly, from or otherwise have interests in both parties to the transaction.

***The Advisor and the Sub-Advisor will experience conflicts of interest in connection with the management of our business affairs and their respective other accounts and clients.***

The Advisor and the Sub-Advisor will experience conflicts of interest in connection with the management of our business affairs relating to the allocation of investment opportunities by the Advisor, the Sub-Advisor and their respective affiliates to us and other clients; compensation to the Advisor, the Sub-Advisor and their respective affiliates; services that may be provided by the Advisor, the Sub-Advisor and their respective affiliates to our businesses; co-opportunities for us and the allocation of such opportunities to us and other clients of the Advisor and/or the Sub-Advisor; the formation of investment vehicles by the Advisor or the Sub-Advisor; and differing recommendations given by the Advisor and/or the Sub-Advisor to us versus other clients.

***Under certain circumstances, subject to the allocation policy adopted by our board of directors, the Sub-Advisor may determine not to pursue some or all of an investment opportunity within our investment objectives and guidelines, including, without limitation, as a result of our prior investments, business or other reasons applicable to us, CNL, Balbec or their respective affiliates.***

Under certain circumstances, subject to the allocation policy adopted by our board of directors, the Sub-Advisor may determine not to pursue some or all of an investment opportunity within our investment objectives and guidelines, including, without limitation, as a result of business, reputational or other reasons applicable to us, the Advisor, the Sub-Advisor or their respective affiliates. In addition, the Sub-Advisor, the Advisor and/or their respective affiliates may determine that we should not pursue some or all of an investment opportunity, including, by way of example and without limitation, because we have already invested sufficient capital in the investment, sector, industry, geographic region or markets in question, as determined by the Sub-Advisor, the Advisor and/or their respective affiliates in their good faith discretion, or the investment is not appropriate for us for other reasons as determined by the Sub-Advisor, the Advisor and/or their respective affiliates in their good faith and reasonable sole discretion. In any such case affiliates of the Advisor and/or the Sub-Advisor could, thereafter, offer such opportunity to other parties, portfolio entities, joint-venture partners, related parties or third parties. Any such entities may be advised by a different CNL or Balbec business group with a different investment committee, which could determine an investment opportunity to be more attractive than the Sub-Advisor and/or the Advisor believes to be the case. In any event, there can be no assurance that the Sub-Advisor's and/or the Advisor's, as applicable, assessment will prove correct or that the performance of any investments actually pursued by us will be comparable to any investment opportunities that are not pursued by us. CNL or Balbec, including their personnel, will, in certain circumstances, receive compensation from any such party that makes the investment, including an allocation of carried interest or referral fees, and any such compensation could be greater than amounts paid by us to the Advisor or Sub-Advisor. In some cases, CNL or Balbec earn greater fees when their other affiliates participate alongside or instead of us in an investment.

When the Advisor, the Sub-Advisor and their affiliates determine not to pursue some or all of an investment opportunity for us that would otherwise be within our investment objectives and strategies, and CNL or Balbec provide the opportunity or offer the opportunity to their affiliates, CNL or Balbec, including their personnel, can be expected to receive compensation from their affiliates, whether or not in respect of a particular investment, including an allocation of carried interest or referral fees, and any such compensation could be greater than amounts paid by us to the Advisor or Sub-Advisor. As a result, the Advisor or the Sub-Advisor (including real estate personnel who receive such compensation) could be incentivized to allocate investment opportunities away from us to or source investment opportunities for their affiliates.

The Advisor, the Sub-Advisor and their affiliates make good faith determinations for allocation decisions based on expectations that will, in certain circumstances, prove inaccurate. Information unavailable to the Advisors, or circumstances not foreseen by the Advisors at the time of allocation, may cause an investment opportunity to yield a different return than expected. For example, an investment opportunity that the Advisor, the Sub-Advisor and their affiliates determine to be consistent with the return objective of an affiliate rather than us may not match the expectations and underwriting of the Advisor, the Sub-Advisor and their affiliates and generate an actual return that would have been appropriate for us. Conversely, an investment that the Advisor, the Sub-Advisor and their affiliates expect to be consistent with our return objectives will, in certain circumstances, fail to achieve them. There is no assurance that any conflicts arising out of the foregoing will be resolved in our favor. Each of CNL and Balbec is entitled to amend its policies and procedures at any time without our consent.

***Certain principals and employees will, in certain circumstances, be involved in and have a greater financial interest in the performance of other CNL or Balbec funds or accounts, and such activities may create conflicts of interest in making investment decisions on our behalf.***

Certain CNL or Balbec personnel will, in certain circumstances, be subject to a variety of conflicts of interest relating to their responsibilities to us, other investment vehicles and portfolio entities, and their outside personal or business activities, including as members of investment or advisory committees or boards of directors of or advisors to investment funds, corporations, foundations or other organizations. Such positions create a conflict if such other entities have interests that are adverse to ours, including if such other entities compete with us for investment opportunities or other resources. The CNL or Balbec personnel in question may have a greater financial interest in the performance of the other entities than our performance. This involvement may create conflicts of interest in making investments on our behalf and on behalf of such other funds, accounts and other entities. Although the Advisors will generally seek to minimize the impact of any such conflicts, there can be no assurance they will be resolved favorably for us. Also, CNL or Balbec personnel are generally permitted to invest in alternative investment funds, private equity funds, real estate funds, hedge funds and other investment vehicles, as well as engage in other personal trading activities relating to companies, assets, securities or instruments (subject to CNL's or Balbec's Code of Ethics requirements), some of which will involve conflicts of interest. Such personal securities transactions will, in certain circumstances, relate to securities or instruments, which can be expected to also be held or acquired by us or other investment vehicles, or otherwise relate to companies or issuers in which we have or acquire a different principal investment (including, for example, with respect to seniority). There can be no assurance that conflicts of interest arising out of such activities will be resolved in our favor. Investors will not receive any benefit from any such investments, and the financial incentives of CNL or Balbec personnel in such other investments could be greater than their financial incentives in relation to us.

**Tax Risks Related to Ownership of Our Shares**

***We would be subject to adverse consequences if we fail to qualify as a REIT.***

We believe that we have been organized and intend to operate in a manner so as to qualify for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2025. Our qualification as a REIT, however, depends and will continue to depend on our ability to meet various requirements concerning, among other things, the ownership of our outstanding stock, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. Our ability to satisfy these asset tests depends upon our analysis of the characterization of our assets for U.S. federal income tax purposes and fair market values of our assets. For example, the determination of whether a debt instrument is treated as a qualifying asset generating qualifying income for purposes of the REIT income and asset tests may depend on whether the instrument is treated as debt or equity for U.S. federal income tax purposes and whether the instrument is treated as secured by real property for purposes of the REIT rules, which in some circumstances could be uncertain. In addition, the fair market values of certain of our assets are not susceptible to a precise determination.

If we were to fail to qualify as a REIT for any taxable year, we would not be allowed a deduction for dividends to our stockholders in computing our net taxable income and would be subject to U.S. federal income tax on our net taxable income at regular corporate rates and applicable state and local taxes. We would also be disqualified from treatment as a REIT for the four subsequent taxable years following the year during which our REIT qualification was lost unless we were entitled to relief under certain Internal Revenue Code provisions and obtained a ruling from the Internal Revenue Service (the "**IRS**"). If disqualified and unable to obtain relief, we may need to borrow money or sell assets to pay taxes. As a result, cash available for distribution would be reduced for each of the years involved. Furthermore, it is possible that future economic, market, legal, tax or other considerations may cause our REIT qualification to be revoked. This could have a material adverse effect on our business and the market price of our stock.

***To qualify as a REIT, we may be forced to borrow funds, sell assets or take other actions during unfavorable market conditions.***

To qualify as a REIT, we must ensure that we meet the REIT gross income test annually and that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities, shares in REITs and other qualifying real estate assets, including certain mortgage loans and certain kinds of mortgage-backed securities. The remainder of our investments in securities (other than government securities and REIT qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and securities that are qualifying real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total securities can be represented by securities of one or more taxable REIT subsidiaries ("**TRS**") and not more than 25% of the value of our assets can consist of debt instruments issued by publicly offered REITs that are not secured by real property. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.

In addition, in order to qualify as a REIT, we generally must distribute to our stockholders at least 90% of our net taxable income, excluding net capital gains each year, and we will be subject to U.S. federal income tax, as well as applicable state and local taxes, to the extent that we distribute less than 100% of our net taxable income each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

In order to meet these requirements, we may be required to liquidate from our portfolio, or contribute to a TRS, otherwise attractive investments, and may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the source of income or asset diversification requirements for qualifying as a REIT. Furthermore, in order to meet the distribution requirements, we may be required to: (i) sell assets in adverse market conditions, (ii) borrow on unfavorable terms, (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt or (iv) make a taxable distribution of our shares as part of a distribution in which stockholders may elect to receive shares or (subject to a limit measured as a percentage of the total distribution) cash, in order to comply with the REIT distribution requirements. All of these actions could reduce our income and amounts available for distribution to our stockholders.

***Ordinary dividends paid by REITs generally do not qualify for the reduced tax rates applicable to "qualified dividend income."***

Dividends paid by C corporations to domestic shareholders that are individuals, trusts and estates currently are generally taxed at a maximum U.S. federal income tax rate of 20% as qualified dividend income. Dividends payable by REITs, however, are generally not eligible for the reduced rates applicable to qualified dividend income, except to the extent designated as capital gain dividends or qualified dividend income. The more favorable rates currently applicable to regular corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in shares of non-REIT corporations that pay dividends, even taking into account the deduction of up to 20% of qualified REIT dividends received by non-corporate U.S. shareholders in taxable years beginning before January 1, 2026.

***The failure of excess MSRs that we hold to qualify as real estate assets, or the failure of the income from excess MSRs to qualify as interest from mortgages, could adversely affect our ability to qualify as a REIT.***

We may acquire excess MSRs directly or indirectly. In certain private letter rulings, the IRS ruled that excess MSRs meeting certain requirements would be treated as an interest in mortgages on real property and thus a real estate asset for purposes of the 75% REIT asset test, and interest received by a REIT from such excess MSRs will be considered interest on obligations secured by mortgages on real property for purposes of the 75% REIT gross income test. A private letter ruling may be relied upon only by the taxpayer to whom it is issued, and the IRS may revoke a private letter ruling. Consistent with the analysis adopted by the IRS in such private letter rulings and based on advice of counsel, we intend to treat any excess MSRs that we acquire that meet the requirements provided in the private letter rulings as qualifying assets for purposes of the 75% REIT gross asset test and we intend to treat income from such excess MSRs as qualifying income for purposes of the 75% and 95% gross income tests. Notwithstanding the IRS's determination in the private letter rulings described above, it is possible that the IRS could successfully assert that any excess MSRs that we acquire do not qualify for purposes of the 75% REIT gross asset test and income from such MSRs does not qualify for purposes of the 75% and/or 95% gross income tests, which could cause us to be subject to a penalty tax and could adversely impact our ability to qualify as a REIT.

***We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.***

We may acquire debt instruments in the secondary market for less than their face amount. The amount of such discount will generally be treated as "market discount" for U.S. federal income tax purposes. Market discount generally is reported as income when, and to the extent that, any payment of principal of the debt instrument is made, unless we elect to include accrued market discount in income as it accrues. Principal payments on certain loans are made monthly, and consequently accrued market discount may have to be included in income each month as if the debt instrument were assured of ultimately being collected in full. If we collect less on the debt instrument than our purchase price plus the market discount we had previously reported as income, we may not be able to benefit from any offsetting loss deductions.

In addition, we may be required to accrue interest and discount income on mortgage loans, RMBS, MSRs and other types of debt securities or interests in debt securities before we receive any payments of interest or principal on such assets. For example, we may recognize income in excess of the cash we receive if we invest in debt instruments with "original issue discount," or if we engage in certain debt modifications. We may also be required under the terms of the indebtedness that we incur, whether to private lenders or pursuant to government programs, to use cash received from interest payments to make principal payment on that indebtedness. Furthermore, we will generally be required to take certain amounts into income no later than the time such amounts are reflected on our financial statements. As a result of the foregoing, we may generate less cash flow than taxable income in a particular year, which could impact our ability to satisfy the REIT distribution requirements.

***The "taxable mortgage pool" rules may increase the taxes that we or our stockholders may incur, and may limit the manner in which we effect future securitizations.***

Securitizations by us or by subsidiaries we have or may form in the future could result in the creation of taxable mortgage pools for U.S. federal income tax purposes. As a result, we could have "excess inclusion income." Certain categories of stockholders, such as non-U.S. stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, could be subject to increased taxes on a portion of their dividend income from us that is attributable to any such excess inclusion income. In addition, to the extent that our common stock is owned by tax-exempt "disqualified organizations," such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business income, we may incur a corporate level tax on a portion of any excess inclusion income. Moreover, we could face limitations in selling equity interests in these securitizations to outside investors, or selling any debt securities issued in connection with these securitizations that might be considered to be equity interests for tax purposes. These limitations may prevent us from using certain techniques to maximize our returns from securitization transactions.

***Complying with REIT requirements may limit our ability to hedge effectively.***

The REIT provisions of the Internal Revenue Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate exposure or currency fluctuations will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges either (i) interest rate risk on liabilities used to carry or acquire real estate assets, (ii) currency fluctuations with respect to items of income that qualify for purposes of the REIT 75% or 95% gross income tests or assets that generate such income, or (iii) an instrument that hedges risks described in clause (i) or (ii) for a period following the extinguishment of the liability or the disposition of the asset that was previously hedged by the instrument, and, in each case, such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a TRS. This could increase the cost of our hedging activities because such TRS could be subject to tax on gains or expose us to greater risks associated with changes in interest rates and currency fluctuations than we would otherwise want to bear. In addition, losses in a TRS will generally not provide any tax benefit to us, although, subject to limitation, such losses may be carried forward to offset future taxable income of the TRS.

***Certain of our business activities may potentially be subject to the prohibited transaction tax, which could reduce the return on your investment. Further, the tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes.***

For so long as we qualify as a REIT, our ability to dispose of certain properties may be restricted under the REIT rules, which generally impose a 100% penalty tax on any gain recognized on "prohibited transactions," which refers to the disposition of property, including mortgage loans, that is deemed to be inventory or held primarily for sale to customers in the ordinary course of our business, subject to certain exceptions. Whether property is inventory or otherwise held primarily for sale depends on the particular facts and circumstances. For example, we might be subject to this tax if we were to sell or securitize loans in a manner that was treated as a sale of the loans as inventory for U.S. federal income tax purposes. The Internal Revenue Code provides a safe harbor that, if met, allows a REIT to avoid being treated as engaged in a prohibited transaction. No assurance can be given that any property that we sell will not be treated as property held for sale to customers, or that we can comply with the safe harbor. The 100% tax does not apply to gains from the sale of foreclosure property or to property that is held through a "taxable REIT subsidiary" or other taxable corporation, although such income will be subject to tax in the hands of the corporation at regular corporate rates. We intend to structure our activities to avoid prohibited transaction characterization. Accordingly, in order to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans, other than through a TRS, and we may be required to limit the structures we use for our securitization transactions, even though such sales or structures might otherwise be beneficial for us.

***Certain of our activities, including our use of TRSs, are subject to taxes that could reduce our cash flows.***

Even if we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay some U.S. federal, state, local and non-U.S. taxes on our income and property, including taxes on any undistributed income, taxes on income from certain activities conducted as a result of foreclosures, and property and transfer taxes. We would be required to pay taxes on net taxable income that we fail to distribute to our stockholders. In addition, we may be required to limit certain activities that generate non-qualifying REIT income and/or we may be required to conduct such activities through a TRS. We may hold assets in a TRS, including assets that we may acquire through foreclosure, assets that may be treated as dealer property and other assets that could adversely affect our ability to qualify as a REIT if held at the REIT level. As a result, we will be required to pay income taxes on the taxable income generated by these assets. Furthermore, we will be subject to a 100% penalty tax to the extent our economic arrangements with our TRSs, if any, are not comparable to similar arrangements among unrelated parties. We will also be subject to a 100% tax to the extent we derive income from the sale of assets to customers in the ordinary course of business other than through a taxable REIT subsidiary. To the extent we or our TRSs, if any, are required to pay U.S. federal, state, local or non-U.S. taxes, we will have less cash available for distribution to our stockholders.

***A failure to comply with the limits on our ownership of and relationship with one of our taxable REIT subsidiaries, if any, would jeopardize our REIT qualification.***

No more than 20% of the value of a REIT's total assets may consist of stock or securities of one or more taxable REIT subsidiary. This requirement limits the extent to which we can conduct activities through taxable REIT subsidiaries or expand the activities that we conduct through taxable REIT subsidiaries. The values of some of our assets, including assets that we hold through taxable REIT subsidiaries may not be subject to precise determination, and values are subject to change in the future. Accordingly, there can be no assurance that we will be able to comply with the taxable REIT subsidiary limitation.

In addition, we may from time to time need to make distributions from a taxable REIT subsidiary in order to keep the value of our taxable REIT subsidiaries below the taxable REIT subsidiary limitation. Taxable REIT subsidiary dividends, however, generally will not constitute qualifying income for purposes of the 75% REIT gross income test. While we will monitor our compliance with both this income test and the limitation on the percentage of our total assets represented by taxable REIT subsidiary securities and intend to conduct our affairs so as to comply with both, the two may at times be in conflict with one another. For example, it is possible that we may wish to distribute a dividend from a taxable REIT subsidiary in order to reduce the value of our taxable REIT subsidiary to comply with limitation, but we may be unable to do so without simultaneously violating the 75% REIT gross income test.

Although there are other measures we can take in such circumstances to remain in compliance with the requirements for REIT qualification, there can be no assurance that we will be able to comply with both of these tests in all market conditions.

***We may choose to pay dividends in the form of our own shares, in which case our stockholders may be required to pay income taxes in excess of the cash dividends received.***

We may distribute taxable dividends that are payable in cash or our shares. Stockholders (that are not otherwise exempt from U.S. federal income tax) receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. Although a U.S. stockholder may not readily be able to sell or redeem its shares, if a U.S. stockholder is able to and does sell or redeem the shares it receives as a dividend in order to pay this tax, the proceeds may be less than the amount included in income with respect to the dividend, depending on the NAV per share of our common stock at the time of the sale or redemption. In addition, in such case, a U.S. stockholder could have a capital loss with respect to the shares sold that could not be used to offset such dividend income. Furthermore, with respect to certain non-U.S. stockholder, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in shares.

***Characterization of any repurchase agreements we enter into to finance our portfolio assets as sales for tax purposes rather than as secured lending transactions would adversely affect our ability to qualify as a REIT.***

We may enter into repurchase agreements with a variety of counterparties to achieve our desired amount of leverage for the assets in which we intend to invest. When we enter into a repurchase agreement, we generally sell assets to our counterparty to the agreement and receive cash from the counterparty. The counterparty is obligated to resell the assets back to us at the end of the term of the transaction. We believe that for U.S. federal income tax purposes we will be treated as the owner of the assets that are the subject of repurchase agreements and that the repurchase agreements will be treated as secured lending transactions notwithstanding that such agreements may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could successfully assert that we did not own these assets during the term of the repurchase agreements, in which case we could fail to qualify as a REIT.

***Distributions or gain on sale may be treated as unrelated business taxable income to U.S. tax-exempt investors in certain circumstances.***

If (1) all or a portion of our assets are subject to the rules relating to taxable mortgage pools and the allocation of "excess inclusion income," (2) we are a "pension-held REIT," (3) a U.S. tax-exempt shareholder has incurred debt to purchase or hold shares of our common stock, or (4) any residual REMIC interests we hold or any of our qualified REIT subsidiaries that is treated as a taxable mortgage pool generate "excess inclusion income," then a portion of the distributions to a U.S. tax-exempt stockholder and, in the case of condition (3), gains realized on the sale of shares of our common stock by such tax-exempt stockholder, may be subject to U.S. federal income tax as unrelated business taxable income under the Internal Revenue Code.

***Foreclosures may impact our ability to qualify as a REIT and minimize tax liabilities.***

If we foreclose, or consider foreclosing, on properties securing defaulted loans that we hold, we will have to consider the impact that taking ownership of such properties would have on our ability to continue to qualify to be taxed as a REIT and any tax liabilities attributable thereto if we continue to qualify as a REIT. In certain cases, the operation of real property will not generate qualifying rents from real property for purposes of the gross income tests, e.g., income from operation of a hotel. In certain circumstances, we will be able to make an election with the IRS to treat property we take possession of in a foreclosure as "foreclosure property." If, and for so long as, such property qualifies as "foreclosure property," income therefrom is treated as qualifying income for purposes of both gross income tests and gain from the sale of such property will not be subject to the 100% prohibited transaction tax for dealer sales, regardless of our how short our holding period in such property is when we sell such property or other dealer sales considerations. On the other hand, net income with respect to a property for which we have made a foreclosure property election that would not otherwise be qualifying income for purposes of the gross income tests will be taxed at the highest U.S. federal corporate income tax rate. In certain circumstances, the IRS might argue that a particular property did not qualify for a foreclosure property election or that its status as foreclosure property terminated while we believed it continued to qualify, possibly causing us to fail one or both gross income tests or causing any gain from the sale of such property to be subject to the prohibited transaction tax.

***Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.***

Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that changes to U.S. federal income tax laws and regulations or other considerations mean it is no longer in our best interests to qualify as a REIT. Our board of directors has duties to us and could only cause such changes in our tax treatment if it determines to do so in good faith and reasonably believes that such changes are in our best interests. In this event, we would become subject to U.S. federal income tax on our taxable income and we would no longer be required to distribute most of our net income to our stockholders, which may cause a reduction in the total return to our stockholders.

***You may have current tax liability on distributions you elect to reinvest in our stock.***

If you participate in our distribution reinvestment plan, you will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our stock to the extent the amount reinvested was not a tax-free return of capital. Therefore, unless you are a tax-exempt entity, you may be forced to use funds from other sources to pay your tax liability on the reinvested dividends.

***Legislative or regulatory tax changes related to REITs could materially and adversely affect us.***

The U.S. federal income tax laws and regulations governing REITs and their stockholders, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect. No assurance can be given as to whether, when, or in what form, the U.S. federal income tax laws applicable to us and our stockholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in our stock.

Stockholders are urged to consult with their tax advisors regarding any legislative, regulatory or administrative developments on an investment in our stock.

**ERISA Risks**

***We may be deemed to hold "plan assets" subject to Title I of ERISA or Section 4975 of the Internal Revenue Code.***

There can be no assurance that, notwithstanding our commercially reasonable efforts, our underlying assets will not otherwise be deemed to include "plan assets" for the purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code. If our assets were deemed to be "plan assets", this could result in, among other things, (i) the application of the prudence and other fiduciary standards of Title I of ERISA to our investments and (ii) the possibility that certain transactions in which we might otherwise seek to engage in the ordinary course of its business and operation could constitute non-exempt prohibited transactions under Section 406 of ERISA or Section 4975 of the Internal Revenue Code, which could restrict us from entering into an otherwise desirable investment or from entering into an otherwise favorable transaction. In addition, fiduciaries considering an investment in our shares could, under certain circumstances, be liable for prohibited transactions under Section 406 of ERISA or Section 4975 of the Internal Revenue Code or other violations as a result of their investment or as co-fiduciaries for actions taken by or on behalf of us, the Advisor, the Sub-Advisor or the Managing Dealer. There may be Similar Laws that may also apply to an investment in our shares.

**ITEM 2. FINANCIAL INFORMATION.**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

The following discussion and analysis should be read in conjunction with the accompanying financial statements and notes thereto. See also "*Cautionary Note Regarding Forward-Looking Statements*" preceding Item 1 of this Registration Statement.

**Overview**

We are a newly formed real estate finance company. Our investment strategy is to acquire, finance and manage a diversified portfolio of primarily U.S. performing and re-performing whole mortgage loans, MSRs and RMBS. Our overall objective is to generate attractive risk-adjusted returns with high current income for our stockholders, through cash distributions and capital appreciation, across interest rate and credit cycles. Our specific investment objectives are to construct a diversified residential credit portfolio that will enable us to:

● provide current income in the form of regular, stable cash distributions to achieve an attractive distribution yield;

● preserve and protect invested capital by focusing on residential credit assets that are primarily amortizing and thus provide current cash-flow; and

● mitigate downside risk through conservative LTV ratios and effectively manage any interest rate and credit sensitivities.

We cannot assure you that we will achieve our investment objectives. See "*Item 1A. Risk Factors*."

We intend to elect and qualify to be taxed as a REIT under the Internal Revenue Code commencing with our taxable year ending December 31, 2025.

Our board of directors will at all times have ultimate oversight and policy-making authority over us, including responsibility for governance, financial controls, compliance and disclosure. Pursuant to the Advisory Agreement and the Sub-Advisory Agreement, however, we have delegated to the Advisor, and the Advisor in turn has delegated to the Sub-Advisor, subject to the oversight of the Advisor, the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, strategy and guidelines, policies and limitations, subject to oversight by our board of directors.

We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from acquiring properties or real estate-related securities, other than those referred to in this Registration Statement.

**Basis of Presentation**

Our financial statements are and will be prepared in accordance with GAAP, which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties.

**Revenues**

As of June 2, 2025, we have not engaged in principal operations nor generated any revenues. Our entire activity since inception to June 2, 2025 was our initial capitalization and preparation for our proposed fundraising through our private offering. We were capitalized through the purchase by the Advisor of 4,000 Class E shares for an aggregate purchase price of $100,000 and by Balbec Capital Holdings, L.P., an affiliate of the Sub-Advisor, of 4,000 Class E shares for an aggregate purchase price of $100,000 on March 26, 2025.

As of June 2, 2025, we have neither acquired nor entered into any arrangements to acquire any investments with the net proceeds from our private offering. The number and type of investments that we acquire will depend upon market conditions, the amount of proceeds we raise in our private offering and other circumstances existing at the time we are acquiring such assets.

We will seek to primarily focus on U.S. performing and re-performing whole mortgage loans, MSRs, and RMBS. We will seek to identify attractive risk-reward investments by focusing on residential credit assets at a substantial discount to face value in a relatively high-interest rate environment.

**Expenses**

***Management Fee***

For a discussion of the management fee payable to the Advisor and the Sub-Advisor, see "*Item 1. Business—The Advisory Agreement.*"

***Total Return Incentive Fee***

For a discussion of the total return incentive fee payable to the Advisor and the Sub-Advisor, see "*Item 1. Business—The Advisory Agreement*."

***Distribution and Stockholder Servicing Fee***

For a discussion of the distribution and stockholder servicing fee payable to the Managing Dealer, see "*Item 7. Certain Relationships and Related Transactions and Director Independence—Relationship with Managing Dealer"* below.

***Organizational and Offering Expenses***

For a discussion of the organizational and offering expense reimbursement to the Advisor and the Sub-Advisor, see "*Item 1. Business—The Advisory Agreement*."

***Expense Support (Reimbursement)***

For a discussion of the expense support (reimbursement) by (to) the Advisor and the Sub-Advisor, see *"Item 1 Business—Expense Support and Conditional Reimbursement Agreement*."

**Financial Condition, Liquidity and Capital Resources**

As of June 2, 2025, we are in our organizational period and have not yet commenced principal operations or generated any revenues. We expect that principal operations will commence when we issue shares in our private offering.

Our primary use of cash will be for (i) acquisition of residential mortgage loans and other residential debt investments, (ii) the cost of operations (including the management fee and performance fee), (iii) debt service of any borrowings, (iv) periodic repurchases, including under our share purchase plan (as described herein), and (v) cash distributions (if any) to the holders of our shares to the extent authorized by our board of directors and declared by us.

**Quantitative and Qualitative Disclosures about Market Risk**

Market risk is the exposure to loss resulting from changes in interest rates, commodity prices, equity prices, real estate values and other market-based risks. The primary market risks that we will be exposed to are credit risk, interest rate risk, liquidity risk, prepayment risk and extension risk.

***Credit Risk***

We assume credit risk through our investment in mortgage loans and other mortgage-related assets. Credit losses on mortgage loans can occur for many reasons, including: fraud; poor underwriting; poor servicing practices; weak economic conditions; increases in payments required to be made by borrowers; declines in the value of real estate; declining rents on residential rental properties; natural disasters, including the effects of climate change (including flooding, drought, wildfires, and severe weather) and other natural events; uninsured property loss; over-leveraging of the borrower; costs of remediation of environmental conditions, such as indoor mold; changes in zoning or building codes and the related costs of compliance; acts of war or terrorism; changes in legal protections for lenders and other changes in law or regulation; and personal events affecting borrowers, such as reduction in income, job loss, divorce or health problems. In addition, the amount and timing of credit losses could be affected by loan modifications, delays in the liquidation process, documentation errors and other action by servicers. Weakness in the U.S. economy or the housing market could cause our credit losses to increase beyond levels that we currently anticipate.

In addition, rising interest rates may increase the credit risks associated with certain residential whole mortgage loans. For example, the interest rate is adjustable for many of the loans that we may acquire or at the securitization entity we may sponsor in the future. In addition, the loans we pledge to secure loan financing lines may have adjustable interest rates. Accordingly, when short-term interest rates rise, required monthly payments from homeowners will rise under the terms of these adjustable-rate mortgages, and this may increase borrower delinquencies and defaults.

Within a securitization of residential whole mortgage loans, various securities are created, each of which has varying degrees of credit risk. We may own the securities in which there is more (or the most) concentrated credit risk associated with the underlying residential whole mortgage loans. In general, losses on an asset securing a loan or loan included as collateral to a securitization will be borne first by the owner of the property (i.e., the owner will first lose any equity invested in the property) and, thereafter, by the first loss security holder, and then by holders of more senior securities. In the event the losses incurred upon default on the loan exceed any classes in which we invest, we may not be able to recover all of our investment in the securities we hold. In addition, if the underlying properties have been overvalued by the originating appraiser or if the values subsequently decline and, as a result, less collateral is available to satisfy interest and principal payments due on the related security, then the first-loss securities may suffer a total loss of principal, followed by losses on the second-loss and then third-loss securities (or other residential securities that we own). In addition, with respect to residential securities we own, we may be subject to risks associated with the determination by a loan servicer to discontinue servicing advances (advances of mortgage interest payments not made by a delinquent borrower) if they deem continued advances to be unrecoverable, which could reduce the value of these securities or impair our ability to project and realize future cash flows from these securities.

Investments in subordinated RMBS involve greater credit risk than the senior classes of the issue or series. Many of the default-related risks of whole mortgage loans will be magnified in subordinated securities. Default risks may be further pronounced in the case of RMBS by, or evidencing an interest in, a relatively small or less diverse pool of underlying mortgage loans. Certain subordinated securities absorb all losses from default before any other class of securities is at risk, particularly if such securities have been issued with little or no credit enhancement or equity. In addition, principal payments on subordinated securities may be subject to a "lockout" period in which some or all of the principal payments are directed to the related senior securities. This lock-out period may be for a set period of time and/or may be determined based on pool performance criteria such as losses and delinquencies. Such securities therefore possess some of the attributes typically associated with equity investments. We believe any potential defaults on the underlying collateral will be minor as the underlying loans had significant equity at the time of deal closing, leading many borrowers with large incentives to reperform. In cases where that is not possible, we believe the recovery of the unpaid principal balance of the loan is likely given the low LTV ratio of the collateral.

***Interest Rate Risk***

Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. A significant portion of our assets and liabilities, including our whole mortgage loans, investment securities, loan financing lines, and security repurchase facilities, are interest earning or interest bearing and, as a result, we are subject to risks arising from fluctuations in the prevailing levels of market interest rates. In addition, our financing arrangements, if any, may have a variable rate component or include rates which reset monthly and add additional risk due to fluctuations in market interest rates. Any excess cash and cash equivalents of ours are invested in instruments earning short-term market interest rates.

Subject to qualifying and maintaining our qualification as a REIT and maintaining our exclusion from regulation as an investment company under the Investment Company Act, we may utilize various derivative instruments and other hedging instruments to mitigate interest rate risk.

***Liquidity Risk***

An insufficient secondary market may prevent the liquidation of an asset or limit the funds that can be generated from selling an asset. A portion of our assets is designated as illiquid and may be subject to high liquidity risk.

***Prepayment Risk***

The frequency at which prepayments occur on loans held and loans underlying RMBS will be affected by a variety of factors, including the prevailing level of interest rates as well as economic, demographic, tax, social, legal and other factors. Generally, mortgage obligors tend to prepay their mortgage loans when prevailing mortgage rates fall below the interest rates on their mortgage loans.

Generally, whole mortgage loans and RMBS purchased at a premium are adversely affected by faster than anticipated prepayments, and whole mortgage loans and RMBS purchased at a discount are adversely affected by slower than anticipated prepayments. The adverse effects of prepayments may impact us in two ways. First, particular investments may experience outright losses, as in the case of an interest-only security in an environment of faster actual or anticipated prepayments. Second, particular investments may underperform relative to the financial instruments that the Advisor and the Sub-Advisor may have constructed to reduce specific financial risks for these investments, resulting in a loss to us. In particular, prepayments (at par) may limit the potential upside of many whole mortgage loans and RMBS to their principal or par amounts, whereas their corresponding hedges, if any, often have the potential for unlimited loss.

***Extension Risk***

The Sub-Advisor computes the projected weighted average life of our investments based on assumptions regarding the rate at which the borrowers will prepay the underlying mortgage loans. In general, when fixed rate or adjustable-rate or hybrid mortgage loans or other mortgage-related assets are acquired via borrowings, we may, but are not required to, enter into an interest rate swap agreement or other economic hedging instrument that attempts to fix our borrowing costs for a period close to the anticipated average life of the fixed rate portion of the related assets, in each case subject to qualifying and maintaining our qualification as a REIT and maintaining our exclusion from regulation as an investment company under the Investment Company Act. This strategy is designed to protect us from rising interest rates as the borrowing costs are managed to maintain a net interest spread for the duration of the fixed rate portion of the related assets. However, if prepayment rates decrease in a rising interest rate environment, the life of the fixed rate portion of the related assets could extend beyond the term of the swap agreement or other hedging instrument. This could have an adverse impact on our results of operations, as borrowing costs would no longer be fixed after the end of the hedging instrument while the income earned on the fixed and adjustable-rate or hybrid assets would remain fixed. In extreme situations, we may be forced to sell assets to maintain adequate liquidity, which could cause us to incur losses.

***Concentration of Credit Risk***

In the normal course of business, we may hold our cash balances with financial institutions, which at times may exceed federally insured limits. We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf. Management will monitor the financial condition of such financial institutions and does not anticipate any losses from these counterparties.

**ITEM 3. PROPERTIES.**

Our principal office is located at CNL Center at City Commons, 450 South Orange Avenue, Suite 1400, Orlando, Florida 32801. As part of the Advisory Agreement, the Advisor is responsible for providing office space and office services to us. We consider these facilities to be suitable and adequate for the management and operations of our business.

**ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.**

The following table sets forth, as of June 2, 2025, information with respect to the beneficial ownership of our shares by:

● each person known to us to beneficially own more than 5% of any class the outstanding shares;

● each of our directors and named executive officers; and

● all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. There are no shares subject to options that are currently exercisable or exercisable within 60 days. Unless otherwise indicated, all shares are owned directly and the indicated person has sole voting and investment power, based upon the information furnished to us by such stockholders, directors and executive officers.

---

| | | |
|:---|:---|:---|
| **Name and Address<sup>(1)</sup>**  | **Number of Shares<br> Beneficially Owned** | **Percentage<br> of all Shares<sup>(2)</sup>**  |
| **Directors and Named Executive Officers** |  |  |
| Chirag J. Bhavsar |  | \* |
| Peter J. Troisi |  | \* |
| Scott T. Boyd |  | \* |
| Jack D. Howard |  | \* |
| Mark D. Linsz |  | \* |
| Tammy J. Tipton |  | \* |
| Bradley S. Yochum |  | \* |
| All executive officers and directors as a group (7 persons) |  | 0% |
| **5% Stockholders** |  |  |
| CNL Residential Credit Manager, LLC | 4000<sup>(3)</sup> | 50% |
| Balbec Capital Holdings, L.P. | 4000<sup>(3)</sup> | 50% |

---

\* Represents beneficial ownership of less than 1%.

(1) Unless
 otherwise indicated, the address of each beneficial owner is c/o CNL Strategic Residential
 Credit, Inc. 450 South Orange Avenue, Suite 1400, Orlando, FL 32801-3336.

(2) Based
 on a total of 8,000 Class E shares outstanding
 as of May 30, 2025.

(3) Represents
 Class E shares.

**ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.**

**Our Directors**

We operate under the direction of our board of directors. Our board of directors is currently comprised of five directors, Chirag J. Bhavsar, Peter J. Troisi, Scott T. Boyd, Jack D. Howard, and Mark D. Linsz.

The following table sets forth certain information regarding our directors as of the date of this Registration Statement.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Name** | **Age** | **Position(s) Held with Us** |
| &nbsp;&nbsp;Chirag J. Bhavsar | 56 | Chief Executive Officer, President and Director |
| &nbsp;&nbsp;Peter J. Troisi | 40 | Director |
| &nbsp;&nbsp;Scott T. Boyd | 70 | Independent Director |
| &nbsp;&nbsp;Jack D. Howard | 67 | Independent Director |
| &nbsp;&nbsp;Mark D. Linsz | 61 | Independent Director |

---

The following sets forth biographical information concerning the individuals who are our directors. The biographical descriptions for each director include the specific experience, qualifications, attributes and skills that led to the conclusion by our board of directors that such person should serve as a director.

**Chirag J. Bhavsar** serves as our Chief Executive Officer and one of our directors. Mr. Bhavsar also currently serves as Co-Chief Executive Officer and Co-President of CNL Financial Group. Mr. Bhavsar served as Chief Operating Officer from January 1, 2017 to April 9, 2018, Chief Financial Officer from January 1, 2017 to May 1, 2018, and as Chief Executive Officer and Chairman of the board of trustees from December 8, 2017 to April 9, 2018 of Corporate Capital Trust II, a business development company. Mr. Bhavsar also currently serves as Chief Executive Officer of CNL Strategic Capital, LLC, a public, non-traded vehicle with a business strategy focused primarily on privately held companies. In addition, Mr. Bhavsar served as Chief Operating Officer and Chief Financial Officer for Corporate Capital Trust, Inc., a business development company, from January 1, 2017 until November 14, 2017. Mr. Bhavsar has spent most of the past 15 years of his career with entities affiliated with CNL Financial Group. Mr. Bhavsar has served in the roles of Executive Vice President, Chief Operating Officer, and Chief Financial Officer for Valley National Bank's Florida Division, from 2015 to 2016, and as the Executive Vice President and Chief Financial Officer of its predecessor, CNLBancshares, Inc., from 2002 to 2015. Mr. Bhavsar is Chairman of the Board of Currency Exchange International Corp., which is a publicly traded company on the Toronto Stock Exchange. Mr. Bhavsar also currently serves as Director and President of Cogent Bank f/k/a Pinnacle Bank, which is a community bank based in Central Florida. Mr. Bhavsar received his Bachelor of Science in accounting from the University of Florida in 1990, and received a Master of Science in accounting from the University of Florida in 1991. Mr. Bhavsar also graduated from University of Virginia's Banking School in 1993. He is a certified public accountant. Mr. Bhavsar was selected as one of our directors because of his particular knowledge and experience in capital raising, particularly with regard to equity offerings and debt transactions, which strengthens our board of directors' collective knowledge, capabilities and experience. In addition, we believe that Mr. Bhavsar's experience is valuable to our board of directors in its oversight of regulatory and compliance requirements as well as its exercise of fiduciary duties to us and our stockholders.

**Peter J. Troisi** serves as one of our directors. Peter J. Troisi was appointed Chief Executive Officer of Balbec in April 2025 after having served as the firm's President since 2023, he is also a partner of the firm. As Chief Executive Officer of Balbec, Mr. Troisi oversees all aspects of Balbec Capital and is a member of the Investment Committee. Since joining the firm at inception in 2010, Mr. Troisi has held a number of roles with increasing responsibilities and has been a key driver in building out the firm's investment capabilities. Mr. Troisi initially worked with other Balbec partners at Max Recovery, a wholly owned subsidiary of Bear Stearns, from 2006 to 2009. Prior to joining Balbec, Mr. Troisi worked at PRA Group on their portfolio investment team. Mr. Troisi holds a Bachelor of Science in Economics from Siena College. Mr. Troisi was selected as one of our directors because of his particular knowledge and experience in capital raising and our investment strategy and target assets through his experience guiding Balbec's investment activities.

**Scott T. Boyd** serves as an independent director on our board of directors. In 1991, Mr. Boyd founded and currently serves as President of Boyd Development Corporation, a real estate development company based in Winter Garden, Florida. Boyd Development Corporation specializes in anchored retail shopping centers, multi-family projects, net-lease real estate, mixed-use, and land development projects. Prior to founding Boyd Development Corporation, Mr. Boyd worked in public accounting with Ernst & Ernst and Price Waterhouse from 1977 to 1982. He then joined CNL Financial Group, where he held a series of positions, ultimately serving as President of CNL Properties, Inc. from 1987 to 1990. Mr. Boyd is actively involved in community and philanthropic organizations. He currently serves as the Orlando chair of the National Christian Foundation, is a member of the board of directors for Lift Orlando, and previously served as chair at The First Academy, a K-12 college preparatory school in Orlando, for 12 years. Mr. Boyd holds a Bachelor of Science in Accounting from North Park University in Chicago, Illinois. Mr. Boyd was selected as one of our three independent directors because of his prior financial and real estate experience and expertise.

**Mark D. Linsz** serves as an independent director on our board of directors. Mr. Linsz currently serves as co-founder and senior managing partner of My Next Season, an organization designed to help companies and individuals with career transitions, a position he has held since September 2014. Mr. Linsz also currently serves as an independent director of CNL Strategic Capital, LLC since June 2017. Mr. Linsz served as an independent trustee for Corporate Capital Trust II. Mr. Linsz also held a series of senior financial positions at Bank of America from 1998 to 2014, most recently serving as CFO Risk Executive from 2013 to 2014 and Corporate Treasurer from 2009 to 2013. Previously, Mr. Linsz served as Bank of America's Global Markets Risk Executive from 2007 to 2009 and as Chief Risk Officer for Europe, the Middle East, Africa and Asia from 2005 to 2008. Prior to 2005, Mr. Linsz also served as Bank of America's Capital Markets Risk Executive and Head of Compliance for the Global Corporate and Investment Bank. Mr. Linsz began his career with Chicago Research and Trading Group ("CRT") in 1987. Prior to being purchased by NationsBank, he was the head of Market Risk for CRT and continued these responsibilities at NationsBanc-CRT until 1998. Mr. Linsz previously served on the board of directors of the Deposit Trust and Clearing Corporation from 2013 to 2014 and on the board of directors of BlackRock Corporation from 2009 to 2011. Mr. Linsz received a Bachelor of Arts from National Louis University. Mr. Linsz was selected as one of our three independent directors because of his prior board experience and financial expertise.

**Our Executive Officers**

The following sets forth biographical information concerning the individuals who are our executive officers.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s) Held with Us** |
| Chirag J. Bhavsar | 56 | Chief Executive Officer, President and Director |
| Tammy J. Tipton | 64 | Chief Financial Officer and Treasurer |
| Bradley S. Yochum | 38 | General Counsel and Secretary |

---

**Chirag J. Bhavsar** has served as our Chief Executive Officer and President since May 28, 2025. Mr. Bhavsar's biographical information is included in this Registration Statement under "—Our Directors."

**Tammy J. Tipton** serves as our Chief Financial Officer and Treasurer. Ms. Tipton also currently serves as Chief Financial Officer and Interim Chief Operating Officer of CNL Strategic Capital, LLC, a public, non-traded vehicle with a business strategy focused primarily on privately held companies. Ms. Tipton also currently serves as Chief Financial Officer, Senior Vice President and Treasurer of CNL Healthcare Corp., the advisor to CNL Healthcare Properties, Inc., a public, non-traded REIT. Ms. Tipton also has previously served as Chief Financial Officer, Senior Vice President and Treasurer of CHP II Advisors, LLC, since its inception on July 9, 2015, the advisor to CNL Healthcare Properties II, Inc., another public, non-traded REIT. Ms. Tipton previously served as the Chief Financial Officer and Treasurer of CNL Lifestyle Properties, Inc., another public non-traded REIT from May 2015 to December 2017, and served as Chief Financial Officer from March 2014 to December 2017, and as Senior Vice President from May 2015 to December 2017 of its advisor. She also served as Chief Financial Officer and Treasurer of CNL Growth Properties, Inc., another public, non-traded REIT, from September 2014 to October 2017. She served as Chief Financial Officer and Treasurer of Global Income Trust, Inc., another public, non-traded REIT, from September 2014 until its dissolution in December 2015. She serves as Chief Financial Officer and Senior Vice President of CNL Financial Group where she oversees the strategic finance, accounting, reporting, budgeting, payroll and purchasing functions for CNL and its affiliates. Ms. Tipton also holds various other offices with other CNL affiliates. Ms. Tipton has served in various other financial roles since joining CNL Financial Group in 1987. These roles have included regulatory reporting for 20 public entities and the accounting, reporting and servicing for approximately 30 public and private real estate programs. Ms. Tipton received her Bachelor of Science in accounting from the University of Central Florida. She is also a certified public accountant.

**Bradley S. Yochum** serves as our General Counsel and Secretary. Mr. Yochum also currently serves as Senior Vice President of Legal of CNL Financial Group Investment Management and serves as the General Counsel of CNL Strategic Venture Partners, LLC. Mr. Yochum joined CNL Financial Group in 2012 and has previously served in various legal and compliance roles, including with the Managing Dealer, a broker-dealer and FINRA member, Corporate Capital Trust, Inc., a business development company, and CNL Strategic Capital, LLC, a public, non-traded vehicle with a business strategy focused primarily on privately held companies. Mr. Yochum received a LL.M Taxation Law from Villanova University in 2020, a J.D. from the John Marshall School of Law in 2012 and B.A. in Business from the University of Georgia in 2009. Mr. Yochum also holds his FINRA Series 7, 24 and 65 registrations and is a Certified Financial Planner™, a designation he has held since 2022. Mr. Yochum is licensed to practice law in Florida and is a member of the Florida Bar Association.

All of our executive officers are employed by and receive compensation from affiliates of the Advisor.

**Leadership Structure of our Board of Directors**

Our business and affairs are managed under the direction of our board of directors. Among other things, our board of directors sets broad policies for us and approves the appointment of the Advisor, the Sub-Advisor, the Administrator and our executive officers. The role of our board of directors, and of any individual director, is one of oversight and not of management of our day-to-day affairs.

Our board of directors understands that there is no single, generally accepted approach to providing board leadership and that given the dynamic and competitive environment in which we operate, the appropriate leadership structure may vary as circumstances warrant. Under our bylaws, our board of directors may designate one of our directors as chair to preside over meetings of our board of directors and meetings of stockholders, and to perform such other duties as may be assigned to him or her by our board of directors. Presently, Chirag J. Bhavsar serves as Chairman of our board of directors and is an "interested person" by virtue of his professional association with CNL. We believe that it is in the best interests of our stockholders for Mr. Bhavsar to serve as Chairman of our board of directors because of his significant experience in matters of relevance to our business. We believe that our board of directors' leadership structure is in the best interests of us and our stockholders. We also believe that this leadership structure creates a firm link between management and our board of directors and provides unified leadership for carrying out our strategic initiatives and business plans.

**Our Board of Directors' Role in Risk Oversight**

Our board of directors plays an important role in the risk oversight of our company. Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. Risk management is a broad concept comprising many disparate elements (for example, investment risk, issuer and counterparty risk, compliance risk, operational risk, and business continuity risk). Our executive officers and the Advisor and the Sub-Advisor are responsible for the day-to-day management of the risks we face, while our board of directors, as a whole and through its committees, has responsibility for the oversight of risk management. In this capacity, our board of directors (or a committee thereof) performs many tasks, including but not limited to, receiving regular periodic reports from our internal and external auditors and the Advisor and the Sub-Advisor (with respect to our business), approving acquisitions and dispositions and new borrowings as well as periodically reviewing and discussing with our management the risks we face. In its risk oversight role, our board of directors has the responsibility of satisfying itself that the risk management processes designed by our executive officers and the Advisor and the Sub-Advisor are adequate and functioning as designed.

One or more committee(s) of our board of directors assist(s) the full board of directors in risk oversight by addressing specific matters within the purview of each committee. For example, our audit committee is specifically responsible, in consultation with management, our independent auditors and our internal auditor for the integrity of our financial reporting processes and controls and valuation process. In executing this responsibility, our audit committee discusses policies with respect to risk assessment and risk management, including significant financial risk exposures and the steps management has taken to monitor, control and report on such exposures. As part of this process, our audit committee oversees the planning and conduct of an annual risk assessment that is designed to identify and analyze risks to implementing and executing our business strategy. The results of the risk assessment are then discussed with management and used to develop our annual internal audit plan.

Our board of directors believes that this role in risk oversight is appropriate. We believe that we have robust internal processes in place and a strong internal control environment to identify and manage risks. However, not all risks that may affect us can be identified or processes and controls developed to eliminate or mitigate their occurrence or effects, and some risks are beyond our control and that of the Advisor, the Sub-Advisor and our other service providers.

**Committees of our Board of Directors**

Our board of directors may delegate many of its powers to one or more committees. Our board has established our audit committee.

Our audit committee is composed of Messrs. Boyd, Howard and Linsz. Our audit committee operates under a written charter adopted by our board of directors. Our audit committee assists our board of directors in overseeing:

● our accounting and financial reporting processes and valuation process;

● the integrity and audits of our financial statements;

● our compliance with legal and regulatory requirements;

● the qualifications and independence of our independent auditors; and

● the performance of our internal and independent auditors.

Mr. Linsz chairs our audit committee and serves as our "audit committee financial expert," as that term is defined by the SEC.

**ITEM 6. EXECUTIVE COMPENSATION.**

**Compensation of Executive Officers**

We have no employees. We are managed by the Advisor pursuant to the Advisory Agreement. All of our executive officers are employees of the Advisor or one or more of its affiliates. We have not paid, and do not intend to pay, any cash compensation to our executive officers and we do not currently intend to adopt any policies with respect thereto. We do not have agreements with any of our executive officers or any employees of the Advisor or its affiliates with respect to their compensation. Pursuant to the Advisory Agreement, we pay the management fee to the Advisor, not to provide compensation to our executive officers, but to compensate the Advisor for the services it provides for our day-to-day management. No specific portion of the management fee is designated for use by the Advisor as compensation to its employees who are our executive officers, and we are not required to, and do not, separately reimburse the Advisor for compensation paid by the Advisor to our executive officers. Rather, the Advisor will determine the levels of base salary and cash incentive compensation that may be earned by our executive officers for services performed for the Advisor, based on the time required for the performance of the duties of the Advisor under the Advisory Agreement and such other factors as the Advisor may determine are appropriate. The Advisor will also determine whether and to what extent our executive officers will be provided with pension, deferred compensation and other employee benefits plans and programs for their services performed for the Advisor. The Advisor, the Sub-Advisor and their respective affiliates, including certain of our officers and some of our directors, will face conflicts of interest including conflicts that may result from compensation arrangements. The Advisor compensates the members of its team with incentive-based compensation, asset-based compensation and/or bonuses and awards which will vary based on the Advisor's performance. The Advisor may choose to allocate any shares it acquires from us to one or more employees of the Advisor or its affiliates from time to time and in its sole discretion. We do not play any role in the Advisor's determination of how it compensates our executive officers as we are not entitled to review or approve compensation decisions made by the Advisor under the terms of the Advisory Agreement or otherwise.

**Compensation Committee Interlocks and Insider Participation**

No compensation committee exists, and no deliberations occurred with respect to executive compensation, as no executive officers will receive any compensation for their service as executive officers.

**ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS<br> AND DIRECTOR INDEPENDENCE.**

We are subject to various conflicts of interest arising out of our relationship with the Advisor, the Sub-Advisor and their affiliates and employees, some of whom serve as our executive officers and directors. Pursuant to the Advisory Agreement, the Advisor is responsible for the overall management of our activities, subject to the overall supervision of our board of directors. Pursuant to the Sub-Advisory Agreement, the Sub-Advisor is responsible for assisting the Advisor with fulfilling certain of its obligations under the Advisory Agreement. Conflicts of interest include (1) conflicts with respect to allocation of the time of the Advisor, the Sub-Advisor and their affiliates and their key personnel, (2) conflicts with respect to allocation of investment opportunities and (3) conflicts related to the compensation arrangements between the Advisor, the Sub-Advisor, their affiliates and us. All of our directors have duties to us under Maryland law.

**Conflicts of Interest**

We will pay the Advisor and the Sub-Advisor management fees regardless of the performance of our portfolio. The Advisor's and Sub-Advisor's entitlement to management fees, which are not based upon performance metrics or goals, might reduce their incentive to devote their time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. We will be required to pay the Advisor and the Sub-Advisor management fees in a particular period despite experiencing a net loss or a decline in the value of our portfolio during that period. We will also be required to reimburse the Advisor and the Sub-Advisor for certain expenses described in the Advisory Agreement.

We will be subject to conflicts of interest arising out of our relationship with CNL and Balbec, including the Advisor, the Sub-Advisor and their respective affiliates. Two members of our board of directors and our chief executive officer and chief financial officer are also executives of either CNL or Balbec and/or one or more of their affiliates. There is no guarantee that the policies and procedures adopted by us, the terms and conditions of the Advisory Agreement or the policies and procedures adopted by the Advisor, CNL, Balbec and their affiliates will enable us to identify, adequately address or mitigate these conflicts of interest. Pursuant to the conflicts of interest policy in the Code of Business Conduct and Ethics adopted by our board of directors, transactions between us and the Advisors or their respective affiliates will be subject to approval by our board of directors.

Some examples of conflicts of interest that may arise by virtue of our relationship with the Advisors, CNL and Balbec include:

● *CNL's and Balbec's Policies and Procedures*. Specified policies and procedures implemented by the Advisor, the Sub-Advisor and their respective affiliates to mitigate potential conflicts of interest and address certain regulatory requirements and contractual restrictions may reduce the advantages across the Advisors' and their respective affiliates' various businesses that CNL and Balbec expect to draw on for purposes of pursuing attractive investment opportunities. In addressing these conflicts and regulatory, legal and contractual requirements, Balbec has implemented certain policies and procedures that also have the effect of reducing firm-wide synergies and collaboration that the Sub-Advisor could otherwise expect to utilize for purposes of identifying and managing attractive investments. For example, the terms of confidentiality or other agreements with or related to companies in which any investment vehicle of CNL or Balbec has or has considered making an investment or which is otherwise an advisory client of CNL, Balbec and their respective affiliates may restrict or otherwise limit the ability of CNL, Balbec or their respective affiliates, including the Advisor and the Sub-Advisor, to engage in businesses or activities competitive with such companies.

● *Allocation of Investment Opportunities; Co-Investments*. The possibility exists that we and one or more Other Balbec Accounts may have capital available for investment at the same time, which has the potential to create a conflict of interest with respect to the allocation of investment opportunities. In addition, the Sub-Advisor is permitted to invest a portion of our assets in investments in which an Other Balbec Account has or will have an existing investment. These and other situations will involve potential conflicts of interest with respect to the allocation of investment opportunities and the sharing of fees and expenses amongst us and Other Balbec Accounts. Although this conflict is mitigated by the fact that the Sub-Advisor typically only selects investments primarily for one entity at any given time and by the fact that the Advisor will establish procedures to address such conflicts, some of which are described herein, there can be no assurance that such conflicts will be resolved in a manner that is most favorable to us. In addition, the appropriate allocation among us and Other Balbec Accounts of expenses and fees generated in the course of evaluating and making investments often may not be clear, especially where more than one entity participates. For instance, if two or more of us and Other Balbec Accounts are considering making an investment that is not consummated, allocation of the expenses generated for the account of us or such Other Balbec Accounts (such as expenses of common counsel and other professionals) will be made by the Sub-Advisor based on the assessment of each such entity's pro rata expected participation in such investment opportunity. When we or Other Balbec Accounts incur expenses that were related to us or such Other Balbec Accounts, such expenses will typically be allocated among all such entities eligible to reimburse expenses of the applicable nature. In general, the Sub-Advisor will participate in the resolution of all such matters using its best judgment, considering all factors it deems relevant, but in its sole but good faith discretion. Potential and actual conflicts are expected to also arise in the allocation of certain Sub-Advisor investment team members' time among us and such Other Balbec Accounts. In the event that a transaction in which a co-investment was planned, including a transaction for which a co-investment was believed necessary in order to consummate such transaction, ultimately is not consummated, all broken deal expenses relating to such unconsummated transaction are likely to be borne entirely by us, and not by any potential co-investors that were to have participated in such transaction, subject to certain exceptions when we planned to participate in such unconsummated transaction alongside Other Balbec Accounts. Additionally, the Sub-Advisor may spend time and incur expenses pursuing assets on behalf of us, and determine that the return profile is not adequate for us or other reasons such assets will not be pursued by us. We may incur such expenses if Other Balbec Accounts also do not make such investments. Additionally, in certain circumstances investment opportunities suitable for us will not be presented to us and there will be one or more investment opportunities where our participation is restricted. For additional information about the Sub-Advisor's allocation policy, see "*Item 1 Business—Allocation of Investment Opportunities*."

● *Corporate Opportunities*. We do not have a policy that expressly prohibits our directors, officers, or affiliates from engaging for their own account in business activities of the types conducted by us. However, the Code of Business Conduct and Ethics adopted by our board of directors contains a conflicts of interest policy that prohibits our directors and executive officers, as well as personnel of the Advisor and the Sub-Advisor who provide services to us, from engaging in any transaction that involves an actual conflict of interest with us. Notwithstanding the prohibitions in such Code of Business Conduct and Ethics, after considering the relevant facts and circumstances of any actual conflict of interest, a majority of our directors may, on a case-by-case basis and in their sole discretion, waive such conflict of interest. In addition, the Advisory Agreement and the Sub-Advisory Agreement do not prevent the Advisor, the Sub-Advisor and their respective affiliates from engaging in additional business opportunities, some of which could compete with us, except as agreed to by the Advisor and the Sub-Advisor.

● *Variation in Financial and Other Benefits*. A conflict of interest arises where the financial or other benefits available to the Advisors or their affiliates differ among the accounts, clients, entities, funds and/or investment vehicles that they manage. If the amount or structure of the management fee and the Advisors' or their affiliates' compensation differs among accounts, clients, entities, funds and/or investment vehicles (such as where certain funds or accounts pay higher base management fees, incentive fees, performance- based management fees or other fees), the Advisors might be motivated to help certain accounts, clients, entities, funds and/or investment vehicles over others. Similarly, the desire to maintain assets under management or to enhance the Advisors' performance records or to derive other rewards, financial or otherwise, could influence the Advisors or their affiliates in affording preferential treatment to those accounts, clients, entities, funds and/or investment vehicles that could most significantly benefit the Advisors or their affiliates. The Advisors may, for example, have an incentive to allocate favorable or limited opportunity investments or structure the timing of investments to favor such accounts, clients, entities, funds and/or investment vehicles. Additionally, the Advisors or their affiliates might be motivated to favor accounts, clients, entities, funds and/or investment vehicles in which it has an ownership interest or in which CNL, Balbec and/or their affiliates have ownership interests. Conversely, if an investment professional at the Advisors or their affiliates does not personally hold an investment in our company but holds investments in other CNL or Balbec affiliated vehicles, such investment professional's conflicts of interest with respect to us may be more acute.

● *Advisory and Other Relationships*. Neither CNL nor Balbec is under any obligation to decline any engagements or investments in order to make an investment opportunity available to us. In connection with its other businesses, CNL or Balbec may come into possession of information that limits their ability to engage in potential transactions. Our activities may be constrained as a result of the inability of CNL or Balbec personnel to use such information. We may be forced to sell or hold existing investments as a result of relationships that CNL or Balbec may have or transactions or investments CNL or Balbec and their affiliates may make or have made. Additionally, there may be circumstances in which one or more individuals associated with CNL or Balbec will be precluded from providing services to the Advisors because of certain confidential information available to those individuals or to other parts of Balbec. Affiliates of CNL or Balbec may also be involved in the private placement of debt or equity securities issued by us or Other CNL Accounts or Other Balbec Accounts, or otherwise in arranging financings with respect thereto. Subject to applicable law, and as may be disclosed to our board of directors in advance, affiliates of CNL or Balbec may receive underwriting fees, placement commissions, or other compensation with respect to such activities, which will not be shared with us or our stockholders. In determining whether to invest in a particular transaction on our behalf, the Advisors may consider existing business relationships it has, which may result in certain transactions that the Advisors will not undertake on our behalf in view of such relationships.

● *Service Providers*. Certain of our service providers (including lenders, brokers, attorneys and investment banking firms) may be sources of investment opportunities, counterparties therein or advisors with respect thereto. This may influence the Advisors in deciding whether to select such a service provider. In addition, in instances where multiple CNL or Balbec businesses may be exploring a potential individual investment, certain of these service providers may choose to be engaged by other CNL or Balbec affiliates rather than us.

Certain of our service providers and their respective affiliates may from time to time act as prime broker, dealer, custodian, depositary, registrar, administrator or distributor, in relation to, or be otherwise involved in, other accounts or other funds, vehicles or accounts established by parties other than the Advisor and/or Sub-Advisor, which may have similar investment objectives and strategies to us. It is, therefore, possible that any of them may, in the course of business, have potential conflicts of interests with us. Each will, at all times, have regard in such event to its obligations to us and will endeavor to ensure that such conflicts are resolved fairly. Such service providers, and their respective officers, employees and affiliates may from time to time provide other services to the Advisor and/Sub-Advisor and/or be involved in other financial, investment or professional activities which may give rise to conflicts of interest with us, or which may conflict with the investment strategy being pursued by us.

The Advisor and/or Sub-Advisor will only select a service provider to perform services for us to the extent the Advisor and/or/Sub-Advisor, or an affiliate thereof, has determined that doing so is appropriate for us given all surrounding facts and circumstances and is consistent with the Advisor and/or Sub-Advisor's, as applicable, responsibilities under applicable law (including the Employee Retirement Income Security Act of 1974 ("**ERISA**")); provided, however, the Advisor and/or Sub-Advisor, as applicable, may consider various relevant factors and may not necessarily seek out the lowest-cost option when engaging such service providers as other factors or considerations may prevail over cost.

● *Loan Transactions*. As part of its services to Other Balbec Accounts, Balbec or its affiliates may also advise or cause such Other Balbec Accounts to invest in loans and/or similar financing arrangements which provide funds to its loan origination partners. If and to the extent that we are invested in residential whole mortgage loans with such loan origination partners, Balbec may advise its Other Balbec Accounts to take such actions in respect of such loans or financing transactions which could result in an adverse impact to the financial condition (including insolvency) to such loan origination partners.

● *Use of Affiliates*. Although our board of directors selects service providers that it believes are aligned with its operational strategies and will enhance our returns, the Sub-Advisor has a financial interest in the appointment of an affiliated servicer or other person because of the financial or other business interests of its affiliates resulting from such affiliation. Whether or not the Sub-Advisor has a relationship or receives financial or other benefit from the appointment of a particular service provider, there can be no assurance that another service provider is not more qualified to provide the applicable services or able to provide such services at lesser cost. For additional information, see "*—Certain Relationships with Affiliates—Affiliate Service Arrangements*."

● *Possible Future Activities*. The Advisors and their affiliates may expand the range of services that they provide over time. Except as and to the extent expressly provided in the Advisory Agreement and the Sub-Advisory Agreement, the Advisors and their affiliates will not be restricted in the scope of their business or in the performance of any such services (whether now offered or undertaken in the future) even if such activities could give rise to conflicts of interest, and whether or not such conflicts are described herein. The Advisors, CNL, Balbec and their affiliates continue to develop relationships with a significant number of companies, financial sponsors and their senior managers, including relationships with clients who may hold or may have held investments similar to those intended to be made by us. These clients may themselves represent appropriate investment opportunities for us or may compete with us for investment opportunities.

Further conflicts could arise once we and CNL, Balbec or their affiliates have made our respective investments. For example, if we enter into a joint venture with an Other CNL Account or an Other Balbec Account, our interests and the interests of such Other CNL Account or Other Balbec Account may conflict, for example when one joint venture partner seeks to sell the assets in the joint venture but the other joint venture partner does not. In such situations, the ability of the Sub-Advisor to recommend actions in our best interests might be impaired.

In addition to the policies described above with respect to transactions between us and the Advisors or any of their affiliates, our board of directors has adopted a policy regarding the approval of any "related person transaction," which is any transaction or series of transactions in which we or any of our subsidiaries is or are to be a participant, the amount involved exceeds $120,000, and a "related person" (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person would need to promptly disclose to our general counsel any related person transaction and all material facts about the transaction. Our general counsel would then assess and promptly communicate that information to our directors. Based on their consideration of all of the relevant facts and circumstances, our directors will decide whether or not to approve such transaction and will generally approve only those transactions that do not create a conflict of interest. If we become aware of an existing related person transaction that has not been pre-approved under this policy, the transaction will be referred to our directors which will evaluate all options available, including ratification, revision or termination of such transaction. Our policy requires any director who may be interested in a related person transaction to recuse himself or herself from any consideration of such related person transaction.

**Certain Relationships with Affiliates**

The following discussion sets forth the agreements that we have entered into with CNL, Balbec and/or their respective affiliates. The statements relating to the Advisory Agreement, Sub-Advisory Agreement, Administrative Services Agreement and Expense Support and Conditional Reimbursement Agreement set forth in this section and elsewhere in this Registration Statement are subject to and are qualified in their entirety by reference to all of the provisions of such agreements, copies of which are filed as exhibits to this Registration Statement.

***The Advisory Agreement and Sub-Advisory Agreement***

Our business and affairs are managed under the direction of our board of directors. However, we have engaged the Advisor under the Advisory Agreement pursuant to which the Advisor is responsible for the overall management of our activities. The Advisor has engaged the Sub-Advisor under the Sub-Advisory Agreement pursuant to which the Sub-Advisor is responsible for implementing our investment strategy, including the day-to-day monitoring and management of our assets, identifying potential opportunities for investments and exercising investment discretion with respect to the origination, acquisition and disposition of our investments or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by us or any of our subsidiaries consistent with our business objectives and policies and in connection with any borrowings proposed to be undertaken by us. The Sub-Advisor is also responsible for investigating, selecting and engaging such persons as the Sub-Advisor deems necessary to the proper performance of its obligations under the Sub-Advisory Agreement. The Advisory Agreement and the Sub-Advisory Agreement do not prevent the Advisor, the Sub-Advisor and their respective affiliates, subject to an exclusivity agreement between the Advisor and the Sub-Advisor, from engaging in additional business opportunities, some of which could compete with us, except as agreed to by the Advisor and the Sub-Advisor. The Advisory Agreement and the Sub-Advisory Agreement were negotiated between related parties, and their respective terms, including fees and other amounts payable, may not be as favorable to us as if they had been negotiated with unaffiliated third parties.

We compensate the Advisor and the Sub-Advisor through both management and total return incentive fees for their services under the Advisory Agreement and the Sub-Advisory Agreement, respectively. The Advisor will not retain any origination fees, which will be retained by us. However, PRP Advisors, LLC ("PRPA"), an affiliate of the Sub-Advisor, will be paid a master servicing fee by us and it will not reduce or offset the management fee or total return incentive fee payable by us to the Advisor or the Sub-Advisor. We will also pay fees for legal and tax services and fees and expenses relating to the purchase of rights to receive cash streams in connection with portfolios of MSRs to Southbridge Law Group, P.C. and Bungalow Funding, LLC, respectively, as further described herein, which fees will be in addition to the compensation paid to the Sub-Advisor. In addition, we reimburse the Advisor and the Sub-Advisor and certain of their affiliates for certain organization and offering expenses and operating expenses that they incur on our behalf. The timing and nature of fees and compensation to the Advisor and the Sub-Advisor could create a conflict between the interests of the Advisor and the Sub-Advisor, on the one hand, and those of our stockholders, on the other hand. The management fee is not performance based since it is based upon NAV, which creates a conflict of interest in all decisions by the Advisor and the Sub-Advisor in selecting between acquisitions and purchase prices. Potential conflicts may arise in connection with the determination by the Advisor and the Sub-Advisor of whether to acquire, hold or sell assets as such determination could impact the timing and amount of fees payable to the Advisor and the Sub-Advisor. See "*Item 1. Business—The Advisory Agreement*."

**The Administrative Services Agreement**

We have entered into the Administrative Services Agreement with the Administrator, pursuant to which it will provide us with administrative services and is entitled to reimbursement of third-party costs and expenses incurred on behalf of us in providing such administrative services. We will pay the Administrator the administrative services fee that shall be calculated at an annual rate of 0.25% per annum of the NAV for each of our share classes. The administrative services fee shall be calculated and payable monthly in arrears and is calculated before giving effect to any accruals for the any applicable management fees, distribution and stockholder servicing fees and/or total return incentive fees for such month. See "*Item 1. Business—The Administrative Services Agreement*."

***The Expense Support and Conditional Reimbursement Agreement***

We have entered into the Expense Support and Conditional Reimbursement Agreement with the Advisor and the Sub-Advisor, pursuant to which each of the Advisor and the Sub-Advisor agrees to reduce the payment of management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Advisor and the Sub-Advisor under the Advisory Agreement and the Sub-Advisory Agreement, as applicable, to the extent that our annual regular cash distributions exceed our annual net income (with certain adjustments). See "*Item 1. Business—The Expense Support and Conditional Reimbursement Agreement*."

***Affiliate Service Arrangements***

We intend to engage in transactions with one or more businesses that are owned or controlled by Balbec, including the businesses described below. These businesses will, in certain circumstances, also enter into transactions with other counterparties of ours. Balbec could benefit from these transactions and activities through current income and creation of enterprise value in these businesses. Furthermore, Balbec may from time to time encourage our third-party service providers to use other Balbec-affiliated service providers and vendors in connection with our business, and Balbec has an incentive to use third-party service providers who do so as a result of the indirect benefit to Balbec and additional business for the related service providers and vendors. No fees charged by these service providers and vendors will reduce or offset the management fee or total return incentive fee payable by us to the Advisor or the Sub-Advisor. Balbec, the Other Balbec Accounts and their affiliates and related parties will use the services of these Balbec affiliates, including at different rates. Although Balbec believes the services provided by its affiliates are equal or better than those of third parties, Balbec directly benefits from the engagement of these affiliates, and there is therefore an inherent conflict of interest.

Balbec-affiliated service providers and vendors, include, without limitation:

*PRPA.* PRPA is a subsidiary Balbec. Under a master servicing agreement with PRPA ("**Master Servicing Agreement**"), will pay PRPA or its affiliate the master servicing fee equal to an amount up to 0.25% per annum of gross asset value of the serviced assets, payable quarterly in arrears. PRPA provides services for our mortgage loans, MSRs and other assets, including (i) sourcing, performing due diligence and assisting in the acquisition of our assets, (ii) monitoring the performance of each unaffiliated mortgage servicer and maintaining appropriate records, (iii) managing the loan modification, forbearance, foreclosure and other loss mitigation efforts, and (iv) the management and disposition of foreclosed properties and certain loan dispositions. In certain circumstances, PRPA may continue to receive certain fees after we have sold the relevant asset, either paid by the purchaser of such investment or paid at the investment level.

*Southbridge.* The Sub-Advisor may obtain certain legal and tax services from a law firm, Southbridge Law Group, P.C. ("**Southbridge**"), in connection with performing certain of its duties under the Sub-Advisory Agreement. Employees of Southbridge are also employed by affiliates of the Sub-Advisor. We will reimburse the Sub-Advisor for the costs and expenses it incurs in connection with the services it receives from Southbridge relating to our activities.

*Bungalow*. We will acquire the right to receive certain revenue streams relating to underlying mortgages within portfolios of residential MSRs through a joint venture (the "**Bungalow JV**") with Bungalow Funding, LLC (together with its parent entity, Bungalow Residential, LLC, "**Bungalow**"), which is an affiliate of Balbec that is licensed and approved (including by Freddie Mac and Fannie Mae) to purchase MSRs. We will own all of the economic interests alongside Other Balbec Accounts in the Bungalow JV and Bungalow will be acting in a non-economic, controlling capacity. Certain other revenue streams relating to underlying mortgages with the MSR portfolio owned by Bungalow are expected to be purchased through contractual agreements by additional entities in which we will own all of the economic interests and Bungalow will be acting in a non-economic, controlling capacity (such entities, "**Bungalow Holdcos**") that will receive the economics of the other revenue streams. Bungalow will engage third-party sub-servicers to handle loan servicing but will manage all other operations that it deems necessary or advisable to maintain its licenses and approvals.

In connection with the contractual agreements described above, we will fund cash to satisfy the purchase price of the MSRs. We and such Other Balbec Accounts will each also fund a portion of the amounts required to sit within Bungalow to satisfy regulatory capital requirements, and pay expenses including but not limited to tax, audit, legal and licensing fees. Bungalow will not charge any fees to us for servicing our and such Other Balbec Accounts' assets. Expenses incurred by Bungalow and the Bungalow Holdcos (other than servicing fees) are not expected to be directly attributable to any particular underlying MSRs or cash streams, and therefore such expenses are expected to be pooled and subsequently apportioned among us and the Other Balbec Accounts in a manner as determined by Balbec to be fair and equitable in its sole, reasonable discretion.

**Indemnification Agreements with Directors and Officers**

We intend to enter into indemnification agreements with each of our directors and executive officers providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against our directors and executive officers in their capacities as such. Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**Initial Capitalization**

We were capitalized through the purchase by the Advisor of 4,000 Class E shares for an aggregate purchase price of $100,000 and by Balbec Capital Holdings, L.P. of 4,000 Class E shares for an aggregate purchase price of $100,000 on March 26, 2025. These shares were issued and sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act.

Each of an affiliate of CNL and Balbec has agreed to subscribe for $2.5 million of our Class E shares on or before the initial closing in our private offering. From time to time, such affiliates of CNL and Balbec may request that we repurchase its Class E shares in accordance with our share repurchase plan.

**Competition for Management Time**

Messrs. Bhavsar and Troisi, who serve as members of our board of directors, and Mr. Bhavsar and Ms. Tipton, who serve as certain of our executive officers, engage in the management of other business entities and investments and in other business activities, including activities associated with our affiliates. All of these individuals devote only as much of their time to our business as they, in their judgment, determine is reasonably required, which could be substantially less than their full time. The amount of time these individuals devote could be impacted by and commensurate with the level of our operating activity which will be impacted by the amount of funds raised from our private offering and the subsequent acquisitions. These individuals may experience conflicts of interest in allocating management time, services, and functions among us and the various entities, investor programs (public or private) and any other business ventures in which any of them are or may become involved.

**Relationship with Managing Dealer**

As described elsewhere in this Registration Statement, we pay the Managing Dealer selling commissions, Managing Dealer fees and distribution and stockholder servicing fees. The Managing Dealer is an affiliate of the Advisor. This relationship may create conflicts in connection with the fulfillment by the Managing Dealer of its due diligence obligations under the federal securities laws. Accordingly, investors will not have the benefit of such independent review. Certain of the participating brokers-dealers have made, or are expected to make, their own independent due diligence investigations. The Managing Dealer is not prohibited from acting in any capacity in connection with the offer and sale of securities offered by entities that may have a similar business strategy to ours and is expected to participate in other offerings sponsored by one or more of our officers or directors.

**Director Independence**

For information relating to our independent directors, see "*Item 5. Directors and Executive Officers—Our Directors and Executive Officers*" of this Registration Statement.

**ITEM 8. LEGAL PROCEEDINGS.**

We may from time to time be a party to legal proceedings which arise in the ordinary course of our business. Management is not aware of any current or pending legal proceedings to which we or any of our subsidiaries are a party or to which any of our property is subject, the outcome of which would, in management's judgment based on information currently available, have a material adverse effect on our results of operations or financial condition, nor is management aware of any such legal proceedings contemplated by governmental authorities.

**ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.**

**Market Information**

There is no established public trading market for shares of our common stock, and we do not expect a public trading market to develop. We have not agreed to register under the Securities Act for sale by stockholders any securities of our company.

**Stockholders**

As of June 2, 2025, there were 8,000 Class E shares outstanding, held by a total of two holders.

**Calculation and Valuation of Net Asset Value**

 ***Determination of Our NAV***

The calculation of our NAV is a calculation of fair value of our assets less our outstanding liabilities. Our board of directors, including a majority of our independent directors and our audit committee, has adopted a valuation policy that provides for the methodologies to be used to estimate the fair values of our assets and liabilities for purposes of our NAV calculation. Any changes to the valuation policy are required to be approved by our board of directors, including a majority of our independent directors, and our audit committee.

We have adopted, and our valuation policy will be performed in accordance with, Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC Topic 820 clarifies that the fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. ASC Topic 820 provides a consistent definition of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. In addition, ASC Topic 820 provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established by ASC Topic 820 are defined as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. An active market is defined as a market in which transactions for the asset or liability occur with sufficient pricing information on an ongoing basis. Publicly listed equity and debt securities and listed derivatives that are traded on major securities exchanges and publicly traded equity options are generally valued using Level 1 inputs. If a price for a Level 1 asset cannot be determined based upon this established process, it shall then be valued as a Level 2 asset.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: (i) quoted prices for similar assets in active markets; (ii) quoted prices for identical or similar assets in markets that are not active; (iii) inputs that are derived principally from or corroborated by observable market data by correlation or other means; and (iv) inputs other than quoted prices that are observable for the assets. Fixed income and derivative assets where there is an observable secondary trading market and through which pricing inputs are available through pricing services or broker quotes are generally valued using Level 2 inputs. If a price for a Level 2 asset cannot be determined based upon this established process, it shall then be valued as a Level 3 asset.

Level 3: Valuations based on inputs that are unobservable, supported by little or no market activity and that are significant to the overall fair value measurement. Unobservable inputs will be used to measure fair value to the extent that observable inputs are not available and such inputs will be based on the best information available in the circumstances, which under certain circumstances might include the Advisors' own data. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain assets may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

A majority of our assets are expected to be unique and have no active secondary market. Valuation inputs in those cases are unobservable and likely will be classified as Level 3 investments.

Unless an exception exists as identified in accordance with our valuation policy (for example, a broker quote or pricing service quote is deemed unreliable), our Level 1 and Level 2 assets will be reviewed and approved by the Advisor, but will not require the approval of our board of directors.

Our board of directors will retain an independent valuation advisor (our "**independent valuation advisor**") to assist the board of directors, the Advisor and the Sub-Advisor in their determination of the fair values of our assets for which market quotations are not readily available and has approved the following valuation process when a valuation is sought:

● Prior to the purchase of a potential asset, the Sub-Advisor typically builds a model to project expected future cash flows for each deal, based on data provided by the seller, actual performance of similar portfolios owned by the Sub-Advisor, and any other relevant information that the Sub-Advisor can gather. As part of ongoing portfolio monitoring, each investment model is maintained and refreshed on no less than a quarterly basis to reflect actual historic performance and updated projections. A multi-step valuation process is utilized by the Sub-Advisor that requires coordination between the Sub-Advisor's finance and accounting team and the investment team professionals who underwrote the investment and subsequent to purchasing the asset, monitored the investments.

● Upon purchasing an asset, the original expected internal rate of return is generally considered by the Sub-Advisor to be the most appropriate market rate for each investment. Assets will generally be reported at amortized cost for the first quarter following initial purchase unless any assumptions at underwriting, including asset performance or macro-economic factors have changed significantly. Following the first quarter of ownership, the investment model is refreshed to generate updated future cash flow projections which are then discounted to arrive at a net present value that is reflective of fair value. The discount rate utilized is reviewed and revised monthly to consider current market rates for similar assets. The discount rate may be corroborated through an evaluation of market clearing returns for purchases or sales of similar assets, market reports and the initial targeted return.

● On an on-going basis, investment, risk and valuation teams at the Sub-Advisor monitor the performance of each deal purchased based on various flash reports (daily, weekly, monthly) and risk reports (monthly), which are circulated internally. Significant variances between actual performance and projected performance as well as trends in performance are analyzed. Additionally, Balbec's risk committee periodically reviews the performance and risk associated with various investments to ensure the current cash flow projection models are reasonable.

● A valuation working group comprised of the investment, risk, and valuation teams at the Sub-Advisor as well as certain members of senior management at the Sub-Advisor will meet monthly to review the refreshed investment projections and discount rates utilized in the valuation. Following that meeting, a valuation memo is prepared to memorialize the significant inputs to the cash projection models and rationale for discount rate utilized in the valuation. A memorandum is prepared by the Sub-Advisor's valuation team documenting the proposed valuations for each asset, the aggregate portfolio values, and any significant changes to investment methodologies or discount rates. The memorandum is presented to the Sub-Advisor's valuation committee for ultimate review and approval. The approved valuation memorandum is then provided to the Advisor for review and approval.

● A committee formed by the Advisor of members of the Advisor's executive management team (the "Advisor's Valuation Committee") will review the proposed valuations for each asset and select the ultimate fair value of each asset anytime a valuation is sought. The valuations selected by the Advisor's Valuation Committee will be in coordination with the Sub-Advisor's process and valuation recommendation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The determination of the fair value of our assets requires judgment, especially with respect to assets for which market prices are not available. For most of our assets, market prices will not be available. Due to the inherent uncertainty of determining the fair value of assets that do not have a readily available market value, the fair value of the assets may differ significantly from the values that would have been used had a readily available market value existed for such assets, and the differences could be material. Because the calculation of our NAV is based, in part, on the estimated fair value of our assets, our calculation of NAV is subjective and could be adversely affected if the determinations regarding the estimated fair value of our assets were materially higher than the values that we ultimately realize upon the disposal of such assets. Furthermore, through the valuation process, our board of directors may determine that the fair value of our assets differs materially from the values that may be provided by the independent valuation advisor.

Our board of directors has delegated the initial responsibility for determining the fair value of the assets for which market quotations are not readily available to the Advisor. The Advisor will make such determinations in good faith based on the recommendations of the Sub-Advisor and with the assistance from our independent valuation advisor. The ultimate determination of the fair value of our assets for which market quotations are not readily available will be made by our board of directors. To support the overall process, the Advisors shall be responsible for reviewing pricing practices, including the methodology used to value assets, gathering information and data inputs necessary to value assets; reviewing pricing services and other pricing sources; reviewing procedures used for obtaining and validating prices from third-party sources; and providing analysis and analytics comparing valuations to actual disposition prices on a periodic basis.

Our board of directors has also delegated the calculation of our NAV to the Administrator; however, our board of directors is ultimately responsible for approval of our NAV on a monthly basis. Prior to our board of directors approving the NAV for any given month, our audit committee will meet to review the material inputs utilized in the valuation of assets or changes to investment methodologies or discount rates. In connection with such meetings, the Advisor will provide a memorandum documenting the proposed valuations for each asset, material valuation inputs and assumptions, and the overall NAV calculation for our audit committee's ratification of the valuation. The Advisors shall provide any other information reasonably requested by our audit committee to facilitate their oversight of the Advisors and the valuation process. Our audit committee may request an adjustment or additional review of any asset.

Our audit committee reviews, and recommends to our board of directors for adoption, our quarterly and annual financial statements for inclusion in our quarterly reports on Form 10-Q and annual report on Form 10-K, and such financial statements include a determination of our NAV and NAV per share for each class of shares as of the last day of each calendar quarter. These financial statements, in turn, are reviewed and approved by our board of directors.

*Independent Valuation Advisor*

Our board of directors will retain one or more independent valuation advisors to assist the Company with a review of a subset of its Level 3 investment valuations for reasonableness each month using certain limited procedures. The Level 3 investments for valuation will be selected by the Advisor in consultation with the Sub-Advisor. Investments are selected to ensure that at least once a year, each Level 3 asset value will be reviewed by our independent valuation advisor for reasonableness. Each review of selected valuations will include an assessment of the key assumptions utilized and documentation of positive assurance that the Advisors determined values in a manner that are reasonable. Additionally, on a quarterly basis, our independent valuation advisor will provide an independent estimate of the range of values for the investments selected for review and reference. Any deliverables from our independent valuation advisor will be addressed solely to our board of directors and Advisor and will be considered as one input among others in the overall valuation process set forth in our valuation policy. All valuation services will rely on information provided by the Advisor, the Sub-Advisor and other third parties without independent verification and such services will not constitute or include a determination of fair value, an audit, or an opinion of solvency or fairness. Our board of directors is ultimately and solely responsible for determining the fair value of all applicable investments in good faith in accordance with our valuation policies and procedures.

*Use of Pricing Services and Broker Quotes*

The Advisors may utilize an independent third-party pricing service to value certain assets that have an active secondary market. The pricing service is selected based on industry standards and is designed to ensure accurate, independent valuations are utilized when available. The pricing service provides both the bid and ask price for each position.

Certain assets will involve valuation as Level 2 assets. These assets may include certain bonds, securitized or asset-backed securities, currency and interest rate hedges. These assets generally have observable inputs such as quoted prices, and ASC 820 provides guidance regarding the appropriate valuation methodology and comparison to other valuation techniques such as discounted cash flow.

The use of broker quotes is only permissible if no reliable price from an approved pricing service is available. The Advisors will receive quotations for all derivative positions held by its derivative broker that are used to price the relevant positions. Privately negotiated derivative investments, such as interest rate swaps, credit default swaps and various basket indices typically will be valued at the midpoint between the "bid" and "asked" prices by third-party pricing services and/or trading counterparties, or based on proprietary pricing models used by the Advisor. Pricing services serve as the preferred source of prices for assets, unless a quotation is not available or is determined to be unreliable or inadequately represents the fair value of the particular assets. In that case, valuations will be based on broker quotes or other similar external valuation sources if available to value the asset. If a price from a pricing service for an asset is determined to be unreliable for that asset and no other external pricing sources (i.e., pricing services or broker quotes) are determined to be available, then the asset will be deemed a Level 3 asset and the valuation will follow procedures for Level 3 assets.

If only one available broker quote is deemed to be reliable on a month end date, we will utilize such quote. If the one available broker quote is not conclusive as to reliability, then a corroborating internal analysis must be prepared and approved by the Advisor. If more than two broker quotes are obtained, the mean of the prices from the quotes is used if the quotes are deemed reliable and the quotes are in a reasonable range to one another. If two broker quotes are obtained and they provide materially different prices, then the Advisor will attempt to reconcile the sources of the quotes and determine whether the quotes are reliable. Broker quotes will be evaluated by the Advisor anytime a valuation is sought and using the following considerations when determining whether broker quotes are reliable:

● type, and complexity of the investment for which a quote is being received;

● unique features or characteristics with regard to the security, including size of the transaction as compared to other market transactions, privy of information as a result of due diligence efforts;

● whether the quote is based on an active market for the financial instrument or through modeled assumptions;

● prices that are inconsistent with other actual trades by the Advisors or us or through broker quotes;

● existence of trading halts, closed markets or singular market event, including material market fluctuation;

● significant event which may relate to a specific issuer, market sector, political or geographical action or natural disaster;

● the reliability of the broker providing the quote for the financial instrument; and

● whether the quote is an indicative price or a binding offer.

Equity securities are priced based on the last reported market price as of the relevant measurement date, or if such date was not a trading day, the price from the immediately preceding trading day is used.

***NAV Determinations in Connection with our Continuous Private Offering***

The offering prices of our shares will generally be based on our prior month's NAV. Beginning in the first full calendar month following the initial closing of Class FA shares, our board of directors will determine the NAV for each class of our shares on a monthly basis, which will generally be the transaction price for the then-current month for such share class. We expect that this determination will ordinarily be made within 15 business days after each month. An investor will have at least five business days after the adjusted offering price becomes available and prior to a monthly closing to consider whether to withdraw their subscription request before they are committed to purchase shares upon our acceptance. Subscribers are not committed to purchase shares at the time their subscription orders are submitted and any subscription may be withdrawn at any time before the time it has been accepted by us. Our NAV may vary significantly from one month to the next. In cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month, we may elect not to hold a monthly closing, or we may update the offering prices per share to a price that we believe reflects the NAV per share more appropriately than the prior month's NAV per share. In the event we adjust the offering price one or more times after an investor submits their subscription agreement and before the date we accept such subscription, such investor will not be provided with direct notice by us of the adjusted offering price but will need to check the adjusted offering price prior to the closing date of their subscription. If the offering price is adjusted after an investor submits their subscription agreement and before the date we accept such subscription, the number of shares that an investor ultimately receives may vary.

**Distributions**

As of June 2, 2025, we had not declared or paid any distributions. For a description of our distribution policy, see "*Item 11. Description of Registrant's Securities to be Registered—Distribution Policy.*"

**ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.**

We were capitalized through the purchase by the Advisor of 4,000 Class E shares for an aggregate purchase price of $100,000 and by Balbec Capital Holdings, L.P. of 4,000 Class E shares for an aggregate purchase price of $100,000 on March 26, 2025. These shares were issued and sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act.

We intend to engage in a continuous, unlimited private placement offering of our shares to "accredited investors" (as defined in Rule 501 promulgated pursuant to the Securities Act) made pursuant to exemptions provided by Section 4(a)(2) of the Securities Act and applicable state securities laws. As of the date of this Registration Statement, there have been no purchases under the continuous offering and CNL and Balbec are our only stockholders.

**ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.**

We were formed under the laws of the State of Maryland. The rights of our stockholders are governed by Maryland law as well as our charter and bylaws. The following summary of the terms of our stock is a summary of all material provisions concerning our stock and you should refer to the MGCL and our charter and bylaws for a full description. The following summary is qualified in its entirety by the more detailed information contained in our charter and bylaws. Copies of our charter and bylaws are filed as exhibits to this Registration Statement and should be reviewed for complete information concerning the rights, privileges, and obligations of investors in our company.

**General**

Under our charter, we have authority to issue a total of 1,100,000,000 shares of capital stock, of which 1,000,000,000 shares are classified as common stock, of which 200,000,000 shares are classified as Class T shares, 200,000,000 shares are classified as Class D shares, 250,000,000 shares are classified as Class I shares, 200,000,000 shares are classified as Class A shares, 100,000,000 shares are classified as Class FA shares and 50,000,000 shares are classified as Class E shares, and 100,000,000 shares are classified as preferred stock. Our charter authorizes our board of directors to amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock or the number of shares of stock of any class or series that we have authority to issue without stockholder approval. As of the date of this Registration Statement, 8,000 Class E shares are issued and outstanding and no shares of preferred stock are issued and outstanding. Under Maryland law, stockholders are not generally liable for our debts or obligations solely as a result of their status as stockholders.

**Common Stock**

Subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding the restrictions on ownership and transfer of our stock, holders of shares of common stock are entitled to receive dividends on such shares of common stock out of assets legally available therefor if, as and when authorized by our board of directors and declared by us, and the holders of our shares of common stock are entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all our known debts and liabilities.

Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in our charter, each outstanding share of common stock entitles the holder thereof to one vote on all matters on which the stockholders of common stock are entitled to vote, including the election of directors, and, except as provided with respect to any other class or series of stock, the holders of shares of common stock will vote together as a single class and will possess the exclusive voting power. Notwithstanding the foregoing, with respect to any matter that would alter only the contract rights of a particular class or series of common stock, only the holders of such affected class or series of common stock will have the right to vote. There is no cumulative voting in the election of our directors, which means that the stockholders entitled to cast a majority of the votes of the outstanding shares of common stock can elect all of the directors then standing for election, and the holders of the remaining shares will not be able to elect any directors. Directors are elected by a majority of the votes cast by stockholders entitled to vote who are present in person or by proxy at an annual meeting of stockholders at which a quorum is present.

Holders of shares of common stock have no preference, conversion, exchange, sinking fund or redemption rights, have no preemptive rights to subscribe for any securities of our company and generally have no appraisal rights unless our board of directors determines that appraisal rights apply, with respect to all or any such classes or series of stock, to one or more transaction(s) occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise appraisal rights. Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as otherwise provided in our charter, shares of common stock will have equal dividend, liquidation and other rights.

Under the charter, we generally cannot dissolve, amend its charter, merge or consolidate with another entity, convert into another entity, sell all or substantially all of its assets or engage in a share exchange unless the action is approved by the affirmative vote of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter.

**Classes of Common Stock**

**Class A Shares**

Class A shares are available for purchase through different distribution channels. Each Class A share issued in our private offering will be subject to a selling commission of up to 6.00% per share and a Managing Dealer fee of up to 2.50% per share. There are no distribution and stockholder servicing fees charged with respect to Class A shares. We will not pay selling commissions or Managing Dealer fees on Class A shares sold pursuant to our distribution reinvestment plan. We will also waive some or all of the selling commissions and Managing Dealer fees on Class A shares sold to certain categories of investors. Certain purchasers of Class A shares may be eligible for volume discounts.

***Class FA Shares***

Class FA shares are available for purchase through different distribution channels. There are no selling commissions or Managing Dealer fees for the sale of Class FA shares in our private offering or on Class FA shares sold pursuant to our distribution reinvestment plan. As a founders share, Class FA shares have a lower management and incentive fee structure than Class A shares, Class T shares, Class D shares, and Class I shares.

**Class T Shares**

Class T shares are available for purchase through different distribution channels. Each Class T share issued in our private offering will be subject to a selling commission of up to 3.00% per share and a Managing Dealer fee of up to 1.75% per share. We pay the Managing Dealer distribution and stockholder servicing fees, subject to certain limits, on the Class T shares sold in our private offering (excluding Class T shares sold through our distribution reinvestment plan and those received as stock dividends) in an annual amount equal to 1.00% of our current NAV per share, as disclosed in our periodic or current reports, payable on a monthly basis. The distribution and stockholder servicing fee will accrue daily and be paid monthly in arrears. We will cease paying the distribution and stockholder servicing fee with respect to Class T shares held in any particular account, and those Class T shares will convert into a number of Class A shares when the total underwriting compensation paid by such account is not less than 8.5% of the offering price paid, as described in our charter. We will not pay selling commissions or Managing Dealer fees on Class T shares sold pursuant to our distribution reinvestment plan.

**Class D Shares**

Class D shares are available for purchase through different distribution channels. We will not pay selling commissions or a Managing Dealer fee with respect to Class D shares. We pay the Managing Dealer distribution and stockholder servicing fees, subject to certain limits, on the Class D shares sold in our private offering (excluding Class D shares sold through our distribution reinvestment plan and those received as stock dividends) in an annual amount equal to 0.50% of our current NAV per share, as disclosed in our periodic or current reports, payable on a monthly basis. The distribution and stockholder servicing fee will accrue daily and be paid monthly in arrears. We will cease paying the distribution and stockholder servicing fee with respect to Class D shares held in any particular account, and those Class D shares will convert into a number of Class A shares when the total underwriting compensation paid by such account is not less than 8.5% of the offering price paid, as described in our charter. We will not pay selling commissions or Managing Dealer fees on Class D shares sold pursuant to our distribution reinvestment plan.

**Class I Shares**

Class I shares are available for purchase through different distribution channels. We will not pay selling commissions or a Managing Dealer fee with respect to Class I shares. There are no distribution and stockholder servicing fees charged with respect to Class I shares. We will not pay selling commissions or Managing Dealer fees on Class I shares sold pursuant to our distribution reinvestment plan. See "*Plan of Distribution*" for additional information.

**Class E Shares**

Class E shares are not available for purchase in our private offering. Class E shares are only made available for purchase in a private offering to certain of CNL's or Balbec's affiliates and employees in one or more private placements by persons that are "accredited investors" (as that term is defined under the Securities Act and Regulation D promulgated thereunder). No management fee will be payable with respect to Class E shares. No total return incentive fee will be payable with respect to Class E shares.

***Other Terms of Common Stock***

If not already converted into Class A shares upon a determination that total upfront selling commissions, Managing Dealer fees and distribution and stockholder servicing fees paid with respect to such shares would exceed the applicable limit as described in the *"—Class T Shares" and "—Class D Shares*" sections above, each Class I share, Class FA share, Class T share, Class D share and Class E share (including any fractional share) held in a stockholder's account will automatically and without any action on the part of the holder thereof convert into a number of Class A shares with an equivalent NAV as such share on our merger or consolidation with or into another entity or the sale or other disposition of all or substantially all of our assets or, if earlier in the case of Class T shares and Class D shares, after termination of our private offering in which such Class T share and Class D share were sold, the end of the month in which we, with the assistance of the Managing Dealer, determine that all underwriting compensation from all sources in connection with a potential public offering, including upfront selling commissions, the distribution and stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross proceeds of shares issued in such public offering. In addition, upon the listing of shares of common stock or a class thereof or such later date or dates not to exceed 12 months from the date of listing as shall be approved by our board of directors with respect to all or any portion of the outstanding shares of the class or classes of common stock that are not so listed, each share of the class or classes of common stock that are not so listed or of such portion thereof will automatically and without any action on the part of the holder thereof convert into a number of shares of common stock or the class thereof that is listed with an equivalent NAV as such share. Also, immediately before any liquidation, dissolution or winding up, each Class I shares, Class FA share, Class T share, Class D share and Class E share (including any fractional shares) will automatically convert into a number of Class A shares with an equivalent NAV as such share.

**Power to Reclassify Unissued Shares of Our Stock**

Our charter authorizes our board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of stock. Prior to issuance of shares of each class or series, our board of directors is required by Maryland law and by our charter to set, subject to the provisions of our charter regarding restrictions on ownership and transfer of our stock, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series. Therefore, our board of directors could authorize the issuance of shares of common or preferred stock with terms and conditions that may have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders. No shares of preferred stock are presently outstanding, and we have no present plans to issue any shares of preferred stock.

**Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock**

We believe the power of our board of directors to amend our charter from time to time to increase or decrease the number of authorized shares of stock, to issue additional authorized but unissued shares of common or preferred stock and to classify or reclassify unissued shares of common or preferred stock and thereafter to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series, as well as the additional shares of common stock, will be available for issuance without further action by our stockholders, unless such approval is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our board of directors does not intend to do so, it could authorize us to issue a class or series of stock that may, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in our best interest.

**Restrictions on Ownership and Transfer**

In order for us to qualify as a REIT under the Internal Revenue Code, shares of our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. In addition, no more than 50% of the value of the outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) during the last half of any taxable year (other than the first year for which an election to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well.

Our charter contains restrictions on the ownership and transfer of shares of our common stock and other outstanding shares of our stock. The relevant sections of our charter generally provide that no person or entity may own, or be deemed to own, by virtue of the applicable constructive ownership provisions of the Internal Revenue Code, more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock (the common stock ownership limit), or 9.8% in value of the outstanding shares of all classes or series of our capital stock (the aggregate stock ownership limit), unless exempted or provided an excepted holder limit by our board of directors as discussed below. We refer to the common stock ownership limit and the aggregate stock ownership limit collectively as the "ownership limits." A person or entity that, but for operation of the ownership limits or another restriction on ownership and transfer of our stock as described below, would beneficially own or be deemed to beneficially own, by virtue of the applicable constructive ownership provisions of the Internal Revenue Code, shares of our stock and/or, if appropriate in the context, a person or entity that would have been the record owner of such shares of our stock is referred to as a "prohibited owner."

The constructive ownership rules under the Internal Revenue Code are complex and may cause shares of stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% in value of the outstanding shares of our common stock or 9.8% in value or number of the outstanding shares of all classes or series of our stock (or the acquisition of an interest in an entity that owns, actually or constructively, shares of our stock) by an individual or entity, could, nevertheless, cause that individual or entity, or another individual or entity, to own constructively in excess of the ownership limits.

Our board of directors may, in its sole and absolute discretion and subject to the receipt of such certain representations, covenants and undertakings deemed reasonably necessary by our board of directors, prospectively or retroactively, exempt a person from the ownership limits or establish an excepted holder limit for such person. However, our board of directors may not exempt any person whose ownership of our outstanding stock would result in our being "closely held" within the meaning of Section 856(h) of the Internal Revenue Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise would result in our failing to qualify as a REIT. The person seeking an exemption must provide representations and undertakings to the satisfaction of our board of directors that it will not violate these restrictions. The person also must agree that any violation or attempted violation of these restrictions will result in the automatic transfer to a trust of the shares of stock causing the violation. As a condition of its waiver, our board of directors may require an opinion of counsel or IRS ruling satisfactory to our board of directors with respect to our qualification as a REIT.

In connection with the waiver of the ownership limits or the creation of an excepted holder limit or at any other time, our board of directors may, in its sole and absolute discretion, from time to time increase or decrease the ownership limits subject to the restrictions in the paragraph above; provided, however, that the ownership limits may not be decreased or increased if, after giving effect to such decrease or increase, five or fewer persons could own or beneficially own in the aggregate, more than 49.9% in value of the shares of our stock then outstanding. Prior to the modification of the ownership limits, our board of directors may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure our qualification as a REIT. Reduced ownership limits will not apply to any person or entity whose percentage ownership of shares of our common stock or stock of all classes and series, as applicable, is in excess of such decreased ownership limits until such time as such person's or entity's percentage ownership of our common stock or stock of all classes and series, as applicable, equals or falls below the decreased ownership limits, but any further acquisition of shares of our common stock or stock of all classes and series, as applicable, in excess of such percentage ownership of shares of our common stock or total shares of our stock will be in violation of the ownership limits.

Our charter further prohibits:

● any person from beneficially or constructively owning (taking into account applicable attribution rules under the Internal Revenue Code) shares of our stock that would result in our being "closely held" under Section 856(h) of the Internal Revenue Code or otherwise cause us to fail to qualify as a REIT;

● any person from beneficially or constructively owning shares of our stock to the extent that such ownership would result in us owning (directly or indirectly) more than a 9.9% interest in one of our tenants that is described in Section 856(d)(2)(B) of the Code (or a tenant of any entity which we own or control) if the income derived by us (either directly or indirectly through one or more partnerships or limited liability companies) from such tenant would reasonably be expected to equal or exceed the lesser of (a) one percent of our gross income (as determined for purposes of Section 856(c) of the Internal Revenue Code) or (b) an amount that would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Internal Revenue Code; and

● any person from transferring our shares of stock if such transfer would result in our shares of stock being beneficially owned by fewer than 100 persons (determined, as a general matter, without reference to any attribution rules).

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limits or any of the foregoing restrictions on ownership and transfer will be required to give written notice immediately to us (or, in the case of a proposed or attempted acquisition, at least 15 days prior written notice to us) and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as a REIT. These restrictions on ownership and transfer will not apply if our board of directors determines that it is no longer in our best interests to qualify as a REIT or that compliance with such provisions is no longer required for REIT qualification.

If any transfer of shares of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons, such transfer will be null and void and the intended transferee will acquire no rights in such shares. In addition, if any purported transfer of shares of our stock or any other event would otherwise result in any person violating the ownership limits or such other limit established by our board of directors or in our being "closely held" under Section 856(h) of the Internal Revenue Code or otherwise failing to qualify as a REIT or in our owning (directly or indirectly) more than a 9.9% interest in one of our tenants (or a tenant of any entity which we own or control) if the income derived by us from such tenant would reasonably be expected to equal or exceed the lesser of (i) one percent of our gross income (as determined for purposes of Section 856(c) of the Internal Revenue Code) or (b) an amount that would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Internal Revenue Code, then generally that number of shares (rounded up to the nearest whole share) that would cause us to violate such restrictions will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us and the intended transferee will acquire no rights in such shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. Any dividend or other distribution paid to the prohibited owner, prior to our discovery that the shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for the benefit of the charitable beneficiary of the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limits or our being "closely held" under Section 856(h) of the Internal Revenue Code or otherwise failing to qualify as a REIT, then our charter provides that the transfer of the shares will be null and void.

Shares of stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, in the event of a gift, devise or other such transaction, the last reported NAV on the day of the event which resulted in the transfer of such shares of stock to the trust) and (ii) the market price on the date we, or our designee, accept such offer. We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust pursuant to the clauses discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, and the trustee must distribute the net proceeds of the sale to the prohibited owner but the trustee may reduce the amount payable to the prohibited owner by the amount of dividends and other distributions which have been paid to the prohibited owner and are owed by the prohibited owner to the trustee. To the extent the prohibited owner would receive an amount for such shares that exceeds the amount that such prohibited owner would have been entitled to receive had the trustee sold the shares held in the trust to a third party, such excess will be retained by the trustee for the benefit of the charitable beneficiary.

If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person designated by the trustee who could own the shares without violating the ownership limitations set forth in the charter. Upon such sale, the trustee must distribute to the prohibited owner an amount equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, in the event of a gift, devise or other such transaction, the last reported NAV on the day of the event which resulted in the transfer of such shares of stock to the trust) and (ii) the sales proceeds (net of commissions and other expenses of sale) received by the trustee for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of dividends and other distributions which have been paid to the prohibited owner and are owed by the prohibited owner to the trustee. Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the beneficiary of the trust and any dividend or other distribution paid to trustee may be held in trust for the charitable beneficiary. In addition, if, prior to discovery by us that shares of stock have been transferred to a trust, such shares of stock are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and to the extent that the prohibited owner received an amount for such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount will be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee.

The trustee will be designated by us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, the trustee will receive, in trust for the beneficiary of the trust, all dividends and other distributions paid by us with respect to the shares held in trust and may also exercise all voting rights with respect to the shares held in trust. These rights will be exercised for the exclusive benefit of the beneficiary of the trust. Any dividend or other distribution paid prior to our discovery that shares of stock have been transferred to the trust will be paid by the recipient to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when due to the trustee.

Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee's sole discretion:

● to rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and

● to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.

However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote.

In addition, if our board of directors or other permitted designees determine in good faith that a proposed transfer would violate the restrictions on ownership and transfer of our shares of stock set forth in our charter, our board of directors or other permitted designees will take such action as it deems or they deem advisable to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem the shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer.

Every owner of 5% or more (or such lower percentage as required by the Internal Revenue Code or the regulations promulgated thereunder) of our stock, within 30 days after the end of each taxable year, is required to give us written notice, stating the stockholder's name and address, the number of shares of each class and series of our stock that the stockholder beneficially owns and a description of the manner in which the shares are held. Each such owner must provide us with such additional information as we may request in order to determine the effect of the stockholder's beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limits. In addition, each stockholder must provide us with such information as we may request in good faith in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Any certificates, or written statements of information delivered in lieu of certificates, representing shares of our stock will bear a legend referring to the restrictions described above.

These restrictions on ownership and transfer will not apply if our board of directors determines that it is no longer in our best interests to qualify as a REIT or that compliance with such provisions is no longer required for REIT qualification.

These ownership limits could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.

**Distribution Policy**

Subject to our board of director's discretion and applicable legal restrictions, our board of directors intends to declare cash distributions on a monthly basis after the minimum offering requirement for our private offering is met and we have completed our initial closing of Class FA shares. We intend to declare distributions based on monthly record dates established by our board of directors and to pay such distributions on a monthly basis.

Our distribution policy will be set by our board of directors and is subject to change based on available cash flows. We cannot guarantee the amount of distributions paid, if any. You will not be entitled to receive a distribution if your shares are repurchased prior to the applicable time of the record date. Our board of directors may also authorize distributions in the form of shares or effect share splits. In connection with a distribution to our stockholders, our board of directors approves a monthly distribution for a certain dollar amount per share for each class of our common stock. We then calculate each stockholder's specific distribution amount for the month using applicable record and declaration dates, and your distributions begin to accrue on the date you are admitted as a stockholder.

Distributions are made on all classes of our common stock at the same time. Amounts distributed will be allocated among each class in proportion to the number of shares of each class outstanding. Amounts distributed to each class will be allocated among our stockholders in such class in proportion to their shares. We have not established limits on the amount of funds we may use from any available sources to make distributions. The per share amount of distributions on Class FA shares, Class A shares, Class T shares, Class D shares, Class I shares and Class E shares will likely differ because of different class-specific distribution and stockholder servicing fees that are deducted from the gross distributions for each share class.

To qualify as a REIT, we are required to pay distributions sufficient to satisfy the requirements for qualification as a REIT for tax purposes. We intend to distribute sufficient income so that we satisfy the requirements for qualification as a REIT. In order to qualify as a REIT, we are required to distribute 90% of our annual REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains, to our stockholders. Generally, income distributed to stockholders will not be taxable to us under the Internal Revenue Code if we distribute at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains.

Distributions are authorized at the discretion of our board of directors, in accordance with our earnings, cash flows and general financial condition. The discretion of our board of directors is directed, in substantial part, by its obligation to cause us to comply with the REIT requirements. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period but may be made in anticipation of cash flows which we expect to receive during a later quarter and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. Due to these timing differences, we may be required to borrow money, use proceeds from the issuance of securities or sell assets in order to distribute amounts sufficient to satisfy the requirement that we distribute at least 90% of our REIT taxable income in order to qualify as a REIT.

There is no assurance we will pay distributions in any particular amount, if at all. We may fund any distributions from sources other than cash flow from operations, including, without limitation, from offering proceeds, from borrowings, the sale of or repayment under our assets or expense support from the Advisor and the Sub-Advisor, and we have no limits on the amounts we may pay from such sources. We may also fund our distributions with proceeds from our private offering. The extent to which we pay distributions from sources other than cash flow from operations will depend on various factors, including how quickly we invest the proceeds from our private offering or future offerings and the performance of our investments, including our real estate credit portfolio. Funding distributions from borrowings or the sale of or repayment under our assets will result in us having less funds available to acquire real estate credit or other real estate-related investments. As a result, the return you realize on your investment may be reduced. Doing so may also negatively impact our ability to generate cash flows.

Under the MGCL, our board of directors may delegate to a committee of directors the power to fix the amount and other terms of a distribution. In addition, if our board of directors gives general authorization for a distribution and provides for or establishes a method or procedure for determining the maximum amount of the distribution, our board of directors may delegate to one of our officers the power, in accordance with the general authorization, to fix the amount and other terms of the distribution.

**Distribution Reinvestment Plan**

We have adopted a distribution reinvestment plan whereby stockholders will have their cash distributions automatically reinvested in additional shares unless they opt-out or terminate their participation; provided that, stockholders who are clients of certain participating broker-dealers that do not permit automatic enrollment must opt-in to participate. Any cash distributions attributable to the class or classes of shares owned by participants in our distribution reinvestment plan will be immediately reinvested in our shares of the same class attributable to the distributions on behalf of the participants on the business day such distribution would have been paid to such stockholder.

The per share purchase price for shares purchased pursuant to our distribution reinvestment plan will be equal to the transaction price at the time the distribution is payable, which will generally be the most recently determined and published net asset value per share of the applicable class of shares, and not based on the price at which you initially purchased your shares. Stockholders will not pay upfront selling commissions or Managing Dealer fees when purchasing shares pursuant to our distribution reinvestment plan. The distribution and stockholder servicing fees with respect to Class T shares and Class D shares are calculated based on our NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under our distribution reinvestment plan. Shares acquired under our distribution reinvestment plan will entitle the participant to the same rights and be treated in the same manner as shares of that class purchased in our private offering.

We reserve the right to amend any aspect of our distribution reinvestment plan without the consent of our stockholders, provided that written notice of any material amendment is sent to participants at least 30 days prior to the effective date of that amendment. In addition, we may suspend or terminate our distribution reinvestment plan for any reason at any time upon 30 days' prior written notice to participants. A stockholder's participation in the plan will be terminated to the extent that a reinvestment of such stockholder's distributions in our shares would cause the percentage ownership or other limitations contained in our charter to be violated. Participants may terminate their participation in our distribution reinvestment plan at any time by written instructions to that effect to the reinvestment agent. To be effective on a distribution payment date, the notice of termination must be received by the reinvestment agent at least 15 days before the record date fixed by our board of directors for that distribution payment date; otherwise, such termination will be effective with respect to any subsequent distribution payment date.

Our transfer agent will provide on a quarterly basis to each participant in our distribution reinvestment plan a statement of account describing, as to such participant, (1) the distributions reinvested during the quarter, (2) the number of shares purchased during the quarter, and (3) the per share purchase price for such shares. On an annual basis, tax information with respect to income earned on shares under the plan for the calendar year will be provided to each applicable participant.

**Liquidity Strategy**

In our perpetual-life structure, investors may request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in our discretion. While we may consider a liquidity event at any time in the future, we are not obligated by our charter or otherwise to effect a liquidity event at any time.

**Certain Provisions of Maryland Law and Our Charter and Bylaws**

The following description of the terms of certain provisions of Maryland law and our charter and bylaws is only a summary. For a complete description, we refer you to the MGCL, our charter and our bylaws. Copies of our charter and bylaws are filed as exhibits to this Registration Statement and should be reviewed for complete information concerning the rights, privileges, and obligations of investors in our company.

**Our Board of Directors**

Each of our directors is elected by our stockholders to serve until the next annual meeting and until his or her successor is duly elected and qualifies. Holders of shares of common stock will have no right to cumulative voting in the election of directors. Consequently, at each annual meeting of stockholders, the holders of a majority of the shares of common stock entitled to vote will be able to elect all of our directors at any annual meeting. Directors are elected by a majority of the votes cast by stockholders entitled to vote who are present in person or by proxy at an annual meeting of stockholders at which a quorum is present.

**Removal of Directors**

**Business Combinations**

Under the MGCL, certain "business combinations" (including a merger, consolidation or share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation's outstanding voting stock or an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding stock of the corporation) or an affiliate of such an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any such business combination must be recommended by the board of directors of such corporation and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding voting stock of the corporation and (ii) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation's common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. The board of directors may provide that its approval is subject to compliance with any terms and conditions determined by it.

These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution exempted business combinations between us and any other person, including CNL, Balbec, the Managing Dealer, the Advisor and the Sub-Advisor, provided that such business combination is first approved by our board of directors, and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and any person as described above. As a result, any person described above may be able to enter into business combinations with us that may not be in the best interest of our stockholders without compliance by our company with the supermajority vote requirements and other provisions of the statute.

We cannot assure you, however, that our board of directors will not opt to be subject to such business combination provisions in the future. However, an alteration or repeal of the resolution described above will not have any effect on any business combinations that have been consummated or upon any agreements existing at the time of such modification or repeal. If our board of directors opted back into the business combination statute or failed to first approve a business combination, the business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

**Control Share Acquisitions**

The MGCL provides that "control shares" of a Maryland corporation acquired in a "control share acquisition" have no voting rights except to the extent approved by the affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock in a corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election of directors: (i) a person who makes or proposes to make a control share acquisition, (ii) an officer of the corporation or (iii) an employee of the corporation who is also a director of the corporation. "Control shares" are voting shares of stock which, if aggregated with all other such shares of stock previously acquired by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (A) one-tenth or more but less than one-third; (B) one-third or more but less than a majority; or (C) a majority or more of all voting power. Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A "control share acquisition" means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an "acquiring person statement" as described in the MGCL), may compel the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders' meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an "acquiring person statement" as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of any meeting of stockholders at which the voting rights of such shares are considered and not approved or, if no such meeting is held, the date of the last control share acquisition by the acquirer. If voting rights for control shares are approved at a stockholders' meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The control share acquisition statute does not apply to (1) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (2) acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any acquisitions by any person of shares of our stock. There is no assurance that such provision will not be amended or eliminated at any time in the future.

**Subtitle 8**

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions:

● a classified board;

● a two-thirds vote requirement for removing a director;

● a requirement that the number of directors be fixed only by vote of the directors;

● a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of class of directors in which the vacancy occurred; and

● a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

We have elected in our charter that, at such time as we become eligible to make a Subtitle 8 election and except as may be provided by our board of directors in setting the terms of any class or series of preferred stock, any vacancy may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any individual elected to fill such vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies. Through provisions in our charter and bylaws unrelated to Subtitle 8, we vest in our board of directors the exclusive power to fix the number of directors, provided that the number is not less than three.

**Meetings of Stockholders**

Pursuant to our bylaws, a meeting of our stockholders for the election of directors and the transaction of any business will be held on a date and at a time and place set by our board of directors. The chairman of our board of directors, our chief executive officer, our president or a majority of our board of directors may call a special meeting of our stockholders. A special meeting of our stockholders will also be called by our secretary upon the written request of the stockholders entitled to cast not less than 10% of all the votes entitled to be cast on any matter that may be properly considered at a meeting of stockholders.

**Amendments to Our Charter and Bylaws**

Our charter generally may be amended only if the amendment is declared advisable by our board of directors and approved by the affirmative vote of the stockholders entitled to cast not less than a majority of all of the votes entitled to be cast on the matter. However, our board of directors, without stockholder approval, has the power under our charter to amend the charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue. See "*Item 11. Description of Registrant's Securities to be Registered—Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock*" and *"—Power to Reclassify Unissued Shares of Our Stock.*"

Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.

**Dissolution of Our Company**

The dissolution of our company must be declared advisable by a majority of our entire board of directors and approved by the affirmative vote of the stockholders entitled to cast not less than a majority of all of the votes entitled to be cast on the matter.

**Advance Notice of Director Nominations and New Business**

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who is a stockholder of record at the record date set by our board of directors for the purpose of determining stockholders entitled to vote at the meeting, at the time of giving the notice required by our bylaws and at the time of the meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on such other business and who has complied with the advance notice provisions set forth in our bylaws.

With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election to our board of directors may be made only (1) by or at the direction of our board of directors, (2) by a stockholder that has requested that a special meeting be called for the purpose of electing directors in compliance with our bylaws and that has supplied the information required by our bylaws about each individual whom the stockholder proposes to nominate for election of directors or (3) provided that the meeting has been called in accordance with our bylaws for the purpose of electing directors, by a stockholder who is a stockholder of record at the record date set by our board of directors for the purpose of determining stockholders entitled to vote at the meeting, at the time of giving the notice required by our bylaws and at the time of the meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions set forth in our bylaws.

The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

***Tender Offers***

Our charter provides that any tender offer made by any person, including any "mini-tender" offer, must comply with the provisions of Regulation 14D of the Exchange Act, including the notice and disclosure requirements. Among other things, the offeror must provide us notice of such tender offer at least ten business days before initiating the tender offer. If a person makes a tender offer that does not comply with such provisions, we may elect to grant tendering stockholders a rescission right with respect to their tendered shares. In addition, the non-complying offeror will be responsible for all of our expenses in connection with that offeror's noncompliance.

**Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws**

Our charter and bylaws and Maryland law contain provisions that may delay, defer or prevent a change in control or other transaction that might involve a premium price for shares of our common stock or otherwise be in the best interests of our stockholders, including restrictions on ownership and transfer of our stock and advance notice requirements for director nominations and stockholder proposals. Likewise, if the provision in the bylaws opting out of the control share acquisition provisions of the MGCL is rescinded, or if we opt into the business combination provisions of the MGCL or our board of directors fails to first approve a business combination, or our board of directors were to approve our election to be subject to any provisions of Subtitle 8 of Title 3 of the MGCL to which we are eligible to be subject but are not currently subject, these provisions of the MGCL could have similar anti-takeover effects.

**Interested Director and Officer Transactions**

Pursuant to the MGCL, a contract or other transaction between us and a director or between us and any other corporation or other entity in which any of our directors is a director or has a material financial interest is not void or voidable solely on the grounds of such common directorship or interest, the presence of such director at the meeting at which the contract or transaction is authorized, approved or ratified or the counting of the director's vote in favor thereof, if:

● the fact of the common directorship or interest is disclosed or known to our board of directors or a committee of our board, and our board or committee authorizes, approves or ratifies the contract or transaction by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum;

● the fact of the common directorship or interest is disclosed or known to our stockholders entitled to vote thereon, and the contract or transaction is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation or other entity; or

● the contract or transaction is fair and reasonable to us.

We have adopted a policy that requires all contracts and transactions between us or any of our subsidiaries, on the one hand, and any of our directors or named executive officers or any entity in which such director or named executive officer is a director or has a material financial interest, on the other hand, to be approved by the affirmative vote of a majority of the disinterested directors, even if less than a quorum. Where appropriate in the judgment of the disinterested directors, our board of directors may obtain a fairness opinion or engage independent counsel to represent the interests of non-affiliated security holders, although our board of directors will have no obligation to do so.

**Exclusive Forum**

Our charter contains a provision designating, unless we consent in writing to an alternative forum, the Circuit Court for Baltimore City, Maryland or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, as the sole and exclusive forum for (1) any Internal Corporate Claim, as such term is defined in the MGCL, other than any action arising under federal securities laws, including, without limitation, (i) any derivative action or proceeding, brought on our behalf, (ii) any action asserting a claim of breach of any duty owed by any of our directors, officers or other employees to us or our stockholders or (iii) any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of the MGCL or our charter or bylaws, or (2) any other action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine of Maryland law. However, it is possible that a court could find our forum selection provision to be inapplicable or unenforceable.

**Springing Charter Provisions in the Event of an Initial Public Offering**

In the future, we may conduct an initial public offering of our common stock without any action by the stockholders. Because shares of our common stock are not listed on a national securities exchange, and are not expected to be listed in connection with a future public offering of shares of our common stock, we would be required to register an initial public offering with the state securities administrators in each state in which we desired to offer securities for sale. In offerings that are subject to their regulation, most states hold real estate investment trusts to the standards set forth in the Statement of Policy Regarding Real Estate Investment Trusts promulgated by the North American Securities Administrators Association, Inc. (the "**NASAA REIT Guidelines**"). As a result, our current charter includes a number of "springing" provisions that are required by the NASAA REIT Guidelines and will come into effect only upon the commencement of an initial public offering. Stockholders subscribing in our private offering also will grant an irrevocable proxy to certain of our officers for the purpose of approving charter amendments required by the NASAA REIT Guidelines or by state securities administrators in connection with requirements for an initial public offering. These provisions are substantially the same as the current requirements under our governance guidelines, but also contain requirements as to suitability of new investors in a public offering. In addition, because these provisions are in our charter, they can only be amended with the approval of holders of a majority of the outstanding shares of our common stock.

**ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.**

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision and eliminates the liability of our directors and officers to the maximum extent permitted by Maryland law.

The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

● the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;

● the director or officer actually received an improper personal benefit in money, property or services; or

● in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

Under the MGCL, a Maryland corporation may not indemnify a director or officer in a suit by or in the right of the corporation or in any proceeding charging improper personal benefit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by the corporation or in its right, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.

In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation's receipt of:

● a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

● a written undertaking by the director or officer or on the director's or officer's behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did not meet the standard of conduct.

Our charter obligates us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

● any present or former director or officer who is made, or threatened to be made, a party to or witness in the proceeding by reason of his or her service in that capacity; or

● any individual who, while a director or officer of our company and at our request, serves or has served another corporation, REIT, partnership, limited liability company, joint venture, trust or employee benefit plan or any other enterprise as a director, officer, partner, member, manager or trustee and who is made, or threatened to be made, a party to or witness in the proceeding by reason of his or her service in that capacity.

Our charter also permits us, with the approval of our board of directors, to indemnify and advance expenses to any individual who served a predecessor of our company in any of the capacities described above or any employee or agent of our company or a predecessor of our company.

Notwithstanding the above, our charter provides that we may not indemnify a director, the Advisors or any of our or the Advisors' affiliates for any liability or loss suffered by any of them, or hold any of them harmless for any loss or liability suffered by us, unless such person has determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests, such person was acting on our behalf or performing services for us, the liability or loss was not the result of negligence or misconduct by any of our non-independent directors, the Advisors or any of our or the Advisors' affiliates or gross negligence or willful misconduct by any of our independent directors, and the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from the stockholders.

In addition, we intend to enter into indemnification agreements with each of our directors and executive officers providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against our directors and executive officers in their capacities as such. Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.**

See "*Index to Financial Statements*" on page F-1 of this Registration Statement.

**ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.**

None.

**ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.**

**Financial Statements**

See "*Index to Financial Statements*" on page F-1 of this Registration Statement.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Exhibit No.** | &nbsp;&nbsp;**Description** |
| [3.1](ex3-1.htm)\* | [Articles of Amendment and Restatement of CNL Strategic Residential Credit, Inc.](ex3-1.htm) |
| &nbsp;&nbsp;[3.2](ex3-2.htm)\* | &nbsp;&nbsp;[Bylaws of CNL Strategic Residential Credit, Inc.](ex3-2.htm) |
| &nbsp;&nbsp;[4.1](ex4-1.htm)\* | &nbsp;&nbsp;[Distribution Reinvestment Plan of CNL Strategic Residential Credit, Inc.](ex4-1.htm) |
| &nbsp;&nbsp;[4.2](ex4-2.htm)\* | &nbsp;&nbsp;[Share Repurchase Plan of CNL Strategic Residential Credit, Inc.](ex4-2.htm) |
| &nbsp;&nbsp;[10.1](ex10-1.htm)\* | &nbsp;&nbsp;[Advisory Agreement by and between CNL Strategic Residential Credit, Inc. and CNL Residential Credit Manager, LLC, dated as of March 10, 2025](ex10-1.htm) |
| &nbsp;&nbsp;[10.2](ex10-2.htm)\* | &nbsp;&nbsp;[Sub-Advisory Agreement by and among CNL Strategic Residential Credit, Inc., CNL Residential Credit Manager, LLC and Balbec Capital Management, L.P., dated as of March 10, 2025](ex10-2.htm) |
| &nbsp;&nbsp;[10.3](ex10-3.htm)\* | &nbsp;&nbsp;[Administrative Services Agreement by and between CNL Strategic Residential Credit, Inc. and CNL Residential Credit Manager, LLC](ex10-3.htm) |
| &nbsp;&nbsp;[10.4](ex10-4.htm)\* | &nbsp;&nbsp;[Expense Support and Conditional Reimbursement Agreement by and among CNL Strategic Residential Credit, Inc., CNL Residential Credit Manager, LLC and Balbec Capital Management, L.P.](ex10-4.htm) |
| &nbsp;&nbsp;[10.5](ex10-5.htm)\* | &nbsp;&nbsp;[Placement Agent Agreement by and between CNL Strategic Residential Credit, Inc. and CNL Securities Corp.](ex10-5.htm) |
| &nbsp;&nbsp;[10.6](ex10-6.htm)\* | &nbsp;&nbsp;[Form of Participating Broker-Dealer Agreement](ex10-6.htm) |
| &nbsp;&nbsp;[10.7](ex10-7.htm)\* | &nbsp;&nbsp;[Distribution and Stockholder Servicing Plan](ex10-7.htm) |
| &nbsp;&nbsp;[10.8](ex10-8.htm)\* | &nbsp;&nbsp;[Form of Indemnification Agreement](ex10-8.htm) |
| &nbsp;&nbsp;[10.9](ex10-9.htm)\* | &nbsp;&nbsp;[Form of Escrow Agreement](ex10-9.htm) |
| &nbsp;&nbsp;[10.10](ex10-10.htm)\* | &nbsp;&nbsp;[Form of Stock Purchase Agreement between among CNL Strategic Residential Credit, Inc. and CNL Residential Credit Manager, LLC](ex10-10.htm) |
| &nbsp;&nbsp;[10.11](ex10-11.htm)\* | &nbsp;&nbsp;[Form of Stock Purchase Agreement between among CNL Strategic Residential Credit, Inc. and Balbec Capital Holdings, L.P.](ex10-11.htm) |
| &nbsp;&nbsp;[10.12\*](ex10-12.htm) | &nbsp;&nbsp;[Form of Master Servicing Agreement by and between PRP Advisors, LLC and CNL Strategic Residential Credit, Inc.](ex10-12.htm) |
| &nbsp;&nbsp;[10.13\*](ex10-13.htm) | &nbsp;&nbsp;[Service Agreement dated as of May 29, 2025, by and between CNL Capital Markets LLC and CNL Residential Credit Manager, LLC](ex10-13.htm) |
| &nbsp;&nbsp;[21.1](ex21-1.htm)\* | &nbsp;&nbsp;[Subsidiaries of CNL Strategic Residential Credit, Inc.](ex21-1.htm) |
| &nbsp;&nbsp;___________________<br>\* Filed herewith. | &nbsp;&nbsp;___________________<br>\* Filed herewith. |

---

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| [Index to Financial Statements](#cnlrcred1012gb001) | F-1 |
| [Report of Independent Registered Public Accounting Firm](#cnlrcred1012gb002) | F-2 |
| [Balance Sheet](#cnlrcred1012gb003) | F-3 |
| [Notes to Financial Statements](#cnlrcred1012gb004) | F-4 |

---

---

| | |
|:---|:---|
| ![](kpmg001.jpg) |  |
|  | KPMG LLP |
|  | Suite 1000 |
|  | 620 S. Tryon Street |
|  | Charlotte, North Carolina 28202-1842 |

---

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors

CNL Strategic Residential Credit, Inc.:

*Opinion on the Financial Statements* 

We have audited the accompanying balance sheet of CNL Strategic Residential Credit, Inc. (the Company) as of March 31, 2025 and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, in conformity with U.S. generally accepted accounting principles.

*Basis for Opinion* 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company's auditor since 2025.

Charlotte, North Carolina

May 22, 2025

KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

**CNL Strategic Residential Credit, Inc.**

**Balance Sheet**

**March 31, 2025**

---

| | |
|:---|:---|
| **ASSETS** |  |
| Cash and cash equivalents | $199985 |
| Receivable | $15 |
| **Total assets** | $**200000** |
|  | $— |
| **LIABILITIES & EQUITY** |  |
| **Total liabilities** | $**—** |
| Commitments and contingencies (Note 5) | $**—** |
| Common stock – Class E shares, $0.001 par value per share, 8,000 shares issued and outstanding as of March 31, 2025 | $8 |
| Additional paid-in capital | $199992 |
| **EQUITY** |  |
| **Total equity** | $**200000** |
| **Total liabilities and equity** | $**200000** |

---

*See accompanying notes to financial statements.* 

**CNL Strategic Residential Credit, Inc.**

**Notes on Financial Statements**

**1. Organization and Business Purpose**

CNL Strategic Residential Capital, Inc. (the "**Company**") is a Maryland corporation formed on January 21, 2025 (the "**Formation Date**"). The Company is externally managed by CNL Residential Credit Manager, LLC, its Advisor, an affiliate of its sponsor (the "**Advisor**"), and by Balbec Capital Management, L.P., its Sub-Advisor, an affiliate of Balbec Capital, L.P. (the "**Sub-Advisor**" and together with the Advisor, the "**Advisors**"). The Advisors are registered as investment advisers under the Investment Advisors Act of 1940, as amended.

The Company has entered into an Advisory Agreement (as the same may be amended or restated from time to time, the "**Advisory Agreement**") with the Advisor, pursuant to which the Advisor is responsible for the overall management of the Company's activities. The Company has also entered into an administration agreement (as the same may be amended or restated from time to time, the "**Administrative Services Agreement**") with the Advisor, pursuant to which the Advisor will provide certain office administrative services to the Company. The Company and the Advisor have entered into a Sub-Advisory Agreement (as the same may be amended or restated from time to time, the "**Sub-Advisory Agreement**") with the Sub-Advisor, pursuant to which the Sub-Advisor is responsible for the day-to-day management of the Company's assets.

The Company's investment strategy is to acquire, finance and manage a diversified portfolio of primarily U.S. performing and re-performing whole loan mortgages, mortgage servicing rights ("**MSRs**") and residential mortgage-backed securities ("**RMBS**").

On March 28, 2025 (date of capitalization), the Company was capitalized with $100,000 investment by the Advisor and $100,000 by an affiliate of the Sub-Advisor. As of March 31, 2025, the Company has neither purchased nor contracted to purchase any investments.

**2. Summary of Significant Accounting Policies**

The Company believes the following significant accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of the financial statements.

***Basis of Presentation***

The accompanying financial statements have been prepared in accordance with principles generally accepted in the United States of America ("**GAAP**") and include the accounts of the Company. Separate statements of operations, comprehensive income, shareholder's equity, and cash flows have not been presented because the Company has not commenced operations.

***Use of Estimates***

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues. Actual results may ultimately differ from those estimates.

***Cash and Cash Equivalents***

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize risk. The Company had $200,000 in cash and equivalents as of March 31, 2025.

***Organization and Offering Expenses***

The Advisor and Sub-Advisor have agreed to advance organization and offering expenses associated with one or more of its offerings, including its initial private offering (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and shareholder servicing fees) and certain of the Company's operating expenses that the Advisor and Sub-Advisor incur on behalf of the Company. The Company will reimburse the Advisor and Sub-Advisor for all such advanced expenses.

As of March 31, 2025, the Advisor and its affiliates have incurred organization and offering expenses on the Company's behalf of approximately $1,246. These organization and offering expenses are not recorded on the accompanying balance sheet because such costs are not the Company's liability until the date on which operations commence. When recorded by the Company, organizational expenses and operating expenses will be expensed as incurred, and offering expenses will be charged to shareholders' equity. Any amount due to the Advisor but not paid will be recognized as a liability on the balance sheet.

***Income Taxes***

The Company intends to make an election to be taxed as a Real Estate Investment Trust ("REIT") under the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes and generally will not be subject to U.S. federal corporate income taxes on its taxable income to the extent it distributes 90% of its taxable income to its shareholders. The Company also intends to operate its business in a manner intended to allow it to remain excluded from registration as an investment company under the Investment Company Act.

The Company has not yet filed its initial tax return.

**3. Equity** 

As of January 15, 2025, the Company was authorized to issue 1,000,000,000 shares of Common Stock, $0.001 par value per share ("Common Stock"), currently classified as Class T common stock, $0.001 par value per share (the "**Class T shares**"), Class D common stock, $0.001 par value per share (the "**Class D shares**"), Class I common stock, $0.001 par value per share (the "**Class I shares**"), Class A common stock, $0.001 par value per share (the "**Class A shares**"), Class FA common stock, $0.001 par value per share (the "**Class FA shares**") and Class E common stock, $0.001 par value per share (the "**Class E shares**").

**4. Related Party Transactions**

As of March 31, 2025, the Advisor and an affiliate of the Sub-Advisor have purchased $200,000 of Class E shares.

**5. Commitments and Contingencies** 

As of March 31, 2025, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened against it.

**6. Subsequent Events**

The Company evaluated events subsequent to March 31, 2025, through May 15, 2025, the date the financial statements were available to be issued. Other than those items previously disclosed, no other events have occurred that require consideration as adjustments to, or disclosures in, the financial statements.

**SIGNATURES**

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| **CNL STRATEGIC RESIDENTIAL CREDIT, INC.** | **CNL STRATEGIC RESIDENTIAL CREDIT, INC.** |
| By: | /s/ Chirag J. Bhavsar |
|  | **CHIRAG J. BHAVSAR** |
|  | **Chief Executive Officer** |
|  | **(Principal Executive Officer)** |
| By: | /s/ Tammy J. Tipton |
|  | **TAMMY J. TIPTON** |
|  | **Chief Financial Officer** |
|  | **(Principal Financial and Accounting Officer)** |

---

Date: June 2, 2025

## Exhibit 3.1

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 3.1**

**ARTICLES OF AMENDMENT AND RESTATEMENT**

**OF**

**CNL STRATEGIC RESIDENTIAL CREDIT, INC.**

<u>FIRST</u>: The charter of CNL Strategic Residential Credit, Inc., a Maryland corporation (the "Corporation"), is hereby amended to provide that, immediately upon the acceptance of these Articles of Amendment and Restatement for record (the "Effective Time") by the State Department of Assessments and Taxation of Maryland, each share of Common Stock, $0.001 par value per share, of the Corporation which was issued and outstanding immediately prior to the Effective Time shall be changed into one issued and outstanding share of Class E Common Stock, $0.001 par value per share.

<u>SECOND</u>: The Corporation desires to further amend and restate its charter as currently in effect and as hereinafter amended.

<u>THIRD</u>: The following provisions are all the provisions of the charter currently in effect and as hereinafter amended:

**ARTICLE I**

**NAME**

The name of the corporation is CNL Strategic Residential Credit, Inc. (the "Corporation").

**ARTICLE II**

**PURPOSE**

Except as provided below, the purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, qualifying as a real estate investment trust under Sections 856 through 860, or any successor sections, of the Internal Revenue Code of 1986, as amended (the "Code")), for which corporations may be organized under the MGCL and the general laws of the State of Maryland as now or hereafter in force.

**ARTICLE III**

**PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT**

The address of the principal office of the Corporation in the State of Maryland is c/o The Corporation Trust Incorporated, 2405 York Rd Ste. 201, Lutherville Timonium, Maryland 21093-2264. The name and address of the resident agent of the Corporation are The Corporation Trust Incorporated, 2405 York Rd Ste. 201, Lutherville Timonium, Maryland 21093-2264. The Corporation may have such other offices and places of business within or outside the State of Maryland as the board of directors may from time to time determine.

**ARTICLE IV**

**DEFINITIONS**

As used herein, the following terms shall have the following meanings unless the context otherwise requires:

<u>Acquisition Expenses</u>. Expenses including but not limited to legal fees and expenses, travel and communications expenses, cost of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance and miscellaneous expenses related to selecting and acquiring properties, or making or investing in loans, whether or not the acquisition or investment is made.

<u>Acquisition Fees</u>. The total of all fees and commissions, excluding Acquisition Expenses, paid by any party to any party in connection with making or investing in loans or the purchase, development or construction of property by the Corporation. Included in the computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, origination fees, loan fees or points or any fee of a similar nature, however designated. Excluded shall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of a project.

<u>Advisor</u> or <u>Advisors</u>. The Person responsible for directing or performing the day-to-day business affairs of the Corporation, including a Person to which an Advisor subcontracts substantially all of, or material aspects of, such functions pursuant to a sub-advisory agreement and including any successor to an Advisor who enters into an Advisory Agreement with the Corporation or who subcontracts with a successor Advisor.

<u>Advisory Agreement</u>. The agreement between the Corporation and an Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the Corporation, including any sub-advisory agreement.

<u>Affiliate</u>. An Affiliate of another Person includes any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Person directly or indirectly owning, controlling or holding, with power to vote, 10% or more of the outstanding voting securities of such other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with power to vote, by such other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Person directly or indirectly controlling, controlled by or under common control with such other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any executive officer, director, trustee or general partner of such other Person; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

<u>Asset</u>. Any Property, Mortgage or other investment owned by the Corporation, directly or indirectly through one or more of its subsidiaries.

<u>Average Invested Assets</u>. For any period, the average of the aggregate book value of the assets of the Corporation invested, directly or indirectly in equity interests in and loans secured by real estate, before deducting depreciation, bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period.

<u>Bidder</u>. The term shall have the meaning as provided in Section 11.10 herein.

<u>Business Day</u>. Any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

<u>Bylaws</u>. The Bylaws of the Corporation, as amended from time to time.

<u>Capital Stock</u>. All classes or series of stock of the Corporation, including, without limitation, Common Stock and Preferred Stock.

<u>Charter</u>. The charter of the Corporation.

<u>Code</u>. The term shall have the meaning as provided in Article II herein.

<u>Class A Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class D Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class D Conversion Rate</u>. The term shall have the meaning as provided in Section 5.12(c) herein.

<u>Class E Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class E Conversion Rate</u>. The term shall have the meaning as provided in Section 5.12(e) herein.

<u>Class FA Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class FA Conversion Rate</u>. The term shall have the meaning as provided in Section 5.12(d) herein.

<u>Class I Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class I Conversion Rate</u>. The term shall have the meaning as provided in Section 5.11(a) herein.

<u>Class T Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Class T Conversion Rate</u>. The term shall have the meaning as provided in Section 5.12(b) herein.

<u>Common Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Common Stockholders</u>. The registered holders of Common Stock.

<u>Commencement of the Initial Public Offering</u>. The date that the Commission declares effective the registration statement filed under the Securities Act for the Initial Public Offering.

<u>Commission</u>. U.S. Securities and Exchange Commission.

<u>Competitive Real Estate Commission</u>. A real estate or brokerage commission paid for the purchase or sale of a property that is reasonable, customary and competitive in light of the size, type and location of the property.

<u>Construction Fee</u>. A fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitation on the Corporation's property.

<u>Contract Purchase Price</u>. The amount actually paid or allocated in respect of the purchase, development, construction or improvement of an asset exclusive of Acquisition Fees and Acquisition Expenses.

<u>Corporation</u>. The term shall have the meaning as provided in Article I herein.

<u>Court</u>. The term shall have the meaning as provided in Section 14.2 herein.

<u>Development Fee</u>. A fee for the packaging of the Corporation's property, including the negotiation and approval of plans, and undertaking to assist in obtaining zoning and necessary variances and necessary financing for a specific property, either initially or at a later date.

<u>Director(s)</u>. The members of the board of directors of the Corporation.

<u>Distributions</u>. The term "distributions" shall mean any distributions (as such term is defined in Section 2-301 of the MGCL) by the Corporation to owners of Common Stock, including distributions that may constitute a return of capital for federal income tax purposes.

<u>Distribution Fee</u>. An annual distribution and stockholder servicing fee on a share of Common Stock.

<u>Excess Amount.</u> The term shall have the meaning as provided in Section 8.9 herein.

<u>Exchange Act</u>. The Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

<u>FINRA</u>. The Financial Industry Regulatory Authority, Inc.

<u>Gross Proceeds</u>. The term "Gross Proceeds" shall mean the aggregate purchase price of all Common Stock sold for the account of the Corporation, without deduction for Selling Commissions, any discount (including any special sale or volume discounts), any marketing support and due diligence expense reimbursement, fees paid to the Managing Dealer, as applicable, or other Organization and Offering Expenses.

<u>Independent Directors</u>. The directors of the Corporation who are not associated and have not been associated within the last two years, directly or indirectly, with the Sponsor or an Advisor of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A director shall be deemed to be associated with the Sponsor or Advisor if he or she:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) owns an interest in the Sponsor, an Advisor or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) is employed by the Sponsor, an Advisor or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) is an officer or director of the Sponsor, an Advisor or any of their Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) performs services, other than as a director, for the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) is a director for more than three REITs organized by the Sponsor or advised by the Advisor; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) has any material business or professional relationship with the Sponsor, an Advisor or any of their Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For purposes of determining whether or not a business or professional relationship is material pursuant to (a)(vi) above, the annual gross revenue derived by the prospective director from the Sponsor, an Advisor and their Affiliates shall be deemed material *per se* if it exceeds 5% of the prospective director's:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) annual gross revenue, derived from all sources, during either of the last two years; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) net worth, on a fair market value basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) An indirect relationship shall include circumstances in which a director's spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with the Sponsor, an Advisor, any of their Affiliates or the Corporation.

<u>Independent Directors Committee</u>. The term shall have the meaning as provided in Section 10.1 herein.

<u>Independent Expert</u>. A Person (selected by the Independent Directors Committee) with no material current or prior business or personal relationship with an Advisor or a director who is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Corporation.

<u>Initial Investment</u>. An investment of $200,000 by the initial Advisors or their respective Affiliates thereof to acquire an equity interest in the Corporation.

<u>Initial Public Offering</u>. The Corporation's first Public Offering of its Common Stock pursuant to an effective registration statement filed on Form S-11 with the Commission.

<u>Invested Capital</u>. The amount calculated by multiplying the total number of shares of Common Stock purchased by Stockholders by the issue price per share at the time of purchase, without deduction for volume or other discounts or Organizational and Offering Expenses (which price per share of Common Stock, in the case of Common Stock purchased pursuant to the Distribution Reinvestment Plan, if any, shall be deemed to be the actual purchase price per share), reduced by the portion of any Distribution that is attributable to Net Sales Proceeds and any amount paid to repurchase Common Stock pursuant to the Corporation's repurchase program.

<u>Joint Ventures</u>. Those joint venture or partnership arrangements in which the Corporation or any of its subsidiaries is a co-venturer or general partner established to acquire or hold Assets.

<u>Leverage</u>. The aggregate amount of indebtedness of the Corporation for money borrowed (including purchase money mortgage loans) outstanding at any time, both secured and unsecured.

<u>Listed</u>. Approved for trading on any securities exchange registered as a national securities exchange under Section 6 of the Exchange Act. The term "Listing" shall have the correlative meaning.

<u>Managing Dealer</u>. CNL Securities Corp., an Affiliate of an Advisor, or such other Person or entity selected by the Directors to act as the managing dealer for a Public Offering or placement agent for a private offering of the Capital Stock. CNL Securities Corp. is a member of FINRA.

<u>Maryland Court</u>. The term shall have the meaning as provided in Section 14.2 herein.

<u>MGCL</u>. The Maryland General Corporation Law, as amended from time to time.

<u>Mortgage</u>. In connection with mortgage financing provided by the Corporation or its subsidiaries, all of the notes, deeds of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness or obligations.

<u>NASAA REIT Guidelines</u>. The Statement of Policy Regarding Real Estate Investment Trusts as revised and adopted by the North American Securities Administrators Association on May 7, 2007.

<u>Net Assets</u>. The total Assets of the Corporation (other than intangibles) at cost, before deducting depreciation or other non-cash reserves, less total liabilities, calculated at least quarterly by the Corporation on a basis consistently applied.

<u>Net Asset Value per share of Class A Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class A Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class A Common Stock.

<u>Net Asset Value per share of Class D Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class D Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class D Common Stock.

<u>Net Asset Value per share of Class E Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class E Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class E Common Stock.

<u>Net Asset Value per share of Class FA Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class FA Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class FA Common Stock.

<u>Net Asset Value per share of Class I Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class I Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class I Common Stock.

<u>Net Asset Value per share of Class T Common Stock</u>. At any given time, the net asset value of the Corporation allocable to the shares of Class T Common Stock, calculated as described in the Offering Memorandum or Prospectus, as applicable, as may be amended from time to time, divided by the number of outstanding shares of Class T Common Stock.

<u>Net Income</u>. For any period, total revenues applicable to such period, less the expenses applicable to such period other than additions to reserves for depreciation or bad debts or other similar non-cash reserves. If an Advisor receives an incentive fee, Net Income, for purposes of calculating Total Operating Expenses in Section 8.9, shall exclude the gain from the sale of the Corporation's assets.

<u>Net Sales Proceeds</u>. In the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of the definition of Sale, the proceeds of any such transaction actually distributed to the Corporation less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf of the Corporation. In the case of a transaction or series of transactions described in clause (i)(D) of the definition of Sale, the proceeds of any such transaction (including the aggregate of all payments under a Mortgage or in satisfaction thereof other than regularly scheduled interest payments) less the amount of selling expenses incurred by or on behalf of the Corporation, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(E) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (ii) of the definition of Sale, the proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one or more Assets within 180 days thereafter and less the amount of any real estate commissions, closing costs, legal fees and expenses and other selling expenses incurred by or allocated to the Corporation in connection with such transaction or series of transactions. Net Sales Proceeds shall also include any amounts that the Corporation determines, in its discretion, to be economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any reserves established by the Corporation in its sole discretion.

<u>Non-Compliant Tender Offer.</u> The term shall have the meaning as provided in Section 11.10 herein.

<u>Offering</u>. Any offering and sale of Capital Stock whether pursuant to (i) a registration statement filed with the Securities and Exchange Commission or (ii) an offering memorandum in a transaction exempt from registration under the Securities Act, as amended, including pursuant to the Distribution Reinvestment Plan, if any.

<u>Offering Memorandum</u>. The offering memorandum utilized for the purpose of offering and selling shares of Capital Stock in any private offering, as the same may at any time and from time to time be amended or supplemented.

<u>Organization and Offering Expenses</u>. All expenses incurred by and to be paid from the assets of the Corporation in connection with or preparing the Corporation for registration and subsequently offering and distributing its shares to the public, including, but not limited to, total underwriting and brokerage discounts and commissions (including fees of the underwriters' attorneys); any expense allowance granted by the Corporation to the underwriter or any reimbursement of expenses of the underwriter by the Corporation; expenses for printing, engraving and mailing; salaries of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under Federal and state laws, including taxes and fees, accountants' and attorneys' fees.

<u>Participating Broker-Dealers</u>. Those broker-dealers that are members of FINRA, registered investment advisors and other entities exempt from broker-dealer registration, that, in each case, enter into participating broker or other selling agreements with the Managing Dealer, as applicable, to sell Capital Stock.

<u>Person</u>. Any natural person, corporation, association, statutory trust, estate, trust, partnership, limited liability company or other legal entity.

<u>Placement Agent</u>. CNL Securities Corp., an Affiliate of an Advisor, or such other Person or entity selected by the Directors to act as the placement agent for the Offering of the Capital Stock in a Private Placement Offering. CNL Securities Corp. is a member of FINRA.

<u>Position Statement</u>. The term shall have the meaning as provided in Section 11.10 herein.

<u>Preferred Stock</u>. The term shall have the meaning as provided in Section 5.1 herein.

<u>Private Placement Offering</u>. The Offering of shares of Capital Stock in an offering exempt from the registration requirements through the use of the Offering Memorandum.

<u>Property or Properties</u>. As the context requires, any, or all, respectively, of the Real Property acquired by the Corporation, directly or indirectly through joint venture arrangements or other partnership or investment interests.

<u>Prospectus</u>. Any prospectus, including a preliminary Prospectus and any other offering document pursuant to which the Corporation offers shares of Capital Stock in a public offering, as the same may at any time and from time to time be amended or supplemented.

<u>Primary Offering</u>. With respect to a Public Offering, the primary portion of such Public Offering, excluding any Distribution Reinvestment Plan portion of such Public Offering, if any.

<u>Public Offering</u>. A public offering of shares of Capital Stock by the Corporation with respect to which registration with the Commission is required pursuant to the Securities Act.

<u>Real Propert</u>y. Land, rights in land (including leasehold interests) and any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land.

<u>REIT</u>. A real estate investment trust under Sections 856 through 860 of the Code.

<u>Rescission Notice</u>. The term shall have the meaning as provided in Section 11.10 herein.

<u>Roll-Up Entity</u>. A partnership, real estate investment trust, corporation, trust or other entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction.

<u>Roll-Up Transaction or Roll-Up</u>. A transaction involving the acquisition, merger, conversion, or consolidation, either directly or indirectly, of the Corporation and the issuance of securities of a Roll-Up Entity to the Common Stockholders.

Such term does not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a transaction involving securities of the Corporation that have been Listed for at least 12 months on a national securities exchange or traded through the National Association of Securities Dealers Automated Quotation National Market System; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a transaction involving the conversion to corporate, trust or association form of only the Corporation, if, as a consequence of the transaction, there will be no significant adverse change in any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the voting rights of Common Stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the term of existence of the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Sponsor or Advisor compensation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Corporation's investment objectives.

<u>Sale or Sales</u>. (i) Any transaction or series of transactions whereby: (A) the Corporation directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Corporation directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of all or substantially all of the interest of the Corporation in which it is a co-venturer or partner; (C) any Joint Venture in which the Corporation is a co-venturer or partner directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (D) the Corporation directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof, including any payments thereunder or in satisfaction thereof (other than regularly scheduled interest payments) or any amounts owed pursuant to such Mortgage, and including any event with respect to any Mortgage which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Corporation directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Corporation in one or more Assets within 180 days thereafter.

<u>Securities Act</u>. The Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

<u>SDAT</u>. The State Department of Assessments and Taxation of Maryland.

<u>Selling Commissions</u>. Any and all commissions payable to underwriters, managing dealers, placement agents, or other Participating Broker-Dealers, as applicable, in connection with the sale of shares of Common Stock, including commissions payable to the Managing Dealer, as applicable.

<u>Sponsor</u>. Any Person directly or indirectly instrumental in organizing, wholly or in part, the Corporation or any Person who will control, manage or participate in the management of the Corporation, and any Affiliate of such Person. Not included is any Person whose only relationship with the Corporation is as that of an independent property manager of the Corporation's assets, and whose only compensation is as such. Sponsor does not include wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services. A Person may also be deemed a Sponsor of the Corporation (as to be determined by the Independent Directors Committee) by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) taking the initiative, directly or indirectly, in founding or organizing the business or enterprise of the Corporation, either alone or in conjunction with one or more other Persons;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) receiving a material participation in the Corporation in connection with the founding or organizing of the business of the Corporation, in consideration of services or property, or both services and property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) having a substantial number of relationships and contacts with the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) possessing significant rights to control the Corporation's properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) receiving fees for providing services to the Corporation which are paid on a basis that is not customary in the industry; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) providing goods or services to the Corporation on a basis which was not negotiated at arms length with the Corporation.

<u>Stockholder List</u>. The term shall have the meaning as provided in Section 11.6 herein.

<u>Tendered Shares</u>. The term shall have the meaning as provided in Section 11.10 herein.

<u>Total Corporation-Level Underwriting Compensation</u>. All underwriting compensation paid or incurred with respect to an Offering from all sources, determined pursuant to the rules and guidance of FINRA, including Distribution Fees and Selling Commissions.

<u>Total Operating Expenses</u>. All expenses paid or incurred by the Corporation, as determined under generally accepted accounting principles, that are in any way related to the operation of the Corporation or to Corporation business, including advisory fees, but excluding (a) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of shares of Capital Stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) incentive fees paid in compliance with Section 8.6, notwithstanding the next succeeding clause (f); and (f) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property and other expenses connected with the acquisition, disposition and ownership of real estate interests, mortgage loans or other property (other than commissions on the sale of assets other than real property), including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property.

<u>Total Share-Level Underwriting Compensation</u>. With respect to any shares of Common Stock sold for the account of the Corporation through an Offering, all Managing Dealer fees, Selling Commissions, Distribution Fees and any other underwriting compensation fees, determined pursuant to the rules and guidance of FINRA, paid to the Managing Dealer or to Participating Broker-Dealers, as applicable, as well as any purchase price discounts from the non-discounted offering price given at the time of purchase.

<u>2%/25% Guidelines.</u> The term shall have the meaning as provided in Section 8.9 herein.

<u>Unimproved Real Property</u>. The real property of the Corporation that has the following three characteristics:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an equity interest in real property which was not acquired for the purpose of producing rental or other operating income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) there is no development or construction in progress on such land; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) no development or construction on such land is planned in good faith to commence on such land within one year.

**ARTICLE V**

**STOCK**

Section 5.1. <u>Authorized Shares</u>. The Corporation has authority to issue 1,100,000,000 shares of Capital Stock, consisting of 1,000,000,000 shares of common stock, $0.001 par value per share ("Common Stock"), 200,000,000 of which are classified as shares of Class A Common Stock (the "Class A Common Stock"), 200,000,000 of which are classified as shares of Class D Common Stock (the "Class D Common Stock"), 50,000,000 of which are classified as shares of Class E Common Stock (the "Class E Common Stock"), 100,000,000 of which are classified as shares of Class FA Common Stock (the "Class FA Common Stock"), 250,000,000 of which are classified as shares of Class I Common Stock (the "Class I Common Stock") and 200,000,000 of which are classified as shares of Class T Common Stock (the "Class T Common Stock"), and 100,000,000 shares of preferred stock, $0.001 par value per share ("Preferred Stock"). The aggregate par value of all authorized shares of Capital Stock having par value is $1,100,000. If shares of Capital Stock of one class are classified or reclassified into shares of Capital Stock of another class pursuant to this Article V, the number of authorized shares of Capital Stock of the former class shall be automatically decreased and the number of shares of Capital Stock of the latter class shall be automatically increased, in each case by the number of shares of Capital Stock so classified or reclassified, so that the aggregate number of shares of Capital Stock of all classes that the Corporation has authority to issue shall not be more than the total number of shares of Capital Stock set forth in the first sentence of this paragraph. The board of directors, with the approval of a majority of the directors and without any action by the stockholders of the Corporation, may amend the Charter from time to time to increase or decrease the aggregate number of shares of Capital Stock or the number of shares of Capital Stock of any class or series that the Corporation has the authority to issue.

Section 5.2. <u>Common Stock</u>.

Section 5.2.1. <u>Description</u>. Subject to the provisions of Article VI and except as may otherwise be specified in the Charter, each share of Common Stock shall entitle the holder thereof to one vote per share on all matters upon which Common Stockholders are entitled to vote. The board of directors may classify or reclassify any unissued shares of Common Stock from time to time into one or more classes or series of Capital Stock.

Section 5.2.2. <u>Rights Upon Liquidation</u>. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, or any distribution of the assets of the Corporation, the aggregate assets available for distribution to holders of the Common Stock shall be determined in accordance with applicable law. Immediately before any liquidation, dissolution or winding up of the Corporation, or any distribution of the assets of the Corporation pursuant to a plan of liquidation, dissolution or winding up, the Class I Common Stock will automatically convert to Class A Common Stock at the Class I Conversion Rate, the Class T Common Stock will automatically convert to Class A Common Stock at the Class T Conversion Rate, the Class D Common Stock will automatically convert to Class A Common Stock at the Class D Conversion Rate, the Class FA Common Stock will automatically convert to Class A Common Stock at the Class FA Conversion Rate, the Class E Common Stock will automatically convert to Class A Common Stock at the Class E Conversion Rate, and the aggregate assets of the Corporation available for distribution, or the proceeds therefrom, shall be distributed to the holders of Class A Common Stock, in accordance with their percentage in interest of shares of Common Stock (after accounting for all converted shares of Class I Common Stock, Class T Common Stock, Class D Common Stock, Class E Common Stock and Class FA Common Stock).

Following such conversion, the aggregate assets of the Corporation available for distribution to holders of the Common Stock, or the proceeds therefrom, shall be distributed to each holder of Class A Common Stock, ratably with each other holder of Class A Common Stock, which will include all converted Class I Common Stock, Class D Common Stock, Class FA Common Stock and Class T Common Stock, in such proportion as the number of outstanding Class A Common Stock held by such holder bears to the total number of outstanding Class A Common Stock then outstanding.

Section 5.2.3. <u>Voting Rights</u>. Except as may be provided otherwise in the Charter, each holder of a share of Common Stock shall vote together with the holders of all other shares of Common Stock, and the holders of the Common Stock shall have the exclusive right to vote on all matters (as to which a Common Stockholder shall be entitled to vote pursuant to applicable law) at all meetings of the stockholders; provided, however, that with respect to any matter that would alter only the contract rights of a particular class or series of Common Stock, only the holders of such affected class or series of Common Stock shall have the right to vote.

Section 5.3. <u>Preferred Stock</u>. The board of directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time into one or more classes or series of Capital Stock; <u>provided</u>, <u>however</u>, that, following the Commencement of the Initial Public Offering, when a privately issued share of Preferred Stock is entitled to vote on a matter with the holders of shares of Common Stock, the relationship between the number of votes per such share of Preferred Stock and the consideration paid to the Corporation for such share shall not exceed the relationship between the number of votes per any publicly offered share of Common Stock and the book value per outstanding share of Common Stock.

Section 5.4. <u>Classified or Reclassified Shares</u>. Prior to the issuance of classified or reclassified shares of any class or series, the board of directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of Capital Stock; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the provisions of Article VI and subject to the express terms of any class or series of Capital Stock outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Corporation to file articles supplementary with the SDAT. Any of the terms of any class or series of Capital Stock set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the board of directors or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of Capital Stock is clearly and expressly set forth in the articles supplementary filed with the SDAT.

Section 5.5. <u>Charter and Bylaws</u>. The rights of all stockholders and the terms of all shares of Capital Stock are subject to the provisions of the Charter and the Bylaws.

Section 5.6. <u>No Preemptive Rights</u>. Except as may be provided by the board of directors in setting the terms of classified or reclassified shares of Capital Stock pursuant to Section 5.4 or as may otherwise be provided by contract approved by the board of directors, no holder of shares of Capital Stock of any class shall have any preemptive right to subscribe to or purchase any additional shares of any class or series, or any bonds or convertible securities of any nature.

Section 5.7. <u>Issuance of Shares Without Certificates</u>. Unless otherwise provided by the board of directors, the Corporation shall not issue stock certificates. The Corporation shall continue to treat the holder of uncertificated shares of Capital Stock registered on its stock ledger as the owner of the shares noted therein until the new owner delivers a properly executed form provided by the Corporation for that purpose. With respect to any shares of Capital Stock that are issued without certificates, information regarding restrictions on the transferability of such shares that would otherwise be required by the MGCL to appear on the stock certificates will instead be furnished to stockholders upon request and without charge.

Section 5.8. <u>Suitability and Minimum Investment of Stockholders</u>. Until the Common Stock is Listed, the following provisions shall apply to purchases of shares of Common Stock in a Public Offering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To purchase shares of Common Stock, the purchaser must represent to the Corporation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) that such purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, the fiduciary account or the grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a minimum annual gross income of $70,000 and a net worth (excluding home, home furnishings and automobiles) of not less than $70,000; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) that such purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, the fiduciary account or the grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a net worth (excluding home, home furnishings and automobiles) of not less than $250,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sponsor, each Person selling shares of Common Stock on behalf of the Sponsor or the Corporation, and each broker or dealer or registered investment adviser recommending the purchase of shares of Common Stock to a customer shall make every reasonable effort to determine that the purchase of shares of Common Stock is a suitable and appropriate investment for each Common Stockholder. In making this determination, the Sponsor, each Person selling shares of Common Stock on behalf of the Sponsor or the Corporation, or each broker or dealer or registered investment adviser recommending the purchase of shares of Common Stock to a customer shall ascertain that the prospective Common Stockholder: (i) meets the minimum income and net worth standards set forth in Section 5.8; (ii) can reasonably benefit from the Corporation based on the prospective stockholder's overall investment objectives and portfolio structure; (iii) is able to bear the economic risk of the investment based on the prospective stockholder's overall financial situation; and (iv) has apparent understanding of (1) the fundamental risks of the investment; (2) the risk that the stockholder may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of the shares; and (5) the tax consequences of the investment. The Sponsor, each Person selling shares of Common Stock on behalf of the Sponsor or the Corporation, or each broker or dealer or registered investment adviser recommending the purchase of shares of Common Stock to a customer shall make this determination on the basis of information it has obtained from a prospective stockholder, including information indirectly obtained from a prospective stockholder through such stockholder's investment adviser, financial advisor or bank acting as a fiduciary. Relevant information for this purpose will include at least the age, investment objectives, investment experience, income, net worth, financial situation and other investments of the prospective stockholder, as well as any other pertinent factors. The Sponsor, each Person selling shares of Common Stock on behalf of the Sponsor or the Corporation, or each broker or dealer or registered investment adviser recommending the purchase of shares of Common Stock to a customer shall cause to be maintained for at least six years records of the information used to determine that an investment in shares is suitable and appropriate for a Common Stockholder.

The Sponsor and each Person selling shares of Common Stock on behalf of the Sponsor or the Corporation may each rely upon (i) the Person directly recommending the purchase of shares of Common Stock to a customer if that Person is a FINRA member broker or dealer that has entered into a selling agreement with the Sponsor or the Corporation or their Affiliates or (ii) a registered investment adviser that has entered into an agreement with the Sponsor or the Corporation or their Affiliates to make suitability determinations with respect to the customers of the registered investment adviser who may purchase shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each purchase of shares of Common Stock shall comply with the requirements regarding minimum initial and subsequent cash investment amounts set forth in any then effective registration statement of the Corporation as such registration statement has been amended or supplemented as of the date of such purchase or any higher or lower applicable state requirements with respect to minimum initial and subsequent cash investment amounts in effect as of the date of the issuance or transfer.

Section 5.9. <u>Distribution Reinvestment Plans</u>. The board of directors may establish, from time to time, a dividend reinvestment plan or plans. Under any dividend reinvestment plan, (a) all material information regarding dividends to the Common Stockholders and the effect of reinvesting such dividends, including the tax consequences thereof, shall be provided to the Common Stockholders not less often than annually, and (b) each Common Stockholder participating in such plan shall have a reasonable opportunity to withdraw from the plan not less often than annually after receipt of the information required in clause (a) above.

Section 5.10. <u>Distributions</u>. The board of directors may from time to time authorize the Corporation to declare and pay to stockholders such dividends or other distributions as the board of directors in its sole and absolute discretion shall determine. Unless the board of directors determines that is not in the best interest of the Corporation to qualify as a REIT, the board of directors shall endeavor to authorize the Corporation to declare and pay such dividends and other distributions as shall be necessary for the Corporation to qualify as a REIT under the Code; provided, however, that stockholders shall have no right to any dividend or other distribution unless and until authorized by the board of directors and declared by the Corporation.

Following the Commencement of the Initial Public Offering, distributions in kind shall not be permitted, except for distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Corporation and the liquidation of its assets in accordance with the terms of the Charter or distributions that meet all of the following conditions: (a) the board of directors advises each Common Stockholder of the risks associated with direct ownership of the property, (b) the board of directors offers each Common Stockholder the election of receiving such in-kind distributions and (c) in-kind distributions are made only to those Common Stockholders who accept such offer.

Section 5.11 <u>Conversion of Class I Common Stock, Class D Common Stock, Class FA Common Stock, Class E Common Stock, and Class T Common Stock Upon Certain Other Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conversion of Class I Common Stock</u>. Each share of Class I Common Stock held in a Common Stockholder's account shall automatically and without any action on the part of the holder thereof convert into such number of shares of Class A Common Stock equal to the product of each share of Class I Common Stock to be converted and a fraction, the numerator of which is the Net Asset Value per share of Class I Common Stock and the denominator of which is the Net Asset Value per share of Class A Common Stock (the "Class A Conversion Rate"), on the earlier of (a) a Listing of the Class A Common Stock and (b) a merger or consolidation of the Corporation with or into another entity, or the sale or other disposition of all or substantially all of the Corporation's assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Conversion of Class T Common Stock</u>. Each share of Class T Common Stock held in a Common Stockholder's account shall automatically and without any action on the part of the holder thereof convert into such number of shares of Class A Common Stock equal to the product of each share of Class T Common Stock to be converted and a fraction, the numerator of which is the Net Asset Value per share of Class T Common Stock and the denominator of which is the Net Asset Value per share of Class A Common Stock (the "Class T Conversion Rate"), on the earlier of (a) a Listing of the Class A Common Stock, (b) a merger or consolidation of the Corporation with or into another entity, or the sale or other disposition of all or substantially all of the Corporation's assets; (c) after the termination of a Primary Offering in which the initial shares of Class T Common Stock in the account were sold, the end of the month in which Total Corporation-Level Underwriting Compensation in such Primary Offering is not less than 10% of the Gross Proceeds of that Primary Offering, as calculated by the Corporation with the assistance of the Managing Dealer; and (d) the end of the month in which the Total Share-Level Underwriting Compensation paid in any particular account from an Offering with respect to all shares of Class T Common Stock held by such Common Stockholder within such account and purchased in such Offering (including shares of Common Stock purchased through a Distribution Reinvestment Plan or received as stock dividends) is not less than 8.5% of the aggregate total of the non-discounted offering price at the time of purchase of each such share of Class T Common Stock purchased in such Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Conversion of Class D Common Stock</u>. Each share of Class D Common Stock held in a Common Stockholder's account shall automatically and without any action on the part of the holder thereof convert into such number of shares of Class A Common Stock equal to the product of each share of Class D Common Stock to be converted and a fraction, the numerator of which is the Net Asset Value per share of Class D Common Stock and the denominator of which is the Net Asset Value per share of Class A Common Stock (the "Class D Conversion Rate"), on the earlier of (a) a Listing of the Class A Common Stock, a merger or consolidation of the Corporation with or into another entity, or the sale or other disposition of all or substantially all of the Corporation's assets; (c) after the termination of a Primary Offering in which the initial shares of Class D Common Stock in the account were sold, the end of the month in which Total Corporation-Level Underwriting Compensation in such Primary Offering is not less than 10% of the Gross Proceeds of such Primary Offering, as calculated by the Corporation with the assistance of the Managing Dealer; and (d) the end of the month in which the Total Share-Level Underwriting Compensation paid in any particular account from an Offering with respect to all shares of Class D Common Stock held by such Common Stockholder within such account and purchased in such Offering (including shares of Common Stock purchased through a Distribution Reinvestment Plan or received as stock dividends) is not less than 8.5% of the aggregate total of the non-discounted offering price at the time of purchase of each such share of Class D Common Stock purchased in such Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Conversion of Class FA Common Stock</u>. Each share of Class FA Common Stock held in a Common Stockholder's account shall automatically and without any action on the part of the holder thereof convert into such number of shares of Class A Common Stock equal to the product of each share of Class FA Common Stock to be converted and a fraction, the numerator of which is the Net Asset Value per share of Class FA Common Stock and the denominator of which is the Net Asset Value per share of Class A Common Stock (the "Class FA Conversion Rate"), on the earlier of (a) a Listing of the Class A Common Stock and (b) a merger or consolidation of the Corporation with or into another entity, or the sale or other disposition of all or substantially all of the Corporation's assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Conversion of Class E Common Stock</u>. Each share of Class E Common Stock held in a Common Stockholder's account shall automatically and without any action on the part of the holder thereof convert into such number of shares of Class A Common Stock equal to the product of each share of Class E Common Stock to be converted and a fraction, the numerator of which is the Net Asset Value per share of Class E Common Stock and the denominator of which is the Net Asset Value per share of Class A Common Stock (the "Class E Conversion Rate"), on the earlier of (a) a Listing of the Class A Common Stock and (b) a merger or consolidation of the Corporation with or into another entity or the sale or other disposition of all or substantially all of the Corporation's assets.

**ARTICLE VI**

**RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES**

Section 6.1. <u>Definitions</u>. As used in this Article VI, the following terms shall have the following meanings:

<u>Aggregate Stock Ownership Limit</u>. 9.8% in value or number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of Capital Stock or such other percentage determined by the board of directors in accordance with Section 6.2.8. The value of the outstanding shares of Capital Stock shall be determined by the board of directors in good faith, which determination shall be conclusive for all purposes hereof.

<u>Beneficial Ownership</u>. Ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner," "Beneficially Owns," "Beneficially Owning" and "Beneficially Owned" shall have the correlative meanings.

<u>Charitable Beneficiary</u>. One or more beneficiaries of the Trust as determined pursuant to Section 6.3.6, provided that each such organization must be described in Section 501(c)(3) of the Code, must not be a private foundation within the meaning of Section 509 of the Code, and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

<u>Common Stock Ownership Limit</u>. 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of Common Stock or such other percentage determined by the board of directors in accordance with Section 6.2.8. The number and value of outstanding shares of Common Stock shall be determined by the board of directors in good faith, which determination shall be conclusive for all purposes hereof.

<u>Constructive Ownership</u>. Ownership of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive Owner," "Constructively Owns," "Constructively Owning" and "Constructively Owned" shall have the correlative meanings.

<u>Excepted Holder Limit</u>. The percentage limit established by the Charter or the board of directors pursuant to Section 6.2.7 provided that the affected Excepted Holder agrees to comply with the requirements, if any, established by the board of directors pursuant to Section 6.2.7, and subject to adjustment pursuant to Section 6.2.8.

<u>Initial Date</u>. Shall mean January 1, 2026, or such other date as determined by the board of directors in their discretion.

<u>Market Price</u>. With respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date. The "Closing Price" on any date shall mean the last sale price for such Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Capital Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which such Capital Stock is listed or admitted to trading or, if such Capital Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by FINRA's OTC Bulletin Board service or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such Capital Stock is not quoted by any such system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the board of directors or, in the event that no trading price is available for such Capital Stock, the fair market value of the Capital Stock, as determined in good faith by the board of directors.

<u>Prohibited Owner</u>. With respect to any purported Transfer, any Person who but for the provisions of Section 6.2.1 would Beneficially Own or Constructively Own shares of Capital Stock and, if appropriate in the context, shall also mean any Person who would have been the record owner of the shares that the Prohibited Owner would have so owned.

<u>Restriction Termination Date</u>. The first day on which the Corporation determines pursuant to Section 7.7 of the Charter that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock set forth herein is no longer required in order for the Corporation to qualify as a REIT.

<u>Transfer</u>. Any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership, of Capital Stock or the right to vote or receive distributions on Capital Stock, or any agreement to take any such actions or cause any such events, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Capital Stock or any interest in Capital Stock or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial Ownership or Constructive Ownership of Capital Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms "Transferring" and "Transferred" shall have the correlative meanings.

<u>Trust</u>. Any trust provided for in Section 6.3.1.

<u>Trustee</u>. The Person unaffiliated with the Corporation and a Prohibited Owner that is appointed by the Corporation to serve as trustee of the Trust.

Section 6.2. <u>Capital Stock</u>.

Section 6.2.1. <u>Ownership Limitations</u>. During the period commencing on the Initial Date and prior to the Restriction Termination Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Basic Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) During the period commencing on the Initial Date and prior to the Restriction Termination Date, (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Common Stock in excess of the Common Stock Ownership Limit and (3) no Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) During the period commencing on the Initial Date and prior to the Restriction Termination Date, no Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership or Constructive Ownership of Capital Stock would result in the Corporation being "closely held" within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year). At all times prior to the Restriction Determination Date, no Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership or Constructive Ownership of Capital Stock would result in the Corporation otherwise failing to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code);.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) During the period commencing on the Initial Date and prior to the Restriction Termination Date, any Transfer of shares of Capital Stock that, if effective, would result in the Capital Stock being Beneficially Owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void *ab initio*, and the intended transferee shall acquire no rights in such shares of Capital Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Transfer in Trust</u>. If any Transfer of shares of Capital Stock occurs that, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of Section 6.2.1(a)(i) or Section 6.2.1(a)(ii),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) then that number of shares of Capital Stock the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 6.2.1(a)(i) or Section 6.2.1(a)(ii) (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 6.3, effective as of the close of business on the Business Day prior to the date of such Transfer and such Person shall acquire no rights in such shares; provided, however,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the transfer to the Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation of Section 6.2.1(a)(i) or Section 6.2.1(a)(ii), then the Transfer of that number of shares of Capital Stock that otherwise would cause any Person to violate Section 6.2.1(a)(i) or Section 6.2.1(a)(ii) shall be void *ab initio* and the intended transferee shall acquire no rights in such shares of Capital Stock.

To the extent that, upon a transfer of shares of Capital Stock pursuant to this Section 6.2.1(b), a violation of any provision of this Article VI would nonetheless be continuing (for example where the ownership of shares of Capital Stock by a single Trust would violate the 100 stockholder requirement applicable to REITs), then shares of Capital Stock shall be transferred to that number of Trusts, each having a distinct Trustee and a Charitable Beneficiary or Charitable Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of this Article VI.

Section 6.2.2. <u>Remedies for Breach</u>. If the board of directors shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 6.2.1(a) or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of Section 6.2.1(a) (whether or not such violation is intended), the board of directors or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Corporation to redeem shares, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event; <u>provided</u>, <u>however</u>, that any Transfers or attempted Transfers or other events in violation of Section 6.2.1(a) shall automatically result in the transfer to the Trust described above and, where applicable, such Transfer (or other event) shall be void *ab initio* as provided above irrespective of any action (or non-action) by the board of directors.

Section 6.2.3. <u>Notice of Restricted Transfer</u>. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Capital Stock that will or may violate Section 6.2.1(a) or any Person who would have owned shares of Capital Stock that resulted in a transfer to the Trust pursuant to the provisions of Section 6.2.1(b) shall immediately give written notice to the Corporation of such event or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation's status as a REIT.

Section 6.2.4. <u>Owners Required to Provide Information</u>. Prior to the Restriction Termination Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) every owner of 5% or more (or such higher percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding shares of Capital Stock, within 30 days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of shares of Capital Stock and other shares of the Capital Stock Beneficially Owned and a description of the manner in which such shares are held. Each such owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation's status as a REIT and to ensure compliance with the Aggregate Stock Ownership Limit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) each Person who is a Beneficial Owner or Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial Owner or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in good faith, in order to determine the Corporation's status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance.

Section 6.2.5. <u>Remedies Not Limited</u>. Subject to Section 7.7, nothing contained in this Section 6.2 shall limit the authority of the board of directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders in preserving the Corporation's status as a REIT.

Section 6.2.6. <u>Ambiguity</u>. In the case of an ambiguity in the application of any of the provisions of this Section 6.2, Section 6.3 or any definition contained in Section 6.1, the board of directors shall have the power to determine the application of the provisions of this Section 6.2 or Section 6.3 with respect to any situation based on the facts known to it. In the event Section 6.2 or Section 6.3 requires an action by the board of directors and the Charter fails to provide specific guidance with respect to such action, the board of directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Sections 6.1, 6.2 or 6.3. Absent a decision to the contrary by the board of directors (which the board of directors may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 6.2.1) acquired Beneficial or Constructive Ownership of Shares in violation of Section 6.1.1, such remedies (as applicable) shall apply first to the shares of Capital Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such shares of Capital Stock based upon the relative number of shares of Capital Stock held by each such Person.

Section 6.2.7. <u>Exceptions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Section 6.2.1(a)(ii), the board of directors, in its sole and absolute discretion, may exempt (prospectively or retroactively) a Person from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, as the case may be, and may establish or increase an Excepted Holder Limit for such Person. The board of directors may determine only to establish or increase an Excepted Holder Limit for such Person if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the board of directors obtains such information from such Person, including representations and undertakings from such Person to the extent determined by the board of directors in its reasonable discretion are reasonably necessary to ascertain that no Person's Beneficial Ownership or Constructive Ownership of such shares of Capital Stock will violate Section 6.2.1(a)(ii);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the board of directors obtains such information from such Person, including representations and undertakings to the extent determined by the board of directors in its reasonable discretion, to establish that such Person does not and will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned or controlled by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (for this purpose, a tenant from whom the Corporation (or an entity owned or controlled by the Corporation) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the board of directors, rent from such tenant would not adversely affect the Corporation's ability to qualify as a REIT shall not be treated as a tenant of the Corporation); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Sections 6.2.1 through 6.2.6) will result in such shares of Capital Stock being automatically transferred to a Trust in accordance with Section 6.2.1(b) and Section 6.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to granting any exception pursuant to Section 6.2.7(a), the board of directors may require a ruling from the Internal Revenue Service or an opinion of counsel, in either case, in form and substance satisfactory to the board of directors in its sole and absolute discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation's status as a REIT. Notwithstanding the receipt of any ruling or opinion, the board of directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to Section 6.2.1(a)(ii), an underwriter which participates in a public offering or a private placement of Capital Stock (or securities convertible into or exchangeable for Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or securities convertible into or exchangeable for Capital Stock) in excess of the Aggregate Stock Ownership Limit, the Common Stock Ownership Limit or both such limits, but only to the extent necessary to facilitate such public offering or private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The board of directors may only reduce the Excepted Holder Limit for an Excepted Holder: (i) with the written consent of such Excepted Holder at any time, (ii) unless the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder provides otherwise, at any time after the Excepted Holder no longer Beneficially Owns or Constructively Owns shares of Capital Stock in excess of the Aggregate Stock Ownership Limit or the Common Stock Ownership Limit, or (iii) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Common Stock Ownership Limit.

Section 6.2.8. <u>Increase or Decrease in Aggregate Stock Ownership Limit and Common Stock Ownership Limit</u>. Subject to Section 6.2.1(a)(ii), the board of directors may from time to time increase the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit for one or more Persons and decrease the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit for all other Persons; provided, however, that the decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit will not be effective for any Person whose percentage ownership in shares of Capital Stock is in excess of such decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit until such time as such Person's percentage of shares of Capital Stock equals or falls below the decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit, but any further acquisition of shares of Capital Stock in excess of such percentage ownership of shares of Capital Stock will be in violation of the Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit and, provided further, that the new Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49.9% in value of the outstanding shares of Capital Stock.

Section 6.2.9. <u>Legend</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Should the Corporation issue stock certificates in a Private Placement Offering, each certificate for shares of Capital Stock shall bear substantially the following legend:

The shares of Capital Stock represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), and have been taken by the issuee for investment purposes. Said shares may not be sold or transferred unless (a) they have been registered under the Act, or (b) the Corporation is presented with either a written opinion of counsel or a "no-action" letter from the U.S. Securities and Exchange Commission, in either case in form and substance acceptable to the Corporation, to the effect that such registration is not required under the circumstances of such sale or transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Should the Corporation issue stock certificates in a Public Offering, each certificate for shares of Capital Stock shall bear substantially the following legend:

The shares represented by this certificate are subject to restrictions on Beneficial Ownership, Constructive Ownership and Transfer for the purpose of the Corporation's maintenance of its status as a real estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). Subject to certain further restrictions and except as expressly provided in the Corporation's charter: (a) no Person may Beneficially Own or Constructively Own shares of Common Stock in excess of 9.8% (in value or number of shares) of the outstanding shares of Common Stock unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holder shall be applicable); (b) no Person may Beneficially Own or Constructively Own shares of Capital Stock in excess of 9.8% of the value or number of shares of the total outstanding shares of Capital Stock, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holder shall be applicable); (c) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being "closely held" under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; and (d) other than as provided in the Corporation's charter, any Transfer of shares of Capital Stock that, if effective, would result in shares of Capital Stock being owned by fewer than 100 Persons (as determined under the principles of Section 856(a)(5) of the Code) shall be void *ab initio*, and the intended transferee shall acquire no rights in such shares of Capital Stock. Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own shares of Capital Stock that causes or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation in writing or, in the case of a proposed or attempted transaction, give at least 15 days prior written notice and provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation's status as a REIT. If any of the restrictions on Transfer or ownership as set forth in (i), (ii) or (iii) above are violated, the shares of Capital Stock represented hereby will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described in (i), (ii) or (iii) above may be void *ab initio*. Furthermore, the Corporation may redeem shares of Capital Stock upon the terms and conditions specified by the board of directors in its sole and absolute discretion if the board of directors determines that ownership or a Transfer or other event may violate the restrictions described above.

Upon the Commencement of the Initial Public Offering and until the Common Stock is Listed, to purchase shares of Common Stock in a Public Offering, the purchaser must represent to the Corporation: (i) that such purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a minimum annual gross income of $70,000 and a net worth (excluding home, home furnishings and automobiles) of not less than $70,000; (ii) that such purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a net worth (excluding home, home furnishings and automobiles) of not less than $250,000; and/ or (iii) that the purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) meets the more stringent suitability standards of such person's jurisdiction as set forth in any then effective registration statement of the Corporation as such registration statement has been amended or supplemented as of the date of such purchase. Until the Common Stock is Listed, unless a stockholder is transferring all of such stockholder's shares of Common Stock, each issuance or transfer of shares of Common Stock for value shall comply with the requirements regarding minimum initial and subsequent cash investment amounts set forth in any then effective registration statement of the Corporation as such registration statement has been amended or supplemented as of the date of such issuance or transfer for value or any higher or lower applicable state requirements with respect to minimum initial and subsequent cash investment amounts in effect as of the date of the issuance or transfer.

All capitalized terms in this legend have the meanings defined in the charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on Transfer and ownership, will be furnished to each holder of Capital Stock on request and without charge.

Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statement about certain restrictions on transferability to a stockholder on request and without charge. Such statement shall also be sent on request and without charge to stockholders who are issued shares without a certificate.

Section 6.3. <u>Transfer of Capital Stock in Trust</u>.

Section 6.3.1. <u>Ownership in Trust</u>. Upon any purported Transfer or other event described in Section 6.2.1(b) that would result in a transfer of shares of Capital Stock to a Trust, such shares of Capital Stock shall be deemed to have been transferred to the Trustee as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Trust pursuant to Section 6.2.1(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 6.3.6.

Section 6.3.2. <u>Status of Shares Held by the Trustee</u>. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock. The Prohibited Owner shall have no rights in the shares held by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee and shall have no rights to dividends or other Distributions attributable to the shares held in the Trust.

Section 6.3.3. <u>Distributions and Voting Rights</u>. The Trustee shall have all voting rights and rights to Distributions with respect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any Distribution paid prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee shall be paid by the recipient of such distribution to the Trustee upon demand, and any Distribution authorized but unpaid shall be paid when due to the Trustee. Any Distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares held in the Trust, and, subject to Maryland law, effective as of the date that the shares of Capital Stock have been transferred to the Trustee, the Trustee shall have the authority with respect to the shares held in the Trust (at the Trustee's sole discretion) (a) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that the shares of Capital Stock have been transferred to the Trustee and (b) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VI, until the Corporation has received notification that shares of Capital Stock have been transferred into a Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

Section 6.3.4. <u>Sale of Shares by Trustee</u>. Within 20 days of receiving notice from the Corporation that shares of Capital Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares held in the Trust to a Person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 6.2.1(a). Upon such sale, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 6.3.4. The Prohibited Owner shall receive the lesser of (a) the price paid by the Prohibited Owner for the shares or, if the Prohibited Owner did not give value for the shares in connection with the event causing the shares to be held in the Trust (*e.g.*, in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Trust or (b) the price per share received by the Trustee from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 6.3.3 of this Article VI. Any net sale proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Corporation that shares of Capital Stock have been transferred to the Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 6.3.4, such excess shall be paid to the Trustee upon demand.

Section 6.3.5. <u>Purchase Right in Stock Transferred to the Trustee</u>. Shares of Capital Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (a) the price per share in the transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) or (b) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 6.3.4. Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner. The Corporation may reduce the amount payable to the Prohibited Owner by the amount of Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 6.3.3 of this Article VI. The Corporation may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary.

Section 6.3.6. <u>Designation of Charitable Beneficiaries</u>. By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (a) the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 6.2.1(a) in the hands of such Charitable Beneficiary and (b) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code. Neither the failure of the Corporation to make such designation nor the failure of the Corporation to appoint the Charitable Trustee before the automatic transfer provided in Section 6.3.1 shall make such transfer ineffective, provided that the Corporation thereafter makes such designation and appointment.

Section 6.4. <u>Settlement</u>. Nothing in this Article VI shall preclude the settlement of any transaction entered into through the facilities of any national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction is so permitted shall not negate the effect of any other provision of this Article VI and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VI.

Section 6.5. <u>Enforcement</u>. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VI.

Section 6.6. <u>Non-Waiver</u>. No delay or failure on the part of the Corporation or the board of directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the board of directors, as the case may be, except to the extent specifically waived in writing.

Section 6.7 <u>Severability</u>. If any provision of this Article VI or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provisions shall be affected only to the extent necessary to comply with the determination of such court.

**ARTICLE VII**

**BOARD OF DIRECTORS**

Section 7.1. <u>Number of Directors</u>. The number of Directors shall be five, which number may be increased or decreased from time to time only by the board of directors pursuant to the bylaws but shall never be less than three. A majority of the seats on the board of directors will be for Independent Directors. The Independent Directors Committee shall nominate all individuals for the Independent Director positions. No reduction in the number of Directors shall cause the removal of any Director from office prior to the expiration of his or her term, except as may otherwise be provided in the terms of any Preferred Stock issued by the Corporation. The names of the Directors who shall serve on the board of directors until the next annual meeting of the stockholders and until their successors are duly elected and qualified are:

Chirag J. Bhavsar

Peter Troisi

Jack D. Howard, Jr.

Mark D. Linsz

Scott T. Boyd

The Corporation elects, at such time as it becomes eligible to make the election provided for under Section 3-804(c) of the MGCL, that, except as may be provided by the board of directors in setting the terms of any class or series of Preferred Stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining Directors in office, even if the remaining Directors do not constitute a quorum, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is elected and qualifies. Notwithstanding the foregoing sentence, if any remaining directors are Independent Directors, the Independent Directors Committee shall nominate replacements for vacancies among the Independent Director positions.

Section 7.2. <u>Term of Directors</u>. Each Director shall hold office for one year, until the next annual meeting of stockholders and until his successor is duly elected and qualified. Directors may be elected to an unlimited number of successive terms.

Section 7.3. <u>Experience</u>. Each Director who is not an Independent Director shall have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of assets being acquired by the Corporation. At least one of the Independent Directors shall have three years of relevant real estate experience.

Section 7.4. <u>Committees</u>. The board of directors may establish such committees as it deems appropriate, provided that the majority of the members of each committee are Independent Directors.

Section 7.5. <u>Fiduciary Obligations</u>. The Directors and the Advisors are fiduciaries of the Corporation and its stockholders. The Directors shall also have a fiduciary duty to the stockholders to supervise the relationship between the Corporation and the Advisors.

Section 7.6. <u>Ratification of Charter</u>. At or before the first meeting of the board of directors following the date of this amendment and restatement of the Charter, the board of directors and the Independent Directors Committee shall each review and ratify the Charter by majority vote.

Section 7.7. <u>REIT Qualification</u>. If the Corporation elects to qualify for federal income tax treatment as a REIT, the board of directors shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the status of the Corporation as a REIT; however, if the board of directors determines that it is no longer in the best interests of the Corporation to continue to be qualified as a REIT, the board of directors may revoke or otherwise terminate the Corporation's REIT election pursuant to Section 856(g) of the Code. The board of directors also may determine that compliance with any restriction or limitation on ownership and transfers of Capital Stock set forth in Article VI is no longer required for REIT qualification.

Section 7.8. <u>Authorization by Board of Stock Issuance</u>. The board of directors may authorize the issuance from time to time of shares of Capital Stock of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of Capital Stock of any class or series, whether now or hereafter authorized, for such consideration as the board of directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws.

Section 7.9. <u>Determinations by the Board</u>. The determination as to any of the following matters, made by or pursuant to the direction of the board of directors or the Independent Directors Committee consistent with the Charter, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of Capital Stock: (a) the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of shares of Capital Stock or the payment of other distributions on shares of Capital Stock; (b) the amount of paid-in surplus, net assets, other surplus, annual or other net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; (c) the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); (d) the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation (which, without exclusion, may be delegated to the Advisors); (e) the interpretation or application of any provision of the Charter or Bylaws in the case of any ambiguity, including, without limitation: (i) any of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other Distributions, qualifications or terms or conditions of redemption of any shares of any class or series of Capital Stock, (ii) any provision of the definitions of any of the following: Affiliate, Independent Director and Sponsor, (iii) which amounts paid to an Advisor or its Affiliates are asset-level expenses connected with the ownership of real estate interests, loans or other property, which expenses are excluded from the definition of Total Operating Expenses, (iv) whether expenses qualify as Organization and Offering Expenses and (v) whether an investment is considered a commodity or commodity future contract and whether a futures contract is used solely for hedging purposes in connection with the Corporation's ordinary business of investing in real estate assets and mortgages as contemplated by Section 9.10; (f) following the Commencement of the Initial Public Offering, whether substantial justification exists to invest in or make a mortgage loan contemplated by Section 9.11(b) because of the presence of other underwriting criteria; (g) any matters relating to the acquisition, holding and disposition of any assets by the Corporation; (h) any interpretation of the terms and conditions of one or more agreements with any Person; (i) the compensation of Directors, officers, employees or agents of the Corporation; and (j) any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board of Directors; <u>provided</u>, <u>however</u>, that any determination by the board of directors as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination.

Section 7.10. <u>Tax on Disqualified Organizations</u>. To the extent that the Corporation incurs any tax pursuant to Section 860E(e)(6) of the Code as the result of any "excess inclusion" income (within the meaning of Section 860E of the Code) of the Corporation that is allocable to a stockholder that is a "disqualified organization" (as defined in Section 860E(e)(5) of the Code), the board of directors may, in its sole and absolute discretion, cause the Corporation to allocate such tax solely to the stock held by such disqualified organization in the manner described in Treasury Regulation Section 1.860E-2(b)(4), by reducing from one or more distributions paid to such stockholder the tax incurred by the Corporation pursuant to Section 860E(e)(6) as a result of such stockholder's stock ownership.

**ARTICLE VIII**

**ADVISOR**

Section 8.1. <u>Appointment and Initial Investment of Advisors</u>. The board of directors may appoint one or more Advisors to direct and/or perform the day-to-day business affairs of the Corporation. The board of directors may exercise broad discretion in allowing an Advisor to administer and regulate the operations of the Corporation, to act as agent for the Corporation, to execute documents on behalf of the Corporation and to make executive decisions that conform to general policies and principles established by the board of directors. The term of retention of any Advisor shall not exceed one year, although there is no limit to the number of times that a particular Advisor may be retained. Before the Initial Public Offering of the Corporation, the Advisors or an affiliate of the Advisor shall have made the Initial Investment. The Advisors or any such Affiliate may not sell the equity interest acquired with its Initial Investment while such Advisor remains an Advisor but may transfer the interest in the Corporation acquired with its Initial Investment to its Affiliates.

Section 8.2. <u>Supervision of Advisors</u>. The board of directors shall evaluate the performance of the Advisors before entering into or renewing an Advisory Agreement, and the criteria used in such evaluation shall be reflected in the minutes of the meetings of the board of directors. The Independent Directors Committee shall determine at least annually whether the total fees and expenses incurred by the Corporation are reasonable in light of the investment performance of the Corporation, its Net Assets, its Net Income and the fees and expenses of other comparable unaffiliated REITs. The Independent Directors Committee shall determine from time to time and at least annually that the compensation to be paid to an Advisor and its Affiliates is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed by the Charter. Each such determination shall be reflected in the minutes of the meetings of the board of directors. The Independent Directors Committee shall also supervise the performance of the Advisors and its Affiliates and the compensation paid to them by the Corporation to determine that the provisions of the Advisory Agreement are being met. Each such determination shall be based on factors such as (a) the amount of the fee paid to the an Advisor in relation to the size, composition and performance of the Corporation's portfolio; (b) the success of an Advisor in generating opportunities that meet the investment objectives of the Corporation; (c) rates charged to other REITs and to investors other than REITs by advisors performing the same or similar services; (d) additional revenues realized by an Advisor and its Affiliates through their relationship with the Corporation, including loan administration, underwriting or broker commissions, servicing, engineering, inspection and other fees, whether paid by the Corporation or by others with whom the Corporation does business; (e) the quality and extent of service and advice furnished by the Advisors and its Affiliates; (f) the performance of the Corporation's portfolio, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and (g) the quality of the Corporation's portfolio relative to the investments generated by an Advisor for its own account. The Independent Directors Committee may also consider all other factors that it deems relevant, and its findings on each of the factors considered shall be recorded in the minutes of the board of directors. The board of directors shall determine whether any successor Advisor possesses sufficient qualifications to perform the advisory function for the Corporation and whether the compensation provided for in its contract with the Corporation is justified.

Section 8.3. <u>Fiduciary Obligations</u>. The Advisors, including any sub-advisors, are fiduciaries of the Corporation and its stockholders.

Section 8.4. <u>Termination</u>. Either the Independent Directors Committee (by majority vote) or an Advisor may terminate the Advisory Agreement on 60 days written notice without cause or penalty, and, in such event, the Advisor will cooperate with the Corporation and the board of directors in making an orderly transition of the advisory function.

Section 8.5. <u>Disposition Fee on Sale of Property</u>. If an Advisor or a director or Sponsor or any Affiliate thereof provides a substantial amount of the services in the effort to sell the property of the Corporation, that Person may receive: (i) if a brokerage commission is paid to a Person other than an Affiliate of the Sponsor, an amount up to one-half of the total brokerage commissions paid but in no event an amount that exceeds 3% of the sales price of such property or properties or (ii) if no brokerage commission is paid to a Person other than an Affiliate of the Sponsor, an amount up to 3% of the sales price of such property or properties. In either case, however, the amount paid when added to all other commissions paid to unaffiliated parties in connection with such sale shall not exceed the lesser of the Competitive Real Estate Commission or an amount equal to 6% of the sales price of such property or properties.

Section 8.6. <u>Incentive Fees</u>. An interest in the gain from the sale of assets of the Corporation (as opposed to disposition fees, which are the subject of Section 8.5), for which full consideration is not paid in cash or property of equivalent value, may be paid to an Advisor or an entity affiliated with an Advisor provided that (a) the interest in the gain must be reasonable, and (b) if multiple Advisors are involved, incentive fees must be distributed by a proportional method reasonably designed to reflect the value added to the Corporation's assets by each respective Advisor or its Affiliates. Such an interest in gain from the sale of assets of the Corporation shall be considered presumptively reasonable if it does not exceed 15% of the balance of such net proceeds remaining after payment to Common Stockholders, in the aggregate, of an amount equal to 100% of the original issue price of the Common Stock, plus an amount equal to 6% of the original issue price of the Invested Capital per annum cumulative. For purposes of this Section, the original issue price of the Invested Capital shall be reduced by prior cash distributions to Common Stockholders of net proceeds from the sale of assets of the Corporation.

Section 8.7. <u>Organization and Offering Expenses</u>. The Corporation shall reimburse the Advisor and its Affiliates for Organization and Offering Expenses incurred by the Advisor or its Affiliates; provided, however, that the total amount of all Organization and Offering Expenses shall be reasonable and shall in no event exceed 15% of the Gross Proceeds of each Offering.

Section 8.8. <u>Acquisition Fees</u>. The Corporation shall not purchase a property or invest in or make a mortgage loan if the combined Acquisition Fees and Acquisition Expenses incurred in connection therewith are not reasonable or exceed 6% of the Contract Purchase Price or, in the case of a mortgage loan, 6% of the funds advanced unless a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction approves the Acquisition Fees and Acquisition Expenses and determines the transaction to be commercially competitive, fair and reasonable to the Corporation.

Section 8.9. <u>Reimbursement for Total Operating Expenses</u>. The Corporation may reimburse an Advisor, at the end of each fiscal quarter, for Total Operating Expenses incurred by an Advisor; <u>provided</u>, <u>however</u> that, following the later of the Commencement of the Initial Public Offering and the fourth fiscal quarter after the quarter in which the Corporation makes its first investment in an Asset, the Corporation shall not reimburse an Advisor at the end of any fiscal quarter for Total Operating Expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of two percent of Average Invested Assets or 25% of Net Income (the "2%/25% Guidelines") for such year. The Independent Directors Committee shall have the fiduciary responsibility of limiting Total Operating Expenses to amounts that do not exceed the 2%/25% Guidelines for such year unless it has made a finding by the Independent Directors Committee that, based on unusual and non-recurring factors that it deems sufficient, a higher level of expenses (an "Excess Amount") is justified. Any such finding and the reasons in support thereof shall be reflected in the minutes of the meetings. After the end of any fiscal quarter of the Corporation for which there is an Excess Amount for the 12 months then ended, such fact shall be disclosed in writing and sent to the Common Stockholders within 60 days of such quarter-end (or shall be disclosed to the Common Stockholders in the next quarterly report of the Corporation or by filing a Current Report on Form 8-K with the Commission within 60 days of such quarter end), together with an explanation of the factors the Independent Directors Committee considered in determining that such Excess Amount was justified. In the event that the Independent Directors Committee does not determine that excess expenses are justified, the Advisor shall reimburse the Corporation at the end of the 12-month period the amount by which the aggregate annual expenses paid or incurred by the Corporation exceeded the 2%/25% Guidelines.

Section 8.10 <u>Applicability of this Article</u>. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under the MGCL even when not addressed in the Charter, Sections 8.4 through 8.9 of this Article VIII, shall apply only following the Commencement of the Initial Public Offering.

**ARTICLE IX**

**INVESTMENT OBJECTIVES AND LIMITATIONS**

Section 9.1. <u>Investment Objectives</u>. The board of directors shall establish written policies on investments and borrowing and shall monitor the administrative procedures, investment operations and performance of the Corporation and its Advisor to assure that such policies are carried out. The Independent Directors Committee shall review the investment policies of the Corporation with sufficient frequency (not less often than annually) to determine that the policies being followed by the Corporation are in the best interests of the Common Stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the board of directors.

Section 9.2. <u>Limitations on Acquisitions</u>. The consideration paid for any real property acquired by the Corporation will ordinarily be based on the fair market value of such property as determined by a majority of the members of the board of directors, or the approval of a majority of the members of a committee of the board of directors, provided that the members of the committee approving the transaction would also constitute a majority of the board of directors. In all cases in which a majority of the members of the Independent Directors Committee (by majority vote) so determine, and in all cases in which real property is acquired from an Advisor, a Sponsor, a Director or an Affiliate thereof, such fair market value shall be as determined by an Independent Expert selected by the Independent Directors Committee.

The Corporation may not purchase or lease properties in which an Advisor, a Sponsor, a Director or an Affiliate thereof has an interest without a determination by a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction that such transaction is fair and reasonable to the Corporation and at a price to the Corporation no greater than the cost of the property to the Affiliated seller or lessor unless there is substantial justification for the excess amount and such excess is reasonable. Notwithstanding the preceding sentence, in no event may the Corporation acquire any such property at an amount in excess of its current appraised value. An appraisal is "current" for purposes of the preceding sentence if obtained within the 12-month period preceding the transaction. If a property with a current appraisal is acquired indirectly from an Affiliated seller through the acquisition of securities in an entity that directly or indirectly owns the property, a second appraisal on the value of the securities of the entity shall not be required if (i) a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction determines that such transaction is fair and reasonable to the Corporation, (ii) the transaction is at a price to the Corporation no greater than the cost of the securities to the Affiliated seller, (iii) the entity has conducted no business other than the financing, acquisition and ownership of the property and (iv) the price paid by the entity to acquire the property did not exceed the current appraised value as determined by an Independent Expert.

Section 9.3. <u>Limitations on Sales to, and Joint Ventures with, Affiliates</u>. The Corporation shall not transfer or lease assets to a Sponsor, an Advisor, a Director or an Affiliate thereof unless approved by a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction as being fair and reasonable to the Corporation. The Corporation may invest in a joint venture with a Sponsor, an Advisor, a Director or an Affiliate thereof; provided, however, that the Corporation may only so invest if a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction approves such investment as being fair and reasonable to the Corporation and on substantially the same terms and conditions as those received by other joint venturers.

Section 9.4. <u>Limitations on Other Transactions Involving Affiliates</u>. A majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction must conclude that all other transactions between the Corporation and a Sponsor, an Advisor, a Director or an Affiliate thereof are fair and reasonable to the Corporation and on terms and conditions not less favorable to the Corporation than those available from unaffiliated third parties.

Section 9.5. <u>Limitations on the Issuance of Options and Warrants</u>. Following the Commencement of the Initial Public Offering, until the Common Stock of the Corporation is Listed, the Corporation shall not issue options or warrants to purchase Common Stock to an Advisor, a Director, the Sponsors or any Affiliate thereof, except on the same terms as such options or warrants are sold to the general public. The Corporation may issue options or warrants to persons other than an Advisor, a Director, the Sponsors or any Affiliate thereof prior to Listing the Common Stock, but not at exercise prices less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of the Independent Directors Committee has a market value less than the value of such option or warrant on the date of grant. Options or warrants issuable to an Advisor, a Director, the Sponsors or any Affiliate thereof shall not exceed an amount equal to 10% of the outstanding shares of Common Stock on the date of grant of any options or warrants.

Section 9.6. <u>Limitations on the Repurchase of Common Stock</u>. The Corporation may voluntarily repurchase shares of Common Stock from its stockholders; provided, however, that such repurchase does not impair the capital or operations of the Corporation. The Corporation may not pay a fee to an Advisor, a Sponsor, a Director or an Affiliate thereof in connection with the Corporation's repurchase of shares of Common Stock.

Section 9.7. <u>Limitations on Loans</u>. The Corporation will not make any loans to a Sponsor, an Advisor, a Director or an Affiliate thereof except as provided in Section 9.11 or to wholly owned subsidiaries (directly or indirectly) of the Corporation. The Corporation will not borrow from such parties unless a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction approves the transaction as being fair, competitive and commercially reasonable and no less favorable to the Corporation than loans between unaffiliated parties under the same circumstances. These restrictions on loans apply to advances of cash that are commonly viewed as loans, as determined by the board of directors. By way of example only, the prohibition on loans would not restrict advances of cash for legal expenses or other costs incurred as a result of any legal action for which indemnification is being sought nor would the prohibition limit the Corporation's ability to advance reimbursable expenses incurred by Directors or officers or an Advisor or its Affiliates.

Section 9.8. <u>Limitations on Leverage</u>. The aggregate borrowings of the Corporation, secured and unsecured, shall be reviewed by the board of directors at least quarterly. The maximum amount of such borrowings in relation to the Net Assets shall not exceed 300% in the absence of a satisfactory showing that a higher level of borrowings is appropriate. Any excess in borrowings over such 300% level shall be approved by the Independent Directors Committee (by majority vote) and disclosed to the Common Stockholders in the next quarterly report of the Corporation, along with justification for such excess.

Section 9.9. <u>Limitations on Investments in Equity Securities</u>. The Corporation may not invest in equity securities unless a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction approves such investment as being fair, competitive and commercially reasonable; provided, that an investment in equity securities of a "publicly traded entity" that is otherwise approved by a majority of the board of directors (including a majority of the members of the Independent Directors Committee) not otherwise interested in the transaction shall be deemed fair, competitive and commercially reasonable if such investment is made through a trade effected on a recognized securities market. This provision is not intended to limit (i) acquisitions effected through the purchase of all of the equity securities of an existing entity, (ii) the investment in wholly owned subsidiaries of the Corporation or (iii) investments in asset-backed securities. For the purpose of this section, a "publicly traded entity" shall mean any entity having securities listed on a national securities exchange or included for quotation on an inter-dealer quotation system.

Section 9.10. <u>Limitations on Investments in Commodities Contracts</u>. The Corporation may not invest in commodities or commodity futures contracts, except for futures contracts used solely for the purpose of hedging in connection with the Corporation's ordinary business of investing in real estate assets and mortgages.

Section 9.11. <u>Limitations Regarding Mortgage Loans</u>. The Corporation may not make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property, except for those mortgage loans insured or guaranteed by a government or government agency. In cases in which the Independent Directors Committee (by majority vote) so determines, and in all cases in which the transaction is with an Advisor, a Director, a Sponsor or an Affiliate thereof, such an appraisal must be obtained from an Independent Expert concerning the underlying property. The Corporation shall keep the appraisal for at least five years and make it available for inspection and duplication by any Common Stockholder. In addition to the appraisal, a mortgagee's or owner's title insurance policy or commitment as to the priority of the mortgage or the condition of the title must be obtained. Further, the Advisor and the board of directors shall observe the following policies in connection with investing in or making mortgage loans:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Corporation shall not invest in real estate contracts of sale, otherwise known as land
 sale contracts, unless such contracts of sale are in recordable form and appropriately
 recorded in the chain of title.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 Corporation shall not make or invest in mortgage loans, including construction loans,
 on any one property if the aggregate amount of all mortgage loans outstanding on the
 property, including the loans of the Corporation, would exceed an amount equal to 85%
 of the appraised value of the property as determined by appraisal unless the board of
 directors determines that a substantial justification exists because of the presence
 of other underwriting criteria. For purposes of this subsection, the "aggregate
 amount of all mortgage loans outstanding on the property, including the loans of the
 Corporation," shall include all interest (excluding contingent participation in
 income and/or appreciation in value of the mortgaged property), the current payment of
 which may be deferred pursuant to the terms of such loans, to the extent that deferred
 interest on each loan exceeds 5% per annum of the principal balance of the loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The
 Corporation may not make or invest in any mortgage loans that are subordinate to any
 mortgage or equity interest of an Advisor, a Sponsor, a Director or an Affiliate of the
 Corporation.

Section 9.12. <u>Limitations on Investments in Unimproved Real Property</u>. The Corporation may not make investments in Unimproved Real Property or mortgage loans on Unimproved Real Property in excess of 10% of the Corporation's total assets.

Section 9.13. <u>Limitations on Issuances of Securities</u>. The Corporation may not (a) issue equity securities on a deferred payment basis or other similar arrangement; (b) issue debt securities in the absence of adequate cash flow to cover debt service unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is sufficient to service that higher level of debt as determined by the board of directors or a duly authorized executive officer of the Corporation; (c) issue equity securities that are assessable after receipt by the Corporation of the consideration for which the board of directors authorized their issuance; or (d) issue equity securities redeemable solely at the option of the holder, which restriction has no effect on the Corporation's ability to implement a share repurchase program. The Corporation may issue shares of Preferred Stock with voting rights; provided that, following the Commencement of the Initial Public Offering, when a privately issued share of Preferred Stock is entitled to vote on a matter with the holders of shares of Common Stock, the relationship between the number of votes per such share of Preferred Stock and the consideration paid to the Corporation for such share shall not exceed the relationship between the number of votes per any publicly offered share of Common Stock and the book value per outstanding share of Common Stock. Nothing in this Section 9.13 is intended to prevent the Corporation from issuing equity securities pursuant to a plan whereby the commissions on the sales of such securities are in whole or in part deferred and paid by the purchaser thereof out of future distributions on such securities or otherwise.

Section 9.14. <u>Limitations on Underwriting</u>. The Corporation may not engage in underwriting or the agency distribution of securities issued by others.

Section 9.15 <u>Applicability of this Article</u>. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under the MGCL even when not addressed in the Charter, Sections 9.2 through 9.12 of this Article IX shall apply only following the Commencement of the Initial Public Offering.

**ARTICLE X**

**CONFLICTS OF INTEREST**

Section 10.1. <u>Independent Directors Committee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During any time that the Corporation is advised by the Advisor, there shall be a committee (the "Independent Directors Committee") of the board of directors composed of all of the Independent Directors. The Independent Directors Committee is authorized to select and retain its own legal and financial advisors. In addition to those other powers delegated to the Independent Directors Committee by the Charter or by the board of directors, the Independent Directors Committee may act on any matter that may be delegated to a committee under the MGCL. If a matter cannot be delegated to a committee under the MGCL but the Independent Directors Committee has determined that the matter at issue is such that the exercise of independent judgment by the Directors who are not Independent Directors could reasonably be compromised, both the board of directors and the Independent Directors Committee must approve the matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) When applicable, any action of the board of directors regarding Organization and Offering Expenses or the selection of an Independent Expert or the matters covered in any of Sections 5.9, 7.6, 8.1, 8.2, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 9.1, 9.2, 9.8, 10.1, 11.1, 12.2 or 12.3 shall require the approval of a majority of the Independent Directors Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Independent Directors Committee may create a subcommittee of the Independent Directors Committee and delegate to the subcommittee any of the powers of the Independent Directors Committee. The members of any such subcommittee shall serve at the pleasure of the Independent Directors Committee.

Section 10.2. <u>Meetings of Independent Directors Committee</u>. Any notice of a meeting of the board of directors shall be deemed to be a notice of a meeting of the Independent Directors Committee.

Section 10.3 <u>Applicability of this Article</u>. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under the MGCL even when not addressed in the Charter, Section 10.1(c) of this Article X shall apply only following the Commencement of the Initial Public Offering.

**ARTICLE XI**

**STOCKHOLDERS**

Section 11.1. <u>Meetings of Stockholders</u>. There shall be an annual meeting of the stockholders, to be held at such time and place as shall be determined by or in the manner prescribed in the Bylaws, at which the Directors shall be elected and any other proper business may be conducted. The annual meeting will be held on a date that is a reasonable period of time following the distribution of the Corporation's annual report to Stockholders but not less than 30 days after delivery of such report; the board of directors and the Independent Directors Committee shall take reasonable efforts to ensure that this requirement is met. A majority of the votes cast by the holders of shares of Capital Stock entitled to vote who are present in person or by proxy at an annual meeting of stockholders at which a quorum is present may, without the necessity for concurrence by the board of directors, vote to elect the Directors. The presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting on any matter constitutes a quorum. Special meetings of stockholders may be called in the manner provided in the Bylaws, including by the president (or equivalent) or by a majority of the Directors or a majority of the Independent Directors, and shall be called by the secretary of the Corporation to act on any matter that may properly be considered at a meeting of stockholders upon written request of Common Stockholders entitled to cast not less than 10% of all the votes entitled to be cast on such matter at any such special meeting. Upon receipt of a written request stating the purpose of such special meeting, the secretary shall provide all stockholders within 10 days after receipt of said request, written notice, whether in person or by mail, of a special meeting and the purpose of such special meeting to be held on a date not less than 15 days nor more than 60 days after the delivery of such notice. If the meeting is called by written request as described in this Section 11.1, the special meeting shall be held at the time and place specified in the request; provided, however, that if none is so specified, at such time and place convenient to the stockholders.

Section 11.2. <u>Extraordinary Actions</u>. Notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of stockholders entitled to cast a greater number of votes, any such action shall be effective and valid if taken or approved by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast on the matter.

Section 11.3. <u>Voting Rights of Stockholders</u>. The concurrence of the board of directors shall not be required in order for the Common Stockholders to remove Directors. Subject to the provisions of any class or series of Capital Stock then outstanding and the mandatory provisions of any applicable laws or regulations, the stockholders shall be entitled to vote only on the following matters: (a) election or removal of Directors, without the necessity for concurrence by the Board; (b) amendment of the Charter as provided in Article XIII; (c) dissolution of the Corporation; (d) merger, consolidation or conversion of the Corporation, or the sale or other disposition of all or substantially all of the Corporation's assets; and (e) such other matters with respect to which the Board of Directors has adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the Stockholders for approval or ratification. Without the approval of stockholders entitled to cast a majority of all the votes entitled to be cast on the matter, the board of directors may not (a) amend the Charter to adversely affect the rights, preferences and privileges of the Common Stockholders; (b) amend the provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (c) liquidate or dissolve the Corporation other than before the initial investment in property; (d) sell all or substantially all of the Corporation's assets other than in the ordinary course of the Corporation's business or in connection with the liquidation or dissolution; or (e) cause the merger or other reorganization of the Corporation.

Section 11.4. <u>Voting Limitations on Shares Held by an Advisor, Directors and Affiliates</u>. With respect to Capital Stock owned by an Advisor, a Director, or any of their Affiliates, following the Commencement of the Initial Public Offering, neither the Advisor, nor such Director, nor any of their Affiliates may vote or consent on matters submitted to the Stockholders regarding the removal of an Advisor, such Director or any of their Affiliates or any transaction between the Corporation and any of them. In determining the requisite percentage in interest of shares of Capital Stock necessary to approve a matter on which an Advisor, a Director or any of their Affiliates may not vote or consent, any shares of Capital Stock owned by any of them shall not be included.

Section 11.5. <u>Right of Inspection</u>. Any Common Stockholder and any designated representative thereof shall be permitted access to the records of the Corporation to which it is entitled under applicable law at all reasonable times and may inspect and copy any such records for a reasonable charge. Inspection of the Corporation's books and records by the office or agency administering the securities laws of a jurisdiction shall be permitted upon reasonable notice and during normal business hours.

Section 11.6. <u>Access to Stockholder List</u>. An alphabetical list of the names, addresses and telephone numbers of the Common Stockholders, along with the number of shares of Common Stock held by each of them (the "Stockholder List"), shall be maintained as part of the books and records of the Corporation and, following the Commencement of the Initial Public Offering, subject to applicable law, shall be available for inspection by any Common Stockholder or the stockholder's designated agent at the home office of the Corporation upon the request of the Common Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of the Stockholder List shall be mailed to any Common Stockholder so requesting within 10 days of receipt by the Corporation of the request. The copy of the Stockholder List shall be printed in alphabetical order, on white paper and in a readily readable type size (in no event smaller than 10-point type). The Corporation may impose a reasonable charge for expenses incurred in reproduction pursuant to the stockholder request. A Common Stockholder may request a copy of the Stockholder List following the Commencement of the Initial Public Offering in connection with matters relating to stockholders' voting rights and the exercise of stockholder rights under federal proxy laws or for any other proper purpose.

If the Advisor or the board of directors neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the Advisor and/ or the board of directors, as the case may be, shall be liable to any Common Stockholder requesting the list for the costs, including reasonable attorneys' fees, incurred by that stockholder for compelling the production of the Stockholder List and for actual damages suffered by any Common Stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is not for a proper purpose but is instead for the purpose of securing such list of stockholders or other information for the purpose of selling such list or copies thereof, or using the same for a commercial purpose other than in the interest of the applicant as a stockholder relative to the affairs of the Corporation. The Corporation may require the stockholder requesting the Stockholder List to represent that the list is not requested for a commercial purpose unrelated to the stockholder's interest in the Corporation. The remedies provided hereunder to stockholders requesting copies of the Stockholder List are in addition to, and shall not in any way limit, other remedies available to stockholders under federal law or the laws of any state.

Section 11.7. <u>Reports</u>. The Corporation shall cause to be prepared and mailed or delivered to each Common Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held securities of the Corporation within 120 days after the end of the fiscal year to which it relates an annual report for each fiscal year ending after the Initial Public Offering of its securities that shall include: (a) financial statements prepared in accordance with generally accepted accounting principles that are audited and reported on by independent certified public accountants; (b) the ratio of the costs of raising capital during the period to the capital raised; (c) the aggregate amount of advisory fees and the aggregate amount of other fees paid to the Advisors and any Affiliate of an Advisor by the Corporation, including fees or charges paid to an Advisor and any Affiliate of such Advisor by third parties doing business with the Corporation; (d) the Total Operating Expenses of the Corporation, stated as a percentage of Average Invested Assets and as a percentage of its Net Income; (e) a report from the Independent Directors Committee that the policies being followed by the Corporation are in the best interests of its Common Stockholders and the basis for such determination; and (f) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving the Corporation and an Advisor, Sponsor, a director or any Affiliate thereof occurring in the year for which the annual report is made, and the Independent Directors Committee shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions. Alternatively, such information may be provided in a proxy statement delivered with the annual report. The board of directors, including the Independent Directors, shall take reasonable steps to ensure that the requirements of this Section 11.7 are met. The annual report may be delivered by any reasonable means, including through an electronic medium. Electronic delivery of the annual report or proxy statement shall comply with any then-applicable rules of the Commission.

Section 11.8. <u>Rights of Objecting Stockholders</u>. Holders of shares of Capital Stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL unless the board of directors, upon the affirmative vote of a majority of the entire board of directors, shall determine that such rights shall apply, with respect to all or any classes or series of Capital Stock, to a particular transaction or all transactions occurring after the date of such determination in connection with which holders of such shares of Capital Stock would otherwise be entitled to exercise such rights.

Section 11.9. <u>Liability of Stockholders</u>. The shares of Common Stock shall be non-assessable by the Corporation upon receipt by the Corporation of the consideration for which the board of directors authorized their issuance.

Section 11.10. <u>Tender Offers</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any stockholder of the Corporation makes a tender offer for shares of Capital Stock, including, without limitation, a "mini-tender" offer, such stockholder (a "Bidder") must comply with all of the provisions set forth in Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, which would be applicable if the tender offer was for more than 5% of the outstanding shares of such class or series of Capital Stock, provided, however, that such documents are not required to be filed with the Commission. In addition, any Bidder must provide notice to the Corporation at least 10 Business Days prior to initiating any such tender offer. If any Bidder initiates a tender offer without complying with the provisions set forth above (a "Non-Compliant Tender Offer"), the Corporation may elect to publish, send or give to stockholders a statement (a "Position Statement") disclosing that the Corporation (a) recommends acceptance or rejection of the Non-Compliant Tender Offer, (b) expresses no opinion and is remaining neutral toward the Non-Compliant Tender Offer, or (c) is unable to take a position with respect to the Non-Compliant Tender Offer. If the Corporation issues a Position Statement but does not recommend acceptance of the Non-Compliant Tender Offer, then the Corporation may elect to cause the rescission provisions of paragraph (ii) of this Section 11.10 to be applicable by providing notice of such election within ten (10) business days of the Corporation becoming aware of the commencement of the Non-Compliant Tender Offer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any Person who tendered shares of Capital Stock in connection with the Non-Compliant Tender Offer delivers a notice (a "Rescission Notice") to the Corporation within 30 days of issuance of the Position Statement indicating a desire to rescind such Person's tender, then such purported tender shall be void *ab initio* and the Bidder shall acquire no rights in such shares of Capital Stock. Until the expiration of this 30-day period, the Corporation shall not record a transfer of Shares to the Bidder or its assignee in connection with the tender offer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In addition, unless waived by the Corporation, any stockholder of the Corporation who makes a Non-Compliant Tender Offer that is not recommended by the Corporation in the Position Statement shall be responsible for all expenses incurred by the Corporation in connection with (x) its review and consideration of the Non-Compliant Tender Offer, including board of directors meeting costs and the costs of counsel and financial advisors, (y) the publication and/or distribution of the Position Statement, including printing and mailing costs, and (z) the enforcement of the provisions of this Section 11.10. In addition to the remedies provided herein, the Corporation may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) This Section 11.10 shall be of no force or effect with respect to any shares of Capital Stock that are then Listed.

**ARTICLE XII**

**LIABILITY OF DIRECTORS,<br> OFFICERS, ADVISORS AND OTHER AGENTS**

Section 12.1. <u>Limitation of Director and Officer Liability</u>. Except as prohibited by Maryland law or the restrictions provided in Section 12.3, no Director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Section 12.1, nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Section 12.1, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act that occurred prior to such amendment, repeal or adoption.

Section 12.2. <u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as prohibited by Maryland law or the restrictions provided in Section 12.2(b), Section 12.3 and Section 12.4, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of the final disposition of a proceeding to: (i) any individual who is a present or former Director or officer of the Corporation; (ii) any individual who, while a Director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise; or (iii) an Advisor or any of its Affiliates acting as an agent of the Corporation, from and against any claim or liability to which such indemnitee may become subject or which such indemnitee may incur by reason of the indemnitee's service in such capacity. Except as provided in Section 12.2(b), Section 12.3 and Section 12.4, the Corporation shall have the power with the approval of the board of directors to provide such indemnification and advancement of expenses to any Person who served a predecessor of the Corporation in any of the capacities described above or to any employee or agent of the Corporation or a predecessor of the Corporation or any employee of an Advisor or any of such Advisor's Affiliates acting as an agent of the Corporation. The indemnification and payment or reimbursement of expenses provided in the Charter shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance or agreement or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, the Corporation shall not indemnify a Director, an Advisor or any Affiliate of the Advisor or the Corporation or any Person acting as a broker-dealer for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular 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 Corporation were offered or sold as to indemnification for violations of securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The rights of a Director or officer to indemnification and advance of expenses provided hereby shall vest immediately upon election of such Director or officer. No amendment of the Charter or repeal of any of its provisions shall limit or eliminate the right of indemnification or advancement of expenses provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

Section 12.3. <u>Limitation on Exculpation and Indemnification</u>. Notwithstanding the foregoing, the Corporation shall not provide for indemnification of a Director, an Advisor or any Affiliate of an Advisor or the Corporation for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Corporation, unless all of the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Such
 Director, such Advisor or such Affiliate of an Advisor or the Corporation has determined,
 in good faith, that the course of conduct that caused the loss or liability was in the
 best interests of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Such
 Director, such Advisor or such Affiliate of an Advisor or the Corporation was acting
 on behalf of or performing services for the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Such
 liability or loss was not the result of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) negligence or misconduct by such Director (excluding an Independent Director), such Advisor or such Affiliate of an Advisor or the Corporation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) gross negligence or willful misconduct by an Independent Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Such
 indemnification or agreement to hold harmless is recoverable only out of the Corporation's
 net assets and not from its Common Stockholders.

Section 12.4. <u>Limitation on Payment of Expenses</u>. The Corporation shall pay or reimburse reasonable legal expenses and other costs incurred by a Director, an Advisor or any Affiliate of an Advisor or the Corporation in advance of the final disposition of a proceeding only if all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Corporation, (b) the legal proceeding was initiated by a third party who is not a Common Stockholder or, if by a Common Stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) such Director, such Advisor or such Affiliate of an Advisor or the Corporation provides the Corporation with written affirmation of his, her or its good faith belief that he, she or it has met the standard of conduct necessary for indemnification by the Corporation as authorized by Section 12.2(a) hereof and undertakes to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon, if it is ultimately determined that he, she or it is not entitled to indemnification.

**ARTICLE XIII**

**AMENDMENT**

Subject to Section 11.3, the Corporation reserves the right from time to time to make any amendment to the Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any outstanding shares of Capital Stock.

**ARTICLE XIV**

**GOVERNING LAW; EXCLUSIVE FORUM**

Section 14.1. <u>Governing Law</u>. The rights of all parties and the validity, construction and effect of every provision hereof shall be subject to and construed according to the laws of the State of Maryland without regard to conflicts of laws provisions thereof; provided that the foregoing choice of law shall not restrict the application of any state's securities laws to the sale of securities to its residents or within such state.

Section 14.2. <u>Exclusive Forum for Certain Litigation</u>. Unless the Corporation consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland (the "Maryland Court") or, if the Maryland Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in the MGCL, other than any action arising under federal securities laws, including, without limitation, (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action or proceeding asserting a claim of breach of any duty owed by any Director or officer or other employee of the Corporation to the Corporation or to the stockholders of the Corporation or (iii) any action or proceeding asserting a claim arising pursuant to any provision of the MGCL or the Charter or Bylaws, or (b) any action or proceeding asserting a claim that is governed by the internal affairs doctrine, and any record or beneficial stockholder of the Corporation who is a party to such an action or proceeding in the Maryland Court shall cooperate in any request that the Corporation may make that the action or proceeding be assigned to the Maryland Court's Business and Technology Case Management Program. None of the foregoing actions, claims or proceedings may be brought in any court sitting outside the State of Maryland unless the Company consents in writing to such court.

**ARTICLE XV**

**ROLL-UP TRANSACTIONS**

Section 15.1 <u>Limitations on Roll-Up Transactions</u>. In connection with any proposed Roll-Up Transaction, an appraisal of all of the Corporation's assets shall be obtained from a competent Independent Expert. If the appraisal will be included in a Prospectus used to offer the securities of a Roll-Up Entity, the appraisal shall be filed with the Commission and, if applicable, the states in which registration of such securities is sought, as an exhibit to the registration statement for the offering. The Corporation's assets shall be appraised on a consistent basis. The appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a 12-month period. The terms of the engagement of the Independent Expert shall clearly state that the engagement is for the benefit of the Corporation and its stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to stockholders in connection with a proposed Roll-Up Transaction. In connection with a proposed Roll-Up Transaction, the Person sponsoring the Roll-Up Transaction shall offer to each Common Stockholder who votes against the proposed Roll-Up Transaction the choice of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) accepting the securities of the Roll-Up Entity offered in the proposed Roll-Up Transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) one of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) remaining as a Common Stockholder and preserving its interests therein on the same terms and conditions as existed previously; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) receiving cash in an amount equal to the stockholder's pro rata share of the appraised value of the Net Assets of the Corporation.

The Corporation is prohibited from participating in any proposed Roll-Up Transaction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) that would result in the Common Stockholders having democracy rights in a Roll-Up Entity that are less than the rights set forth in Sections 11.1, 11.3, 11.4, 11.5 and 11.6 hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or that would limit the ability of an investor to exercise the voting rights of its securities of the Roll-Up Entity on the basis of the number of shares of Common Stock held by that investor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in which investors' rights of access to the records of the Roll-Up Entity will be less than those described in Section 11.6 hereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in which any of the costs of the Roll-Up Transaction would be borne by the Corporation if the Roll-Up Transaction is rejected by the Common Stockholders.

Section 15.2 <u>Applicability of this Article</u>. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under the MGCL even when not addressed in the Charter, Section 15.1 of this Article XV shall apply only following the Commencement of the Initial Public Offering.

<u>FOURTH</u>: The amendment and restatement of the charter of the Corporation as hereinabove set forth have been duly advised and approved by the board of directors and approved by the stockholder of the Corporation as required by law.

<u>FIFTH</u>: The current address of the principal office of the Corporation is as set forth in Article III of the foregoing amendment and restatement of the charter.

<u>SIXTH</u>: The name and address of the Corporation's current resident agent are as set forth in Article III of the foregoing amendment and restatement of the charter.

<u>SEVENTH</u>: The number of directors of the Corporation and the names of those currently in office are as set forth in Section 7.1 of the foregoing amendment and restatement of the charter.

<u>EIGHTH</u>: The total number of shares of stock which the Corporation had authority to issue immediately prior to the foregoing amendment and restatement of the charter of the Corporation was 1,100,000,000, consisting of 1,000,000,000 shares of Common Stock, $0.001 par value per share, and 100,000,000 shares of Preferred Stock, $0.001 par value per share. The aggregate par value of all authorized shares of stock having par value was $1,100,000.

<u>NINTH</u>: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendment and restatement of the charter of the Corporation is 1,100,000,000, consisting of 1,000,000,000 shares of common stock, $0.001 par value per share, 200,000,000 of which are classified as shares of Class A Common Stock, 250,000,000 of which are classified as shares of Class I Common Stock, 200,000,000 of which are classified as shares of Class D Common Stock, 100,000,000 of which are classified as shares of Class E Common Stock, 50,000,000 of which are classified as shares of Class FA Common Stock and 200,000,000 of which are classified as shares of Class T Common Stock, and 100,000,000 shares of preferred stock, $0.001 par value per share. The aggregate par value of all authorized shares of stock having par value is $1,100,000.

<u>TENTH</u>: The undersigned acknowledges these Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters and facts required to be verified under oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, CNL Strategic Residential Credit, Inc., has caused the foregoing Articles of Amendment and Restatement to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 28th day of May, 2025.

---

| | |
|:---|:---|
| CNL STRATEGIC RESIDENTIAL CREDIT, INC. | CNL STRATEGIC RESIDENTIAL CREDIT, INC. |
| By: | /s/ Chirag Bhavsar (SEAL) |
|  | Chirag J. Bhavsar |
|  | Chief Executive Officer |

---

---

| | |
|:---|:---|
| ATTEST | ATTEST |
| By: | /s/ Bradley S. Yochum |
|  | Bradley S. Yochum |
|  | Secretary |

---

## Exhibit 3.2

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 3.2**

**BYLAWS OF**

 **CNL STRATEGIC RESIDENTIAL CREDIT, INC.**

**ARTICLE I**

 **OFFICES**

SECTION 1. <u>PRINCIPAL OFFICE</u>. The principal office of CNL Strategic Residential Credit, Inc., a Maryland corporation (the "Company"), shall be located at such place or places as the Board of Directors (as defined below) may designate from time to time.

SECTION 2. <u>ADDITIONAL OFFICES</u>. The Company may have additional offices at such places as the Board of Directors may from time to time determine or the business of the Company may require.

**ARTICLE II**

**MEETINGS OF STOCKHOLDERS**

SECTION 1. <u>PLACE</u>. All meetings of stockholders shall be held at the principal office of the Company or at such other place as shall be set in accordance with these bylaws (the "Bylaws"). The Board of Directors may determine that a meeting not be held at any place, but instead may be held partially or solely by means of remote communication. In accordance with these Bylaws and subject to any guidelines and procedures adopted by the Board of Directors, stockholders and proxy holders may participate in any meeting of stockholders held by means of remote communication and may vote at such meeting as permitted by Maryland law. Participation in a meeting by these means constitutes presence in person at the meeting.

SECTION 2. <u>ANNUAL MEETING</u>. An annual meeting of the stockholders for the election of Directors, as such term is defined below, and the transaction of any business within the powers of the Company shall be held on the date and at the time and place set by the Board of Directors but not less than thirty (30) days after delivery of the annual report.

SECTION 3. <u>SPECIAL MEETINGS</u>. Special meetings of the stockholders may be called by (i) the chief executive officer, the president or the chairman of the Board of Directors; (ii) a majority of the Board of Directors; or (iii) a majority of the Company's independent directors ("Independent Directors") as defined in the Charter (defined below). Any such special meeting of stockholders shall be held on the date and at the time and place set by the chief executive officer, the president, the chairman of the Board of Directors, the Board of Directors or the Independent Directors, whoever has called the meeting. A special meeting of stockholders shall also be called by the secretary to act on any matter that may properly be considered at a meeting of stockholders at the request in writing of stockholders holding outstanding shares of stock of the Company of any class or series ("Equity Shares"), including common and preferred stock, entitled to cast at least ten percent (10%) of all votes entitled to be cast on such matter at any such special meeting. Written notice of any special meeting called pursuant to the foregoing sentence will be provided to all stockholders within ten (10) days after any such request is received, stating the purpose of the meeting and time and place of the meeting specified in the request, or if none is specified, a time and place convenient to the stockholders. Notwithstanding anything to the contrary herein, such meeting shall be held on a date not less than fifteen (15) nor more than sixty (60) days after distribution of the notice.

SECTION 4. <u>NOTICE</u>. Except as provided otherwise in Section 3 of this Article II, not less than ten (10) nor more than ninety (90) days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting, notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by statute or these Bylaws, the purpose for which the meeting is called, either by mail to the address of such stockholder as it appears on the records of the Company, by presenting it to such stockholder personally, by leaving it at such stockholder's residence or usual place of business or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder's post office address as it appears on the records of the Company, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Company may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless such stockholder objects in writing to receiving such single notice or revokes in writing a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

SECTION 5. <u>SCOPE OF NOTICE</u>. Subject to Section 12(a) of this Article II, any business of the Company may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. The Company may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section 12(c)(3) of this Article II) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in this Section 5.

SECTION 6. <u>QUORUM</u>. At any meeting of stockholders, the presence in person or by proxy of the stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting shall constitute a quorum; but this section shall not affect any requirement under any statute, any other provision of these Bylaws, or the Company's charter (the "Charter") for the vote necessary for the approval of any matter. If, however, such quorum is not established at any meeting of the stockholders, the chairman of the meeting shall have power to adjourn the meeting from time to time to a date not more than one hundred twenty (120) days after the original record date without notice other than announcement at the meeting. The date, time and place of the meeting, as reconvened, shall be either (a) announced at the meeting or (b) provided at a future time through means announced at the meeting. At such adjourned meeting at which a quorum is established, any business may be transacted which might have been transacted at the meeting as originally notified.

SECTION 7. <u>VOTING</u>. A majority of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a Director, and the concurrence of the Board of Directors to such action shall not be required. With respect to the election of Directors, "a majority of all the votes cast" shall mean that a nominee for Director receives the affirmative vote of a majority of the total votes cast for and against or affirmatively withheld as to such nominee. Each share may be voted for as many individuals as there are Directors to be elected and for whose election the share is entitled to be voted. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Charter. Unless otherwise provided by statute or in the Charter, each Equity Share owned of record on the applicable record date, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.

SECTION 8. <u>PROXIES</u>. A holder of record of Equity Shares may cast votes in person or by proxy that is (a) executed by the stockholder or by the stockholder's duly authorized attorney in fact or authorized agent in any manner permitted by applicable law, (b) compliant with Maryland law and these Bylaws, and (c) filed in accordance with the procedures established by the Company. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Company before or at the time of the meeting. No proxy shall be valid more than eleven months after the date of its execution, unless otherwise provided in the proxy.

SECTION 9. <u>VOTING OF SHARES BY CERTAIN HOLDERS</u>. Equity Shares registered in the name of a corporation, partnership, limited liability company, joint venture, trust or other entity, if entitled to be voted, may be voted by the chief executive officer, the president or a vice president, managing member, member, general partner, trustee or other fiduciary thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such Equity Shares pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such Equity Shares. Any trustee or other fiduciary, in such capacity, may vote Equity Shares registered in such trustee's or such fiduciary's name, either in person or by proxy.

Equity Shares owned directly by the Company or indirectly by the Company's subsidiaries shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by the Company in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Company that any Equity Shares registered in the name of the stockholder are held for the account of a specific person other than the stockholder. The resolution shall set forth: the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Company; and any other provisions with respect to the procedure which the Board of Directors consider necessary or desirable. On receipt by the secretary of the Company of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified shares in place of the stockholder who makes the certification.

SECTION 10. <u>INSPECTORS</u>. At or before any meeting of stockholders, the Board of Directors or the chairman of the meeting may appoint one or more persons as inspectors for such meeting (or one or more entities that designate individuals to act as inspectors at the meeting) or any postponement or adjournment thereof and any successor to an inspector. Except as otherwise provided by the chairman of the meeting, such inspectors, if any, shall ascertain and report the number of Equity Shares represented at the meeting, in person or by proxy, based upon their determination of the validity and effect of proxies, determine the existence of a quorum, count all votes, report the results to the chairman of the meeting, hear and determine all challenges and questions arising in connection with the right to vote and perform such other acts as are proper to conduct the election and voting with impartiality and fairness to all the stockholders.

Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

SECTION 11. <u>ORGANIZATION AND CONDUCT OF MEETINGS.</u> Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors or the chairman of the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the board or, in the case of a vacancy in the office or absence of the chairman of the board, by one of the following individuals present at the meeting in the following order: the chief executive officer, the president, the vice presidents in their order of rank and, within each rank, in their order of seniority, the secretary or, in the absence of such individuals, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The secretary or, in the case of a vacancy in the office of the secretary or the secretary's absence, an individual appointed by the Board of Directors or the chairman of the meeting shall act as secretary of the meeting. In the event that the secretary presides at a meeting of stockholders, an assistant secretary or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting shall record the minutes of the meeting. Even if present at the meeting, the individual holding the office named herein may delegate to another individual the power to act as chairman or secretary of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (i) restricting admission to the time set for the commencement of the meeting; (ii) limiting attendance at the meeting to stockholders of record of the Company, their duly authorized proxies or such other persons as the chairman of the meeting may determine; (iii) limiting participation at the meeting on any matter to stockholders of record of the Company entitled to vote on such matter, their duly authorized proxies or such other persons as the chairman of the meeting may determine; (iv) recognizing speakers at the meeting and determining when and for how long speakers and any individual speaker may address the meeting; (v) determining when and for how long polls should be opened and when the polls should be closed and when announcement of the results should be made; (vi) maintaining order and security at the meeting; (vii) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (viii) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place either (i) announced at the meeting or (ii) provided at a future time through means announced at the meeting; and (ix) complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with any rules of parliamentary procedure.

SECTION 12. <u>NOMINATIONS AND STOCKHOLDER BUSINESS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Annual Meetings of Stockholders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) With respect to an annual meeting of stockholders, nominations of individuals for election to the Board of Directors and the proposal of business to be considered may be made by the stockholders only (i) pursuant to the Company's notice of meeting, (ii) by or at the direction of the Board of Directors or a nomination and governance committee of the Board of Directors or (iii) by any stockholder of the Company who was a stockholder of record at the record date set by the Board of Directors for the purpose of determining stockholders entitled to vote at the annual meeting, at the time of giving of notice provided for in this Section 12(a) and at the time of the annual meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 12(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 12, the stockholder must have given timely notice thereof in writing to the secretary of the Company and any such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder's notice shall set forth all information and representations required under this Section 12 and shall be delivered to the secretary at the principal executive offices of the Company not earlier than the one hundred fiftieth (150<sup>th</sup>) day nor later than 5:00 p.m., Eastern Time, on the one hundred twentieth (120<sup>th</sup>) day prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year's annual meeting; <u>provided</u>, however, that in connection with the Company's first annual meeting or in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from the first anniversary of the date of the preceding year's annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the one hundred fiftieth (150<sup>th</sup>) day prior to such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the one hundred twentieth (120<sup>th</sup>) day prior to such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made. The postponement or adjournment of an annual meeting (or the public announcement thereof) shall not commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth: (i) as to each person whom the stockholder proposes to nominate for election or re-election as a Director (each, a "Proposed Nominee"), all information relating to the Proposed Nominee that would be required to be disclosed in a solicitation of proxies for election of Directors (even if an election contest is not involved), or would otherwise be required in such solicitation, in each case pursuant to Regulation 14A (or any successor regulation) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including the Proposed Nominee's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (ii) as to any other business that the stockholder proposes to bring before the meeting, (A) a description of such business (including the text of any proposal), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom, and (B) any other information relating to such business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Regulation 14A (or any successor provision) under the Exchange Act; (iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person, (A) the class, series and number of all shares of stock or other securities of the Company (collectively, the "Company Securities"), if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person, (B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person, (C) whether and the extent to which such stockholder, Proposed Nominee or Stockholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of Company Securities for such stockholder, Proposed Nominee or Stockholder Associated Person or (II) increase or decrease the voting power of such stockholder, Proposed Nominee or Stockholder Associated Person in the Company disproportionately to such person's economic interest in the Company Securities and (D) any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Company), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, in the Company, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series, (iv) as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (2) of this Section 12(a) and any Proposed Nominee, (A) the name and address of such stockholder, as they appear on the Company's books, and the current name and address, if different, of any Stockholder Associated Person and any Proposed Nominee and (B) the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person; (v) the name and address of any person who contacted or was contacted by the stockholder giving the notice or any Stockholder Associated Person about the Proposed Nominee or other business proposal; and (vi) to the extent known by the stockholder giving the notice, the name and address of any other person financially supporting Proposed Nominee or the proposal of other business.

"Stockholder Associated Person" of any stockholder shall mean (i) any person who is a member, with such stockholder, of any "group," as that term is used for purposes of Section 13(d)(3) of the Exchange Act or who is otherwise a participant (as defined in Instruction 3 to Item 4 of Schedule 14A under the Exchange Act) in any solicitation of proxies, (ii) any beneficial owner of shares of stock of the Company owned of record or beneficially by such stockholder (other than a stockholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such stockholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Such stockholder's notice shall, with respect to any Proposed Nominee, be accompanied by: (i) a written representation executed by the Proposed Nominee (A) that such Proposed Nominee (I) is not, and will not become, a party to any agreement, arrangement or understanding with any person or entity other than the Company in connection with service or action as a Director that has not been disclosed to the Company, (II) consents to be named in a proxy statement as a nominee, (III) consents to serve as a Director if elected, (IV) will notify the Company simultaneously with any notification to the stockholder of the Proposed Nominee's actual or potential unwillingness or inability to serve as a Director and (V) does not need any permission or consent from any third party (including any employer or any other board or governing body on which such Proposed Nominee serves) to serve as a Director, if elected, that has not been obtained; (B) attaching copies of any and all requisite permissions or consents; and (C) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Company, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a Director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act, or would be required pursuant to the rules of any national securities exchange on which any securities of the Company are listed or over-the-counter market on which any securities of the Company are traded); and (ii) a written representation executed by the stockholder that such stockholder will (A) notify the Company as promptly as practicable of any determination by the stockholder to no longer solicit proxies for the election of any Proposed Nominee as a Director at the annual meeting, (B) furnish such other or additional information as the Company may request for the purpose of determining whether the requirements of this Section 12 have been satisfied or of evaluating any nomination or other business described in the stockholder's notice and (C) appear in person or by proxy at the meeting to present each Proposed Nominee or to bring such business before the meeting, as applicable, and acknowledges that, if the stockholder does not so appear in person or by proxy at the meeting to present each Proposed Nominee or bring such business before the meeting, as applicable, the Company need not bring such Proposed Nominee or such business for a vote at such meeting and any proxies or votes cast in favor of the election of any Proposed Nominee or any proposal related to such other business need not be counted or considered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Special Meetings of Stockholders</u>. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Company's notice of meeting. No stockholder may make a proposal of other business to be considered at a special meeting or, except as contemplated by and in accordance with the next two sentences of this Section 12(b), nominate an individual for election to the Board of Directors at a special meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which Directors are to be elected pursuant to the Company's notice of meeting only (i) by or at the direction of the Board of Directors, (ii) by a stockholder that has requested that a special meeting be called for the purpose of electing Directors in compliance with Section 3 of this Article II and that has supplied the information required by Section 3 of this Article II about each individual whom the stockholder proposes to nominate for election of Directors or (iii) provided that the Board of Directors has determined that Directors shall be elected at such special meeting, by any stockholder of the Company who is a stockholder of record at the time of giving of notice provided for in this Section 12(b), who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 12(b). In the event the Company calls a special meeting of stockholders for the purpose of electing one or more Directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) for election to such position as specified in the Company's notice of meeting, if the stockholder's notice complies with the requirements of Section 12(a)(2) and (3) and is delivered to the secretary at the principal executive offices of the Company not earlier than the one hundred twentieth (120<sup>th</sup>) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90<sup>th</sup>) day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors (or a nominating and governance committee of the Board of Directors) to be elected at such meeting. The postponement or adjournment of a special meeting (or public announcement thereof) shall not commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If any information or representation submitted pursuant to this Section 12 by any stockholder proposing a nominee for election as a Director or any proposal for other business at a meeting of stockholders, including any information or representation from a Proposed Nominee, shall be inaccurate in any material respect, such information or representation may be deemed not to have been provided in accordance with this Section 12. Any such stockholder shall notify the Company of any inaccuracy or change (within two Business Days (as defined below) of becoming aware of such inaccuracy or change) in any such information or representation. Upon written request by the secretary or the Board of Directors, any stockholder or Proposed Nominee shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (i) written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Company, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 12, (ii) a written update of any information (including, if requested by the Company, written confirmation by such stockholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the stockholder pursuant to this Section 12 as of an earlier date and (iii) an updated representation by each Proposed Nominee that such individual will serve as a director of the Company if elected. If a stockholder or Proposed Nominee fails to provide such written verification, update or representation within such period, the information as to which such written verification, update or representation was requested may be deemed not to have been provided in accordance with this Section 12. For purposes of these Bylaws, "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Only such individuals who are nominated in accordance with the procedures set forth in this Section 12 shall be eligible for election by stockholders as Directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 12. A stockholder proposing a Proposed Nominee shall have no right to (i) nominate a number of Proposed Nominees that exceeds the number of Directors to be elected at the meeting or (ii) substitute or replace any Proposed Nominee unless such substitute or replacement is nominated in accordance with this Section 12 (including the timely provision of all information and representations with respect to such substitute or replacement Proposed Nominee in accordance with the deadlines set forth in this Section 12). If the Company provides notice to a stockholder that the number of Proposed Nominees proposed by such stockholder exceeds the number of Directors to be elected at a meeting, the stockholder must provide written notice to the Company within five Business Days stating the names of the Proposed Nominees that have been withdrawn so that the number of Proposed Nominees proposed by such stockholder no longer exceeds the number of Directors to be elected at a meeting. If any individual who is nominated in accordance with this Section 12 becomes unwilling or unable to serve on the Board of Directors, then the nomination with respect to such individual shall no longer be valid and no votes may validly be cast for such individual. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 12 and, if any proposed nomination or business is not in compliance with this Section 12, to declare that such defective nomination or proposal be disregarded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For purposes of this Section 12, "the date of the proxy statement" shall have the same meaning as "the date of the company's proxy statement released to shareholders" as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time. "Public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Notwithstanding the foregoing provisions of this Section 12, a stockholder also shall comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 12. Nothing in this Section 12 shall be deemed to affect any rights of stockholders to request inclusion of proposals or the right of the Company to omit a proposal from, in the Company's proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section 12 shall require disclosure of revocable proxies received by, or routine solicitation contacts made by or on behalf of, the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies from substantially all of the holders of any class of securities conducted in accordance with applicable state and federal securities laws.

SECTION 13. <u>VOTING BY BALLOT</u>. Voting on any question or in any election may be *viva voce* unless the chairman of the meeting shall order or any stockholder shall demand that voting be by ballot.

SECTION 14. <u>CONTROL SHARE ACQUISITION ACT</u>. Notwithstanding any other provision of the Charter or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law, or any successor statute (the "MGCL"), shall not apply to any acquisition by any person of shares of stock of the Company. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

**ARTICLE III**

**DIRECTORS**

SECTION 1. <u>GENERAL POWERS; NUMBER; QUALIFICATIONS; RESIGNATION</u>. The business and affairs of the Company shall be managed under the direction of its board of directors (also referred to herein as "Board" or "Board of Directors", and each director being referred to as a "Director" or collectively, the "Directors"). Notwithstanding the other requirements set forth herein and in the Charter, a Director shall be an individual at least twenty-one (21) years of age who is not under legal disability. The number of Directors that shall constitute the whole board shall not be less than three (3) nor more than eleven (11). Within such limits, the actual number of directors which shall constitute the whole board shall be as fixed from time to time by the Board of Directors. Any Director may resign at any time by delivering a resignation to the Board of Directors, the chairman of the board or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

SECTION 2. <u>NOMINATIONS</u>. For so long as the Advisory Agreement (the "Advisory Agreement") by and between the Company and CNL Residential Credit Manager, LLC (the "Advisor") and the Sub-Advisory Agreement (the "Sub-Advisory Agreement") between the Advisor and Balbec Capital Management, L.P. (the "Sub-Advisor") are in effect, the Board of Directors must include one individual designated for nomination by the Advisor and one individual designated for nomination by the Sub-Advisor, subject to the approval of the nomination of such director designees by the Board of Directors; provided, however, that in the event the number of Directors constituting the Board of Directors is increased pursuant to this Article III, such number of director designees of the Advisor or the Sub-Advisor, as the case may be, shall be increased as necessary by a number that will result in individuals designated by the Advisor or the Sub-Advisor, as the case may be, representing not less than 20% of the total number of Directors. Only an individual designated for nomination as a Director by the Advisor or the Sub-Advisor, as the case may be, shall be eligible for nomination or election as a successor to a Director designated for nomination by the Advisor or the Sub-Advisor, as the case may be. In addition, for so long as the Advisory Agreement and the Sub-Advisory Agreement are in effect, the Board of Directors must include three Independent Directors jointly designated for nomination by the Advisor and the Sub-Advisor after consultation with each other, subject to the approval of the nomination of such Independent Director designees by the Board of Directors; provided, however, that in the event the number of Directors constituting the Board of Directors is increased pursuant to this Article III, such number of Independent Director designees of the Advisor and the Sub-Advisor shall be increased as necessary by a number that will result in individuals jointly designated by the Advisor and the Sub-Advisor representing not less than the minimum number of Independent Directors required under applicable law and pursuant to the Charter and these Bylaws. Only an individual jointly designated for nomination as an Independent Director by the Advisor and the Sub-Advisor shall be eligible for nomination by the Board of Directors as a successor to an Independent Director jointly designated for nomination by the Advisor and the Sub-Advisor.

SECTION 3. <u>REGULAR AND ANNUAL MEETINGS</u>. A meeting of the Board of Directors shall be held at least quarterly in person or by means of remote communication. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Maryland, for the holding of regular meetings of the Board of Directors without other notice than such resolution.

SECTION 4. <u>SPECIAL MEETINGS</u>. Special meetings of the Board of Directors may be called by or at the request of the chief executive officer, president, or chairman of the board or by a majority of the Board of Directors then in office. The person or persons authorized to call special meetings of the Directors may fix any place, either within or without the State of Maryland, as the place for holding any special meeting of the Board of Directors called by them.

SECTION 5. <u>NOTICE</u>. Notice of any annual, regular or special meeting shall be given by written notice delivered personally or by facsimile, electronic mail or mail to each Director at his or her business or residence address. Personally delivered, facsimile transmitted or electronically mailed notices shall be given at least two (2) days prior to the meeting. Notice by facsimile shall be promptly followed by mailed notice. Notice by mail shall be given at least five (5) days prior to the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. If given by facsimile transmission, a notice shall be deemed given and received upon completion of the transmission of the message to the number given to the Company by the Director and receipt of a completed answer-back indicating receipt. If given by electronic mail, a notice shall be deemed given and received when the electronic mail is transmitted to the recipient's electronic mail address provided in writing by the recipient and electronic confirmation of receipt (either by reply from the recipient or by automated response to a request for delivery receipt) is received by the sending party during normal business hours or on the next Business Day if not confirmed during normal business hours, and an identical notice is also sent simultaneously by mail, overnight courier or personal delivery as otherwise provided in this Section 5. Except for facsimile and electronic mail notices sent as expressly described above, no notice hereunder shall be effective if sent or delivered by electronic means. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

SECTION 6. <u>QUORUM</u>. A whole number of Directors equal to at least a majority of the Directors then in office, including a majority of Independent Directors, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors; provided, that if a quorum is not established at said meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice; and provided further, that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of Directors is required for action, a quorum must also include a majority or such other percentage of such group.

The Directors present at a meeting that has been duly called and convened and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough Directors to leave fewer than required to establish a quorum.

SECTION 7. <u>VOTING</u>. The action of the majority of the Directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws unless the concurrence of a particular group of Directors or of a greater proportion is required for such action by applicable statute, the Articles of Incorporation or these Bylaws.

SECTION 8. <u>MEETINGS BY REMOTE COMMUNICATION</u>. Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

SECTION 9. <u>INFORMAL ACTION BY DIRECTORS</u>. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each Director and is filed with the minutes of proceedings of the Board of Directors.

SECTION 11. <u>COMPENSATION</u>. Subject to the provisions of the Charter, the Directors may, in the discretion of the entire Board of Directors, receive annual or monthly compensation for their services as Directors, including but not limited to fixed sums per meeting and/or per visit to real property or other facilities owned or leased by the Company, and/or for any service or activity performed or engaged in as Directors on behalf of the Company. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their reasonable out-of-pocket expenses, if any, in connection with each such meeting, property visit, and/or other service or activity they performed or engaged in as Directors on behalf of the Company. Nothing herein contained shall be construed to preclude any Director from serving the Company in any other capacity and receiving compensation therefor.

SECTION 12. <u>CHAIRMAN OF THE BOARD</u>. The Directors from time to time may elect a chairman of the board. The chairman of the board, if one be elected, shall preside at all meetings of the Board of Directors, and the chairman of the board shall have and perform such other duties as from time to time may be assigned to the chairman of the board by the Board of Directors.

SECTION 13. <u>LOSS OF DEPOSITS</u>. No Director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with which moneys or shares have been deposited.

SECTION 14. <u>SURETY BONDS</u>. Unless required by law, no Director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.

SECTION 15. <u>RELIANCE</u>. Each Director and officer of the Company shall, in the performance of such Director's or officer's duties with respect to the Company, be entitled to rely on and be fully justified and protected with regard to any act or failure to act in reliance in good faith upon, any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Company whom the Director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the Director or officer reasonably believes to be within the person's professional or expert competence, or, with respect to a Director, by a committee of the Board of Directors on which the Director does not serve, as to a matter within its designated authority, if the Director reasonably believes the committee to merit confidence.

SECTION 16. <u>CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS</u>. The Directors shall have no responsibility to devote their full time to the affairs of the Company. Any Director, officer, employee or agent of the Company, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to, or in competition with those of or relating to the Company, subject to the adoption of any policies relating to such interests and activities adopted by the Board of Directors and applicable law.

SECTION 17. <u>RATIFICATION</u>. The Board of Directors or the stockholders may ratify any act, omission, failure to act or determination made not to act (an "Act") by the Company or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the Act and, if so ratified, such Act shall have the same force and effect as if originally duly authorized, and such ratification shall be binding upon the Company and its stockholders. Any Act questioned in any proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a Director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders, and such ratification shall constitute a bar to any claim or execution of any judgment in respect of such questioned Act.

**ARTICLE IV**

**COMMITTEES**

SECTION 1. <u>NUMBER, TENURE AND QUALIFICATIONS</u>. The Board of Directors may appoint from among its members an Audit Committee and other committees, composed of one (1) or more Directors to serve at the pleasure of the Board of Directors. At least a majority of the members of each committee of the Board of Directors, or if a committee numbers two (2) or less, both Directors, must be Independent Directors.

SECTION 2. <u>POWERS</u>. The Board of Directors may delegate to committees appointed under Section 1 of this Article IV any of the powers of the Board of Directors, except as prohibited by law. Except as may be otherwise provided by the Board of Directors, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more Directors, as the committee deems appropriate in its sole and absolute discretion.

SECTION 3. <u>COMMITTEE PROCEDURES</u>. Each committee may fix rules of procedure for its business. A majority of the members of a committee shall constitute a quorum for the transaction of business at any committee meeting. The action of a majority of those present at a meeting at which a quorum is present shall be action of such committee. In the absence of any member of any committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another Director to act in the place of such absent member, subject to the requirements of Section 1 of this Article IV. Any action required or permitted to be taken at a meeting of a committee may be taken without a meeting, if a consent in writing or by electronic transmission which sets forth the action to be taken is given by each member of the committee and filed with the minutes of the proceedings of such committee. The members of a committee may conduct any meeting thereof by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at the meeting.

SECTION 4. <u>CHANGES</u>. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to appoint the chair of any committee, to fill any vacancy on any committee, to designate an alternate member to replace any absent or disqualified member of any committee, to dissolve any committee or to withdraw or add to any powers previously delegated to any committee.

**ARTICLE V**

**OFFICERS**

SECTION 1. <u>GENERAL PROVISIONS</u>. The officers of the Company may consist of a chairman of the board, a chief executive officer, a president, a chief operating officer, one or more vice presidents, a chief financial officer and treasurer, a secretary, one or more assistant secretaries and one or more assistant treasurers, as determined by the Board of Directors. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Company shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of stockholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death or his or her resignation or removal in the manner hereinafter provided. Any two (2) or more offices except (i) chief executive officer and vice president, or (ii) president and vice president, may be held by the same person, although any person holding more than one office in the Company may not act in more than one capacity to execute, acknowledge or verify an instrument required by law to be executed, acknowledged or verified by more than one officer. In its discretion, the Board of Directors may leave unfilled any office except that of the chief executive officer, the president, the treasurer and the secretary. Election of an officer or agent shall not of itself create contract rights between the Company and such officer or agent.

SECTION 2. <u>REMOVAL AND RESIGNATION</u>. Any officer or agent of the Company may be removed by the Board of Directors, with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Company may resign at any time by delivering a resignation to the Board of Directors, the chairman of the board, the chief executive officer or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Company.

SECTION 3. <u>VACANCIES</u>. A vacancy in any office may be filled by the Board of Directors for the balance of the term.

SECTION 4. <u>CHIEF EXECUTIVE OFFICER</u>. The Board of Directors may designate a chief executive officer from among the elected officers. In the absence of such designation, the president shall be the chief executive officer of the Company. The chief executive officer shall in general supervise the management of the business affairs of the Company and the implementation of the policies of the Company, as determined by the Board of Directors. He or she shall, when present and in the absence of the chairman of the board, preside at all meetings of the Board of Directors. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Company or shall be required by law to be otherwise executed, and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 5. <u>PRESIDENT</u>. The president, subject to the control of the Board of Directors and with the chief executive officer, shall in general supervise and control all of the business and affairs of the Company. He or she shall, when present and in the absence of the chairman of the board and the chief executive officer, preside at all meetings of the Board of Directors. He or she may sign with the secretary or any other proper officer of the Company authorized by the Board of Directors, deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Company, or shall be required by law to be otherwise signed or executed, and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the chief executive officer or the Board of Directors from time to time.

SECTION 6. <u>CHIEF OPERATING OFFICER</u>. The Company may have a chief operating officer, which, under the direction of the chief executive officer, shall have general management authority and responsibility for the day-to-day implementation of the policies of the Company. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Company or shall be required by law to be otherwise executed, and in general shall perform all duties incident to the office of chief operating officer and such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 7. <u>VICE PRESIDENTS</u>. In the absence of the chief executive officer, the president, the chief operating officer or in the event of a vacancy in all such offices, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the chief executive officer or the president and when so acting shall have all the powers of and be subject to all the restrictions upon the chief executive officer and the president. Each of the vice presidents shall additionally have authority to perform such other duties as from time to time may be assigned to him or her by the chief executive officer, by the president, by the chief operating officer or by the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president, senior vice president or vice president for particular areas of responsibility.

SECTION 8. <u>SECRETARY</u>. The secretary shall: (i) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (ii) see that all notices are duly given in accordance with the provisions of the Charter or these Bylaws or as required by law; (iii) be custodian of the corporate records and of the seal (if any) of the Company; (iv) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (v) have general charge of the share transfer books of the Company; and (vi) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, by the president, by the chief operating officer or by the Board of Directors.

SECTION 9. <u>CHIEF FINANCIAL OFFICER AND TREASURER</u>. The chief financial officer and treasurer shall have the custody of the funds and securities of the Company and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The chief financial officer shall disburse the funds of the Company as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the chief executive officer and Board of Directors, at the regular meetings of the Board of Directors or whenever the Board of Directors may require it, an account of all his or her transactions as chief financial officer and of the financial condition of the Company.

SECTION 10. <u>ASSISTANT SECRETARIES</u>. The assistant secretaries, in general, shall perform such duties as shall be assigned to them by the secretary, or by the chief executive officer, the president, or the Board of Directors.

SECTION 11. <u>ASSISTANT TREASURERS</u>. The assistant treasurers, in general, shall perform such duties as shall be assigned to them by the chief financial officer and treasurer, or by the chief executive officer, the president, or the Board of Directors.

SECTION 12. <u>GENERAL COUNSEL</u>. The role of the general counsel, include providing legal advice to the corporation, overseeing legal compliance, managing litigation, supervising outside counsel, and ensuring the Company's legal interests are protected.

SECTION 13. <u>COMPENSATION</u>. The compensation of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a Director. The Board of Directors may delegate authority to fix compensation to the president or chief executive officer for Company employees, if any, not specifically listed in this Article.

**ARTICLE VI**

**CONTRACTS, LOANS, CHECKS AND DEPOSITS**

SECTION 1. <u>CONTRACTS</u>. The Board of Directors or any advisor of the Company approved by the Board of Directors and acting within the scope of its authority pursuant to a management agreement with the Company may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Company and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be deemed valid and binding upon the Company when so authorized or ratified by action of the Board of Directors or an advisor acting within the scope of its authority pursuant to a management agreement and executed by an authorized person.

SECTION 2. <u>CHECKS AND DRAFTS</u>. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Company shall be signed by such officer or officers, agent or agents of the Company and in such manner as shall from time to time be determined by the Board of Directors.

SECTION 3. <u>DEPOSITS</u>. All funds of the Company not otherwise employed shall be deposited or invested from time to time to the credit of the Company in such banks, trust companies or other depositories as the Board of Directors, the chief executive officer, the president, the chief financial officer or any other officer designated by the Board of Directors may determine.

**ARTICLE VII**

**EQUITY SHARES**

SECTION 1. <u>CERTIFICATES</u>. The Company will not issue stock certificates. A stockholder's investment will be recorded on the books of the Company. A stockholder wishing to transfer such stockholder's Equity Shares will be required to send only an executed form to the Company, and the Company will provide the required form upon a stockholder's request.

SECTION 2. <u>TRANSFERS</u>. Transfers of Equity Shares shall be effective, and the transferee of the Equity Shares will be recognized as a holder of such Equity Shares as of the first day of the following month on which the Company receives properly executed documentation.

The Company shall be entitled to treat the holder of record of any Equity Shares as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

SECTION 3. <u>NOTICE OF ISSUANCE OR TRANSFER</u>. Upon issuance or transfer of Equity Shares, the Company shall send the stockholder a written statement that complies with any requirements of the Charter and reflects such investment or transfer. In addition such written statement shall set forth (i) the name of the Company; (ii) the name of the stockholder or other person to whom it is issued or transferred; (iii) the class of shares and number of shares purchased; (iv) the designations and any preferences, conversions and other rights, voting powers, restrictions, limitations as to Distributions (as defined below), qualifications and terms and conditions of redemption of the shares of each class which the Company is authorized to issue; (v) the differences in the relative rights and preferences between the shares of each series of shares to the extent they have been set; (vi) the authority of the Board of Directors to set the relative rights and preferences; (vii) the restrictions on transferability of the shares sold or transferred (without affecting § 8-204 of the Commercial Law Article of the Annotated Code of Maryland); and (viii) any other information required by law. The Company, alternatively, may furnish notice that a full statement of the information contained in the foregoing subsections (i) through (viii) and otherwise complying with the Charter will be provided to any stockholder upon request and without charge.

SECTION 4. <u>FIXING OF RECORD DATE</u>. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or determining stockholders entitled to receive payment of any Distribution or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such record date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than ninety (90) days and, in the case of a meeting of stockholders, not less than ten (10) days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been set as provided in this Section 4, such record date shall continue to apply to the meeting if postponed or adjourned, except if the meeting is postponed or adjourned to a date more than one hundred twenty (120) days after the record date originally fixed for the meeting, in which case a new record date for such meeting shall be determined as set forth herein.

SECTION 5. <u>SHARE LEDGER</u>. The Company shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger, in written form or in any other form which can be converted within a reasonable time into written form for visual inspection, containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

SECTION 6. <u>FRACTIONAL SHARES; ISSUANCE OF UNITS</u>. The Board of Directors may authorize the Company to issue fractional shares of stock or authorize the issuance of scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may issue units consisting of different securities of the Company. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Company, except that the Directors may provide that for a specified period securities of the Company issued in such unit may be transferred on the books of the Company only in such unit.

**ARTICLE VIII**

**ACCOUNTING YEAR**

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Company by a duly adopted resolution, provided that the fiscal year of the Company shall be the calendar year for all taxable periods following the Company's election as, and prior to any termination or revocation of the election of the Company as a real estate investment trust under the Internal Revenue Code of 1986, as amended.

**ARTICLE IX**

**DISTRIBUTIONS**

SECTION 1. <u>AUTHORIZATION</u>. Dividends and other distributions upon the Equity Shares of the Company ("Distributions") may be authorized by the Board of Directors and declared by the Company, subject to the provisions of law and the Charter. Distributions may be paid in cash, stock, or other property of the Company, subject to the provisions of law and the Charter.

SECTION 2. <u>CONTINGENCIES</u>. Before payment of any Distributions, there may be set aside out of any assets of the Company available for Distributions such sum or sums as the Board of Directors may from time to time, in its sole and absolute discretion, think proper as a reserve fund for contingencies, for equalizing Distributions, for repairing or maintaining any property of the Company or for such other purpose as the Board Directors shall determine to be in the best interest of the Company, and the Board Directors may modify or abolish any such reserve.

**ARTICLE X**

**INVESTMENT POLICY**

Subject to the provisions of the Charter, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Company as it shall deem appropriate in its sole and absolute discretion.

**ARTICLE XI**

**SEAL**

SECTION 1. <u>SEAL</u>. The Board of Directors may authorize the adoption of a seal by the Company. The seal shall have inscribed thereon the name of the Company and the year of its organization or be in such other form as may be approved by the Board of Directors. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

SECTION 2. <u>AFFIXING SEAL</u>. Whenever the Company is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent to the signature of the person authorized to execute the document on behalf of the Company.

**ARTICLE XII**

**WAIVER OF NOTICE**

Whenever any notice is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

**ARTICLE XIII**

**AMENDMENT OF BYLAWS**

SECTION 1. <u>AMENDMENTS</u>. The Board of Directors shall have the exclusive power, at any time, to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

SECTION 2. <u>LOCATION OF BYLAWS</u>. The original or a certified copy of these Bylaws, including any amendments thereto, shall be kept at the Company's principal office, as determined pursuant to Article I, Section 1 of these Bylaws.

The foregoing are certified as the Bylaws of the Company as of May 27, 2025.

/s/ Chirag Bhavsar

## Exhibit 4.1

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 4.1**

**FORM OF DISTRIBUTION REINVESTMENT PLAN**

CNL STRATEGIC RESIDENTIAL CREDIT, INC., a Maryland Corporation (the "**Company**"), has adopted the following Distribution Reinvestment Plan (the "**DRP**"). Capitalized terms shall have the same meaning as set forth in the Company's Amended and Restated Charter dated May 28, 2025, as may be amended ("**Charter**") unless otherwise defined herein. The effective date of the DRP is May 29, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Distribution Reinvestment**. As an agent for the stockholders ("**Stockholders**") of the Company who purchase shares of common stock of the Company (the "**Shares**") pursuant to a private offering by the Company (an "**Offering**") and the stockholders who enroll in the DRP (each a "**Participant**" and, collectively, the "**Participants**"), SS&C Technologies, Inc. (f/k/a DST Systems, Inc.), the reinvestment agent (the "**Reinvestment Agent**"), will apply all cash distributions ("**Distributions**"), including Distributions paid with respect to any full or fractional Shares acquired under the DRP, to the purchase of the Shares for such Participants directly, if permitted under state securities laws and, if not, through the Managing Dealer or other Participating Broker-Dealers registered in the Participant's state of residence. The Shares purchased pursuant to the DRP shall be of the same Share class as the Shares with respect to which the Participant is receiving Distributions to be reinvested through the DRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Participation**. Any Stockholder who owns Shares and who has received a private placement offering memorandum, as supplemented and amended ("**Memorandum**"), will automatically become a Participant, however, other Stockholders who are clients of certain participating broker-dealers that do not permit automatic enrollment in the DRP (collectively, the "**Opt-In Stockholders**") will not be automatically enrolled in the DRP. An Opt-In Stockholder may elect to become a Participant by completing and executing a subscription agreement, an enrollment form or any other appropriate authorization form as may be available from the Company from time to time. For Opt-In Stockholders, participation in the DRP will begin with the next Distribution payable after receipt of the Opt-In Stockholders' written election to participate in the DRP at least 15 business days prior to the last day of the calendar month.

Subject to the provisions of the Charter relating to certain restrictions on and after the effective dates of transfer, Shares acquired pursuant to the DRP entitle the Participant to the same rights, including the same voting rights, and to be treated in the same manner as those purchased by the investors in an Offering. The Company's board of directors (the "**Board of Directors**") reserves the right to prohibit fiduciaries, pension or profit-sharing plans, other employee benefit plans, individual retirement accounts and other plans, whether or not subject to Employee Retirement Income Security Act of 1974, as amended, or the Internal Revenue Code of 1986, as amended, from participating in the DRP if such participation could, in the Company's view, cause its underlying assets to constitute "plan assets" of such plans and accounts, and entities deemed to hold assets of such plans and accounts.

Participation in the DRP shall continue until such participation is terminated in writing by the Participant pursuant to Section 8 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Suitability**. Each Participant that is reinvesting into Shares of the Company pursuant to the DRP, which are not registered under the Securities Act of 1933, as amended (the "**Securities Act**") is requested to promptly notify the Company in writing if the Participant experiences a material change in his or her financial condition, including the failure to meet the definition of an "accredited investor" and other investment requirements, as set forth in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Share Purchases***.* Shares to be distributed by the Company in connection with this DRP will be offered and sold by the Company pursuant to an applicable exemption from such registration requirements under the Securities Act.

Each class of Shares under the DRP will be initially issued at $25.00 per Share, until such time as the Company commences monthly valuations of its assets commencing no later than the first full calendar month following the satisfaction of the minimum offering requirement and, thereafter, at the price equal to the most recently determined and published net asset value per share of the applicable class of Shares. Participants in the DRP may also purchase fractional Shares so that 100% of the Distributions will be used to acquire Shares. However, a Participant will not be able to acquire Shares pursuant to the DRP to the extent that any such purchase would cause such Participant to violate any provision of the Charter.

Shares to be distributed by the Company in connection with the DRP may (but are not required to) be supplied from: (a) the DRP Shares which are exempt from registration under the Securities Act, (b) Shares to be registered with the Securities and Exchange Commission (the "**Commission**") after an Offering for use in the DRP (a "**Future Registration**"), or (c) Shares purchased by the Company for the DRP in a secondary market (if available) or on a securities exchange (if listed) (collectively, the "**Secondary Market**"). Shares purchased on the Secondary Market as set forth in (c) above will be purchased at the then-prevailing market price, which price will be utilized for purposes of purchases of Shares in the DRP. Shares acquired by the Company on the Secondary Market will have a price per share equal to the then-prevailing market price, which shall equal the price on the securities exchange, or over-the-counter market on which such Shares are listed at the date of purchase if such Shares are then listed.

If the Company acquires Shares in the Secondary Market for use in the DRP, the Company shall use reasonable efforts to acquire Shares for use in the DRP at the lowest price then reasonably available. However, the Company does not in any respect guarantee or warrant that the Shares so acquired and purchased by the Participant in the DRP will be at the lowest possible price. Further, irrespective of the Company's ability to acquire Shares in the Secondary Market or to complete a Future Registration for Shares to be used in the DRP, the Company is in no way obligated to do either, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Timing of Purchases***.* The Reinvestment Agent will make every reasonable effort to reinvest all Distributions on the day the cash Distribution is paid, except where necessary for the Company to comply with applicable securities laws*.* If, for any reason beyond the control of the Reinvestment Agent, reinvestment of the Distribution cannot be completed within 30 days after the applicable distribution payment date, Participants' funds held by the Reinvestment Agent will be distributed to the Participants to whom they are attributable*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Taxation of Distributions***.* The reinvestment of Distributions does not relieve the Participant of any taxes which may be payable as a result of those Distributions and their reinvestment in Shares pursuant to the terms of the DRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Commissions***.* The Company will not pay any selling commissions or dealer manager fees on Shares issued pursuant to the DRP. The annual distribution and stockholder servicing fee payable with respect to Class T or Class D shares will be allocated among all Class T or Class D shares including those issued pursuant to the DRP. The Company shall be responsible for all administrative charges and expenses charged by the Reinvestment Agent. Any interest earned on Distributions will be paid to the Company to defray costs relating to the DRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Termination by Participant***.* A Participant may terminate participation in the DRP at any time by written instructions to that effect to the Reinvestment Agent*.* To be effective on a Distribution payment date, the notice of termination must be received by the Reinvestment Agent at least fifteen days before the record date fixed by the Board of Directors for such Distribution payment date; otherwise, such termination will be effective with respect to any subsequent Distribution payment date*.* The Reinvestment Agent may also terminate any Participant's account at any time in its discretion by notice in writing mailed to such Participant. The Reinvestment Agent will terminate a Participant's participation in the DRP if the Company receives a request from such Participant for repurchase of all of the Participant's Shares under the Company's Share Repurchase Plan. Notwithstanding the foregoing, if the Company publicly announces in a filing with the Commission a new net asset value per share or a new public offering price, then a Participant shall have no less than two business days after the date of such announcement to notify the Company in writing of such Participant's termination of participation in the DRP and the Participant's termination will be effective for the next date Shares are purchased under the DRP.

Any full or partial transfer of Shares by a Participant to a non-Participant will terminate participation in the DRP with respect to the transferred Shares. The transferee of such Shares in connection with such transfer (other than if the transferee is an Opt-In Stockholder) will have their Distributions automatically reinvested in additional Shares having the same class designation as the class of Shares to which such Distributions are attributable, unless such transferee elects to opt-out of the DRP in its executed enrollment form as otherwise provided. If the Company repurchases a portion of a Participant's Shares, the Participant's participation in the DRP with respect to the Participant's Shares that were not repurchased will not be terminated unless the Participant requests such termination. Conversion of a Participant's Shares from one class to another class pursuant to the Charter will not terminate a Participant's participation in the DRP with respect to such Shares, though it will cause, from the effective date of conversion, Distributions with respect to such Shares to be applied to the purchase of Shares of such new class.

Upon termination of DRP participation, future Distributions, if any, will be distributed to the Stockholders in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Amendment, Termination and Suspension by the Company***.* The Company reserves the right to amend any aspect of the DRP at any time; provided, however, that for any material amendment to the DRP, the Company shall provide to each Participant written notice at least 30 days prior to the effective date of that amendment. The Company reserves the right to suspend or terminate the DRP any time by the giving of written notice to each Participant at least 30 days prior to the effective date of the supplement or termination. The Company may provide notice by including such information in a current report on Form 8-K or in its annual or quarterly reports, each of which are publicly filed with the Commission. While the DRP is in effect and has not been terminated, the Company will not amend the DRP in a manner that would eliminate a Participant's right to terminate his or her participation in the DRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **No Share Certificates***.* The ownership of the Shares purchased through the DRP will be in book-entry form only.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Reports***.* During each fiscal quarter, but in no event later than 30 days after the end of each fiscal quarter, the Reinvestment Agent (or a broker-dealer acting on behalf of a Participant who is their client) will mail and/or make electronically available to each Participant, a statement of account describing, as to such Participant, the Distributions received during such quarter, the number of Shares purchased during such quarter, and the per share purchase price for such Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Liability of the Company***.* Neither the Company nor the Reinvestment Agent shall be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claims or liability: (a) arising out of failure to terminate a Participant's account upon such Participant's death prior to receipt of notice in writing of such death; and (b) with respect to the time and the prices at which Shares are purchased or sold for Participant's account. Neither the Company nor the Reinvestment Agent shall have any responsibility or liability as to the value of the Company's Shares, any change in the value of the Shares acquired for the Participant's account, or the rate of return earned on, or the value of, the interest-bearing accounts in which Distributions are invested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Governing Law.** THIS DISTRIBUTION REINVESTMENT PLAN AND A PARTICIPANT'S ELECTION TO PARTICIPATE IN THE DISTRIBUTION REINVESTMENT PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY IN SAID STATE; PROVIDED, HOWEVER, THAT CAUSES OF ACTION FOR VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS SHALL NOT BE GOVERNED BY THIS SECTION 13.

All correspondence concerning the plan should be directed to the Reinvestment Agent by mail at SS&C Technologies, Inc., 1055 Broadway, Kansas City, MO 64105.

## Exhibit 4.2

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 4.2**

**SHARE REPURCHASE PLAN**

CNL STRATEGIC RESIDENTIAL CREDIT, INC., a Maryland corporation (the "**Company**"), has adopted a Share Repurchase Plan (the "**Share Repurchase Plan**") by which Class FA, Class A, Class T, Class D, Class I and Class E shares of common stock of the Company (the "**Shares**") may be repurchased by the Company from stockholders subject to the terms and conditions set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Repurchase Price**. The Share Repurchase Plan is designed to provide eligible stockholders with limited, interim liquidity by enabling them to sell Shares back to the Company. Subject to certain restrictions described below, the Company may repurchase Shares, including fractional Shares, computed to three decimal places, from time to time.

The price for repurchase of Shares shall be equal to the net asset value per Share as of the last date of the month immediately prior to the Repurchase Date (as defined below). The Repurchase Date generally will be the last business day of the month of a calendar quarter end (the "**Repurchase Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Repurchase of Shares**. Any stockholder may present for the Company's consideration all or any portion of his or her Shares for repurchase at any time, in accordance with the procedures outlined herein. A stockholder may present fewer than all of his or her Shares to the Company for repurchase, provided that the minimum number of Shares presented for repurchase shall be at least 5% of his or her Shares.

The Company may, at the Company's sole option, choose to repurchase the Shares presented for repurchase for cash to the extent it has sufficient funds available. There is no assurance that there will be sufficient funds available for repurchase or that the Company will exercise its discretion to repurchase such Shares and, accordingly, a stockholder's Shares may not be repurchased. Factors that the Company will consider in making its determination to repurchase Shares include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) whether such repurchase impairs the Company's capital or operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) whether such repurchase is not reasonably practical due to an emergency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) whether such repurchase is demanded by any governmental or regulatory agency with jurisdiction over the Company for the protection of the Company's stockholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) whether such repurchase would be unlawful; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) whether such repurchase, when considered with all other sales, assignments, transfers and exchanges of the Shares, could cause direct or indirect ownership of the Shares to become concentrated to an extent which could adversely affect the Company's ability to qualify as a REIT for tax purposes.

The Company is not obligated to repurchase Shares under the Share Repurchase Plan. If the Company determines to repurchase Shares, the total amount of aggregate repurchases of Class FA, Class A, Class T, Class D, Class I and Class E shares will be limited to up to 2.5% of the Company's aggregate net asset value per calendar quarter based on the aggregate net asset value as of the last date of the month immediately prior to the Repurchase Date and up to 10% of the Company's aggregate net asset value per year based on the average aggregate net asset value as of the end of each of the Company's trailing four quarters. The aggregate amount of funds under the Share Repurchase Plan will be determined on a quarterly basis in the sole discretion of the board of directors of the Company. At the sole discretion of the Company's board of directors, the Company may use cash on hand, including offering proceeds, cash available from borrowings and cash from the sale of assets as of the end of the applicable period to repurchase Shares. Further, no Shares will be repurchased under the Share Repurchase Plan on any date upon which the Company pays any distribution with respect to the Shares.

Shares will not be repurchased if they have not been outstanding for at least one year. For purposes of calculating the ownership period set forth above, if a stockholder purchased Shares for economic value from a prior stockholder (a "Resale"), the purchasing stockholder's period of ownership for such Shares shall commence on the date the purchasing stockholder purchased the Shares from the prior stockholder. For a transfer of ownership that is not considered a Resale, the stockholder's period of ownership for such Shares shall commence on the date of the acquisition of Shares by the original stockholder. The Company has the right to waive the one-year holding period and the *pro rata* repurchase requirements, in the event of the death, permanent disability or bankruptcy of a stockholder or other exigent circumstances (individually and collectively, "Exigent Circumstances"). If the Company determines to permit any such repurchase for Exigent Circumstances, notwithstanding anything contained in this Share Repurchase Plan to the contrary, the Company, in its sole discretion, may repurchase such Shares prior to the repurchase of any other Shares.

The Company will not repurchase Shares that are subject to liens or other encumbrances until the lienholder or stockholder presents evidence that the liens or encumbrances have been removed. If any Shares subject to a lien are inadvertently repurchased or the Company is otherwise required to pay to any other party all or any amount in respect of the value of repurchased Shares, then the recipient of amounts in respect of repurchase shall repay the Company the amount paid for such repurchase up to the amount it is required to pay to such other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Insufficient Funds**. In the event the Company is oversubscribed or there are insufficient funds to repurchase all of the Shares for which repurchase requests have been submitted, and the Company determines to repurchase Shares, the Company will repurchase pending requests, computed to three decimal places, at the end of each quarter, on a *pro rata* basis, from among the requests for repurchases received by the Company based upon the total number of Shares for which repurchase is requested in the following order of priority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) first, *pro rata* as to all repurchases sought upon a stockholder's death;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) second, *pro rata* as to all repurchases sought by stockholders with a Qualifying Disability or by stockholders who have been confined to a long-term care facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) third, *pro rata* as to all repurchases sought by stockholders subject to Bankruptcy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) fourth, *pro rata* as to all repurchases that would result in a stockholder owning less than 100 Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) finally, *pro rata* as to all other repurchase requests.

For a disability to be considered a "Qualifying Disability" for the purposes of this Share Repurchase Plan: (a) the stockholder must receive a determination of disability based upon a physical or mental impairment arising after the date the stockholder acquired the Shares to be repurchased that can be expected to result in death or to last for a continuous period of not less than twelve months; and (b) the determination of disability must have been made by the governmental agency, if any, responsible for reviewing the disability retirement benefits that the stockholder could be eligible to receive. Such governmental agencies are limited to the following: (1) if the stockholder is eligible to receive Social Security disability benefits, the Social Security Administration; (2) if the stockholder is not eligible for Social Security disability benefits but could be eligible to receive disability benefits under the Civil Service Retirement System (the "**CSRS**"), the U.S. Office of Personnel Management or the agency charged with responsibility for administering the CSRS benefits at that time; or (3) if the stockholder is not eligible for Social Security disability benefits but could be eligible to receive military disability benefits, the Veteran's Administration or the agency charged with the responsibility for administering military disability benefits at that time. Repurchase requests following an award by the applicable government agency of disability death benefits must be accompanied by the stockholder's application for disability benefits and a Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under the CSRS, a Veteran's Administration record of disability-related discharge or such other documentation issued by the applicable governmental agency that the Company deems acceptable and which demonstrates an award of disability benefits.

With respect to repurchases sought upon a stockholder's confinement to a long-term care facility, "long-term care facility" shall mean an institution that is an approved Medicare provider of skilled nursing care or a skilled nursing home licensed by the state or territory where it is located and that meets all of the following requirements: (a) its main function is to provide skilled, immediate or custodial nursing care; (b) it provides continuous room and board to three or more persons; (c) it is supervised by a registered nurse or licensed practical nurse; (d) it keeps daily medical records of all medication dispensed; and (e) its primary service is other than to provide housing for residents. A stockholder seeking repurchase of Shares due to confinement to a long-term care facility must have begun such confinement after the date the stockholder acquired the Shares to be repurchased and must submit a written statement from a licensed physician certifying the stockholder's continuous and continuing confinement to a long-term care facility over the course of the last year or the determination that the stockholder will be indefinitely confined to a long-term care facility.

With respect to repurchases sought upon a stockholder's Bankruptcy, "Bankruptcy" shall mean a bankruptcy over which a trustee was appointed by a bankruptcy court after the date the stockholder acquired the Shares to be repurchased. A stockholder seeking Shares to be repurchased due to Bankruptcy must submit the court order appointing the trustee or an order of discharge from the applicable bankruptcy court.

With regard to a stockholder whose Shares are not repurchased due to insufficient funds in that quarter, the repurchase request will not be retained by the Company and such stockholder must resubmit his or her repurchase request in a subsequent quarter for his or her Shares to be repurchased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Procedures for Repurchase**. A stockholder requesting the company to repurchase his or her Shares must mail or deliver a written request on a form the Company provides, executed by the stockholder, its trustee or authorized agent to the repurchase agent. The repurchase agent will be registered as a broker-dealer with the SEC and each state's securities commission at all times unless exempt from registration. The Company will pay repurchase proceeds within five business days after the Repurchase Date. A stockholder's repurchase request must be received by the repurchase agent on or before the date which is (60) days prior to the date the Shares are repurchase; therefore, a stockholder's repurchase request must be received by the repurchase agent on or prior to the following dates for each applicable share repurchase date: (i) January 31 for repurchases on March 31; (ii) April 30 for repurchases on June 30; (iii) July 31 for repurchases on September 30; and (iv) October 31 for repurchases on December 31.

With regard to a stockholder whose repurchase request which is not received by the Company on or before the applicable required submission date prior to the Repurchase Date, such repurchase request will be retained by the Company for the immediate next available quarterly Repurchase Date (unless such request is otherwise withdrawn). Thereafter, such a stockholder must resubmit his or her repurchase request in subsequent quarters for his or her Shares to be repurchased.

In the event of repurchases sought upon the death, Qualifying Disability, confinement to a long-term care facility or Bankruptcy of a stockholder, the written request must be received by the Company within twelve months after the onset or determination of the qualifying event. If requests in the event of a qualifying event are not received within the twelve-month period described in the preceding sentence, they will be treated as ordinary repurchase requests and will not be subject to priority.

Stockholders will not relinquish their Shares to the Company until such time as the Company commits to repurchase such Shares. However, the repurchase price for repurchase requests not withdrawn by the stockholder and Shares subsequently repurchased by the Company will be at the current repurchase price under this Share Repurchase Plan as of the Repurchase Date. Stockholders will have the right to withdraw their repurchase requests at any time before 4:00 p.m. Eastern Time on the Repurchase Date. To the extent the repurchase price for the applicable quarter is not made available by the tenth business day prior to the Repurchase Date, the Company may, in its sole discretion, extend the Repurchase Date into the immediately subsequent month to ensure such notice period is satisfied. Otherwise, no repurchase requests will be accepted for such quarter and stockholders who wish to have their Shares repurchased the following quarter must resubmit their repurchase requests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Amendment, Suspension or Termination of the Share Repurchase Plan**. The Company's board of directors, in its sole discretion, may amend, suspend, or terminate the Share Repurchase Plan or waive any of its specific conditions to the extent it is in the Company's best interests and the best interest of the stockholders, such as when repurchase requests would place an undue burden on our liquidity, adversely affect our operations, risk having an adverse impact on us that would outweigh the benefit of repurchasing our shares, and to ensure the Company's ability to qualify as a REIT for U.S. federal income tax purposes, upon 30 days' prior notice to the stockholders. Continued suspension of our share repurchase plan would only be permitted under the plan if our board of directors determines that the continued suspension of the share repurchase plan is in our best interest and the best interest of our stockholders. The Company's board of directors must affirmatively authorize the recommencement of the Share Repurchase Plan if it is suspended before stockholder requests will be considered again.

The Company may provide notice by including such information in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or by a separate mailing to the stockholders. The Share Repurchase Plan will terminate, and the Company no longer will accept Shares for repurchase, if and when the Company's Shares are listed on a national securities exchange, are included for quotation in a national securities market or, in the sole determination of the board of directors, a secondary market for Shares otherwise develops. All Shares to be repurchased under the Share Repurchase Plan must be (i) fully transferable and not be subject to any liens or other encumbrances and (ii) free from any restrictions on transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Governing Law**. THIS SHARE REPURCHASE PLAN AND A STOCKHOLDER'S ELECTION TO PARTICIPATE IN THE SHARE REPURCHASE PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY IN SAID STATE; PROVIDED, HOWEVER, THAT CAUSES OF ACTION FOR VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS SHALL NOT BE GOVERNED BY THIS SECTION 6.

## Exhibit 10.1

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.1**

***Execution Version***

CNL STRATEGIC RESIDENTIAL CREDIT, INC.

and

CNL RESIDENTIAL CREDIT MANAGER, LLC

ADVISORY AGREEMENT

**TABLE OF Contents**

---

| | | |
|:---|:---|:---|
|  | | **Page** |
| 1. | DEFINITIONS | 1 |
| 2. | APPOINTMENT | 6 |
| 3. | DUTIES OF THE ADVISOR | 7 |
| 4. | AUTHORITY OF ADVISOR | 9 |
| 5. | BANK ACCOUNTS | 11 |
| 6. | RECORDS; ACCESS | 11 |
| 7. | LIMITATIONS ON ACTIVITIES | 11 |
| 8. | OTHER ACTIVITIES OF THE ADVISOR | 11 |
| 9. | RELATIONSHIP WITH DIRECTORS AND OFFICERS | 14 |
| 10. | COMPENSATION | 14 |
| 11. | EXPENSES | 16 |
| 12. | OTHER SERVICES | 19 |
| 13. | NO JOINT VENTURE | 19 |
| 14. | TERM OF AGREEMENT | 19 |
| 15. | TERMINATION | 19 |
| 16. | ASSIGNMENT TO AN AFFILIATE | 19 |
| 17. | REPRESENTATIONS AND WARRANTIES | 20 |
| 18. | PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION | 21 |
| 19. | INDEMNIFICATION BY THE COMPANY | 21 |
| 20. | INDEMNIFICATION BY ADVISOR | 22 |
| 21. | NON-SOLICITATION | 22 |
| 22. | MISCELLANEOUS | 22 |

---

**ADVISORY AGREEMENT**

THIS ADVISORY AGREEMENT (this "**Agreement**"), dated as of March 10, 2025 (the "**Effective Date**"), is by and between CNL Strategic Residential Credit, Inc., a Maryland corporation (the "**Company**"), and CNL Residential Credit Manager, LLC, a Delaware limited liability company (the "**Advisor**"). Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

**W I T N E S S E T H:**

WHEREAS, the Company intends to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;

WHEREAS, the Company desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Board, all as provided herein; and

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **DEFINITIONS**. As used in this Agreement, the following terms have the definitions hereinafter indicated:

"**Acquisition Expenses**" shall mean any and all expenses incurred by the Company, the Advisor, the Sub-Advisor or any Affiliate of either in connection with the selection, evaluation, structuring, acquisition, origination, financing and development of any assets, whether or not acquired, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses title insurance premiums, and the costs of performing due diligence.

"**Advisor**" shall have the meaning set forth in the preamble of this Agreement.

"**Advisor Persons**" shall have the meaning set forth in Section 21 of this Agreement.

"**Advisor Expenses**" shall have the meaning set forth in Section 11(a) of this Agreement.

"**Affiliate"** or "**Affiliated**" shall mean, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, 10% or more of the outstanding voting securities of such other Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person, including any partnership in which such Person is a general partner; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

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

"**Annual Preferred Return**" shall have the meaning set forth in Section 10(b) of this Agreement.

"**Balbec**" shall mean Balbec Capital LP.

"**Board**" shall mean the board of directors of the Company, as of any particular time.

"**Business Day**" shall mean any day upon which banking institutions are required or permitted to be open for the transaction of business in New York City.

"**Bylaws**" shall mean the bylaws of the Company, as amended from time to time.

"**Cause**" shall mean, if the termination or non-renewal of this Agreement is the result of (a) a member of the senior management team of the Advisor has been convicted in a final, non-appealable determination by a court of competent jurisdiction or a government body or entered a plea of guilt or nolo contendere of any felony or a material violation of any federal or state securities laws, (b) willful breach of fiduciary duty by the Advisor as determined by a final, non-appealable decision by a court of competent jurisdiction, (c) a material breach of the this Agreement which breach is not cured within ninety (90) days of written notice given to the Advisor specifying in reasonable detail the nature of the alleged breach, or (d) an assignment of this Agreement (or deemed assignment under the Investment Advisers Act) by the Advisor occurs and a majority of the Independent Directors does not provide their consent to the assignment.

"**CEA**" shall mean the U.S. Commodities Exchange Act, as amended.

"**Change of Control**" shall mean any event (including, without limitation, issue, transfer or other disposition of shares of capital stock of the Company, merger, share exchange or consolidation) after which any "person" (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing greater than 50% or more of the combined voting power of Company's then outstanding securities; provided, that, a Change of Control shall not be deemed to occur as a result of any widely distributed public offering of the Shares.

"**Charter**" shall mean the Articles of Incorporation of the Company filed with the Maryland State Department of Assessments and Taxation in accordance with the Maryland General Corporation Law, as amended from time to time.

"**Class A Common Shares**" shall mean shares of the Class A common stock of the Company.

"**Class D Common Shares**" shall mean shares of the Class D common stock of the Company.

"**Class E Common Shares**" shall mean shares of the Class E common stock of the Company.

"**Class FA Common Shares**" shall mean shares of the Class FA common stock, $0.01 par value per share, of the Company.

"**Class I Common Shares**" shall mean shares of the Class I common stock, $0.01 par value per share, of the Company.

"**Class T Common Shares**" shall mean shares of the Class T common stock, $0.01 par value per share, of the Company.

"**CNL**" shall mean CNL Financial Group, LLC.

"**Code**" shall mean the Internal Revenue Code of 1986, as amended.

"**Commencement Date**" shall mean the date the Company commences investment operations after holding its first closing in its initial Offering.

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

"**Dealer Manager**" shall mean such Person selected by the Board to act as the dealer manager for an Offering.

"**Director**" shall mean a member of the Board.

"**Distributions**" shall mean any distributions (as such term is defined in Section 2-301 of the Maryland General Corporation Law, as amended from time to time), pursuant to Section 6.5 of the Charter, by the Company to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes.

"**Effective Date**" shall have the meaning set forth in the preamble of this Agreement.

"**Expense Support Agreement**" shall have the meaning set forth in Section 11(a) of this Agreement.

"**Founder Breakpoint**" shall have the meaning set forth in Section 10(b)(iii)(A) of this Agreement.

"**Founder Catch Up**" shall have the meaning set forth in Section 10(b)(iii)(A) of this Agreement.

"**Founder Shares**" shall have the meaning set forth in Section 10(a) of this Agreement.

"**High Water Mark**" shall have the meaning set forth in Section 10(b)(iv) of this Agreement.

"**Independent Director**" shall have the meaning set forth in the Charter.

"**Investment Advisers Act**" shall mean the Investment Advisers Act of 1940, as amended.

"**Investment Company Act**" shall mean the Investment Company Act of 1940, as amended, and all applicable rules, regulations and interpretations thereunder.

"**Investment Guidelines**" shall mean the investment guidelines developed by the Advisor and Sub-Advisor and adopted by the Board, as amended from time to time, pursuant to which the Advisor has discretion to acquire and dispose of Investments for the Company, without the prior approval of the Board.

"**Investments**" shall mean any investments by the Company, directly or indirectly, in U.S. performing and re-performing whole loan mortgages, mortgage servicing rights, residential mortgage-backed securities or other assets.

"**Joint Ventures**" shall mean those joint venture or partnership arrangements in which the Company or any of its subsidiaries is a co-venturer or partner established to acquire or hold assets of the Company.

"**Management Fee**" shall have the meaning set forth in Section 10(a) of this Agreement.

"**Master Servicing Fee**" shall mean the fee paid by the Company or at the Investment level to PRPA, an affiliate of the Sub-Advisor, in connection with certain services PRPA provides to the Company's mortgage assets related to (a) pre-acquisition due diligence and transaction management, (b) post-acquisition monitoring including the day-to-day supervision of unaffiliated mortgage servicers and the monitoring the performance of each loan, (c) the coordination of loan modification and other loss mitigation efforts, and (d) the management and disposition of foreclosed properties and certain loan dispositions.

"**NAV**" shall mean the Company's net asset value, calculated pursuant to the Valuation Guidelines. For purposes of this Agreement only, the per Share NAV of each class of Shares shall be (i) the NAV per Share of such class; (ii) the actual value accorded to each class of Shares in connection with any merger or sale of the Company or its assets; or (iii) if any class of Shares is listed on a national securities exchange, the volume weighted average closing price of such Shares for the last thirty (30) trading days of the current year, or such shorter period as such Shares have been "listed" during the current year.

"**Non-Founder Breakpoint**" shall have the meaning set forth in Section 10(b)(ii)(A) of this Agreement.

"**Non-Founder Catch Up**" shall have the meaning set forth in Section 10(b)(ii)(A) of this Agreement.

"**Non-Founder Shares**" shall have the meaning set forth in Section 10(a) of this Agreement.

"**Offering**" shall mean any offering of Shares for the account of the Company.

"**Offering Memorandum**" shall mean the confidential private offering memorandum of the Company as such offering memorandum may be amended or supplemented from time to time.

"**Organization and Offering Expenses**" shall mean any and all costs and expenses incurred by the Company in connection with the formation of the Company, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions, costs related to investor and broker-dealer sales meetings, expenses for printing, engraving, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including design and website expenses and the costs related to investor and broker-dealer sales meetings), reasonable bona fide due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, expense reimbursements for actual costs incurred by employees of a dealer manager in the performance of wholesaling activities, charges of transfer agents, registrars, trustees (including the Board), subscription processing, escrow holders, depositories and experts, and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants' and attorneys' fees.

"**Origination Fees**" shall mean loan origination fees, extension fees, exit fees, prepayment fees and loan assumption fees paid by borrowers in connection with the origination of each new loan by the Company.

"**Other Balbec Accounts**" shall mean investment funds, partnerships, joint ventures, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by Balbec or its Affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with Balbec or its Affiliates side-by-side or additional general partner investments with respect thereto).

"**Other CNL Accounts**" shall mean investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by CNL or its Affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with CNL or its Affiliates side-by-side or additional general partner investments with respect thereto).

"**Person**" shall mean any natural person or any partnership, corporation, trust, limited liability company or other legal entity.

"**PRPA**" shall mean PRP Advisors, LLC.

"**REIT**" shall mean a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both as defined pursuant to Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.

"**Restricted Person**" shall have the meaning set forth in Section 21 of this Agreement.

"**Selling Commissions**" shall mean any and all up-front fees and commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, up-front fees or commissions payable to the Dealer Manager.

"**Services**" shall have the meaning set forth in Section 8(c) of this Agreement.

"**Shares**" shall mean shares of stock of the Company of any class or series.

"**Stockholder Servicing Fee**" shall mean the stockholder servicing fee payable to the Dealer Manager and reallowable to soliciting dealers with respect to Class T Common Shares and Class D Common Shares as described in the Offering Memorandum.

"**Stockholders**" shall mean the holders of record of the Shares as maintained in the books and records of the Company or its transfer agent.

"**Sub-Advisor**" shall mean Balbec Capital Management, L.P., a Delaware limited partnership.

"**Sub-Advisory Agreement**" shall mean the Sub-Advisory Agreement, dated the date hereof (as amended from time to time), between the Advisor and the Sub-Advisor.

"**Termination Date**" shall mean the date of termination of this Agreement or expiration of this Agreement in the event this Agreement is not renewed for an additional term.

"**Total Return Incentive Fee**" shall have the meaning set forth in Section 10(b) of this Agreement.

"**Total Return to Stockholders**" shall mean the investment return provided to Stockholders, which shall be calculated independently for each class of Shares, and shall be equal to, for all such Shares outstanding during such applicable period, the sum of (i) declared Distributions per Share over such applicable period plus (ii) change in NAV per Share over the calendar year (or such other applicable period). For purposes of the Total Return Incentive Fee, the Annual Preferred Return, the Non-Founder Breakpoint and the Founder Breakpoint are adjusted for the actual number of days in each calendar year, measured as of each calendar quarter end. In no event will the Total Return Incentive Fee exceed 15% of the annual Total Return to Stockholders allocable to a class of Shares over any calendar year.

"**Valuation Guidelines**" shall mean the valuation guidelines adopted by the Board, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **APPOINTMENT**. The Company hereby appoints the Advisor to serve as its investment adviser on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment. Except as otherwise provided in this Agreement, the Advisor hereby agrees to use its commercially reasonable efforts to perform the duties set forth herein, provided that the Company reimburses the Advisor (and, as applicable, the Sub-Advisor) for costs and expenses in accordance with Section 11 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **DUTIES OF THE ADVISOR**. Subject to the oversight of the Board and the terms and conditions of this Agreement and consistent with the provisions of the Offering Memorandum for the Shares, the Investment Guidelines, the Charter and Bylaws, the Advisor will have plenary authority with respect to the management of the business and affairs of the Company and will be responsible for implementing the investment strategy of the Company. The Advisor will perform (or cause to be performed through one or more of its Affiliates or third parties, including the Sub-Advisor) such services and activities relating to the selection of investments and rendering investment advice to the Company as may be appropriate or otherwise mutually agreed from time to time, which may include, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) manage the day-to-day operations of the Company or its subsidiaries, consistent with the investment objectives and policies established by the Board from time to time, including the Investment Guidelines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) serve as an advisor to the Company with respect to the establishment and periodic review of the Investment Guidelines for the Company's investments, financing activities and operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) on behalf of the Company, investigate, select, engage such persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, correspondents, lenders, technical advisers, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, securities investment advisors, mortgagors, mortgage servicing companies, any and all agents for any of the foregoing, or other persons (including Affiliates of the Advisor) acting in any capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services, including but not limited to entering into contracts in the name of the Company with any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) consult with the Company's officers and Board and assist the Board in the formulation and implementation of the Company's financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the origination, acquisition and disposition of Investment or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by the Company or any its subsidiaries consistent with the business objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) subject to the provisions of Section 4 hereof, on behalf of the Company, identify potential opportunities for investments consistent with the Company's investment objectives and policies, including but not limited to: (i) locate, analyze, perform due diligence on and select potential Investments; (ii) structure and negotiate the terms and conditions of transactions pursuant to which originations, acquisitions and dispositions of Investments will be made including, without limitation, the formation and qualification of wholly owned subsidiaries, securitizations of Investments, joint ventures, and special purpose vehicles; (iii) arrange for financing and refinancing and make other changes in the Investments or capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with originations, acquisitions or securitizations of Investments; (iv) coordinate and manage operations of any co-investment interests held by the Company and conducting matters with co-investment partners; and (v) determine the composition of the Investments, the nature and timing of the changes therein and the manner of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) service, monitor, and manage the Investments whether such Investments are held directly or indirectly, including, but not limited to, with respect to mortgage loans, mortgage-related securities, real estate, real estate securities and other real estate-related assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) arrange financings and borrowing facilities for the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) upon request, provide the Board with periodic reports regarding prospective business opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) use commercially reasonable efforts to cause the Company to comply with all applicable laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) from time to time, or at any time reasonably requested by the Board, make reports to the Board regarding (a) the Advisor's performance of services to the Company under the terms of this Agreement, and (b) the Sub-Advisor's performance of services under the Sub-Advisory Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) advise the Company regarding the Company's ability to elect REIT status, and thereafter maintenance of the Company's status as a REIT, form and utilize taxable REIT subsidiaries and monitor compliance with the various REIT qualification tests in the REIT Provisions of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) evaluate and recommend cash management and hedging strategies and modifications thereto in effect and cause the Company to engage in overall securitization and hedging strategies consistent with the Company's status as a REIT and with the Company's investment policies approved by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) advise the Company regarding the maintenance of the Company's exception from the Investment Company Act, and monitor compliance with the requirements for maintaining an exception from the Investment Company Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) in the event that the Company is a commodity pool under the CEA, act as the Company's commodity pool operator for the period and on the terms and conditions set forth in this Agreement, including, for the avoidance of doubt, the authority to make any filings, submissions or registrations (including for exemptive or "no action" relief) to the extent included or desirable under the CEA (and the Company hereby appoints the Advisor to act in such capacity and the Advisor accepts such appointment and agrees to be responsible for such services);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) handle and resolve all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company and may be subject, arising out of the Company's day-to-day operations, subject to such limitations or parameters as may be imposed from time to time by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) support the Company's capital raising efforts, including without limitation, to be reasonably available to support any placement agent's or dealer manager's marketing, syndicate building and placement process, it being understood that such placement agent or dealer manager will lead all day-to-day capital raising efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) participate in the fair valuation process for Investments pursuant to the Valuation Guidelines, including making supportable recommendations of fair values to the Company for all investments for which publicly observable prices are not available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) provide such assistance as reasonably requested by the Company in calculating, as of the last Business Day of each month, the NAV per Share for each Share class in accordance with the Valuation Guidelines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) participate in the review of draft financial statements and registration statements to ensure that the information presented regarding the Advisor or its Affiliates and the Company's underlying Investments are accurate and not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) participate in presentations to (i) managing dealer or placement agent wholesaling personnel; (ii) broker-dealer and registered investment adviser and other distribution intermediaries road shows; (iii) educational forums; (iv) due diligence review programs conducted by third-party evaluators and due diligence officers of broker-dealers; and (v) other marketing events and forums to facilitate the Company's fund raising efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) assist the Company in maintaining the registration of the Shares under federal and state securities laws, as applicable, with respect to any Offering and complying with all federal, state and local regulatory requirements applicable to the Company with respect to any Offering and the Company's business activities (including the Sarbanes-Oxley Act of 2002, as amended), including with respect to any Offering, preparing or causing to be prepared all supplements to the Offering Memorandum and financial statements and all reports and documents, if any, required under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (to the extent not performed by the Company's Administrator); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) perform such other services as may be required from time to time for the management and other activities relating to the Company's respective business and Investments as the Board shall reasonably request or the Advisor shall deem appropriate under the particular circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **AUTHORITY OF ADVISOR**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Pursuant to the terms of this Agreement (including the restrictions included in this Section 4 and in Section 7), and subject to the continuing and exclusive authority of the Board over the management of the Company, the Board (by virtue of its approval of this Agreement and authorization of the execution hereof by the officers of the Company) hereby delegates to the Advisor the authority to take, or cause to be taken, any and all actions and to execute and deliver any and all agreements, certificates, assignments, instruments or other documents and to do any and all things that, in the judgment of the Advisor, may be necessary or advisable in connection with the Advisor's duties described in Section 3, including the entry into the Sub-Advisory Agreement and the making of any Investment that fits within the Company's investment objectives, strategy and guidelines, policies and limitations and within the discretionary limits and authority as granted to the Advisor from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, any Investment that does not fit within the Investment Guidelines will require the prior approval of the Board or any duly authorized committee of the Board, as the case may be. Except as otherwise set forth herein, in the Investment Guidelines or in the Charter, any Investment that fits within the Investment Guidelines may be made by the Advisor on the Company's behalf without the prior approval of the Board or any duly authorized committee of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Board will review the Investment Guidelines with sufficient frequency and at least annually and may, at any time upon the giving of notice to the Advisor and the Sub-Advisor, amend the Investment Guidelines; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and the Sub-Advisor or such later date as is specified by the Board and included in the notice provided to the Advisor and the Sub-Advisor and such modification or revocation shall not be applicable to investment transactions to which the Advisor and/or the Sub-Advisor has committed the Company prior to the date of receipt by the Advisor and the Sub-Advisor of such notification, or if later, the effective date of such modification or revocation specified by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Advisor may retain, for and on behalf, and at the sole cost and expense, of the Company, such services as the Advisor deems necessary or advisable in connection with the management and operations of the Company, which may include Affiliates of the Advisor or the Sub-Advisor. In performing its duties under Section 3, the Advisor shall be entitled to rely reasonably on qualified experts and professionals (including, without limitation, accountants, legal counsel and other professional service providers) hired by the Advisor at the Company's sole cost and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Advisor entered into the Sub-Advisory Agreement with the Sub-Advisor pursuant to which the Advisor has delegated and agreed to obtain the services of the Sub-Advisor to assist the Advisor in fulfilling its responsibilities hereunder. Specifically, the Advisor has retained the Sub-Advisor to exercise investment discretion to determine the Investments that the Company will originate, acquire and dispose of based upon the Company's business objectives, policies and restrictions, and work, along with the Advisor, in sourcing, structuring, negotiating, arranging, or effecting the origination, acquisition and disposition of such assets and monitoring or securitizing assets on behalf of the Company, subject to the oversight of the Advisor and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Advisor shall monitor the Sub-Advisor to ensure that material information discussed by management of any such Sub-Advisor is communicated to the Board, as appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Sub-Advisor shall be subject to the same fiduciary duties imposed on the Advisor pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Advisor shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **BANK ACCOUNTS**. The Advisor may establish and maintain one or more bank accounts in the name of the Company and any subsidiary thereof and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, consistent with the Advisor's authority under this Agreement, provided that no funds shall be commingled with the funds of the Advisor; and the Advisor shall from time to time render, upon request by the Board, its audit committee or the auditors of the Company, appropriate accountings of such collections and payments to the Board, its audit committee and the auditors of the Company, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **RECORDS; ACCESS**. The Advisor shall maintain appropriate records of its activities hereunder and make such records available for inspection by the Board and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours. The Advisor shall at all reasonable times have access to the books and records of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **LIMITATIONS ON ACTIVITIES**. The Advisor shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Guidelines, (ii) would adversely and materially affect the qualification of the Company as a REIT under the Code or the Company's status as an entity excluded from the definition of an investment company under the Investment Company Act (unless and until such time as the Board notifies the Advisor that it has determined that it is no longer in the best interest of the Company to continue to satisfy the requirements for exemption from registration under the Investment Company Act), or (iii) would materially violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or of any exchange on which the securities of the Company may be listed or that would otherwise not be permitted by the Charter or Bylaws. If the Advisor is ordered to take any action by the Board, the Advisor shall seek to notify the Board if it is the Advisor's reasonable judgment that such action would adversely and materially affect such status or violate any such law, rule or regulation or the Charter, Bylaws or Operating Agreement. Notwithstanding the foregoing, neither the Advisor nor any of its Affiliates shall be liable to the Company, the Board, or the Stockholders for any act or omission by the Advisor or any of its Affiliates, except as provided in Section 20 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **OTHER ACTIVITIES OF THE ADVISOR**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Nothing in this Agreement shall (i) prevent the Advisor or any of its Affiliates, officers, directors, employees or personnel, from engaging in other businesses or from rendering services of any kind to any other Person, including, without limitation, investing in, or rendering advisory services to others investing in, any type of business (including, without limitation, investments that meet the principal investment objectives of the Company), whether or not the investment objectives or policies of any such other Person or entity are similar to those of the Company, including, without limitation, the sponsoring, closing and/or managing of any Other Balbec Accounts or Other CNL Accounts, or (ii) in any way bind or restrict the Advisor or any of its Affiliates, officers, directors, employees or personnel from buying, selling or trading any securities or investments for their own accounts or for the account of others for whom the Advisor or any of its Affiliates, officers, directors, employees or personnel may be acting, or (iii) prevent the Advisor or any of its Affiliates, officers, directors, employees or personnel from receiving fees or other compensation or profits (whether in cash or in-kind) from such activities described in this Section 8(a) which shall be for the sole benefit of the Advisor (and/or its Affiliates, officers, directors, employees or personnel), subject to any agreements with the Sub-Advisor, including the Exclusivity Agreement by and between the respective parent companies of the Advisor and Sub-Advisor, dated as of February 3, 2025 (the "**Exclusivity Agreement**"). While information and recommendations supplied to the Company shall, in the Advisor's reasonable and good faith judgment, be appropriate under the circumstances and in light of the investment objectives and policies of the Company, such information and recommendations may be different in certain material respects from the information and recommendations supplied by the Advisor or any Affiliate of the Advisor to others (including, for greater certainty, the Other Balbec Accounts and Other CNL Accounts and their investors, as described more fully in Section 8(b)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Advisor and the Company acknowledges and agrees that, notwithstanding anything to the contrary contained herein, (i) Affiliates of the Advisor sponsor, advise and/or manage Other CNL Accounts and may in the future sponsor, advise and/or manage additional Other CNL Accounts, subject to any agreements with the Sub-Advisor, including the Exclusivity Agreement, (ii) in accordance with Balbec's prevailing policies and procedures, there may be circumstances where investments that are consistent with the Company's Investment Guidelines may be shared with or allocated to one or more Other Balbec Accounts (in lieu of the Company) in accordance with Balbec's prevailing policies and procedures on a basis that the Advisor and its Affiliates determine to be fair and equitable and (iii) in accordance with CNL's prevailing policies and procedures, there may be circumstances where investments that are consistent with the Company's Investment Guidelines may be shared with or allocated to one or more Other CNL Accounts (in lieu of the Company) in accordance with CNL's prevailing policies and procedures on a basis that the Advisor and its Affiliates determine to be fair and equitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In connection with the services of the Advisor hereunder, the Company and the Board acknowledge and/or agree that (i) as part of CNL's and Balbec's regular businesses, personnel of the Advisor and its Affiliates may from time-to-time work on other projects and matters (including with respect to one or more Other Balbec Accounts and Other CNL Accounts), and that conflicts may arise with respect to the allocation of personnel between the Company and one or more Other Balbec Accounts and Other CNL Accounts and/or the Advisor and such other Affiliates, (ii) Other Balbec Accounts and Other CNL Accounts may invest, from time to time, in investments in which the Company also invests (including at a different level of an issuer's capital structure (e.g., an investment by an Other Balbec Account or an Other CNL Account in a debt or mezzanine interest with respect to the same portfolio entity in which the Company owns an equity interest or vice versa) or in a different tranche of equity or debt with respect to an issuer in which the Company has an interest) and while Balbec and CNL will seek to resolve any such conflicts in a fair and equitable manner in accordance with their prevailing policies and procedures with respect to conflicts resolution among Other Balbec Accounts and Other CNL Accounts generally, such transactions are not required to be presented to the Board or any committee thereof for approval (unless otherwise required by the Investment Guidelines), and there can be no assurance that any conflicts will be resolved in the Company's favor, (iii) the Company may from time to time pay fees to the Advisor and its Affiliates, including portfolio entities of Other Balbec Accounts and of Other CNL Accounts, for providing various services described in the Offering Memorandum (collectively, "**Services**"), which fees will be in addition to the compensation paid to the Advisor pursuant to Section 10 hereof, (iv) the Advisor and its Affiliates may from time to time receive fees from portfolio entities or other issuers for providing Services, including with respect to Other Balbec Accounts and Other CNL Accounts and related portfolio entities, and while such fees will give rise to conflicts of interest the Company will not receive the benefit of any such fees, and (v) the terms and conditions of the governing agreements of such Other Balbec Accounts and Other CNL Accounts (including with respect to the economic, reporting, and other rights afforded to investors in such Other Balbec Accounts and Other CNL Accounts) are materially different from the terms and conditions applicable to the Company and the Stockholders, and neither the Company nor the Stockholders (in such capacity) shall have the right to receive the benefit of any such different terms applicable to investors in such Other Balbec Accounts and Other CNL Accounts as a result of an investment in the Company or otherwise. The Advisor shall keep the Board reasonably informed on a periodic basis in connection with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Advisor is not permitted to consummate on the Company's behalf any transaction that involves (i) the sale of any investment to or (ii) the acquisition of any investment from CNL, Balbec, any Other Balbec Account, any Other CNL Account, or any of their Affiliates, the Directors or any of their Affiliates, unless such transaction is approved by a majority of the Directors not otherwise interested in such transaction as being fair and reasonable to the Company. In addition, the Company may enter into Joint Ventures with Other Balbec Accounts and Other CNL Accounts, or with CNL or Balbec, the Advisor, the Sub-Advisor, one or more Directors, or any of their respective Affiliates, only if a majority of the Directors not otherwise interested in the transaction approve the transaction as being fair and reasonable to the Company and on substantially the same, or more favorable, terms and conditions as those received by other Affiliate joint venture partners. The Advisor will seek to resolve any conflicts of interest in a fair and equitable manner in accordance with its prevailing policies and procedures with respect to conflicts resolution among Other Balbec Accounts and Other CNL Accounts generally, but only those transactions set forth in this Section 8(d) will be expressly required to be presented for approval to the Directors or any committee thereof (unless otherwise required by the Charter or the Investment Guidelines).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Advisor and its Affiliates will provide the Company with a management team, including a chief executive officer, president, chief financial officer and chief compliance officer, and other appropriate support personnel to provide the advisory services to be provided by the Advisor to the Company hereunder, the members of which team shall devote such portion of their time to the management of the Company as is necessary and appropriate to enable the Company to operate its business, commensurate with the Company's level of activity. None of the officers or employees of the Advisor will be dedicated exclusively to the Company, except for any such officer or employee who may be seconded exclusively to the Company pursuant to a secondment arrangement with the Advisor. The Advisor and its Affiliates shall provide reasonable access to their respective investment professionals in order to support the day-to-day operations of the Company and its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Managers, partners, officers, employees, personnel and agents of the Advisor or Affiliates of the Advisor may serve as directors, officers, employees, partners, personnel, agents, nominees or signatories for the Company, to the extent permitted by the Charter and Bylaws, or by any resolutions duly adopted by the Board pursuant to the Charter and Bylaws. When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) For the avoidance of doubt, it is understood that neither the Company nor the Board has the authority to determine the salary, bonus or any other compensation paid by the Advisor to any director, officer, member, partner, employee, or stockholder of the Advisor or its Affiliates, including any person who is also a director or officer employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **RELATIONSHIP WITH DIRECTORS AND OFFICERS**. Subject to Sections 7 and 11 of this Agreement and to restrictions advisable with respect to the qualification of the Company as a REIT, directors, managers, officers and employees of the Advisor or an Affiliate of the Advisor or any corporate parent of an Affiliate, may serve as a Director or officer of the Company, except that no director, officer or employee of the Advisor or its Affiliates who also is a Director or principal executive officer of the Company shall receive any compensation from the Company for serving as a Director or officer other than (a) reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board or (b) as otherwise approved by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **COMPENSATION**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Management Fee**. The Company will pay the Advisor a management fee (the "**Management Fee**") that shall be calculated for each share class at an annual rate of (i) 1.25% of NAV for Class A Common Shares, Class I Common Shares, Class D Common Shares and Class T Common Shares (collectively, the "**Non-Founder Shares**"), and (ii) 1.0% of NAV for the Class FA Common Shares (collectively, the "**Founder Shares**") in each case, per annum and payable monthly in arrears and before giving effect to any accruals for the Management Fee, Stockholder Servicing Fees and Total Return Incentive Fee. No Management Fee will be payable with respect to Class E Common Shares. The Management Fee for a certain month shall be calculated on a class-by-class basis based on the NAV for each applicable Share class at the end of that month and shall be due and payable no later than thirty (30) calendar days following the end of the applicable month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Total Return Incentive Fee.** The Company shall pay the Advisor a total return incentive fee ("**Total Return Incentive Fee**") that shall be based on the Total Return to Stockholders for each Share class of the Company in any calendar year, payable annually in arrears. The Total Return Incentive Fee will be calculated and will accrue on a quarterly basis, to the extent that it is earned. The Company will perform a final reconciliation of the Total Return Incentive Fee calculation at the completion of each calendar year and the Total Return Incentive Fee shall be due and payable to the Advisor no later than ninety (90) calendar days following the end of the applicable calendar year. The Company shall pay the Advisor a Total Return Incentive Fee for each Share class calculated as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Annual Preferred Return.** No Total Return Incentive Fee shall be payable with respect to a particular Share class of the Company for any calendar year in which the Total Return to Stockholders of such Share class for such calendar year does not exceed 6%, which is referred to as the "**Annual Preferred Return**." No Total Return Incentive Fee shall be payable with respect to Class E Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Non-Founder Shares**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) 100% of the Total Return to Stockholders payable with respect to each particular Share class of Non-Founder Shares, calculated at each Share-class level based on the Total Return to Stockholders on Non-Founder Shares, if any, that exceeds the Annual Preferred Return, but is less than or equal to 7.06% (the "**Non-Founder Breakpoint**") in any calendar year. This portion of the Total Return Incentive Fee is referred to as the "**Non-Founder Catch Up**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) 15% of the Total Return to Stockholders with respect to each particular Share class of Non-Founder Shares, calculated at each Share-class level based on the Total Return to Stockholders on Non-Founder Shares, if any, that exceeds the Non-Founder Breakpoint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Founder Shares**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) 100% of the Total Return to Stockholders payable with respect to the Founder Shares, calculated at each Share class based on the Total Return to Stockholders on Founder Shares, if any, that exceeds the Annual Preferred Return, but is less than or equal to 6.86% ("**Founder Breakpoint**") in any calendar year. This portion of the Total Return Incentive Fee is referred to as the "**Founder Catch Up**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) 12.5% of the Total Return to Stockholders with respect to the Founder Shares, calculated at each Share class based on the Total Return to Stockholders on Founder Shares, if any, that exceeds the Founder Breakpoint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) **High Water Mark.** For the purposes of calculating each Total Return to Stockholders, the change in the per Share NAV is subject to a High Water Mark. For purposes of this Agreement, the "**High Water Mark**" is equal to the highest asset value, for each Share class of the Company since inception, adjusted to account for any stock dividend, stock split, recapitalization or any other similar change in the Company's capital structure or for any special distributions, provided such adjustment is approved by the Board. If, as of each calendar year end, the per Share NAV for the applicable Share class is (A) above the High Water Mark, then, for such calendar year, the Total Return to Stockholders calculation will include the increase in the per Share NAV for such Share class in excess of the High Water Mark, and (B) if the per Share NAV for the applicable Share class is below the High Water Mark, for such calendar year, (i) any increase in the per Share NAV will be disregarded in the calculation of Total Return to Stockholders for such Share class while (ii) any decrease in the per Share NAV will be included the calculation of Total Return to Stockholders for such Share class. For the year ending December 31, 2025, the High Water Marks which will apply to the incentive fee calculation will be $24.75 for Class FA Common Shares, $24.75 for Class A Common Shares, $24.75 for Class T Common Shares, $24.75 for Class D Common Shares, and $24.75 for Class I Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event this Agreement is terminated or its term expires without renewal, the Advisor will be entitled to receive each of its prorated Management Fee and the Total Return Incentive Fee through the date of termination. Such pro ration shall take into account the number of days of any partial calendar month or calendar year for which this Agreement was in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In the event the Company commences a liquidation of its Investments during any calendar year, the Company will pay the Advisor the Management Fee and the Total Return Incentive Fee from the proceeds of the liquidation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Advisor shall not retain Origination Fees, which, for the avoidance of doubt, shall be retained by the Company; provided, that, it is understood that PRPA or its Affiliate will be paid and may retain the Master Servicing Fee. Such Master Servicing Fee shall be paid by the Company or at the Investment level directly to PRPA or its Affiliate, and will not reduce or offset the Management Fee or Total Return Incentive Fee payable by the Company to the Advisor or the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **EXPENSES**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Sections 4(e) and 11(b) and any reduction or deferral of such amounts required to be reimbursed pursuant to any Expense Support and Conditional Reimbursement Agreement currently effective among the parties hereto (the "**Expense Support Agreement**"), the Advisor shall be responsible for the expenses related to any and all personnel of the Advisor who provide investment advisory services to the Company pursuant to this Agreement (including, without limitation, each of the principal executive officers of the Company and any Directors who are also directors, officers or employees of the Advisor or any of its Affiliates), including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance with respect to such personnel ("**Advisor Expenses**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In addition to the compensation paid to the Advisor pursuant to Section 10 hereof, the Company shall pay all of its costs and expenses directly or reimburse the Advisor or its Affiliates for costs and expenses of the Advisor and its Affiliates incurred on behalf of the Company, other than Advisor Expenses. Without limiting the generality of the foregoing, it is specifically agreed that the following costs and expenses of the Company are not Advisor Expenses and shall be paid by the Company and shall not be paid by the Advisor or Affiliates of the Advisor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Organization and Offering Expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Acquisition Expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) fees, costs and expenses in connection with the issuance and transaction costs incident to the trading, origination, settling, disposition and financing of the Investments of the Company and its subsidiaries (whether or not consummated), including brokerage commissions, hedging costs, prime brokerage fees, custodial expenses, clearing and settlement charges, and other investment costs, fees and expenses actually incurred in connection with the pursuit, making, holding, originating, settling, monitoring or disposing of actual or potential investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the actual cost of goods and services used by the Company and obtained from Persons not Affiliated with the Advisor, including fees paid to administrators, consultants, attorneys, technology providers and other services providers, and brokerage fees paid in connection with the origination, acquisition and/or sale of Investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) (1) all fees, costs and expenses of legal, tax (including expenses related to tax advice), accounting, valuing assets, including expenses as fees to third parties with respect to the valuation of the Company's investments and (2) consulting, auditing (including internal audit), finance, administrative, investment banking, capital market, transfer agency, escrow agency, custody, prime brokerage, asset management, data, subscription or technology services and other non-investment advisory services rendered to the Company by the Advisor or its Affiliates in compliance with Section 4(e);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) expenses of acquiring, originating, managing and operating the Investments, whether payable to an Affiliate of the Advisor or a non-Affiliated Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the compensation and expenses of the Directors (excluding those directors who are directors, officers or employees of the Advisor) and the cost of liability insurance to indemnify the Directors and officers and expenses incurred in connection with preparation of materials for meetings of the Board and its committees as well as subsequent compensation and expenses incurred in relation to such meetings of the Board and its committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) interest and fees and expenses arising out of borrowings made by the Company, including, but not limited to, costs associated with the establishment and maintenance of any of the Company's credit facilities, other financing arrangements, or other indebtedness of the Company (including commitment fees, accounting fees, legal fees, closing and other similar costs) or any of the Company's securities offerings, whether or not any facilities arrangements or indebtedness are implemented or such securities are offered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) expenses connected with communications to holders of the Company's securities or securities of its subsidiaries and other bookkeeping and clerical work necessary in maintaining relations with holders of such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies, including, without limitation, all costs of preparing and filing required reports with the SEC, the costs payable by the Company to any transfer agent and registrar, expenses in connection with the listing and/or trading of the Company's securities on any exchange, the fees payable by the Company to any such exchange in connection with its listing, costs of preparing, printing and mailing the Company's annual report to the stockholders and proxy materials, if any, with respect to any meeting of the stockholders and any other reports or related statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the Company's allocable share of costs associated with technology-related expenses, including without limitation, any computer software or hardware, electronic equipment or purchased information technology services from third-party vendors or Affiliates of the Advisor, technology service providers and related software/hardware utilized in connection with the Company's investment and operational activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the Company's allocable share of expenses incurred by managers, officers, personnel and agents of the Advisor for travel on the Company's behalf and other out-of-pocket expenses incurred by them in connection with the origination, purchase, financing, refinancing, sale or other disposition of an Investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) expenses relating to compliance-related matters and regulatory filings relating to the Company's activities (including, without limitation, expenses relating to the preparation and filing of reports to be filed with the U.S. Commodity Futures Trading Commission, reports, disclosures, and/or other regulatory filings of the Advisor and its Affiliates relating to the Company's activities (including the Company's pro rata share of the costs of the Advisor and its Affiliates of regulatory expenses that relate to the Company, Other Balbec Accounts and Other CNL Accounts));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the costs of any litigation involving the Company or its assets and the amount of any judgments or settlements paid in connection therewith, directors' and officers' liability or other insurance and indemnification or extraordinary expense or liability relating to the affairs of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) all taxes and license fees in any relevant state, federal or other jurisdiction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) all insurance costs incurred in connection with the operation of the Company's business except for the costs attributable to the insurance that the Advisor elects to carry for itself and its personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) expenses connected with the payments of interest, dividends or distributions in cash or any other form authorized or caused to be made by the Board to or on account of holders of the Company's securities, including, without limitation, in connection with any distribution reinvestment plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) any judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company, or against any Director or officer of the Company or in his or her capacity as such for which the Company is required to indemnify such Director or officer by any court or governmental agency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) expenses incurred in connection with the formation, organization and continuation of any corporation, partnership, Joint Venture or other entity through which the Company's investments are made or in which any such entity invests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) expenses incurred related to industry association memberships or attending industry conferences on behalf of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) data and subscription costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Advisor may, at its option, elect not to seek reimbursement for certain expenses during a given period, which determination shall not be deemed to construe a waiver of reimbursement for similar expenses in future periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any reimbursement payments owed by the Company to the Advisor shall be reimbursed no less than monthly to the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary in this Section 11, the Company's reimbursement of Organizational and Offering Expenses of the Advisor and Sub-Advisor, or their respective Affiliates, will be limited to 1.5% of the cumulative gross offering proceeds from one or more of the Company's offerings ("**Offering Proceeds**") over time. The Advisor, jointly and equally with the Sub-Advisor, shall be responsible for the payment of the Organizational and Offering Expenses without recourse against or reimbursement by the Company unless and until, over time, the total Organizational and Offering Expenses paid to the Advisor and Sub-Advisor and their respective Affiliates do not exceed 1.5% of the Offering Proceeds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any reimbursement payments owed by the Company to the Advisor may be offset by the Advisor against amounts due to the Company from the Advisor. Cost and expense reimbursement to the Advisor shall be subject to adjustment at the end of each calendar year in connection with the annual audit of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **OTHER SERVICES**. Should the Board request that the Advisor or any director, officer or employee thereof render services for the Company other than set forth in Section 3, such services shall be separately compensated at such rates and in such amounts as are agreed by the Advisor and the Board, and shall not be deemed to be services pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **NO JOINT VENTURE**. The Company, on the one hand, and the Advisor on the other, are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as such on either of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **TERM OF AGREEMENT.** This Agreement shall continue in force for a period of one year from the Effective Date, subject to an unlimited number of successive one-year renewals upon approval of a majority of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **TERMINATION.** This Agreement may be terminated (i) at the option of the Advisor immediately upon a Change of Control of the Company; (ii) immediately by the Company for Cause or upon the bankruptcy of the Advisor; (iii) upon 60 days' written notice without Cause or penalty by a majority vote of the Directors; (iv) in the event the Company becomes regulated as an "investment company" under the Investment Company Act, with such termination deemed to have occurred immediately prior to such event or (v) upon 60 days' written notice by the Advisor. The provisions of Sections 18 through 21 survive termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **ASSIGNMENT TO AN AFFILIATE**. This Agreement may be assigned by the Advisor to an Affiliate of the Advisor with the approval of a majority of the Directors. The Advisor may assign any rights to receive fees or other payments under this Agreement to any Person without obtaining the consent of the Board. This Agreement shall not be assigned by the Company without the approval of the Advisor, except in the case of an assignment by the Company to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement. This Agreement shall be binding on successors to the Company resulting from a Change in Control or sale of all or substantially all the assets of the Company, and shall likewise be binding on any successor to the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **REPRESENTATIONS AND WARRANTIES**. The Advisor hereby represents and warrants to the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) There is no action, suit, proceeding, investigation or arbitration, either at law or in equity, of or before any court or tribunal of any jurisdiction or any governmental authority of any jurisdiction pending or, to the knowledge of the Advisor, threatened or proposed in any manner against the Advisor, or, to the knowledge of the Advisor, any circumstances which could or should reasonably form the basis of any such action, suit, proceeding, investigation or arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Advisor is duly formed, validly existing and in good standing under the laws of the State of Delaware, has the limited liability company power to own its assets and to transact the business in which it is now engaged and is duly qualified to do business and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Advisor has the limited liability company power and authority to execute, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary limited liability company action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other person including, without limitation, members or creditors of the Advisor, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Advisor in connection with this Agreement or the execution, delivery or performance of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized agent of the Advisor, and, when executed and delivered by the parties, this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the valid and binding obligation of the Advisor enforceable against the Advisor in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law binding on the Advisor, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Advisor, or the governing instruments of, or any securities issued by, the Advisor or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Advisor is a party or by which the Advisor or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Advisor, and will not result in, or require, the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION**.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Advisor shall promptly upon termination:

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) deliver to the Board all assets, including all Investments, and documents of the Company then in the custody of the Advisor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) cooperate with, and take all reasonable actions requested by, the Company and Board in making an orderly transition of the advisory function.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **INDEMNIFICATION BY THE COMPANY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Indemnification.** The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective officers, directors, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys' fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, and to the fullest extent possible without such indemnification being inconsistent with the laws of the State of Maryland or the Charter. Notwithstanding the preceding sentence of this paragraph to the contrary, nothing contained herein shall protect or be deemed to protect the Advisor and its Affiliates against or entitle or be deemed to entitle the Advisor and its Affiliates to indemnification in respect of, any liability to the Company to which the Advisor and its Affiliates would otherwise be subject by reason of bad faith, fraud, wilful misconduct, negligence or reckless disregard of duties under this Agreement in the performance of the Advisor's duties and obligations, as applicable, under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Limitation.** Notwithstanding anything herein to the contrary, Section 19(a) shall not be construed so as to provide for the indemnification or exculpation of the Advisor or its Affiliates for any liability (including liability under U.S. federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), claims, damages, or losses to the extent (but only to the extent) that such liability, claims, damages, or losses may not be waived, modified, or limited under applicable law, but shall be construed so as to effectuate the provisions of Section 19(a) to the fullest extent permitted by law. For the avoidance of doubt, notwithstanding anything herein to the contrary, no provision of this Agreement should be interpreted as a waiver of any Investment Advisers Act fiduciary duty owed by the Advisor to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **INDEMNIFICATION BY ADVISOR**. The Advisor shall indemnify and hold harmless the Company from contract or other liability, claims, damages, taxes or losses and related expenses including attorneys' fees, to the extent that (i) such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and (ii) are incurred by reason of the Advisor's bad faith, fraud, wilful misconduct, gross negligence or reckless disregard of its duties under this Agreement; **provided**, **however**, **that** the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **NON-SOLICITATION**. During the term of this Agreement and for a period of one (1) year following the Termination Date, the Company shall not, directly or indirectly on behalf of itself or any other Person or entity: (a) solicit the employment of or employ any partners, directors, officers and/or employees (each, a "**Restricted Person**") of the Advisor hereto or any of its Affiliates (collectively, "**Advisor Persons**") or any person or entity who was a Restricted Person of an Advisor Person during the one-year period preceding such proposed solicitation or employment, or (b) induce, persuade or attempt to induce or persuade the discontinuation of, or in any way interfere or attempt to interfere with, the relationship between an Advisor Person and any Restricted Person of such Advisor Person or any person or entity who was a Restricted Person of such Advisor Person during the one-year period preceding such proposed inducement, persuasion or interference or attempted inducement, persuasion or interference. The parties intend that any provision of this Section 21 held invalid, illegal or unenforceable only in part or degree because of the duration or geographic scope thereof shall remain in full force to the extent not held invalid, illegal or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **MISCELLANEOUS**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Notices**. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Charter, the Bylaws, or accepted by the party to whom it is given, and shall be given by being delivered by hand, by courier or overnight carrier, by registered or certified mail, by electronic mail or posted on a password protected website maintained by the Advisor and for which the Company has received access instructions by electronic mail, when posted, using the contact information set forth herein:

The Company: CNL Strategic Residential Credit, Inc. <br> CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> Attention: Chirag Bhavsar<br> Email: Chirag.Bhavsar@CNL.com

The Advisor: CNL Residential Credit Manager, LLC<br> CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> Attention: Tammy J. Tipton<br> Email: Tammy.Tipton@CNL.com

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Modification**. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by the parties hereto, or their respective successors or assignees.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Governing Law; Exclusive Jurisdiction; Jury Trial**. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in Borough of Manhattan, New York for purposes of any suit, action or other proceeding arising from this Agreement, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts. Each of the parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Headings**. The titles and headings of Sections and Subsections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) **Execution in Counterparts**. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. For the avoidance of doubt, a Person's execution and delivery of this Agreement by electronic signature and electronic transmission, including via Docusign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such Person and shall bind such Person to the terms of this Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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

---

| | |
|:---|:---|
| CNL Strategic Residential Credit, Inc. | CNL Strategic Residential Credit, Inc. |
| By: | /s/ Chirag Bhavsar |
|  | Name: Chirag J. Bhavsar |
|  | Title: Chief Executive Officer |

---

---

| | |
|:---|:---|
| CNL Residential Credit Manager, LLC | CNL Residential Credit Manager, LLC |
| By: | /s/ Tammy Tipton |
|  | Name: Tammy J. Tipton |
|  | Title: Chief Financial Officer |

---

## Exhibit 10.2

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.2**

***Execution Version***

CNL RESIDENTIAL CREDIT MANAGER, LLC

and

BALBEC CAPITAL MANAGEMENT, L.P.

Sub-ADVISORY AGREEMENT

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| 1. | **DEFINITIONS** | 1 |
| 2. | **APPOINTMENT** | 5 |
| 3. | **DUTIES OF THE SUB-ADVISOR** | 5 |
| **4.** | **AUTHORITY OF SUB-ADVISOR** | **7** |
| **5.** | **ACCEPTANCE OF APPOINTMENT** | **8** |
| **6.** | **RECORDS; ACCESS** | **8** |
| **7.** | **LIMITATIONS ON ACTIVITIES** | **8** |
| 8. | **OTHER ACTIVITIES OF THE SUB-ADVISOR** | 9 |
| 9. | **COMPENSATION** | 11 |
| 10. | **EXPENSES** | 12 |
| 11. | **RELATIONSHIP OF SUB-ADVISOR, ADVISOR, AND THE COMPANY** | 12 |
| 12. | **INTELLECTUAL PROPERTY RIGHTS; BRAND USAGE** | 12 |
| 13. | **NO THIRD PARTY BENEFICIARIES** | 13 |
| 14. | **TERM OF AGREEMENT** | 13 |
| 15. | **TERMINATION** | 14 |
| 16. | **ASSIGNMENT** | 14 |
| 17. | **REPRESENTATIONS AND WARRANTIES** | 14 |
| 18. | **PAYMENTS TO SUB-ADVISOR UPON TERMINATION** | 16 |
| 19. | **INDEMNIFICATION BY THE ADVISOR AND THE COMPANY** | 16 |
| 20. | **INDEMNIFICATION BY SUB-ADVISOR** | 17 |
| 21. | **NON-SOLICITATION** | 17 |
| 22. | **MISCELLANEOUS** | 17 |

---

-i-

**SUB-ADVISORY AGREEMENT**

THIS SUB-ADVISORY AGREEMENT (this "**Agreement**"), dated as of March 10, 2025 (the "**Effective Date**"), is by and between CNL Residential Credit Manager, LLC, a Delaware limited liability company (the "**Advisor**") and Balbec Capital Management, L.P., a Delaware limited partnership (the "**Sub-Advisor**"), and solely for the purpose of its rights and obligations hereunder, CNL Strategic Residential Credit, Inc., a Maryland corporation (the "**Company**"). Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

**W I T N E S S E T H:**

WHEREAS, the Advisor entered into an Advisory Agreement with the Company, dated as of March 10, 2025, to provide various advisory services for the Company pursuant to the terms of said agreement (and together with any amendments thereto and/or any successor agreement, the "**Advisory Agreement**"); and

WHEREAS, the Advisory Agreement permits the Advisor, subject to the supervision and direction of the Company's Board of Directors (the "**Board**"), to obtain the services of a sub-advisor to assist the Advisor in fulfilling its duties thereunder; and

WHEREAS, the Advisor wishes to retain the Sub-Advisor to assist it in fulfilling certain of its obligations under the Advisory Agreement, and the Sub-Advisor is willing to undertake to render such services subject to the terms and conditions hereinafter set forth; and

WHEREAS, the Advisor and the Sub-Advisor have agreed upon compensation for the services to be provided pursuant to this Agreement, and specifically remuneration for the performance of consulting from time to time relative to matters which arise in connection with the Advisory Agreement.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **DEFINITIONS**. As used in this Agreement, the following terms have the definitions hereinafter indicated:

"**Advisor**" shall have the meaning set forth in the preamble of this Agreement.

"**Advisory Agreement**" shall have the meaning set forth in the recitals of this Agreement.

"**Affiliate" or "Affiliated**" shall mean, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, 10% or more of the outstanding voting securities of such other Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person, including any partnership in which such Person is a general partner; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

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

"**Balbec**" shall mean Balbec Capital LP.

"**Balbec Brand**" shall have the meaning set forth in Section 12(b) of this Agreement.

"**Board**" shall have the meaning set forth in the recitals of this Agreement.

"**Business Day**" shall mean any day upon which banking institutions are required or permitted to be open for the transaction of business in New York City.

"**Bylaws**" shall mean the bylaws of the Company, as amended from time to time.

"**Cause**" shall mean, if the termination or non-renewal of this Agreement is the result of, (a) a member of the senior management team of the Sub-Advisor has been convicted in a final, non-appealable determination by a court of competent jurisdiction or a government body or entered a plea of guilt or nolo contendere of any felony or a material violation of any federal or state securities laws, (b) willful breach of fiduciary duty by the Sub-Advisor as determined by a final, non-appealable decision by a court of competent jurisdiction, (c) a material breach of the this Agreement which breach is not cured within ninety (90) days of written notice given to the Sub-Advisor specifying in reasonable detail the nature of the alleged breach, or (d) an assignment of this Agreement (or deemed assignment under the Investment Advisers Act) by the Sub-Advisor occurs and a majority of the Independent Directors of the Company does not consent to the assignment.

"**Change of Control**" shall mean any event (including, without limitation, issue, transfer or other disposition of shares of capital stock of the Company, merger, share exchange or consolidation) after which any "person" (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing greater than 50% or more of the combined voting power of Company's then outstanding securities; provided, that, a Change of Control shall not be deemed to occur as a result of any widely distributed public offering of the Shares.

"**CEA**" shall mean the U.S. Commodities Exchange Act, as amended.

"**Charter**" shall mean the Articles of Incorporation of the Company filed with the Maryland State Department of Assessments and Taxation in accordance with the Maryland General Corporation Law, as amended from time to time.

"**CNL**" shall mean CNL Financial Group, LLC.

"**CNL Brand**" shall have the meaning set forth in Section 12(c) of this Agreement.

"**Code**" shall have the meaning set forth in the Advisory Agreement.

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

"**Director**" shall mean a member of the Board.

"**Effective Date**" shall have the meaning set forth in the preamble of this Agreement.

"**Expense Support Agreement**" shall have the meaning set forth in Section 9(a) of this Agreement.

"**Independent Director**" shall have the meaning set forth in the Charter.

"**Investment Advisers Act**" shall mean the Investment Advisers Act of 1940, as amended.

"**Investment Company Act**" shall mean the Investment Company Act of 1940, as amended, and all applicable rules, regulations and interpretations thereunder.

"**Investment Guidelines**" shall mean the investment guidelines developed by the Advisor and Sub-Advisor and adopted by the Board, as amended from time to time, pursuant to which the Advisor (and, in accordance with this Agreement, the Sub-Advisor) has discretion to acquire and dispose of Investments for the Company, without the prior approval of the Board.

"**Investments**" shall mean any investments by the Company, directly or indirectly, in U.S. performing and re-performing whole loan mortgages, mortgage servicing rights, residential mortgage-backed securities or other assets.

"**Joint Ventures**" shall mean those joint venture or partnership arrangements in which the Company or any of its subsidiaries is a co-venturer or partner established to acquire or hold assets of the Company.

"**Licensee**" shall have the meaning set forth in Section 12(e).

"**Management Fee**" shall have the meaning set forth in Advisory Agreement.

"**Master Servicing Fee**" shall mean the fee paid by the Company or at the Investment level to PRPA, an affiliate of the Sub-Advisor, in connection with certain services PRPA provides to the Company's mortgage assets related to (a) pre-acquisition due diligence and transaction management, (b) post-acquisition monitoring including the day-to-day supervision of unaffiliated mortgage servicers and the monitoring the performance of each loan, (c) the coordination of loan modification and other loss mitigation efforts, and (d) the management and disposition of foreclosed properties and certain loan dispositions.

"**Offering Memorandum**" shall mean the confidential private offering memorandum of the Company as such offering memorandum may be amended or supplemented from time to time.

"**Organization and Offering Expenses**" shall mean any and all costs and expenses incurred by the Company in connection with the formation of the Company, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions, costs related to investor and broker-dealer sales meetings, expenses for printing, engraving, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including design and website expenses and the costs related to investor and broker-dealer sales meetings), reasonable bona fide due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, expense reimbursements for actual costs incurred by employees of a dealer manager in the performance of wholesaling activities, charges of transfer agents, registrars, trustees (including the Board), subscription processing, escrow holders, depositories and experts, and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants' and attorneys' fees.

"**Origination Fees**" shall mean loan origination fees, extension fees, exit fees, prepayment fees and loan assumption fees paid by borrowers in connection with the origination of each new loan by the Company.

"**Other Balbec Accounts**" shall mean investment funds, partnerships, joint ventures, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by Balbec or its Affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with Balbec or its Affiliates side-by-side or additional general partner investments with respect thereto).

"**Other CNL Accounts**" shall mean investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by CNL or its Affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities formed in connection with CNL or its Affiliates side-by-side or additional general partner investments with respect thereto).

"**Party**" shall mean the Company, the Advisor or the Sub-Advisor as the context requires.

"**Person**" shall mean any natural person or any partnership, corporation, trust, limited liability company or other legal entity.

"**PRPA**" shall mean PRP Advisors, LLC.

"**REIT**" shall mean a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both as defined pursuant to Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.

"**Restricted Person**" shall have the meaning set forth in Section 21 of this Agreement.

"**Services**" shall have the meaning set forth in Section 8(c) of this Agreement.

"**Shares**" shall mean shares of stock of the Company of any class or series.

"**Stockholders**" shall have the meaning set forth in the Advisory Agreement.

"**Sub-Advisor**" shall have the meaning set forth in the preamble of this Agreement.

"**Sub-Advisor Persons**" shall have the meaning set forth in Section 21 of this Agreement.

"**Termination Date**" shall mean the date of termination of this Agreement or expiration of this Agreement in the event this Agreement is not renewed for an additional term.

"**Total Return Incentive Fee**" shall have the meaning set forth in the Advisory Agreement.

"**Valuation Guidelines**" shall have the meaning set forth in the Advisory Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **APPOINTMENT**. The Advisor hereby retains the Sub-Advisor to assist the Advisor in managing the investment and reinvestment of the assets of the Company, including overseeing the day-to-day management of the Company's Investments, subject to the supervision of the Advisor and the Board, upon the terms set forth herein, and the Sub-Advisor hereby accepts such appointment. Except as otherwise provided in this Agreement, the Sub-Advisor hereby agrees to use its commercially reasonable efforts to perform the duties set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **DUTIES OF THE SUB-ADVISOR**. Subject to the oversight of the Advisor and the terms and conditions of this Agreement and consistent with the provisions of the Offering Memorandum, the Investment Guidelines, the Charter and Bylaws, the Sub-Advisor will be responsible for implementing the investment strategy of the Company. The Sub-Advisor will perform (or cause to be performed through one or more of its Affiliates or third parties) such services and activities relating to the selection of investments and rendering investment advice to the Company as may be appropriate or otherwise mutually agreed from time to time (but subject in all cases to the terms and conditions of the Advisory Agreement), which shall include the following, each subject to the oversight of the Advisor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) on behalf of the Advisor, investigate, select, engage such persons as the Sub-Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, correspondents, lenders, technical advisers, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, securities investment advisors, mortgagors, mortgage servicing companies, any and all agents for any of the foregoing, or other persons (including Affiliates of the Sub-Advisor) acting in any capacity deemed by the Sub-Advisor necessary or desirable for the performance of any of the foregoing services, including but not limited to entering into contracts in the name of the Company with any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) subject to the Investment Guidelines, exercise investment discretion with respect to the origination, acquisition, and disposition of Investments or arranging for any issuance of mortgage-backed securities from pools of mortgage loans or mortgage-backed securities owned by the Company or any its subsidiaries consistent with the business objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) subject to the provisions of Section 4 hereof, on behalf of the Company, identify potential opportunities for investments consistent with the Company's investment objectives and policies, including but not limited to: (i) locate, analyze, perform due diligence on and select potential Investments; (ii) structure and negotiate the terms and conditions of transactions pursuant to which originations, acquisitions and dispositions of Investments will be made; (iii) arrange for financing and refinancing and make other changes in the Investments or capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with originations, acquisitions or securitizations of Investments; (iv) coordinate and manage operations of any co-investment interests held by the Company and conducting matters with co-investment partners; and (v) determine the composition of the Investments, the nature and timing of the changes therein and the manner of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) monitor and manage the Investments whether such Investments are held directly or indirectly, including, but not limited to, with respect to mortgage loans, mortgage-related securities, real estate, real estate securities and other real estate-related assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) upon reasonable request by the Board or the Advisor, provide the Company and/or the Advisor with periodic reports regarding prospective business opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) upon reasonable request by the Board or the Advisor, make reports to the Board regarding the Sub-Advisor's performance of services to the Advisor and the Company under the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) oversee all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) involving the Investments that Sub-Advisor deems reasonably likely to have a material impact on the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) support the Company's capital raising efforts, including without limitation, to be reasonably available to support any placement agent's or dealer manager's marketing, syndicate building and placement process, it being understood that such placement agent or dealer manager will lead all day-to-day capital raising efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide reasonable sales and due diligence support as reasonably requested by the placement agent or dealer manager, as applicable, including, as reasonably requested, onsite sales education for wholesalers at their location or field visits with wholesalers, key broker-dealer or registered investment advisor accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) participate in the fair valuation process for Investments pursuant to the Valuation Guidelines, including making supportable recommendations of fair values to the Advisor for all investments for which publicly observable prices are not available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) provide such assistance as reasonably requested by the Company in calculating the fair value of the portfolio, as of the last Business Day of each month, used in the NAV per Share for each Share class in accordance with the Valuation Guidelines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) participate in the review of draft financial statements and registration statements prepared by the administrator to ensure that the information presented regarding the Sub-Advisor or its Affiliates and the Company's underlying Investments are accurate and not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) upon reasonable request of the Advisor, participate in presentations to (i) managing dealer or placement agent wholesaling personnel; (ii) broker-dealer and registered investment adviser and other distribution intermediaries road shows; (iii) educational forums; (iv) due diligence review programs conducted by third-party evaluators and due diligence officers of broker-dealers; and (v) other marketing events and forums to facilitate the Company's fund raising efforts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) perform such other services as may be required from time to time and mutually agreed to by the parties hereto relating to the management of the Company's Investments.

The investment process is a collaborative effort between the Advisor and Sub-Advisor, with respect to which the Advisor will monitor the Sub-Advisor and provide input to the Board on the Investment Guidelines and the Sub-Advisor will exercise investment discretion to determine the Investments that the Company will originate, acquire and dispose of. In addition, certain joint investments or co-investments by the Company with the Sub-Advisor or its Affiliates will require the prior approval of the Board, including a majority of the Independent Directors, to the extent set forth in the Investment Guidelines and required under Section 8(d) below. All investment decisions and approvals shall comply in all respects with the Advisor's and Sub-Advisor's investment approval policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **AUTHORITY OF SUB-ADVISOR**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To facilitate the Sub-Advisor's performance of its responsibilities as set forth herein, but subject to the restrictions contained herein and the obligation of the Advisor to provide general oversight over the Sub-Advisor, the Advisor hereby delegates to the Sub-Advisor, and the Sub-Advisor hereby accepts, the power and authority to act on behalf of the Company to effectuate investment decisions for the Company, including the execution and delivery of all documents relating to the Company's Investments and the placing of orders for other purchase or sale transactions on behalf of the Company. The Advisor, on behalf of the Company, but subject to the restrictions contained herein, also grants to the Sub-Advisor power and authority to engage in all activities (and anything incidental thereto) that the Sub-Advisor reasonably deems appropriate, necessary or advisable to carry out its duties pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, any Investment that does not fit within the Investment Guidelines will require the prior approval of the Board or any duly authorized committee of the Board, as the case may be. Except as otherwise set forth herein, in the Investment Guidelines or in the Charter, any Investment that fits within the Investment Guidelines may be made by the Sub-Advisor on the Company's behalf without the prior approval of the Board or any duly authorized committee of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Sub-Advisor acknowledges that, pursuant to the Advisory Agreement, the Board will review the Investment Guidelines with sufficient frequency and at least annually and may, at any time upon the giving of notice to the Advisor and the Sub-Advisor, amend the Investment Guidelines; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and the Sub-Advisor or such later date as is specified by the Board and included in the notice provided to the Advisor and the Sub-Advisor and such modification or revocation shall not be applicable to investment transactions to which the Advisor and/or the Sub-Advisor has committed the Company prior to the date of receipt by the Advisor and the Sub-Advisor of such notification, or if later, the effective date of such modification or revocation specified by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Sub-Advisor may retain, in accordance with Section 3(a), for and on behalf, and at the sole cost and expense, of the Company, such services as the Sub-Advisor deems necessary or advisable in connection with the Services (as defined below). In performing its duties under Section 3, the Sub-Advisor shall be entitled to rely reasonably on qualified experts and professionals (including, without limitation, accountants, legal counsel and other professional service providers) hired by the Sub-Advisor at the Company's sole cost and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Sub-Advisor shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **ACCEPTANCE OF APPOINTMENT**. The Sub-Advisor hereby agrees during the term hereof to render the services described herein for the compensation provided herein, subject to the limitations contained herein. The Sub-Advisor shall carry out its responsibilities under this Agreement in compliance with: (i) the Company's investment objectives, policies and restrictions as set forth in the Offering Memorandum, including the Investment Guidelines; (ii) such policies, directives, regulatory restrictions and compliance policies as the Advisor may from time to time establish or issue and communicate to the Sub-Advisor in writing; and (iii) applicable law and related regulations. The Advisor shall notify the Sub-Advisor in writing of changes to (i), (ii) or (iii) above promptly after it becomes aware of such changes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **RECORDS; ACCESS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Sub-Advisor shall maintain appropriate records of all its activities hereunder and make such records available for inspection by the Advisor, auditors and authorized agents of the Advisor, from time to time following reasonable written request during normal business hours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sub-Advisor shall (i) at all reasonable times have access to the books and records of the Company to the extent necessary or appropriate to performing the services hereunder; and (ii) at all reasonable times have access to the books and records of the Company, and shall be permitted to retain copies thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **LIMITATIONS ON ACTIVITIES**. The Sub-Advisor shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Guidelines, (ii) would adversely and materially affect the qualification of the Company as a REIT under the Code or the Company's status as an entity excluded from the definition of an investment company under the Investment Company Act (unless and until such time as the Board notifies the Advisor (and the Advisor notifies the Sub-Advisor) that it has determined that it is no longer in the best interest of the Company to continue to satisfy the requirements for exemption from registration under the Investment Company Act), or (iii) would materially violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or of any exchange on which the securities of the Company may be listed or that would otherwise not be permitted by the Charter or Bylaws. If the Sub-Advisor is ordered to take any action by the Board or the Advisor, the Sub-Advisor shall seek to notify the Board or the Advisor, as applicable if it is the Sub-Advisor's reasonable judgment that such action would adversely and materially affect such status or violate any such law, rule or regulation or the Charter, Bylaws or Operating Agreement. Notwithstanding the foregoing, neither the Sub-Advisor nor any of its Affiliates shall be liable to the Advisor, the Company, the Board, or the Stockholders for any act or omission by the Sub-Advisor or any of its Affiliates, except as provided in Section 19 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **OTHER ACTIVITIES OF THE SUB-ADVISOR**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Nothing in this Agreement shall (i) prevent the Sub-Advisor or any of its Affiliates, officers, directors, employees or personnel, from engaging in other businesses or from rendering services of any kind to any other Person, including, without limitation, investing in, or rendering advisory services to others investing in, any type of business (including, without limitation, investments that meet the principal investment objectives of the Company), whether or not the investment objectives or policies of any such other Person or entity are similar to those of the Company, including, without limitation, the sponsoring, closing and/or managing of any Other Balbec Accounts, or (ii) in any way bind or restrict the Sub-Advisor or any of its Affiliates, officers, directors, employees or personnel from buying, selling or trading any securities or investments for their own accounts or for the account of others for whom the Sub-Advisor or any of its Affiliates, officers, directors, employees or personnel may be acting, or (iii) prevent the Sub-Advisor or any of its Affiliates, officers, directors, employees or personnel from receiving fees or other compensation or profits (whether in cash or in-kind) from such activities described in this Section 8(a) which shall be for the sole benefit of the Sub-Advisor (and/or its Affiliates, officers, directors, employees or personnel), subject to any agreements with the Sub-Advisor, including the Exclusivity Agreement by and between the respective parent companies of the Advisor and Sub-Advisor, dated as of February 3, 2025 (the "**Exclusivity Agreement**"). While information and recommendations supplied to the Advisor or the Company shall, in the Sub-Advisor's reasonable and good faith judgment, be appropriate under the circumstances and in light of the investment objectives and policies of the Company, such information and recommendations may be different in certain material respects from the information and recommendations supplied by the Sub-Advisor or any Affiliate of the Sub-Advisor to others (including, for greater certainty, the Other Balbec Accounts and their investors, as described more fully in Section 8(b)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Sub-Advisor and the Advisor acknowledges and agrees that, notwithstanding anything to the contrary contained herein, (i) Affiliates of the Sub-Advisor sponsor, advise and/or manage Other Balbec Accounts and may in the future sponsor, advise and/or manage additional Other Balbec Accounts, subject to any agreements with the Advisor, including the Exclusivity Agreement and (ii) in accordance with Balbec's prevailing policies and procedures, there may be circumstances where investments that are consistent with the Company's Investment Guidelines may be shared with or allocated to one or more Other Balbec Accounts (in lieu of the Company) in accordance with Balbec's prevailing policies and procedures on a basis that the Sub-Advisor and its Affiliates determine to be fair and equitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In connection with the services of the Sub-Advisor hereunder, the Advisor and the Company acknowledge and/or agree that (i) as part of Balbec's regular businesses, personnel of the Sub-Advisor and its Affiliates may from time-to-time work on other projects and matters (including with respect to one or more Other Balbec Accounts), and that conflicts may arise with respect to the allocation of personnel between the Company and one or more Other Balbec Accounts and/or the Sub-Advisor and such other Affiliates, (ii) Other Balbec Accounts may invest, from time to time, in investments in which the Company also invests (including at a different level of an issuer's capital structure (e.g., an investment by an Other Balbec Account in a debt or mezzanine interest with respect to the same portfolio entity in which the Company owns an equity interest or vice versa) or in a different tranche of equity or debt with respect to an issuer in which the Company has an interest) and while Balbec will seek to resolve any such conflicts in a fair and equitable manner in accordance with their prevailing policies and procedures with respect to conflicts resolution among Other Balbec Accounts generally, such transactions are not required to be presented to the Advisor or the Board or any committee thereof for approval (unless otherwise required by the Investment Guidelines), and there can be no assurance that any conflicts will be resolved in the Company's favor, (iii) the Company may from time to time pay fees, including but not limited to the Master Servicing Fee, fees for legal and tax services, and fees and expenses relating to the purchase of rights to receive cash streams in connection with portfolios of mortgage servicing rights, to the Sub-Advisor and its Affiliates, including portfolio entities of Other Balbec Accounts, for providing various services described in the Offering Memorandum (collectively, "**Services**"), which fees will be in addition to the compensation paid to the Sub-Advisor pursuant to Section 9 hereof, (iv) the Advisor and its Affiliates may from time to time receive fees from portfolio entities or other issuers for providing Services, including with respect to Other Balbec Accounts and related portfolio entities, and while such fees will give rise to conflicts of interest the Company will not receive the benefit of any such fees, and (v) the terms and conditions of the governing agreements of such Other Balbec Accounts (including with respect to the economic, reporting, and other rights afforded to investors in such Other Balbec Accounts) are materially different from the terms and conditions applicable to the Company and the Stockholders, and neither the Company nor the Stockholders (in such capacity) shall have the right to receive the benefit of any such different terms applicable to investors in such Other Balbec Accounts as a result of an investment in the Company or otherwise. The Sub-Advisor shall keep the Advisor reasonably informed on a periodic basis in connection with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Sub-Advisor is not permitted to consummate on the Company's behalf any transaction that involves (i) the sale of any investment to or (ii) the acquisition of any investment from CNL, Balbec, any Other Balbec Account, any Other CNL Account, or any of their Affiliates, Directors or any of their Affiliates, unless such transaction is approved by a majority of the Directors not otherwise interested in such transaction as being fair and reasonable to the Company. In addition, the Company may enter into Joint Ventures with Other Balbec Accounts and Other CNL Accounts, or with CNL or Balbec, the Advisor, the Sub-Advisor, one or more Directors, or any of their respective Affiliates, only if a majority of the Directors not otherwise interested in the transaction approve the transaction as being fair and reasonable to the Company and on substantially the same, or more favorable, terms and conditions as those received by other Affiliate joint venture partners. Notwithstanding the forgoing, with respect to the approval required under this Section 8(d) to consummate on the Company's behalf transactions to purchase rights to receive cash streams in connection with portfolios of mortgage servicing rights from Bungalow Funding, LLC, an affiliate of the Sub-Advisor and a licensed mortgage servicer, subject to applicable law and the Company's Governance Documents, the Board may elect to approve the general terms and structure of arrangements for mortgage servicing rights transactions with Bungalow Funding, LLC as being fair and reasonable to the Company which will apply to a series of such transactions made on substantially the same material terms, provided that the Board shall also reserve the right to revoke such general approval in its sole and absolute discretion. The Sub-Advisor will seek to resolve any conflicts of interest in a manner that is fair and equitable in accordance with its prevailing policies and procedures with respect to conflicts resolution among Other Balbec Accounts generally, but only those transactions set forth in this Section 8(d) will be expressly required to be presented for approval to Directors or any committee thereof (unless otherwise required by the Charter or the Investment Guidelines).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Sub-Advisor, for so long as it serves as the Sub-Advisor of the Company, shall devote an amount of its business time and attention to the affairs of the Company as it reasonably determines is consistent with the Company achieving its investment objectives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Managers, partners, officers, employees, personnel and agents of the Sub-Advisor or Affiliates of the Sub-Advisor may serve as directors, officers, employees, partners, personnel, agents, nominees or signatories for the Company, to the extent permitted by the Charter and Bylaws, or by any resolutions duly adopted by the Board pursuant to the Charter and Bylaws. When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **COMPENSATION**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to any fees (including, without limitation, the Management Fee and the Total Return Incentive Fee) earned pursuant to the Advisory Agreement, the Sub-Advisor shall be entitled to receive from the Company, 50% of any and all such amounts earned pursuant to Section 10 of the Advisory Agreement subject to any reduction or deferral of any such fees pursuant to the terms of any Expense Support and Conditional Reimbursement Agreement currently effective among the parties hereto (the "**Expense Support Agreement**"). The Management Fee shall be paid monthly in arrears by the Company, or as otherwise provided for in this Section 9 or Section 18 hereof, at the same time fees are paid to the Advisor pursuant to the Advisory Agreement, but not later than monthly in arrears.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the Advisor nor the Sub-Advisor shall retain Origination Fees, which, for the avoidance of doubt, shall be retained by the Company; provided, that, it is understood that the PRPA or its Affiliate will be paid and may retain the Master Servicing Fee. Such Master Servicing Fee shall be paid by the Company or at the Investment level directly to PRPA or its Affiliate, and will not reduce or offset the Management Fee or Total Return Incentive Fee payable by the Company to the Advisor or the Sub-Advisor. The Sub-Advisor shall, on an annual basis, report to the Advisor or the Company the aggregate amount of the Master Servicing Fee for the applicable calendar year, subject to the oversight of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **EXPENSES**. Except as provided below in this Section 10 and any reduction or deferral of such amounts required to be reimbursed pursuant to the Expense Support Agreement, the Sub-Advisor assumes no obligation with respect to, and shall not be responsible for, the expenses of the Company, including the expenses set forth in Section 11(b) of the Advisory Agreement, or the expenses of the Advisor in fulfilling the Sub-Advisor's obligations hereunder. During the term of this Agreement, the Sub-Advisor shall pay all expenses incurred by it in connection with the activities it undertakes to meet its obligations hereunder. The Sub-Advisor shall, at its sole expense, employ or associate itself with such Persons as it reasonably believes to be capable of assisting it in the execution of its duties under this Agreement, including without limitation, Persons employed or otherwise retained by the Sub-Advisor or made available to the Sub-Advisor by its members or Affiliates. For the avoidance of doubt, this Section 10 shall not require Sub-Advisor to pay any expenses relating to services provided by its Affiliates to the Company or its Investments under separate agreements. The Advisor shall cause the Sub-Advisor to be reimbursed by the Company or the Advisor, as appropriate, for expenses reasonably incurred by the Sub-Advisor at the request of or on behalf of the Company or the Advisor, to the same extent as such expenses would be reimbursable to the Advisor pursuant to Section 11 of the Advisory Agreement had such expenses been incurred by the Advisor. Notwithstanding anything to the contrary in this Section 10, the Company's reimbursement of Organization and Offering Expenses of the Advisor and Sub-Advisor and their respective Affiliates will be limited to 1.5% of the cumulative gross offering proceeds from the Company's offerings ("**Offering Proceeds**"). The Sub-Advisor acknowledges and agrees that, jointly and equally with the Advisor, it shall be responsible for the payment of the Organizational and Offering Expenses without recourse against or reimbursement by the Company unless and until, over time, the total Organizational and Offering Expenses paid to the Advisor and Sub-Advisor and their respective Affiliates do not exceed 1.5% of the Offering Proceeds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **RELATIONSHIP OF SUB-ADVISOR, ADVISOR, AND THE COMPANY**. The Advisor and the Sub-Advisor are not partners or joint venturers with each other nor with the Company, and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as such on any of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **INTELLECTUAL PROPERTY RIGHTS; BRAND USAGE**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as expressly set forth in this Section ‎12, the Sub-Advisor shall not have any right, title and interest in and to, and has not been granted any license to use, any intellectual property of the Advisor or the Company, and the Advisor shall not have any right, title and interest in and to, and has not been granted any license to use, any intellectual property of the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sub-Advisor conducts its business under, owns all rights to, and has proprietary interests in the name "Balbec," and/or "Balbec Capital" as well as under any associated trademarks, trade names, service marks, and other intellectual property (collectively, the "**Balbec Brand**"). Each of the Company and the Advisor acknowledge and agree that the Balbec Brand, and all goodwill in the foregoing, are and shall be the exclusive and valuable intellectual property of the Sub-Advisor, and any and all goodwill in the Balbec Brand arising from the Advisor's or Company's use shall inure solely to the benefit of the Sub-Advisor. In connection with the Company's (a) public filings; (b) requests for information from state and federal regulators; (c) offering materials and advertising materials; and (d) press releases, the Company may state in such materials that Sub-Advisor services are being provided to the Company under the terms of this Agreement. During the term of this Agreement, the Sub-Advisor hereby grants a non-exclusive, non-transferable, and non-sublicensable license to the Advisor and the Company to use the Balbec Brand solely as permitted in the foregoing sentence. Without limiting the foregoing, this license shall have no effect on the Company's ownership rights of the works within which the Balbec Brand shall be used. Upon the termination of this Agreement, the Company and the Advisor, as applicable, will, promptly after receipt of written request from the Sub-Advisor, cease using the name "Balbec," any diminutive thereof, or any word substantially similar thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company and the Advisor conduct business under, and the Advisor owns all rights to, and has proprietary interests in the name "CNL" as well as under any associated trademarks, trade names and service marks and other intellectual property (collectively, the "**CNL Brand**"). The Sub-Advisor acknowledges and agrees that the CNL Brand, and all goodwill in the foregoing, are and shall be the exclusive and valuable intellectual property of the Advisor, and any and all goodwill in the CNL Brand arising from the Company's use shall inure solely to the benefit of the Advisor. In connection with the provision by Sub-Advisor of the services hereunder, in (a) public filings; (b) requests for information from state and federal regulators; (c) offering materials and advertising materials; and (d) press releases, Sub-Advisor may make reference to the Advisor and/or the Company. The Advisor hereby grants to the Sub-Advisor a non-exclusive, non-transferable, and non-sublicensable license to the Sub-Advisor to use the CNL Brand solely as permitted in the foregoing sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any combined marketing that includes the use of the Balbec Brand and/or the CNL Brand shall, as an illustration, be under a name such as "CNL Strategic Residential Credit, Inc., Inc., Sub-Advised by Balbec." In no event may the Company, the Advisor or the Sub-Advisor use or seek to register the respective brands as a single combination or conjoined trademark. At all times, each of the Company, the Advisor and the Sub-Advisor shall have the right to require a Party (each, a "**Licensee**") to produce copies of all materials generated by such Licensee in which the requesting Party's brand was used, and to immediately cease any use of its brand that is not in accordance with the license granted in this Section 12.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company and the Advisor acknowledge and agree that nothing herein limits, and the Sub-Advisor has and shall have all rights to, during the term of this Agreement and thereafter, use and reference all performance data (including but not limited to, rates of return) of the Company and its investments generated in connection with services provided by the Sub-Advisor under this Agreement and the name of the Company in marketing materials and other similar documentation distributed, and proposals made, for the solicitation of business by or on behalf of the Sub-Advisor and/or as otherwise necessary to satisfy the Sub-Advisor's disclosure obligations under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **NO THIRD PARTY BENEFICIARIES**. Except for the Company, which is the intended beneficiary of this Agreement, the parties to this Agreement do not intend any person or entity not a party of this Agreement to be a beneficiary of any provision of this Agreement, and no provision of this Agreement shall be interpreted or construed as being for the benefit of any third party, and no third party shall by virtue of any provision contained herein be entitled to rely hereon or have a claim under this Agreement or with respect to the services provided pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **TERM OF AGREEMENT**. This Agreement shall become effective upon the effectiveness of the Advisory Agreement. Thereafter, the parties agree that this Agreement shall automatically be extended concurrently with the Advisory Agreement and upon approval of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **TERMINATION**. This Agreement may be terminated immediately (i) at the option of the Sub-Advisor upon a Change of Control of the Company; (ii) by the Advisor for Cause on sixty (60) days' written notice (iii) by the Sub-Advisor for a material breach of this Agreement by the Advisor which remains uncured after fifteen (15) days' written notice or upon the bankruptcy of the Advisor; (iv) upon sixty (60) days' written notice by the Sub-Advisor; or (v) at the option of the Sub-Advisor upon the termination of the Advisory Agreement. The provisions of this Section 15 and Sections 6, 12, 17(c), 18 through 21, and 22(e) survive termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **ASSIGNMENT**. This Agreement may not be assigned, within the meaning of the Investment Advisers Act, by the Sub-Advisor without the prior written consent of the Company. The Sub-Advisor may assign any rights to receive fees or other payments under this Agreement to any Person without obtaining the approval of, but with prior written notice to, the Advisor. This Agreement may not be assigned by the Advisor, within the meaning of the Investment Advisers Act, without the prior written consent of the Sub-Advisor. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **REPRESENTATIONS AND WARRANTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Advisor hereby represents and warrants to the Sub-Advisor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) There is no action, suit, proceeding, investigation or arbitration, either at law or in equity, of or before any court or tribunal of any jurisdiction or any governmental authority of any jurisdiction pending or, to the knowledge of the Advisor, threatened or proposed in any manner against the Advisor, or, to the knowledge of the Advisor, any circumstances which could or should reasonably form the basis of any such action, suit, proceeding, investigation or arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Advisor is duly formed, validly existing and in good standing under the laws of the State of Delaware, has the limited liability company power to own its assets and to transact the business in which it is now engaged and is duly qualified to do business and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Advisor has the limited liability company power and authority to execute, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary limited liability company action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other person including, without limitation, members or creditors of the Advisor, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Advisor in connection with this Agreement or the execution, delivery or performance of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized agent of the Advisor and, when executed and delivered by the parties hereto, this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the valid and binding obligation of the Advisor, enforceable against the Advisor, in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law binding on the Advisor, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Advisor, or the governing instruments of, or any securities issued by, the Advisor, or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Advisor is a party or by which the Advisor or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Advisor, and will not result in, or require, the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sub-Advisor hereby represents and warrants to the Advisor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) There is no action, suit, proceeding, investigation or arbitration, either at law or in equity, of or before any court or tribunal of any jurisdiction or any governmental authority of any jurisdiction pending or, to the knowledge of the Sub-Advisor, threatened or proposed in any manner against the Sub-Advisor, or, to the knowledge of the Sub-Advisor, any circumstances which could or should reasonably form the basis of any such action, suit, proceeding, investigation or arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Sub-Advisor is duly formed, validly existing and in good standing under the laws of the State of Delaware, has the limited liability company power to own its assets and to transact the business in which it is now engaged and is duly qualified to do business and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Sub-Advisor has the limited liability company power and authority to execute, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other person including, without limitation, members or creditors of the Sub-Advisor, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Sub-Advisor in connection with this Agreement or the execution, delivery or performance of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized agent of the Sub-Advisor, and, when executed and delivered by the parties, this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the valid and binding obligation of the Sub-Advisor enforceable against the Sub-Advisor in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder, will not violate any provision of any existing law binding on the Sub-Advisor, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Sub-Advisor, or the governing instruments of, or any securities issued by, the Sub-Advisor or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Sub-Advisor is a party or by which the Sub-Advisor or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Sub-Advisor, and will not result in, or require, the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Advisor and the Company hereby acknowledge and agree that (a) the Advisory Agreement may not be amended, modified or waived, in whole or in part, without the prior written consent of the Sub-Advisor, and (b) the Advisor and the Company may not waive defer, or otherwise alter any Management Fee or Total Return Incentive Fee due and payable to the Advisor under the Advisory Agreement without the prior written consent of the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **PAYMENTS TO SUB-ADVISOR UPON TERMINATION**. After the Termination Date, the Sub-Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Advisor within 30 days after the effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Sub-Advisor prior to termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **INDEMNIFICATION BY THE ADVISOR AND THE COMPANY**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Advisor and the Company shall indemnify and hold harmless the Sub-Advisor and its Affiliates, including their respective officers, directors, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys' fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, and to the fullest extent possible without such indemnification being inconsistent with the laws of the State of Maryland or the Charter. Notwithstanding the preceding sentence of this paragraph to the contrary, nothing contained herein shall protect or be deemed to protect the Sub-Advisor and its Affiliates against or entitle or be deemed to entitle the Sub-Advisor and its Affiliates to indemnification in respect of, any liability to the Advisor and the Company to which the Sub-Advisor and its Affiliates would otherwise be subject by reason of bad faith, fraud, wilful misconduct, negligence or reckless disregard of duties under this Agreement in the performance of the Sub-Advisor's duties and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything herein to the contrary, Section 19(a) shall not be construed so as to provide for the indemnification or exculpation of the Sub-Advisor or its Affiliates for any liability (including liability under U.S. federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), claims, damages, or losses to the extent (but only to the extent) that such liability, claims, damages, or losses may not be waived, modified, or limited under applicable law, but shall be construed so as to effectuate the provisions of Section 19(a) to the fullest extent permitted by law. For the avoidance of doubt, notwithstanding anything herein to the contrary, no provision of this Agreement should be interpreted as a waiver of any Investment Advisers Act fiduciary duty owed by the Sub-Advisor to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **INDEMNIFICATION BY SUB-ADVISOR**. The Sub-Advisor shall indemnify and hold harmless the Advisor and the Company from contract or other liability, claims, damages, taxes or losses and related expenses including attorneys' fees, to the extent that (i) such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and (ii) are incurred by reason of the Sub-Advisor's bad faith, fraud, wilful misconduct, gross negligence or reckless disregard of its duties under this Agreement; **provided**, **however**, **that** the Sub-Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **NON-SOLICITATION**. During the term of this Agreement and for a period of one (1) year following the Termination Date, the Company shall not, directly or indirectly on behalf of itself or any other Person or entity: (a) solicit the employment of or employ any partners, directors, officers and/or employees (each, a "**Restricted Person**") of the Sub-Advisor or any of its Affiliates (collectively, "**Sub-Advisor Persons**") or any person or entity who was a Restricted Person of a Sub-Advisor Person during the one-year period preceding such proposed solicitation or employment, or (b) induce, persuade or attempt to induce or persuade the discontinuation of, or in any way interfere or attempt to interfere with, the relationship between a Sub-Advisor Person and any Restricted Person of such Sub-Advisor Person or any person or entity who was a Restricted Person of such Sub-Advisor Person during the one-year period preceding such proposed inducement, persuasion or interference or attempted inducement, persuasion or interference. The parties intend that any provision of this Section 21 held invalid, illegal or unenforceable only in part or degree because of the duration or geographic scope thereof shall remain in full force to the extent not held invalid, illegal or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **MISCELLANEOUS**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing shall be given by being delivered by hand, by courier or overnight carrier, by registered or certified mail, by electronic mail or posted on a password protected website maintained by the Advisor and for which the Company has received access instructions by electronic mail, when posted, using the contact information set forth herein:

The Company: CNL Strategic Residential Credit, Inc. <br> CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> Attention: Chirag Bhavsar<br> Email: Chirag.Bhavsar@CNL.com

The Advisor: CNL Residential Credit Manager, LLC <br> CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> Attention: Tammy J. Tipton<br> Email: Tammy.Tipton@CNL.com

The Sub-Advisor: Balbec Capital Management, L.P. <br> 7114 E Stetson Dr, Suite 250 Scottsdale, Arizona 85251 Attention: Jacob Armour email: jarmour@balbec.com

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Modification**.** This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by the parties hereto, or their respective successors or assignees.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Governing Law; Exclusive Jurisdiction; Jury Trial. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in Borough of Manhattan, New York for purposes of any suit, action or other proceeding arising from this Agreement, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts. Each of the parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Headings. The titles and headings of Sections and Subsections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. For the avoidance of doubt, a Person's execution and delivery of this Agreement by electronic signature and electronic transmission, including via Docusign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such Person and shall bind such Person to the terms of this Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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

---

| | |
|:---|:---|
| CNL Residential Credit Manager, LLC | CNL Residential Credit Manager, LLC |
| By: | /s/ Tammy Tipton |
|  | Name: Tammy J. Tipton |
|  | Title: Chief Financial Officer |

---

---

| | | |
|:---|:---|:---|
| Balbec Capital Management, L.P. | Balbec Capital Management, L.P. | Balbec Capital Management, L.P. |
| By: | /s/ Jeff Padden | /s/ Jeff Padden |
|  | Name: | Jeff Padden |
|  | Title: | Manager |

---

Agreed and acknowledged for the purpose of its rights and obligations under Sections 4, 9, 12, 18 and 19 only:

---

| | |
|:---|:---|
| CNL Strategic Residential Credit, Inc. | CNL Strategic Residential Credit, Inc. |
| By: | /s/ Chirag J. Bhavsar |
|  | Name: Chirag J. Bhavsar |
|  | Title: Chief Executive Officer |

---

## Exhibit 10.3

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.3**

**ADMINISTRATIVE SERVICES AGREEMENT**

THIS ADMINISTRATIVE SERVICES AGREEMENT (the "**Agreement**") made as of the 28th day of May, 2025, effective as of the date provided for herein, by and between CNL Strategic Residential Credit, Inc., a Maryland corporation (the "**Company**"), and CNL Residential Credit Manager, LLC, a Delaware limited liability company (the "**Administrator**").

W I T N E S S E T H:

WHEREAS, the Company is a newly-formed Maryland corporation that intends to target attractive risk-adjusted returns in opportunities related to the residential mortgage market in the United States and intends to invest primarily in U.S. performing and re-performing whole loan mortgages, mortgage servicing rights, and residential mortgage-backed securities;

WHEREAS, the Company intends to qualify as a real estate investment trust ("**REIT**"), and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "**Code**");

WHEREAS, subject to the supervision and direction of the Company's board of directors (the "**Board**"), the Company shall operate consistent with and in accordance with the business strategies, policies and restrictions that are (a) set forth in the Company's charter and bylaws (collectively, as amended from time to time, the "**Governance Documents**"), (b) set forth in one or more Company's confidential private placement offering memorandums, as amended and/or supplemented from time to time ("**Offering Memorandum**"), (c) if applicable, as set forth in the Company's Registration Statement on Form S-11 (the "**Registration Statement**") which may be filed with the U.S. Securities and Exchange Commission (the "**SEC**"), as amended from time to time, and (d) otherwise approved or implemented by the Board (as hereinafter defined);

WHEREAS, the Company desires to retain the Administrator to provide administrative services to the Company in the manner and on the terms and conditions hereinafter set forth, on behalf of, and subject to the supervision of the Board, all as provided herein; and

WHEREAS, the Company and the Administrator have agreed upon compensation for the services to be provided pursuant to this Agreement and the Administrator is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Duties of the Administrator**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Retention of Administrator**. The Company hereby engages and retains the Administrator to furnish, or arrange for others to furnish, the administrative services, personnel and facilities described below for the period and on the terms and conditions set forth in this Agreement. The Administrator hereby accepts such engagement and retention and agrees during such period to render, or arrange for the rendering of, such services and to assume the obligations herein set forth, subject to the reimbursement of costs and expenses provided for below.

The Administrator shall be subject to review and oversight by the Board to assure that the administrative procedures, operations and programs of the Company are in the best interests of the Company's stockholders and that the expenses incurred are reasonable in light of the business objectives of the Company, for the period and upon the terms herein set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in accordance with all other applicable federal and state laws, rules and regulations, and the Governance Documents, in each case as amended from time to time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such business policies, directives, regulatory restrictions as the Company may from time to time establish or issue and communicate to the Administrator in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Services**. The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Company. Without limiting the generality of the foregoing, the Administrator shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide administrative services to the Company, including but not limited to all, services provided for in the Approved Budget (as defined in Section 4 hereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) provide the Company with office facilities and equipment, and provide clerical, bookkeeping, general ledger accounting, fund accounting and recordkeeping services, legal services, investor services and shall provide all such other services, except investment advisory services, as the Administrator, subject to review by the Board, shall from time to time determine to be necessary or useful to perform its obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) on behalf of the Company, enter into agreements and/or conduct relations with custodians, depositories, transfer agents, sub-transfer agent services, distribution disbursing agents, the dividend reinvestment plan administrator, shareholder servicing agents, accountants, auditors, tax consultants, advisers and experts, investment advisers, compliance officers, escrow agents, attorneys, underwriters, managing dealer, brokers and dealers, investor custody and share transaction clearing platforms, financial technology platforms and service providers, marketing, sales and advertising materials contractors, public relations firms, investor account services, investor communication agents, printers, insurers, banks, independent valuers, and such other persons in any such other capacity deemed to be necessary or desirable by the Administrator and the Company, including engagement of CNL Capital Markets, LLC, an affiliate of the Administrator, to provide investor and capital markets operational services on behalf of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) furnish advice and recommendations with respect to such other aspects of the business and affairs of the Company as the Administrator reasonably shall determine to be desirable; provided that nothing herein shall be construed to require the Administrator to, and the Administrator shall not, pursuant to this Agreement, provide any advice or recommendation relating to the assets that the Company should acquire or dispose of or any other investment advisory services to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) assist the Company in the preparation of the financial and other records that the Company will maintain and the preparation, printing and dissemination of reports that the Company will furnish to stockholders, and, if any, reports and other materials filed with the SEC, and states and jurisdictions where any offering of the Company's shares is registered and there is a duty to file information with one or more states on an ongoing basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) assist the Company in maintaining the registration of the Company's shares of common stock under federal and state securities laws, as applicable, with respect to any offering of securities of the Company and complying with all federal, state and local regulatory requirements applicable to the Company with respect to any such offering and the Company's business activities (including the Sarbanes-Oxley Act of 2002, as amended (the "**Sarbanes-Oxley Act**")), including with respect to any such offering, preparing or causing to be prepared all supplements to an Offering Memorandum and financial statements and all reports and documents, if any, required under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) advise and assist the Company, if applicable, with respect to the Sarbanes-Oxley Act compliance for the Company and its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) assist the Company in calculating and publishing the Company's net asset value ("**NAV**"), oversee and administer programs for investor relations and communications, the preparation and filing of the Company's tax forms and any necessary regulatory filings, and generally oversee and monitor the payment of the Company's expenses and ensure that costs and expenses are within any applicable limitations set forth in the Governance Documents and monitor compliance with the various REIT qualification tests in the REIT provisions of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) from time to time, or at any time reasonably requested by the Board, make reports to the Board regarding the Administrator's performance of services to the Company under the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) manage stockholder and/or marketing communications and meetings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) oversee the performance of sub-administrative and other professional services rendered to the Company by others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Power and Authority**. To facilitate the Administrator's performance of these undertakings, but subject to the restrictions contained herein, the Company and its subsidiaries hereby delegate to the Administrator, and the Administrator hereby accepts, the power and authority on behalf of the Company and its subsidiaries to effectuate its decisions relating to the administration of the Company. The Board may, at any time upon the giving of notice to the Administrator, modify or revoke the authority set forth in this Section 1(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Acceptance of Appointment**. The Administrator hereby accepts such appointment and agrees during the term hereof to render the services described herein for the consideration provided herein, subject to the limitations contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Independent Contractor Status**. The Administrator shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Record Retention**. Subject to review by and the overall control of the Board, the Administrator shall at all times have access to and maintain all books and records that relate to activities performed by the Administrator hereunder, and shall make such records available for inspection by the Board and its authorized agents, at any time and from time to time during normal business hours. The Administrator agrees that all records that it maintains for the Company are the property of the Company and shall surrender promptly to the Company any such records upon the Company's request and upon termination of this Agreement pursuant to Section 8; **provided that** the Administrator may retain a copy of such records, subject to observance of its confidentiality obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Confidentiality**.

The parties hereto agree that each shall treat confidentially all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto, including all "nonpublic personal information," as defined under the Gramm-Leach-Bliley Act of 1999 (Public law 106-102, 113 Stat. 1138), shall be used by the other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party, without the prior consent of such providing party, except that such confidential information may be disclosed to an affiliate or agent of the disclosing party to be used for the sole purpose of providing the services set forth herein. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed to any regulatory authority, by judicial or administrative process or otherwise by applicable law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Sub-Administrators**

The Administrator is hereby authorized to enter into one or more sub-administration or similar agreements with expertise in the types of administration the Company requires (each, a "**Sub**-**Administrator**") pursuant to which the Administrator may delegate and obtain the services of the Sub-Administrator(s) to assist the Administrator in fulfilling its responsibilities hereunder. The Administrator shall monitor any Sub-Administrator to ensure that material information discussed by management of any such Sub-Administrator is communicated to the Board, as appropriate. Any Sub-Administrator shall be subject to the same fiduciary duties imposed on the Administrator pursuant to this Agreement and other applicable federal and state law. The Company, either directly or through reimbursement to the Administrator, shall bear all third-party costs and expenses for the administration of the Company's business, including such costs and expenses incurred by a Sub-Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Approved Budget**.

The Administrator shall use commercially reasonable efforts to prepare, prior to each fiscal year end of the Company, an estimated budget (as may be amended and approved by the Board from time to time, the "**Approved Budget**") that includes anticipated third-party costs and expenses related to the services to be provided by the Administrator in such form and substance as shall be requested and approved by the Board. The Company acknowledges that this estimated budget is for reporting purposes only and, subject to the limitations below, it shall remain obligated to reimburse the Administrator for any third-party costs and expenses which may exceed the initial or any amended Approved Budget.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Fee; Reimbursement of Third Party Expenses**.

The Company will pay the Administrator an administrative services fee (the "**Administrative Services Fee**") that shall be calculated at an annual rate of 0.25% per annum of the NAV for each share class of the Company's common stock. The Administrative Services Fee shall be calculated and payable monthly in arrears and is calculated before giving effect to any accruals for the any applicable management fees, stockholder servicing fees and/or total return incentive fees for such month. The Administrative Services Fee for a certain month shall be calculated on a class-by-class basis based on the NAV for each applicable share class at the end of that month and shall be due and payable no later than thirty (30) calendar days following the end of the applicable month.

With respect to third-party costs and expenses incurred on behalf of the Company in providing Services under this Agreement, the Company shall either pay such third parties directly or reimburse the Administrator the costs and expenses of third parties that it pays on behalf of the Company. Such reimbursement of the Administrator shall be made in cash within thirty (30) calendar days following the Administrator's delivery of a reimbursement statement to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Limitation of Liability of the Administrator; Indemnification**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Indemnification**. The Administrator and any Sub-Administrator (and their respective officers, managers, partners, members, agents, employees, controlling persons, shareholders and any other person or entity affiliated with the Administrator or Sub- Administrator) shall not be liable to the Company or any of its subsidiaries, to the Board, or the Company's or any of its subsidiary's members, stockholders or partners for any action taken or omitted to be taken by the Administrator or Sub-Administrator in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an administrator of the Company, concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services and for reimbursement for goods and services, and the Company and its subsidiaries shall indemnify, defend and protect the Administrator and any Sub-Administrator (and their respective officers, managers, partners, members, agents, employees, controlling persons and any other person or entity affiliated with the Administrator or Sub-Administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the "**Indemnified Parties**") and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance of any of the Administrator's or Sub-Administrator's duties or obligations under this Agreement or otherwise as an administrator of the Company. Notwithstanding the preceding sentence of this paragraph to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Company or any of its subsidiaries, to the Board, or the Company's or any of its subsidiary's members, stockholders or partners to which the Indemnified Parties would otherwise be subject by reason of negligence or misconduct in the performance of the Administrator's or Sub-Administrator's duties or by reason of the reckless disregard of the Administrator's duties and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Administrator shall indemnify the Company (and its officers, managers, partners, members, agents, employees, controlling persons and any other person or entity affiliated with the Company) for any losses that the Company (and its officers, managers, partners, members, agents, employees, controlling persons and any other person or entity affiliated with the Company) may sustain primarily as a result of the Administrator's willful misfeasance, bad faith, gross negligence or reckless disregard of its duties hereunder or violation of applicable law, including without limitation, the federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Advancement of Funds**. The Company shall be permitted to advance funds to the Indemnified Party for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought only if all of the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Indemnified Party undertakes to repay the advanced funds to the Company, together with the applicable legal rate of interest thereon, in cases in which the Indemnified Party is not found to be entitled to indemnification; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The legal action was initiated by a third party who is not the holder of an ownership interest in the Company, or if the legal action was not initiated by such a holder, a court of competent jurisdiction approves such advancement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Activities of the Administrator**.

The services provided by the Administrator and its affiliates to the Company are not exclusive, and the Administrator may engage in any other business or render similar or different services to others, so long as its services to the Company hereunder are not impaired thereby and nothing in this Agreement shall limit or restrict the right of any officer, director, shareholder (and their shareholders or members, including the owners of their shareholders or members), officer or employee of the Administrator to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith. The Administrator assumes no responsibility under this Agreement other than to render the services set forth herein. It is understood that directors, officers, employees and members of the Company are or may become interested in the Administrator and its affiliates, as directors, officers, employees, partners, members, managers or otherwise, and that the Administrator and its directors, officers, employees, partners, stockholders, members and managers, and the Administrator's affiliates are or may become similarly interested in the Company and/or its subsidiaries as members or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Duration and Termination of this Agreement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Term and Effectiveness**. This Agreement shall become effective as of the first date noted above and shall remain in effect for one year (the "**Initial Term**"), and thereafter shall continue automatically for successive annual periods (a "**Renewal Term**"); **provided that** such continuance is specifically approved at least annually by the vote of a majority of the Company's independent directors. This Agreement shall automatically terminate upon termination of the advisory agreement by and between the Company and CNL Residential Credit Manager, LLC, dated March 10, 2025, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Termination**. This Agreement may be terminated at any time, without the payment of any penalty by either party upon 60 days written notice; **provided that** termination by the Company will require a vote of the Board. This Agreement shall not be assigned by the Administrator without the consent of the Company, which consent shall be approved by a majority of the Company's independent directors; **provided that** (a) the Administrator may assign any rights to receive payments under this Agreement without obtaining the approval of the Company, and (b) the Administrator may assign or delegate any or all of its other rights or obligations to any subsidiary of the Administrator or any affiliate of CNL Financial Group, LLC, without obtaining the approval of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Payments to and Duties of Administrator upon Termination**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) After the termination of this Agreement, the Administrator shall not be entitled to compensation for further services provided hereunder, except that it shall be entitled to receive from the Company within 90 days after the effective date of such termination all unpaid third-party reimbursements payable to the Administrator prior to termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Administrator shall promptly upon termination:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) deliver to the Board all assets and documents of the Company then in custody of the Administrator; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) cooperate with the Company's reasonable request to provide an orderly administration transition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Notices**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All notices, requests, claims, demands and other communications hereunder which relate to this Agreement shall be in writing and shall deemed to be delivered, (i) upon delivery in person, (ii) one day after deposit with Federal Express or similar overnight courier service, (iii) three (3) days after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iv) one day after sending an e-mail provided such e-mail is followed by deposit with Federal Express or similar overnight courier no later than the following day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless otherwise notified in writing, all notices, requests, claims, demands, and other communications shall be given to the respective parties at the following addresses or at such other address for a party as shall be specified in a notice given in accordance with this Section 9:

The Company: CNL Strategic Residential Credit, Inc. <br> CNL Center at City Commons <br> 450 South Orange Avenue, Suite 1400<br> Orlando, Florida 32801<br> Attention: Chirag Bhavsar<br> Email: Chirag.Bhavsar@CNL.com

The Administrator: CNL Residential Credit Manager, LLC <br> CNL Center at City Commons <br> 450 South Orange Avenue, Suite 1400<br> Orlando, Florida 32801<br> Attention: Tammy J. Tipton<br> Email: Tammy.Tipton@CNL.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Amendments**.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Severability**.

If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the remainder hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Counterparts**.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Entire Agreement; Governing Law**.

This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, this Agreement shall be construed in accordance with the laws of the State of Maryland and any action brought to enforce the agreements made hereunder or any action which arises out of the relationship created hereunder shall be brought exclusively in the federal or state courts for Baltimore, Maryland. Each party hereby irrevocably waives its rights to trial by jury in any action or proceeding arising out of this Agreement or the transactions relating to its subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Waivers**.

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **Third Party Beneficiaries**.

Except for any identified Sub-Administrator and any Indemnified Party, such Sub-Administrator and Indemnified Party, each being an intended beneficiary of this Agreement, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein shall give or be construed to give any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **Survival**.

The provisions of Sections 5, 6, 8, 13, 14 and this Section 16 shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **Gender**.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **Titles not to Affect Interpretation**.

The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **Representations, Warranties and Covenants of the Administrator**.

The Administrator represents, warrants, and covenants to the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrator is a limited liability company duly organized and validly existing under the laws of the State of Delaware with the power to own and possess its assets and carry on its business as the business is now being conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution, delivery and performance by the Administrator of this Agreement is within the Administrator's powers and has been duly authorized by all necessary actions on the part of the Administrator and its members and managers and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Administrator for the execution, delivery or performance of this Agreement by the Administrator. The execution, delivery and performance of this Agreement by the Administrator does not violate, contravene or constitute a default under (i) any provision of any applicable law, rule or regulation, (ii) the Administrator's limited liability company operating agreement or certificate of formation, or (iii) any agreement, judgment, injunction, order, decree or other instruments binding upon the Administrator or any of the Administrator's property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Administrator has met, in all material respects, and will continue to meet, in all material respects, for the duration of this Agreement, any applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met by the Administrator in order for the Administrator to perform the services contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrator will carry out its responsibilities under this Agreement in compliance in all material respects with (i) any applicable federal or state laws, rules or regulations, including securities laws, rules and regulations, (ii) the Company's guidelines, policies and limitations as may be set by the Board from time to time and (iii) such other policies or directives as the Board may from time to time establish or issue and that the Company communicates to the Administrator in writing, provided that the Company will promptly notify the Administrator in writing of changes to the matters identified in (ii) or (iii) above.

*[Remainder of page intentionally left blank.]*

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

---

| | |
|:---|:---|
| CNL Strategic Residential Credit, Inc. | CNL Strategic Residential Credit, Inc. |
| By: | /s/Chirag Bhavsar |
|  | Name: Chirag Bhavsar |
|  | Title: CEO |
| CNL Residential Credit Manager, LLC | CNL Residential Credit Manager, LLC |
| By: | /s/ Tammy Tipton |
|  | Name: Tammy Tipton |
|  | Title: CFO |

---

[*Signature Page to Administrative Services Agreement*]

## Exhibit 10.4

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.4**

**Execution Version**

**Expense Support and Conditional Reimbursement Agreement**

This Expense Support and Conditional Reimbursement Agreement (this "<u>Agreement</u>") is dated May 6, 2025 by and among CNL Strategic Residential Credit, Inc., a Maryland Corporation (the "<u>Company</u>"), and CNL Residential Credit Manager, LLC, a Delaware limited liability company (the "<u>Advisor</u>") and Balbec Capital Management, L.P. (the "<u>Sub-Advisor</u>," and together with the Advisor, the "<u>Advisors</u>").

**WHEREAS**, the Company and the Advisor have entered into that certain Advisory Agreement, dated as of March 10, 2025 (as it may be amended from time to time, the "<u>Advisory Agreement</u>");

**WHEREAS**, the Advisor and the Sub-Advisor have entered into that certain Sub-Advisory Agreement, dated of even date with the Advisory Agreement (as may be amended from time to time, the "<u>Sub-Advisory Agreement</u>," and together with the Advisory Agreement, the "Advisory Agreements");

**WHEREAS**, the Company monitors its Available Operating Funds (as defined below), and has incurred, and continues to incur, Operating Expenses (as defined below); and

**WHEREAS**, the Company and the Advisors have determined that it is appropriate and in the best interests of the Company to conditionally reduce Fees and reimbursement of Reimbursable Expenses until the Company has achieved economies of scale sufficient to ensure that the Company is able to bear a reasonable level of expenses relative to the value of the assets it has acquired.

**NOW, THEREFORE**, in consideration of the promises and the mutual agreements contained herein, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

1. **<u>Definitions</u>**. Capitalized terms not otherwise defined herein have the meaning ascribed to them in the Advisory Agreement. As used herein, the following capitalized terms shall have the following meanings:

***Applicable Calendar Month*** – shall have the meaning ascribed to such term in <u>Section 2.2</u> of this Agreement.

***Articles of Incorporation*** – shall mean the Company's current Amended and Restated Articles of Incorporation adopted by the Board and amended from time to time.

***Available Operating Funds*** – shall mean net operating income, as determined under U.S. generally accepted accounting principles, including realized capital gains and realized capital losses, but excluding Conditional Waiver Amounts, Expense Support Amounts, any non-cash expenses, and any ongoing shareholder servicing and distribution fees.

***Board*** – shall mean the board of directors of the Company.

***Business Day*** – shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

***Bylaws*** – shall mean the Company's current Bylaws adopted by the Board and amended from time to time.

***Commencement Date*** – shall mean the date on which the Company commences investment operations.

***Conditional Reimbursement*** – shall have the meaning ascribed to such term in <u>Section 3.1</u> of this Agreement.

***Conditional Waiver Amount*** – shall have the meaning ascribed to such term in <u>Section 2.2</u> of this Agreement.

***Distribution*** –shall have the meaning ascribed to such term in the Company's Articles of Incorporation and Bylaws, net of distributions reinvested pursuant to the Company's Distribution Reinvestment Plan, and excluding Special Dividends and Distributions.

***Distribution Reinvestment Plan*** – shall mean that certain dividend reinvestment plan, if any, as disclosed in the Offering Memorandum and, if the Company determines to pursue a public offering, then the Company's S-11 Registration Statement filed with the Securities and Exchange Commission.

***Effective Distributions Per Share*** – shall mean the dollar amount of regular cash Distributions per share excluding declared Special Dividends and Distributions, if any.

***Equity Shares*** – shall mean the outstanding equity interest in any of the Company's Equity Share Classes.

***Equity Share Class*** – shall any class of common shares that the Board may authorize from time to time pursuant to the Company Articles of Incorporation and Bylaws.

***Excess Operating Funds*** – shall have the meaning ascribed to such term in <u>Section 3.1</u> of this Agreement.

***Expense Support Amount*** – shall have the meaning ascribed to such term in <u>Section 2.1</u> of this Agreement.

***Fees*** – shall mean the amounts paid by the Company to the Advisor or Sub-Advisor, as applicable, pursuant to <u>Section 10</u> of the Advisory Agreement and <u>Section 9</u> of the Sub-Advisory Agreement.

***Notice*** – shall have the meaning ascribed to such term in <u>Section 2.2</u> of this Agreement.

***Offering Memorandum*** – shall mean the confidential private offering memorandum of the Company as such offering memorandum may be amended or supplemented from time to time.

***Operating Expenses*** – shall mean all of the Company's operating costs and expenses incurred, as determined in accordance with U.S. generally accepted accounting principles.

***Operating Expense Ratio*** – shall have the meaning ascribed to such term in <u>Section 3.2(b)</u> of this Agreement.

***Organization and Offering Expenses*** –shall have the meaning ascribed to such term in <u>Section 1</u> of the Advisory Agreement.

***Other Operating Expenses*** – shall mean Operating Expenses incurred by the Company, excluding Management Fees, Master Servicing Fees, Total Return Incentive Fees, Administrative Services Fees, interest costs, financing fees and financing costs, any ongoing shareholder servicing and distribution fees, any Organizational and Offering Expenses, Expense Support Amounts, investment-related costs to diligence, invest, monitor or finance investments and brokerage commissions, as determined under U.S. generally accepted accounting principles.

***Reimbursable Expenses*** – shall mean the *sum of* reimbursements payable to the Advisor and Sub-Advisor permitted under the Advisory and Sub-Advisory Agreement, respectively, *less* Organization and Offering Expenses. Reimbursable Expenses is limited to expenses that are deductible in the current taxable year by the Company.

***Special Dividends and Distributions*** – shall mean any distributions declared by the Board other than monthly distributions declared in the ordinary course of business.

***Stockholders*** – shall mean the registered holders of the Company's Equity Shares.

***Unreimbursed Expense Support Amounts*** – shall mean the amount of Expense Support Amounts (in aggregate since the Commencement Date) that have been reduced by the Advisor and/or Sub-Advisor, as applicable, for the benefit of the Company, and for which the Company has not made Conditional Reimbursements to the Advisor and/or Sub-Advisor, as applicable.

2. **<u>Expense Support</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Annual Obligation</u>. Beginning on the Commencement Date and continuing until the Agreement is terminated as provided in Section 4, the Advisor and the Sub-Advisor shall provide expense support to the Company through reducing the payment of Fees and reimbursements of Reimbursable Expenses in an amount that is equal to the annual (calendar year) *excess of* (a) the Distributions declared and payable to Stockholders *over* (b) Available Operating Funds (the "<u>Expense Support Amount</u>"), <u>provided</u>, however, that for the calendar year ending December 31, 2025, the Expense Support Amount may be equal to any negative Available Operating Funds. The Expense Support Amount payable by the Advisor and the Sub-Advisor, as applicable, shall first be treated as reducing Fees due in the current taxable year to the Advisor or the Sub-Advisor, as applicable, until such Fees, as applicable, have been fully offset, and then such Expense Support Amounts shall be attributable to Reimbursable Expenses. The Expense Support Amount shall be borne equally (50%/50%) by the Advisor and the Sub-Advisor, and shall be calculated as of the last Business Day of the calendar year. The Expense Support Amount with respect to a period will in no event exceed the total of Fees and Reimbursable Expenses incurred for such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Monthly Conditional Waiver</u>. Beginning on the Commencement Date and continuing until the Agreement is terminated as provided in Section 4, within fifteen (15) Business Days from the last Business Day of each full calendar month (and not any partial months) (each, an "<u>Applicable Calendar Month</u>"), the Company shall deliver to the Advisors a notice (the "<u>Notice</u>") specifying, on a per Equity Share Class basis for each Equity Share Class, the Conditional Waiver Amount for such Applicable Calendar Month. Unless the Advisor or Sub-Advisor, as applicable, within five (5) Business Days from receipt of the Notice, objects to the Conditional Waiver Amount included in such Notice, the Advisor and Sub-Advisor shall equally (50%/50%) conditionally reduce the payment of Fees and reimbursements of Reimbursable Expenses in an amount equal to the Conditional Waiver Amount; <u>provided</u>*,* however, that the Advisor and Sub-Advisor shall not reduce Fees and reimbursements of Reimbursable Expenses to the extent that such reductions are estimated to cause the annualized (based on a 365-day year) aggregate amount of Conditional Waiver Amounts to exceed the Expense Support Amount for the calendar year in which the Applicable Calendar Month occurs. For purposes of this Agreement, the "<u>Conditional Waiver Amount</u>" shall mean the aggregate estimated amount of per Equity Share Class expense support required by the Company for the Applicable Calendar Month, but in no event will exceed the *excess of* (a) the sum of the Distributions declared and payable to Stockholders of each Equity Share Class *over* (b) the sum of the Available Operating Funds attributable to each Equity Share Class, in each case, for such Applicable Calendar Month. An example of how such Conditional Waiver Amount is calculated is attached hereto as <u>Exhibit B</u>.

3. **<u>Conditional Reimbursement.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Payment Obligation</u>. If, on the last Business Day of the calendar year, annual (calendar year) year-to-date Available Operating Funds *exceeds* the sum of the annual (calendar year) year-to-date Distributions paid per Equity Share Class (the amount of such excess being hereafter referred to as "<u>Excess Operating Funds</u>"), subject to the conditions and limitations set forth in <u>Section 3.2</u> below, the Company shall pay to the Advisors an amount equal to the lesser of (a) such Excess Operating Funds and (b) the outstanding Unreimbursed Expense Support Amounts. Any payments required to be made by the Company pursuant to this <u>Section 3.1</u> shall be referred to herein as "<u>Conditional Reimbursements</u>." Any Conditional Reimbursements shall be applied to the earlier Expense Support Amount provided by the Company; <u>provided</u>, however, that Conditional Reimbursements shall be applied first, to Unreimbursed Expense Support Amounts attributable to Reimbursable Expenses of the Advisor and the Sub-Advisor equally (50%/50%), and next to Unreimbursed Expense Support Amounts attributable to Fees of the Advisor and the Sub-Advisor equally (50%/50%). The Company will make any Conditional Reimbursements equally to the Advisor and the Sub-Advisor in cash (or, if sufficient cash is not available, other immediately available funds) as promptly as possible after the last Business Day of the calendar year, but in any event no later than 90 calendar days after the last day of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Conditions</u>. The Company's obligation to make Conditional Reimbursements is subject to the following conditions and limitations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is required to make Conditional Reimbursements attributable to an Equity Share Class only to the extent that such Conditional Reimbursements do not cause such Equity Share Class's Other Operating Expenses (on an annualized basis (based on a 365-day year) and net of any Conditional Waiver Amounts reduced by the Advisors for the benefit of the Company during the calendar year) to exceed 1.75% of the net asset value ("NAV") attributable to such Equity Shares (on an annualized basis (based on a 365-day year)) after taking the Expense Support Amount attributable to such Equity Shares into account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary in this Agreement, no Conditional Reimbursements attributable to an Equity Share Class shall be made if the Operating Expense Ratio attributable to such Equity Share Class at the time of such Conditional Reimbursement payment is less than or equal to the Operating Expense Ratio attributable to such Equity Share Class at the time the Expense Support Amount was reduced by the Advisors, and to which such Conditional Reimbursement relates. The "<u>Operating Expense Ratio</u>" is calculated by dividing the Operating Expenses, less Organizational and Offering Expenses, Management and Total Return Incentive Fees owed to Advisors, and interest expense, by net assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary in this Agreement, no Conditional Reimbursements of the Expense Support Amount allocable to an Equity Share Class shall be made with respect to such Equity Share Class if: the Effective Distributions Per Share declared by the Company allocable to such Equity Share Class at the time of such Conditional Reimbursements is less than the Effective Distributions Per Share allocable to such Equity Share Class at the time the Expense Support Amount was made to which such Conditional Reimbursement relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company's obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three (3) years following the date which the Expense Support Amount was provided and to which such Conditional Reimbursement relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Conditional Reimbursement Payments</u>. Subject to the conditions set forth in <u>Section 3.2</u> and the last sentence in <u>Section 3.1</u>, the Company shall make Conditional Reimbursements to the Advisor and Sub-Advisor equally (50% / 50%). For the avoidance of doubt, the Conditional Reimbursement to the Advisor or Sub-Advisor, as applicable, shall first be applied to Unreimbursed Expenses Support Amounts attributable to Reimbursable Expenses and then applied to Unreimbursed Expenses Support Amounts attributable to Fees. All Unreimbursed Expense Support Amounts shall remain eligible for reimbursement subject to the conditions set forth in <u>Sections 3.1</u> and <u>3.2</u>.

4. <u>Term and Termination of Agreement; Survival</u>. This Agreement shall have an initial term of three (3) years and automatically renew for successive one (1) year terms. Notwithstanding the foregoing, this Agreement may be terminated by the Advisors, acting jointly, upon written notice to the Company, except that once effective, the Advisors may not terminate their obligations under <u>Section 2</u>, unless any party provides one-hundred and twenty (120) days prior written notice to the other parties. This Agreement shall automatically terminate upon (a) with respect to the Advisor, the termination by the Company of the Advisory Agreement, or with respect to the Sub-Advisor, termination of the Sub-Advisory Agreement, or (b) the dissolution or liquidation of the Company, <u>provided</u> that <u>Sections 3</u> (with respect to any Unreimbursed Expense Support Amounts), <u>4, 5, 6, 10</u> and <u>11</u> survive termination. Notwithstanding any provision to the contrary, if this Agreement terminates automatically pursuant to clause (a) of this Section 4, the Company agrees to make a Conditional Reimbursement to the Advisors in an amount equal to the total amount of Unreimbursed Expense Support Amounts. Such repayment shall be made to the Advisors under the terms set forth in <u>Section 3.3</u>, and not later than thirty (30) days after such termination of this Agreement.

5. <u>Titles not to Affect Interpretation</u>. The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

6. <u>Notices</u>.

All notices, requests, claims, demands, and other communications hereunder which relate to this Agreement shall be in writing and shall deemed to be delivered, (i) upon delivery in person, (ii) one (1) day after deposit with Federal Express or similar overnight courier service, (iii) three (3) days after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iv) if delivered by email, when sent to the email address for the receiving party stated in this Section 6.

Unless otherwise notified in writing, all notices, request, claims, demands and other communications shall be given to the respective parties at the following addresses or at such other address for a party as shall be specified in a notice given in accordance with this Section 6:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the Company: | CNL Strategic Residential Credit, Inc. |
|  | CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> email: Tammy.Tipton@cnl.com |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the Advisor: | CNL Residential Credit Manager, LLC |
|  | CNL Center at City Commons<br> 450 South Orange Avenue<br> Orlando, Florida 32801<br> email: Tammy.Tipton@cnl.com |

---

To the Sub-Advisor: Balbec Capital Management, L.P. <br>7114 E Stetson Dr, Suite 250 Scottsdale, Arizona 85251 Attention: Jacob Armour email: jarmour@balbec.com

7. <u>Entire Agreement; Governing Law</u>. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof, provided that the Advisory Agreement shall remain in full force and effect. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, this Agreement shall be construed in accordance with the laws of the State of Maryland (without giving effect to any conflict of laws provisions), and any action brought to enforce the agreements made hereunder or any action which arises out of the relationship created hereunder shall be brought exclusively in the federal or state courts in Maryland. Each party hereby irrevocably waives its rights to trial by jury in any action or proceeding arising out of this Agreement or the transactions relating to its subject matter.

8. <u>Amendment</u>. This Agreement shall not be amended, modified, or waived, in whole or in part, except by an instrument in writing signed by the parties hereto, or their respective successors or permitted assignees.

9. <u>Severability</u>. If any provision of this Agreement shall be declared illegal, invalid, or unenforceable by any law or public policy in any jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law), and, in any event, such illegality, invalidity, or unenforceability shall not affect the remainder this Agreement.

10. <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

11. <u>Waivers</u>. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege preclude any other or further exercise of the same or of any other right, remedy, power, or privilege, nor shall any waiver of any right, remedy, power, or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power, or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

*<u>[Signatures appear on the following page.]</u>*

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

---

| | |
|:---|:---|
| CNL Strategic Residential Credit, Inc. | CNL Strategic Residential Credit, Inc. |
| By: | /s/ Chirag J. Bhavsar |
| Name: Chirag J. Bhavsar | Name: Chirag J. Bhavsar |
| Title: Chief Executive Officer | Title: Chief Executive Officer |
| CNL Residential Credit Manager, LLC | CNL Residential Credit Manager, LLC |
| By: | /s/ Tammy J. Tipton |
| Name: Tammy J. Tipton<br> Title: CFO | Name: Tammy J. Tipton<br> Title: CFO |
| Balbec Capital Management, L.P. | Balbec Capital Management, L.P. |
| By: | /s/ Jeff Padden |
| Name: Jeff Padden<br> Title: Manager | Name: Jeff Padden<br> Title: Manager |

---

## Exhibit 10.5

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.5**

**<u>CNL STRATEGIC RESIDENTIAL CREDIT, INC.</u>**

<u>FORM OF PLACEMENT AGENT AGREEMENT</u>

**THIS PLACEMENT AGENT AGREEMENT** (the "Agreement") is made effective as of this ______ day of ______________, 2025 by and among **CNL STRATEGIC RESIDENTIAL CREDIT, INC.**, a Maryland corporation (the "**Company**"); **CNL RESIDENTIAL CREDIT MANAGER, LLC,** a Delaware limited liability company (the "**Advisor**"); and [**CNL SECURITIES CORP.]**, a Florida corporation ("**Placement Agent**"). In consideration of the promises and mutual covenants and agreements hereinafter set forth the parties hereto, intending to be legally bound, hereby agree as follows:

For purposes of this Agreement an "Affiliate" is (i) any person or entity directly or indirectly through one or more intermediaries controlling, controlled by or under common control with another person or entity; (ii) any person or entity owning or controlling ten percent or more of the outstanding voting securities of another person or entity; (iii) any officer, director, partner, or trustee of such person or entity; and (iv) if such other person or entity is an officer, director, partner, or trustee of a person or entity, the person or entity for which such person or entity acts in any such capacity.

The Advisor is entering into this Agreement individually and on behalf of the Company and references in this Agreement to actions, representations, warranties, and agreements of the Advisor shall refer to actions, representations, warranties, and agreements of the Advisor, either individually or on behalf of the Company, as applicable. References to "Placement Agent" shall include the Placement Agent and its officers, directors, agents, and employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Description of Offering and Appointment of the Placement Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. On the basis of the representations, warranties, and covenants herein contained, but subject to the terms and conditions herein set forth, Placement Agent is hereby retained for the purpose of using its best efforts to find, through a private offering pursuant to Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the "**Act**"), subscribers for offering of up to $250,000,000 (the "**Offering**") of shares of common stock of the Company (the "**Shares**"). The Company is initially offering Class FA Shares ("**Class FA Shares**"). The minimum offering requirement for the Offering is defined in the Memorandum. The Company has initially allocated offering $100,000,000 of Class FA Shares (also referred to as "**Founder Shares**"). Once the minimum offering requirement is satisfied and the Company has completed the initial closing of Class FA Shares, the Company will continue to offer up to $100,000,000 of Class FA Shares. Once the Company has completed the initial closing of Founder Shares, in its sole and absolute discretion, it may also begin to offer any combination of Class A Shares, Class T Shares, Class D Shares or Class I Shares (collectively, "**Non-Founder Shares**") up to the remaining maximum amount of the Offering. The initial minimum purchase amount for Class FA Shares is $25,000 at a per Share price of $25.00. There are no selling commission or placement agent fee for the sale of Class FA Shares. The Shares may be sold only to investors who are "accredited investors," as that term is defined in Regulation D under the Act, and meet the other suitability standards set forth in the Subscription Agreement (as defined herein). The Shares are more fully described in and are being offered and sold pursuant to the terms of the Company's preliminary confidential offering memorandum dated _________________, 2025, and when available and delivered to and approved by the Placement Agent, the Company's definitive confidential offering memorandum, (collectively, the "**Memorandum**"). Except as otherwise indicated, as used herein, "Memorandum" shall include any supplements and amendments thereto, all financial statements, appendices, and all other documents which are a part thereof. Subscribers who are accepted by the Advisor are referred to as "stockholders" in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The "**Offering Period**" shall mean that period during which Shares may be offered for sale, commencing on the date the Shares are first offered for sale, and continuing until the close of business on the applicable date described in the Memorandum. The Company currently intends to conduct the Offering until the earlier of: (i) the date the Company has sold the maximum offering amount or (ii) two years from the start of the Offering; provided, however, that the Company, in its sole discretion, may extend the Offering on a perpetual basis. The Company may, in its sole discretion, increase the minimum offering requirement, decrease the initial minimum purchase amounts or increase the maximum offering amount of the Offering, conduct contemporaneous or additional offerings, and/or extend the outside date of the Offering. Subscriptions for Class FA Shares will initially be made through a capital commitment payable upon the Company's initial closing of Class FA Shares. Each subscriber of Class FA Shares will irrevocably commit to purchase its committed amount of Class FA Shares for the initial closing for the Founder Shares. Subscribers will be required to fund the purchase of Class FA Shares up to the amount of their respective capital commitments upon delivery of a notice (a "**Capital Call Notice**") in connection with the Company's initial closing for Class FA Shares. Capital Call Notices will specify: (i) the amount of the capital call (the "**Capital Call Amount**"); (ii) the portion of the Capital Call Amount to be paid by the subscriber, which will include the subscription amount and the number of Class FA Shares to be purchased by such subscriber; (iii) the date on which the capital call amount is due ("**Capital Call Date**"); and (iv) the payee, mailing address and escrow account, to which to send the subscription proceeds. The Company will use its best efforts to deliver the Capital Call Notice to each accepted subscriber at least ten (10) business days prior to the Capital Call Date.

After the Company holds its initial closing, the Company will no longer take capital commitments, and the entire purchase price of Shares subscribed for by a subscriber will be payable upon subscription to the Company's escrow agent. Funds received in connection with a subscription will be placed in a non-interest-bearing escrow account pending Closing (defined herein). The monthly closing date on which we will accept subscriptions is expected to be the last business day of each month (the "**Closings**" or individually, a "**Closing**"), upon which time proceeds held in escrow, if any, will be released to the Company and subscribers will be admitted as stockholders of the Company. In each Closing, Shares will generally be issued at an offering price based on the net asset value of each class of shares as of the last calendar day of the prior month. Following the initial Closing, subscribers are not committed to purchase Shares at the time their subscription orders are submitted and any subscription may be withdrawn at any time before the time it has been accepted by the Company. Subscriptions will be effective only upon the Company's acceptance, and the Company reserves the right to accept or reject, in whole or part, any subscription for any reasons in its sole and absolute discretion. Subscriptions will be accepted or rejected within thirty (30) calendar days of receipt by the Company. If a subscription is rejected, all subscription funds will be returned to the subscriber, without deduction for any expenses, within ten (10) business days from the date the subscription is rejected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Placement Agent may, in its sole discretion, request other registered broker-dealers who are members of the Financial Industry Regulatory Authority ("FINRA") ("Participating Brokers") or investment advisers registered under the Investment Advisers Act of 1940 or under applicable state law ("Participating Advisors" and together, with Participating Brokers, collectively the "Distribution Participants") to assist in the efforts to locate and make offers of the Shares to a limited number of qualified persons. Before the Placement Agent obtains such assistance from any Participating Broker, the Placement Agent will cause such Participating Broker to execute a Participating Broker Agreement substantially in such form as is attached hereto as Exhibit A-1. Before Placement Agent obtains such assistance from any Participating Advisor, Placement Agent will cause such Participating Advisor to execute a Participating Advisor Agreement substantially in such form as is attached hereto as Exhibit A-2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Subject to the performance by the Advisor and the Company of all of their respective obligations to be performed under this Agreement and to the completeness and accuracy of all of the representations and warranties contained herein, the Placement Agent agrees on the terms and conditions herein set forth to use its best efforts during the Offering Period to find subscribers for the Shares. Upon termination of the Offering, this Agreement shall terminate without obligation on the Placement Agent's part or on the part of the Advisor or the Company to the Placement Agent, except as set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The Offering of the Shares shall be at the offering price upon the terms and conditions set forth in the Memorandum and the form of subscription agreement (the "Subscription Agreement"), which is an appendix thereto, and on the basis of the representations and warranties herein and therein contained, subject to the terms and conditions herein set forth. Prior to the admission of a subscriber as a stockholder, all monies received from subscribers by the Company will be held in an escrow account with UMB Bank, N.A. (the "**Escrow Agent**"), upon the terms and conditions described in the Memorandum. Shares purchased by subscribers who are admitted to the Company as stockholders will be registered in such names as are set forth in the applicable Subscription Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The Company shall establish an escrow account with the Escrow Agent, which escrow account shall be entitled "UMB Bank, N.A. as EA for CNL Strategic Residential Credit, Inc." (the "Escrow Account"). The Escrow Account shall be effective on the date both (a) monies and (b) subscription documents received from subscribers for the subscription of Shares are first deposited into the Escrow Account. The Placement Agent will cause the Distribution Participants to instruct subscribers to make payments for subscriptions payable as provided for in the Capital Call Notice and/or the Memorandum, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Notwithstanding anything to the contrary contained in Section 3 of this Agreement, in the event that the Company pays any placement fees or other fees to the Placement Agent for the sale of one or more Shares and the subscription is rescinded or rejected as to one or more of the Shares covered by such subscription, the Company may decrease the next payment of compensation otherwise payable to the Placement Agent by the Company for sales by the Participating Broker that executed the Subscription Agreement that is rescinded or rejected under this Agreement by an amount equal to the compensation rate established in Section 3 of this Agreement, multiplied by the number of Shares as to which the subscription is rescinded or rejected, as applicable. In the event that no payment of compensation is due to the Placement Agent after such withdrawal occurs, the Placement Agent shall pay the amount specified in the preceding sentence to the Company within ten (10) days following mailing of notice to the Placement Agent by the Company stating the amount owed as a result of rescinded or rejected, as applicable, subscriptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Representations, Warranties, and Covenants of the Advisor and the Company</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Advisor and the Company represent, warrant, and covenant to the Placement Agent and all Participating Brokers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Advisor has prepared the Memorandum, which furnishes all material information required to be furnished to offerees pursuant to an offering under Rule 506(b) of Regulation D of the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Memorandum will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; except that no representations or warranties are made with respect to any statements or omissions made in reliance upon and in conformity with information furnished to the Advisor by Placement Agent with respect to Placement Agent expressly for use in the Memorandum. The Company will promptly notify Placement Agent of any amendments or supplements to the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Assuming the offering and sale of the Shares are made in compliance with the terms of the Memorandum and this Agreement, the Advisor shall have complied with the exemption provisions of Section 4(a)(2) of the Act and Rule 506(b) of Regulation D promulgated thereunder, and in compliance with all state securities laws and regulations applicable to it in connection with the Offering and sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company has been duly incorporated and validly exists as a corporation under the Maryland General Corporation Law, as amended (the "**Maryland Law**"). The Company has not been, is not at present, and will not be in violation of its articles of incorporation or bylaws, as amended and/or restated from time to time (the "**Charter**") and will become duly qualified and in good standing in the jurisdiction in which the ownership or leasing of the property or the character of its operations makes such qualification necessary and will take such action as is necessary in any jurisdiction where the Company engages in to assure limited liability for the stockholders in those jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Shares, upon the issuance thereof and payment therefore, will conform in all material respects to all statements relating thereto contained in the Memorandum pursuant to which such Shares were issued, will have the rights set forth in the Charter, will be duly and validly authorized and issued and, except as set forth in the Memorandum, will be fully paid and non-assessable and will subject the holders thereof to no liability as such holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or the rules and regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company and the Advisor have such corporate power, authority, authorizations, approvals and orders to enter into this Agreement and to carry out the provisions and conditions hereof and conduct its business as described in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Advisor has been duly organized and validly exists as a limited liability company in good standing under the laws of the State of Delaware. The Advisor is or will be duly qualified and in good standing in the jurisdictions in which its ownership or leasing of property or the conduct of its business makes such qualification necessary prior to the date upon which qualification becomes necessary. The Advisor has the requisite power and authority, and has or shall obtain the necessary authorizations, approvals, and orders of and from necessary governmental regulatory officials and bodies to own and lease its property and conduct its business as described in the Memorandum and to act as Advisor of the Company. The Advisor has such corporate power, authority, authorizations, approvals and orders to enter into this Agreement and to carry out the provisions and conditions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The execution and delivery of this Agreement by the Advisor, the consummation of the transactions by the Advisor or the Company herein contemplated, and compliance with the terms of this Agreement by the Advisor or the Company will not materially conflict with, or result in a material breach of, any of the terms, provisions, or conditions of the operating agreement or certificate of organization of the Advisor or the Charter of the Company, or any material agreement or instrument to which the Advisor or the Company is a party or by which each is bound, or, to the best knowledge of the Advisor and the Company, after reasonable inquiry, any order, rule or regulation directed to the Advisor or the Company by any court or governmental agency or body having jurisdiction over the Advisor or the Company, as the case may be, or any statute, rule, or regulation applicable to the Advisor or the Company. No other consent, approval, authorization, or action is required for the consummation of the transactions herein contemplated by the Advisor or the Company other than such as have been obtained or will be obtained prior to the date of the Initial Closing, except for any such conflict with or breach of, any statute, rule, or regulation or the failure to obtain any consent, approval, authorization, or action, which conflict, breach, or failure does not or will not materially adversely affect the business, property, prospects (financial or otherwise) of the Advisor or the Company, or either of their abilities to consummate their respective obligations hereunder or contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) There is no litigation or governmental proceeding pending, or to the best knowledge of the Advisor and the Company after reasonable inquiry, threatened against, or involving the property or business of, the Company or the Advisor, that would materially adversely affect the value or the operation of such property or the business of the Company or the Advisor. For purposes of the foregoing representations and warranty, a litigation or governmental proceeding which is "pending" shall mean one in which the Advisor or the Company has been served with legal process or otherwise formally notified in writing of the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) There has been no material adverse change in the condition, business, property or prospects of the Company or the Advisor, financial or otherwise, from the latest dates as of which the descriptions of such condition, business, property or prospects are set forth in the Memorandum, except as referred to therein, and the outstanding debt, property and business of the Company conform in all material respects to the descriptions thereof contained in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) No defaults by the Advisor or the Company exist in the due performance and observance of any material obligation, term, covenant, or condition of any agreement or instrument to which the Advisor or the Company is party or by which each is bound.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) None of the Advisor, the Company, or any of their employees or agents have made, nor will they make, any payment of funds of the Company for any purpose other than that disclosed in the Memorandum, and no funds of the Company have been, or will be, set aside by the Advisor, the Company or their employees or agents to be used for any payment prohibited by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) All contracts or other documents or the form which the Advisor and the Company will use or would be entitled to use in connection with the Offering will be provided to the Placement Agent upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Advisor or the Company will notify the Placement Agent immediately and confirm the notice in writing of the issuance by the Securities and Exchange Commission (the "Commission") or by any state securities administration of any stop order suspending the Offering or sale of the Shares or enjoining the sale of the Shares or of the initiation of any proceedings for that purpose. The Advisor will make every reasonable effort (i) to prevent the issuance of any such stop order, and (ii) if any such stop order shall at any time be issued, to obtain the lifting thereof at the earliest possible moment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) None of the Company, the Advisor or any of their agents or employees has made, or caused to be made, any payment of fees, commissions or other payments of funds, directly or indirectly, to or through any "broker" or "dealer" (as such terms are defined in the 1934 Act), as herein defined, in connection with the Offering or sale of the Shares other than brokers or dealers who are registered with the Commission pursuant to the 1934 Act and with FINRA or who are exempt from such registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) No Disqualification Events. With respect to Shares to be offered and sold hereunder in reliance on Rule 506, none of the Company, any director, executive officer, other officers of the Company participating in the offering, any beneficial owner (as that term is defined in Rule 13d-3 under the 1934 Act) of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Act) connected with the Company in any capacity at the time of sale of any Shares (but, in each case, excluding the Distribution Participant Covered Persons, as defined below, as to whom no representation is made) (each, a "Company Covered Person" and, collectively, "Company Covered Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) under the Act, and has furnished to the Placement Agent a copy of any disclosures provided thereunder. The Company will notify the Placement Agent in writing, prior to the closing date of the Offering of (i) any Disqualification Event relating to any Company Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Placement Agent represents, warrants, and covenants to the Advisor and the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Placement Agent is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Florida. The Placement Agent has the requisite corporate power and authority to execute this Agreement and to perform its duties hereunder, and the execution and delivery by it of this Agreement and the consummation of the transactions herein contemplated will not result in any violation of, or be in conflict with, or constitute a default under, any agreement or instrument to which the Placement Agent is a party or by which the Placement Agent or its properties are bound, or any judgment, decree, order, or, to its knowledge, any statute, rule or regulation applicable to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Placement Agent is a member of FINRA and a broker-dealer registered as such under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and under the securities laws of the states in which the Shares are to be offered or sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Placement Agent will offer the Shares in accordance with the applicable provisions of the Act in a manner so as to preserve the exemption from registration as provided in Section 4(a)(2) of the Act and will not take, or omit to take, any action in connection with offers and sales of Shares that would cause the Offering not to be made in compliance with Rule 506(b) pursuant to Regulation D promulgated thereunder; the Placement Agent will not offer the Shares for sale in any jurisdiction unless and until the Advisor or the Company shall have advised it that the Shares are either registered in accordance with, or exempt from, the securities, and other laws applicable thereto; and Placement Agent has not and will not take any action that would require registration of the Shares under any federal or state securities laws, real estate syndication laws, or any other laws, orders, rules or regulations. The Placement Agent will not use any offering or selling materials other than materials furnished or previously approved in writing by the Advisor or the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Placement Agent shall make no representations concerning the Offering, except as set forth in the Memorandum, as it may be amended or supplemented, and except for such supplemental information relating to the Advisor and the Company as shall be made available in writing by the Advisor or the Company to offerees and their representatives as contemplated by Regulation D promulgated under the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Placement Agent will not offer the Shares by means of any form of general solicitation or general advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising, and otherwise will comply with the provisions of Rule 506(b) of Regulation D. The Placement Agent shall make and maintain a record of each contact with each Financial Intermediary and each potential subscriber to the Company, which shall include the identity of the Distribution Participant or potential subscriber, the date of contact and the information provided to such Distribution Participant or potential subscriber. The Placement Agent shall provide a written summary of such records to the Advisor at such time as shall be agreed by the Placement Agent and the Advisor. Further, the Placement Agent will conduct the Offering only with Distribution Participants and potential subscriber that have a substantive pre-existing relationship with the Placement Agent or Distribution Participants, or their respective affiliates.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Neither the Placement Agent nor any of its agents or employees has made, or caused to be made, nor will they cause to be made, any payment of fees, commissions or other payments of funds, directly or indirectly, to or through any "broker" or "dealer" (as such terms are defined in the 1934 Act), in connection with the Offering or sale of the Shares other than brokers or dealers who are registered with the Commission pursuant to the 1934 Act and with FINRA or who are exempt from such registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Any written information relating to the Placement Agent furnished to the Advisor, the Company and/or their counsel expressly for inclusion in the Memorandum or in any Blue Sky Application (as defined in Section 5 below) does not, and will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Placement Agent either (1) will not purchase Shares for its own account or (2) will hold all such Shares for investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Placement Agent represents that neither it, nor any of its directors, executive officers, other officers, or employees of the Placement Agent participating in the offering of Shares that have been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares ("Collectively Placement Agent Covered Person") is subject to any Disqualification Event except for a Disqualification Event (i) contemplated by Rule 506(d)(2) under the Act and (ii) a description of which has already been furnished in writing to the Company and Advisor prior to the date hereof. Placement Agent further agrees to notify the Company and Advisor in a writing provided in accordance with Section 9 of this Agreement prior to offering Shares of (i) any Disqualification Event relating to any Placement Agent Covered Person or Distribution Participant Covered Person (as defined in the Participating Broker Agreement or Participating Advisor Agreement, respectively) not previously disclosed to the Company and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Placement Agent Covered Person or any Distribution Participant Covered Person. Each of the Placement Agent will, and the Placement Agent will cause the Distribution Participants to, notify the Company in writing, prior to the offering of Shares of (i) any Disqualification Event relating to any Distribution Participant Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Distribution Participant Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Compensation and Expenses</u>. As compensation for the Placement Agent's services hereunder and the agreements hereunder pursuant to the Memorandum, the Advisor and/or the Company agree to pay (in accordance with the terms of the Memorandum):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. There are no selling commissions or placement agent fees for Class FA Shares. Sales of Class FA Shares shall be deemed to be completed only after (i) the Company receives a properly completed Subscription Agreement from a subscriber who satisfies each of the terms and conditions of the Memorandum and (ii) such Subscription Agreement has been accepted in writing by the Company, the Advisor or an agent acting on behalf of the Company or the Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Except as may be provided in the "Plan of Distribution" section of the Memorandum, the Company shall pay to the Placement Agent, as compensation for all services to be rendered by the Placement Agent pursuant to this Agreement, a commission of 6.0% of the price of each Class A Share in the Offering, and 3.0% of the price of each Class T Share in the Offering, regardless of whether such Shares are sold by the Placement Agent or a Participating Broker. The Company will not pay commissions for sales of Class A or Class T Shares pursuant to the Distribution Reinvestment Plan, and will not pay commissions for sales of any Class D or Class I Shares in the Offering or pursuant to the Distribution Reinvestment Plan. The Company may pay reduced commissions or eliminate commissions on certain sales of Shares in accordance with, and on the terms set forth in, the Memorandum and herein, which reduction or elimination of commissions will not change the net proceeds to the Company. Such commission rate shall remain in effect during the full term of this Agreement unless otherwise changed by a written agreement between the parties hereto. The Placement Agent may reallow all or any portion of such selling commissions to Distribution Participants in its sole discretion in compliance with applicable law. The Placement Agent shall not re-allow any commissions to non-FINRA members. Sales of Non-Founder Shares shall be deemed to be completed only after (i) the Company receives a properly completed Subscription Agreement from a subscriber who satisfies each of the terms and conditions of the Memorandum and (ii) such Subscription Agreement has been accepted in writing by the Company, the Advisor or an agent acting on behalf of the Company or the Advisor. Notwithstanding anything contained herein, in accordance with and provided by the terms of the Memorandum, which may be amended and supplemented from time to time, discounts may be offered for the Company's Shares. The amount of net proceeds to the Company will not be affected by reducing or eliminating commissions and dealer manager fees payable in connection with sales to investors described in this paragraph. I accordance with the volume discounts schedule set forth in the "Plan of Distribution" section of the Memorandum, the amount of selling commissions otherwise payable shall be reduced with respect to sales to a subscriber or group of subscribers based upon the aggregate number of Class A Shares purchased by such subscriber or group through the same Distribution Participant. Distribution Participants and/or subscribers are responsible for requesting that subscriptions be combined, if applicable, for the purpose of determining whether such subscriptions qualify for volume discounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. In addition, the Company will pay the Placement Agent a dealer manager fee equal to 2.5% of the price of each Class A Share and 1.75% of the price of each Class T Share sold in the Offering, subject to reduction in certain circumstances as outlined in the Memorandum. The Placement Agent may re-allow to Participating Brokers, in its discretion, all or a portion of the dealer manager fee as a marketing support fee. The Company will pay for all other fees and expenses of the Offering of the Shares by the Company, including fees and expenses associated with any qualification of the Shares under state securities or "blue sky" laws. The Company will reimburse the Advisor and its Affiliates for Company Organizational and Offering Expenses ("O&O Expenses") at an amount up to 1.5% of Gross Proceeds. The Company will not pay a dealer manager fee for sales of Class A or Class T Shares pursuant to the Distribution Reinvestment Plan, and will not pay a dealer manager fee for sales of any Class D or Class I Shares in the Offering or pursuant to the Distribution Reinvestment Plan. The Placement Agent may reallow all or any portion of this dealer manager fee for each Share sold by a Distribution Participant that agrees to comply with one or more of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) have
and use internal marketing support personnel (such as telemarketers or a marketing director) to assist the Placement Agent's
marketing team;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) answer
investors' inquiries concerning monthly statements, valuations, distribution rates, tax information, annual reports, reinvestment
and repurchase rights and procedures, the Company's financial status and the businesses in which the Company has invested;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) assist
investors with reinvestments and repurchases;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Except as may be provided in the "Plan of Distribution" section of the Memorandum, the Company will pay to the Placement Agent an annual distribution and stockholder servicing fee in connection with sales of Class T Shares and Class D Shares in the Offering during the term of this Agreement, subject to the limitations set forth below. The annual distribution and stockholder servicing fee of 1.0% per annum and 0.50% per annum of the then-current Offering price (or, once reported, the amount of the estimated net asset value per Share) per Class T Share and Class D Share, respectively, will accrue daily and be paid to the Placement Agent monthly in arrears, as provided in the "Plan of Distribution" section of the Memorandum. For Class T Shares and Class D Shares, the Placement Agent agrees to provide oversight services related to administration of the annual distribution and stockholder servicing fee, which may include oversight of the Company's Transfer Agent, tracking underwriting compensation consistent with applicable regulatory limits, and assistance with stockholder Share conversions. The Placement Agent may reallow all or a portion of the distribution and stockholder servicing fee to one or more Distribution Participants or broker-dealers providing services with respect to the Class T Shares or Class D Shares, in its sole discretion, to the extent a distribution agreement or other servicing agreement with such Distribution Participant or servicing broker-dealer provides for such a reallowance. All determinations regarding reallowance of the annual distribution and stockholder servicing fee will be made in good faith. Additionally, for Class T Shares and Class D Shares, the Placement Agent also agrees to use commercially reasonable efforts to cause a Participating Broker to make available on-going stockholder and account maintenance services with respect to the Company's Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The Company will cease paying the annual distribution and stockholder servicing fee with respect to Class T Shares held in any particular account, upon the conversion of those Class T Shares into a number of Class A Shares in accordance with the provisions of the Company's Charter. If the Company repurchases a portion, but not all of the Class T Shares held in a stockholder's account, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class T Shares that were repurchased and those Class T Shares that were retained in the account. Likewise, if a portion of the Class T Shares in a stockholder's account is sold or otherwise transferred in a secondary transaction, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class T Shares that were transferred and the Class T Shares that were retained in the account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The Company will cease paying the annual distribution and stockholder servicing fee with respect to Class D Shares held in any particular account, upon the conversion of the Class D Shares into a number of Class A Shares in accordance with the provisions of the Company's Charter. If the Company repurchases a portion, but not all of the Class D Shares held in a stockholder's account, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class D Shares that were repurchased and those Class D Shares that were retained in the account. Likewise, if a portion of the Class D Shares in a stockholder's account is sold or otherwise transferred in a secondary transaction, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class D Shares that were transferred and the Class D Shares that were retained in the account.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. It is understood and agreed by the parties hereto that the Placement Agent will not be considered to be a partner of the Company by virtue of its receipt of any of the above-described compensation. It is further understood and agreed by the parties hereto that payment of all commissions and other fees contemplated hereby will be made to the Placement Agent, and the Placement Agent may, in turn will pay any Participating Broker retained by Placement Agent on such terms to which Placement Agent and the Participating Broker may agree. The Placement Agent will indemnify and hold harmless the Company and the Advisor from any claim or action by, or liability to, any Participating Broker retained by Placement Agent arising from or related to the non-payment or alleged non-payment of placement fees or marketing support fees to any such Participating Broker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. The Company will reimburse the Placement Agent and Distribution Participants for reasonable out-of-pocket due diligence expenses that are incurred by the Placement Agent and/or Distribution Participants, provided that such expenses are detailed on itemized invoices and such expenses do not exceed the Company's limits on Organization and Offering Expenses, as set forth in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Covenants of the Company, the Advisor and the Placement Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company and the Advisor covenant and agree that they will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Deliver to the Placement Agent such number of copies of the Memorandum, including any amendment or supplement thereto, and appendices, as it may reasonably request for the purposes contemplated by the Act or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Comply with all requirements imposed upon them by the Act, as now and hereafter amended, and by all applicable state securities laws (of those states in which an exemption has been obtained or qualification of the Shares has been effected), to permit the continuance of offers and sales of the Shares in accordance with the provisions hereof and of the Memorandum. During the Offering Period, they will amend or supplement the Memorandum as necessary to comply with the requirements of the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Furnish the Placement Agent, until the termination of the Offering, information necessary in their judgment, or in the reasonable judgment of its counsel, to keep the Memorandum fair, accurate, and complete in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notify the Placement Agent of the occurrence of any event of which the Advisor or the Company becomes aware if such event would cause the Memorandum to include an untrue statement of a material fact or, in view of the circumstances under which such statement of fact was made, omit to state any material fact necessary to make the statements therein not misleading, in which event the Company will promptly effect the preparation of an amended or supplemented Memorandum which will correct such statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Endeavor in good faith, in cooperation with the Placement Agent, prior to, or as soon as practicable after, the commencement of the Offering Period, to qualify the Shares (or to obtain an exemption from any registration requirement) for offering and sale under the securities laws relating to the offering or sale of the Shares in such jurisdictions as the Placement Agent may reasonably request. In each jurisdiction where such qualification or exemption shall be effected, the Company and the Advisor will file and make such statements or reports at such times as are or may reasonably be required by the laws of such jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Not offer, offer to sell, offer for sale or sell any Shares or interest in the Company, or other securities, except and to the extent any such offer, offer to sell, offer for sale or sale shall not render unavailable the exemptions from registration or qualification requirements of applicable federal and state securities laws relied upon with respect to the offering and sale of the Shares contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Upon the initial closing of Class FA Shares, admit as stockholders all subscribers for Shares approved and accepted by the Advisor and which have fulfilled their capital contributions, in accordance with the description of the procedures set forth in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Pursuant to Regulation D of the Act, file a Form D (and any amendment(s) thereto and periodic filings thereof) with the Commission and any applicable state regulatory agencies or authorities in a timely manner and promptly deliver copies of the same to the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Apply the net proceeds from the Offering received by the Company in the manner set forth in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Not take any action or permit any action to be taken on behalf of the Company or Advisor that would result in any of the Company's or the Advisor's representations and warranties contained herein being untrue in any material respect as of a time immediately after such action is taken or permitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Endeavor, for as long as the Company shall own assets, to maintain the Company as a validly existing corporation under Maryland Law or under the laws of whatever state in which it shall be incorporated and duly qualified as a foreign corporation in the state where it shall own and/or lease property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Placement Agent covenants and agrees with the Company and the Advisor that it will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In connection with the offering and sale of the Shares by the Company, comply with all requirements imposed upon the Placement Agent by the Act, as now and hereafter amended, Regulation D of the Act and any other applicable law, all applicable state securities laws, this Agreement and the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Provide the Company on a timely basis (i.e., at the time of an offer or sale of one or more Shares) with such information relating to the offering and sale of the Shares by it, to the extent the Placement Agent has such information in its possession or may reasonably obtain such information, as the Company may from time to time request or as may be requested to enable the Company to prepare such other reports of sale as may be required to be filed under the applicable state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Not take any action or permit any action to be taken on behalf of the Placement Agent that would result in any of the representations and warranties contained herein being untrue in any material respect as of a time immediately after such action is taken or permitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Indemnification.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Placement Agent agrees to indemnify, defend and hold harmless the Company, for whose account it offers and sells Shares, the Advisor, and their respective officers, directors, managers, trustees, employees and agents, against all losses, claims, demands, liabilities, and expenses, joint or several, including reasonable legal and other expenses incurred in defending such claims or liabilities, whether or not resulting from any liability to the Company, the Advisor, and their respective officers, directors, managers, trustees, employees, or agents, which they or any of them may incur arising out of the offer or sale by the Placement Agent, or any officer, director or employee acting on the Placement Agent's behalf, of any Shares pursuant to this Agreement if such loss, claim, demand, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement of a material fact, or any omission or alleged omission of a material fact, which is also, as the case may be, contained in or omitted from the Memorandum and which statement or omission was based on information supplied to the Company by the Placement Agent, or (ii) the breach by the Placement Agent, or any person acting on its behalf, of any of the terms and conditions of this Agreement. This indemnity provision shall survive the termination of this Agreement. By virtue of entering into a Participating Broker Agreement or a Participating Advisor Agreement, the Placement Agent shall ensure that Distribution Participants agree to indemnify, defend and hold harmless the Company as an intended third party beneficiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Company and the Advisor agree to indemnify, defend and hold harmless the Placement Agent, and its officers, directors, managers, trustees, employees and agents, and each Distribution Participant, against all losses, claims, demands, liabilities and expenses, including reasonable legal and other expenses incurred in defending such claims or liabilities, which they or any of them may incur, including, but not limited to, alleged violations of the Act, but only to the extent that such losses, claims, demands, liabilities and expenses shall arise out of or be based upon (i) any untrue statement of a material fact contained in the Memorandum or in any amendment or supplement thereto, or in any application prepared and filed with the Commission and any state regulatory agency in order to comply with the exemptions available in such states with respect to the Shares (the "Blue Sky Applications"), (ii) any omission or alleged omission to state therein a material fact required to be stated in the Memorandum or the Blue Sky Applications, or necessary to make such statements, and any part thereof not misleading; provided, that any such untrue statement, omission or alleged omission is not based on information which was supplied to the Company or the Advisor by the Placement Agent, or (iii) the breach by the Company or the Advisor, or any person acting on their behalf, of any of the terms and conditions of this Agreement. This indemnity provision shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. No indemnifying party shall be liable under the indemnity agreements contained in subparagraphs A. and B. above unless the party to be indemnified shall have notified such indemnifying party in writing promptly after the summons or other first legal process giving information of the nature of the claim shall have been served upon the party to be indemnified, but failure to notify an indemnifying party of any such claim shall not relieve it from any liabilities which it may have to the indemnified party against whom action is brought other than on account of its indemnity agreement contained in subparagraphs A. and B. above. In the case of any such claim, if the party to be indemnified notified the indemnifying party of the commencement thereof as aforesaid, the indemnifying party shall be entitled to participate at its own expense in the defense of such claim. If it so elects, in accordance with arrangements satisfactory to any other indemnifying party or parties similarly notified, the indemnifying party has the option to assume the entire defense of the claim, with counsel who shall be satisfactory to such indemnified party and all other indemnified parties who are defendants in such action; and after notice from the indemnifying party of its election so to assume the defense thereof and the retaining of such counsel by the indemnifying party, the indemnifying party shall not be liable to such indemnified party under subparagraphs A. or B. above for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof, other than for the reasonable costs of investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Compliance</u>. All actions, direct or indirect, by the Placement Agent, the Company, and the Advisor, and their respective, officers, directors and employees in connection with the offering and sale of the Shares shall conform to the requirements of the exemption available under Section 4(a)(2) of the Act and Rule 506(b) of Regulation D and to all procedures for the offering and sale of the Shares established by the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Representations and Agreements to Survive Sale and Payment</u>. Except as the context otherwise requires, all representations, warranties and agreements contained in this Agreement shall be deemed to be representations, warranties, and agreements at each closings on subscriptions received and accepted by the Company or the Advisor on behalf of the Company, and such representations, warranties and agreements of the Placement Agent, the Company, and the Advisor (individually or on behalf of the Company), including the indemnity agreements contained in Section 5 hereof and the covenants contained in Section 2 and 4 hereof, shall remain operative and in full force and effect regardless of any investigation made by the Placement Agent or on its behalf, or by any controlling person of it, and shall survive the sale of, and payment for, the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Termination of this Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. This Agreement shall become effective on the date on which this Agreement is executed by the Placement Agent, the Company and the Advisor. After this Agreement becomes effective, any party may terminate it at any time for any reason by giving thirty (30) days written notice to the other party; provided, however, that this Agreement shall in any event automatically terminate at the first occurrence of any of the following events: (a) the termination of the Offering as described in the Memorandum; (b) the termination and liquidation of the Company; (c) the revocation or suspension of the Placement Agent's license or registration to act as broker-dealer by any federal, self-regulatory or state agency and such revocation or suspension is not cured within ten (10) days from the date of such occurrence; or (d) the determination by any of the parties that there shall have been such change in the condition or prospects of the Company or the Advisor that would make it inadvisable to proceed with the Offering and sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. If any party hereto elects to terminate this Agreement as provided in this Section 8, all other parties hereto shall be notified promptly by the terminating party pursuant to Section 9 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. If this Agreement is terminated pursuant to this Section 8, no party shall have any liability to any other party, other than for obligations, if any, pursuant to Section 3 and Section 5 hereof. Notwithstanding the foregoing, no fee, compensation or expense reimbursement may be paid to the Placement Agent or any Participating Broker following the termination of this Agreement in violation of FINRA Conduct Rule 5110(f)(2)(D).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notices</u>. All notices provided for in this Agreement shall be made in writing either (i) by actual delivery of the notice into the hands of the parties thereto entitled or (ii) by the mailing of the notice in the United States mail to the address, as stated below (or at such other address as may have been designated by written notice), of the party entitled thereto, by certified or registered mail, return receipt requested. The notice shall be deemed to be received in case (i) on the date of its actual receipts by the party entitled thereto and in case (ii) on the date of deposit in the United States mail.

All communications hereunder, except as herein otherwise specifically provided, shall be in writing and, if sent to the Placement Agent, shall be mailed or delivered to CNL Securities Corp., 450 South Orange Ave., Suite 1300 Orlando, Florida 32801 Attention: Legal Counsel; if sent to the Company or the Advisor, shall be mailed or delivered to CNL Residential Credit Manager, LLC, 450 South Orange Ave., Suite 1400, Orlando, Florida 32801 Attention: Legal Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Construction</u>. This Agreement shall be governed by, subject to and construed in accordance with the internal laws (without regard to principles of conflicts of laws) of the State of Florida.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Severability</u>. If any portion of this Agreement shall be held invalid or inoperative, then, so far as is reasonable and possible (i) the remainder of this Agreement shall be considered valid and operative and (ii) effect shall be given to the intent manifested by the portion held invalid or inoperative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Modification or Amendment</u>. This Agreement may not be modified or amended except by written agreement executed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Number and Gender of Words</u>. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall include the plural, and conversely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Other Instruments</u>. The parties hereto covenant and agree that they will execute such other and further instruments and documents as are or may become necessary to effectuate and carry out this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Captions</u>. The captions used in this Agreement are for convenience only and shall not be construed in interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Parties</u>. This Agreement shall be binding upon the parties hereto and inure solely to the benefit of the parties hereto and their respective successors, legal representatives, heirs, and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Entire Agreement</u>. This Agreement, together with Exhibit A hereto, contains the entire understanding between the parties hereto and supersedes any prior understanding or written or oral agreements between them respecting the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Definitions</u>. Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Counterparts</u>. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Third-Party Beneficiaries</u>. The Distribution Participants shall be third-party beneficiaries of Section 5(B) of this Agreement; otherwise, there shall be no third-party beneficiaries of this Agreement, and other than the Participating Brokers with respect to Section 5(B), no provision of this Agreement is intended for the benefit of any person or entity not a party to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Further, no other third party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against either party to this Agreement.

*(signature page follows)*

**IN WITNESS WHEREOF**, the parties hereto have each duly executed this Placement Agent Agreement as of the day and year above written.

---

| | | | |
|:---|:---|:---|:---|
| **[CNL Securities CORP.]** | **[CNL Securities CORP.]** | **CNL RESIDENTIAL Credit Manager, LLC** | **CNL RESIDENTIAL Credit Manager, LLC** |
| By: |  |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: | By: |  |
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: <br> Title: |
|  |  | **CNL STRATEGIC Residential credit, inc.** | **CNL STRATEGIC Residential credit, inc.** |
|  |  | By: |  |
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:<br> Title: |

---

<u>EXHIBIT A-1</u>

FORM OF PARTICIPATING BROKER AGREEMENT

<u>EXHIBIT A-2</u>

FORM OF PARTICIPATING ADVISOR AGREEMENT

## Exhibit 10.6

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.6**

**FORM OF PARTICIPATING BROKER AGREEMENT**

**CNL STRATEGIC RESIDENTIAL CREDIT, INC.**

**THIS PARTICIPATING BROKER AGREEMENT** (the "Agreement") is made and entered into as of _________________, 20___, by and between [CNL SECURITIES CORP.], a Florida corporation (the "Placement Agent"), and ______________________________________, (the "Broker").

**WHEREAS**, CNL STRATEGIC RESIDENTIAL CREDIT, INC. is a Maryland corporation (the "Company"); and

**WHEREAS**, the Company is offering to sell up to $250,000,000 (the "Offering") of shares of its common stock in the Company (the "Shares") pursuant to a private offering (the "Offering") that is intended to qualify for an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, (the "Act") and Rule 506(b) of Regulation D promulgated thereunder, and an exemption from registration under various state securities laws; and

**WHEREAS,** the Company is initially offering Class FA Shares ("Founders Shares") and, once the minimum offering requirement is satisfied and the Company has completed the initial closing of Class FA Shares, the Company will continue to offer up to $100,000,000 of Class FA Shares, and after the initial closing, the Company, in its sole and absolute discretion, may also begin to offer any combination of Class A Shares, Class T Shares, Class D Shares or Class I Shares (collectively, "Non-Founder Shares") up to the remaining maximum amount of the Offering, and

**WHEREAS,** the minimum offering requirement for the Offering is defined in the Memorandum, and the Company currently intends to conduct the Offering until the earlier of: (i) the date the Company has sold the maximum offering amount or (ii) two years from the start of the Offering; provided, however, that the Company, in its sole discretion, may extend the Offering on a perpetual basis; and

**WHEREAS**, Subscriptions for Class FA Shares will initially be made through a capital commitment payable upon the Company's initial closing of Class FA Shares, and the initial minimum purchase amount for Class FA Shares is $25,000, and once the Company has met its minimum offering requirement and completed its initial closing of Class FA Shares, Shares will generally be issued at an offering price based on the net asset value of each class of Shares as of the last calendar day of the prior month; and

**WHEREAS**, the Placement Agent, which has heretofore entered into a placement agent agreement (the "Placement Agent Agreement") with the Company pursuant to which it has been designated as the Placement Agent to sell and manage the sale of the Shares by other participating broker- dealers pursuant to the terms of such Placement Agent Agreement and the Offering, is a corporation incorporated in and presently in good standing in the State of Florida, and is presently registered with the securities commissions of all states and with the Financial Industry Regulatory Authority ("FINRA") as a securities broker-dealer qualified to offer and sell to members of the public securities of the type represented by the Shares; and

**WHEREAS**, the Broker is an entity organized and presently in good standing in the jurisdictions in which it does business, presently registered as a broker-dealer with FINRA, and presently licensed by the appropriate regulatory agency of each jurisdiction in which it will offer and sell the Shares as a securities broker-dealer qualified to offer and sell to members of the public securities of the type represented by the Shares or exempt from all such registration requirements; and

**WHEREAS**, the Company has prepared a preliminary confidential offering memorandum dated __________, 2025, and when available and delivered to and approved by the Placement Agent, the Company's definitive confidential private placement offering memorandum, as may be amended and supplemented from time to time (the "Memorandum"), and the offering and sale of Shares will be made only to investors who are "Accredited Investors," as that term is defined under the Act and Regulation D promulgated thereunder, and meet the other suitability standards set forth in the Subscription Agreement and further pursuant to the terms and conditions of all applicable federal securities laws and all applicable securities laws of all states in which the Shares are offered and sold; and

**WHEREAS**, the Placement Agent desires to retain the Broker to use its best efforts to sell the Shares, and the Broker is willing and desires to serve as a broker for the Placement Agent for the sale of the Shares upon the following terms and conditions.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. *Relationship.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions herein set forth, the Placement Agent hereby retains the Broker to use its best efforts to sell for the account of the Company a portion of the Shares described in the Memorandum. The Broker hereby accepts such retention and covenants, warrants and agrees to sell the Shares according to all of the terms and conditions of the Memorandum, all applicable state and federal laws, including the Act, and any and all regulations and rules pertaining thereto, including, but not limited to, Rule 506(b) of Regulation D promulgated thereunder. The Broker and its associated persons shall have no authority to give any information or make any representations in connection with any offer or sale of the Shares other than as contained in the Memorandum, the brochure, and the sales material supplied by the Company, each as amended and supplemented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Broker shall comply with all requirements set forth in the Memorandum. The Broker shall use and distribute, in connection with the offering and sale of the Shares, only the Memorandum, the brochure, and any other sales material which have been supplied by the Company, and no other material shall be permitted to be used or distributed. The Placement Agent reserves the right to establish such additional procedures as it may deem necessary to ensure compliance with the requirements of the Memorandum, and the Broker shall comply with all such additional procedures to the extent that it has received written notice thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary contained in Section 2 of this Agreement, in the event that the Placement Agent pays any placement fees or other fees to the Broker for sale of one or more Shares, where representatives of the Broker execute the subscription agreement relating to such Shares, and the subscription is rescinded or rejected as to one or more of the Shares covered by such subscription, the Placement Agent shall decrease the next payment of compensation otherwise payable to the Broker by the Placement Agent under this Agreement by an amount equal to the compensation rate established in Section 2, multiplied by the number of Shares as to which the subscription is rescinded or rejected, as applicable. In the event that no payment of compensation is due to the Broker after such withdrawal occurs, the Broker shall pay the amount specified in the preceding sentence to the Placement Agent within ten (10) days following mailing of notice to the Broker by the Placement Agent stating the amount owed as a result of rescinded or rejected, as applicable, subscriptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All monies received for purchase of any of the Shares shall be forwarded by the Broker to UMB Bank, N.A. (the "Escrow Agent"), where such monies will be deposited in a non-interest bearing escrow account, established by the Company solely for such subscriptions, except that, until such time (if any) that such monies are deliverable to the Company pursuant to the escrow agreement between the Company and the Escrow Agent, the Broker shall return any monies not made payable to "UMB Bank as EA for CNL Strategic Residential Credit, Inc." directly to the subscriber who submitted the monies. In such case, the Broker will collect the proceeds of the subscribers' payments and issue a payment made payable to the order of the Escrow Agent for the aggregate amount of the subscription proceeds. Subscription documents in the form attached as Appendix II to the Memorandum (the "Subscription Documents") will be executed as described in the Memorandum. The monies shall be deposited or transmitted by the Broker to the Company no later than as allowed by the Securities Exchange Act of 1934 and the rules promulgated thereunder, (collectively, the "1934 Act") and interpretive guidance from self-regulatory organizations applicable to the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) During the full term of this Agreement, the Placement Agent shall have full authority to take such action as it may deem advisable in respect to all matters pertaining to the performance of the Broker under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Shares shall be offered and sold by the Broker only where the Shares may be legally offered and sold, only by Broker's registered representatives appropriately licensed to sell Shares in such jurisdiction, and only to such persons in such states who shall be legally qualified to purchase the Shares. For purposes of this Agreement, wherever used herein the terms "state" and "states" shall be deemed to refer inclusively to the 50 states in the United States, the District of Columbia, and the Commonwealth of Puerto Rico. The Placement Agent shall give the Broker written notice of those states in which the offering and sale of Shares may be made, and shall amend such notice thereafter as additional states are added; no Shares shall be offered or sold in any other states.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Broker shall have no obligation under this Agreement to purchase any of the Shares for its own account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Broker will use every reasonable effort to assure that Shares are sold only to investors who:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) meet the investor suitability standards, including the minimum income and net worth standards established by the definition of the term "accredited investor" as set forth in Regulation D under the Act, and the minimum purchase requirements set forth in the Memorandum;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) have apparent understanding of: (A) the fundamental risks of the investment; (B) the risk that the prospective investor may lose the entire investment; (C) the lack of liquidity of the Shares; (D) the restrictions on transferability of the Shares; (E) the background and qualifications of the officers and directors of the Company or of CNL Residential Credit Manager, LLC (the "Advisor"); and (F) the tax consequences of an investment in the Shares.

The Broker will make the determinations required to be made by it pursuant to this subsection (h) based on information it has obtained from the prospective investor, including, at a minimum, but not limited to, the prospective investor's age, investment objectives, investment experience, income, net worth, financial situation, other investments and information gathered pursuant to FINRA's anti-money laundering rules and the Securities and Exchange Commission's (the "SEC") current books and records rules, as well as any other pertinent factors deemed by the Broker to be relevant. The Broker agrees that the Placement Agent is not and does not intend to be in any fiduciary relationship or contract with investors or clients of the Broker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Broker will offer the Shares in accordance with the applicable provisions of the Act in a manner so as to preserve the exemption from registration as provided in Section 4(a)(2) of the Act and will not take, or omit to take, any action in connection with offers and sales of Shares that would cause the Offering not to be made in compliance with Rule 506(b) pursuant to Regulation D promulgated thereunder; the Broker will not offer the Shares for sale in any jurisdiction unless and until the Placement Agent shall have advised it that the Shares are either registered in accordance with, or exempt from, the securities, real estate syndication, and other laws applicable thereto; and the Broker has not and will not take any action that would require registration of the Shares under any federal or state securities, real estate syndication, or any other laws, orders, rules or regulations. The Broker will not use any offering or selling materials other than materials furnished or previously approved in writing by the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Broker shall make no representations concerning the Offering, except as set forth in the Memorandum, and except for such supplemental information relating to the Offering, the Company and the Advisor as shall be made available in writing by the Placement Agent to offerees and their representatives as contemplated by Regulation D promulgated under the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Broker will not offer the Shares by means of any form of general solicitation or general advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising, and otherwise will comply with the provisions of Rule 506(b) of Regulation D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) In addition to complying with the provisions of subsection (h) above, and not in limitation of any other obligations of the Broker to determine suitability imposed by state or federal law, the Broker agrees that it will comply fully with all of the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Broker shall have reasonable grounds to believe, based upon information provided by the prospective investor concerning his investment objectives, other investments, financial situation and needs, and upon any other information known by the Broker, that (A) each prospective investor to whom the Broker sells Shares is in a financial position appropriate to enable him to realize to a significant extent the benefits (including tax benefits) of an investment in the Shares, (B) each prospective investor to whom the Broker sells Shares has a fair market net worth sufficient to sustain the risks inherent in an investment in the Shares (including potential loss and lack of liquidity), and (C) the Shares otherwise are a suitable investment for each prospective investor to whom it sells Shares, and the Broker shall maintain files disclosing the basis upon which the determination of suitability was made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Broker shall cause the prospective investor to fully complete the Subscription Documents provided by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Broker shall have reasonable grounds to believe, based upon the information made available to it, that all material facts are adequately and accurately disclosed in the Memorandum and provide a basis for evaluating the Shares;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) If the Broker relies upon the results of any inquiry conducted by another member of FINRA with respect to the obligations set forth in subsections (iii) or (iv) above, the Broker shall have reasonable grounds to believe that such inquiry was conducted with due care, that the member or members conducting or directing the inquiry consented to the disclosure of the results of the inquiry and that the person who participated in or conducted the inquiry is not a sponsor or an affiliate of the sponsor of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Prior to executing a purchase transaction in the Shares, the Broker shall have informed the prospective investor of all pertinent facts relating to the lack of liquidity and marketability of the Shares and the risk factors involved in the purchase of Shares as disclosed in the Memorandum and by delivery of the Memorandum to such prospective investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Broker agrees that it will comply with all FINRA Conduct Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Broker agrees to retain in its files, for at least six years, or for that period of time which shall comply with all applicable federal, state, jurisdictional and other regulatory requirements, including as required by FINRA and the SEC books and records rules, information that will establish that each purchaser of Shares falls within the permitted class of investors and will update all such information as may be required under FINRA's anti-money laundering rules and the SEC's books and records rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Broker shall verify the identity of each prospective investor to whom it offers and sells Shares under its "customer identification program" and verify the source of the prospective investor's funds as required by the anti-money laundering rules of FINRA, the SEC and Department of Treasury, and screen such investors against current lists of individuals and organizations available from the Office of Foreign Asset Control ("OFAC"). The Broker shall not accept subscriptions from any person, entity or organization in a blocked jurisdiction. The Broker shall file any necessary or appropriate suspicious activity reports and currency transaction reports and other required under applicable "know your customer" and "anti-money laundering" laws and regulations in respect of investors or potential investors. The Broker has in place and adheres to a comprehensive anti -money laundering program that meets the requirements of FINRA Conduct Rule 3011, Department of Treasury regulations issued pursuant to Title III of the USA PATRIOT Act and other applicable laws and regulations. The Broker agrees to cooperate with the Company and the Placement Agent in gathering additional information in respect of an investor or the source of the investor's funds as reasonably requested by the Placement Agent or the Company, and agrees to cooperate with the Company and the Placement Agent in connection with anti-money laundering laws and regulations. By forwarding an investor's subscription information to the Company, the Broker represents and warrants that it has verified the identity of the investor and the source of the investor's funds, that the investor is not listed on the OFAC list, and that the Broker, after conducting commercially reasonable diligence, is not aware of any suspicious or illegal activity associated with the prospective investor or the source of the prospective investor's funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Broker agrees to have in place and adhere to a commercially reasonable program of customer privacy in compliance with applicable laws and industry best practices designed to assure the confidentiality and security of confidential investor information, as required by Regulation S-P and other applicable laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) The Broker agrees to have in place and adhere to a "business continuity plan" in conformity with the rules of FINRA and to cooperate with the Placement Agent on business continuity plan matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) The Broker shall not, directly or indirectly, pay or award any finder's fees, placement fees or other compensation to any persons engaged by a prospective investor for investment advice as an inducement to such adviser to advise the prospective investor to purchase Shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) The Broker understands that the Shares have not been registered under the Act or any other securities laws on the grounds that the offering and sale of the Shares are exempt from registration under applicable exemptions from federal securities laws and in accordance with the private, covered securities or limited offering exemptions available in the states in which the Company desires to sell Shares, and the Broker represents and warrants that it shall not offer or sell Shares in a manner which would prevent the Company from availing itself of such exemptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) The Broker either (i) shall not purchase Shares for its own account or (ii) if it purchases Shares for its own account, shall hold all such Shares for investment.

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) The Broker shall promptly provide subscribers with all amendments or supplements to the Memorandum provided to the Broker by the Placement Agent or Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Broker hereby represents and warrants that all registered representatives who participate in, or who effect a sale or transfer in Shares in connection with this Offering shall have, and be in good standing with, all required FINRA and state licensing and any other applicable regulatory licensing prior to such participation, sale or transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) To the extent that the Broker and the Broker's clients execute the Subscription Agreement and/or other applicable account-related forms, in whole or in part, by electronic means, the Broker will comply with the Electronic Signatures in Global and National Commerce Act and the Uniform Electronic Transactions Act (collectively, as such may be amended from time to time, "Electronic Signature Law"), and the following terms and conditions set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In facilitating the use of Electronic Signatures (as defined by Electronic Signature Law), the Broker will utilize technology that: (a) will be implemented in compliance with Electronic Signature Law, and will include a commercially reasonable level of security and assurances of accuracy, and will include required federal disclosures, as applicable; (b) will employ an authentication process to establish signer credentials; (c) will employ mechanisms that ensure the potential investor reviews all required disclosure on the Subscription Agreement; (d) will employ security features that protect signed records from alteration; (e) will affix the Electronic Signature to the appropriate location in the relevant document; and (f) will provide for retention of electronically signed documents in compliance with applicable laws and regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Broker shall: (a) advise clients that the execution of documents by Electronic Signature is optional and that participation may be terminated at any time; (b) prior to use of Electronic Signature, obtain and document the prospective investor's written consent to utilize Electronic Signature, and such consent shall be made available to the Company and/or the Placement Agent upon request; (c) allow clients that elect to participate in electronic signature initiative the ability to receive offering documents and other materials electronically or in paper form; (d) allow its clients to sign any document with an original handwritten signature; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Broker shall maintain written policies and procedures covering the use of Electronic Signatures, which shall comply with all applicable federal, state, jurisdictional and other regulatory requirements. Such policies and procedures shall include a process for removing Electronic Signature credentials, if any, used in connection with the Electronic Signature, when a client revokes their participation in the Electronic Signature initiative; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Broker will provide clients participating in the Electronic Signature program a written confirmation of purchase, which may be provided in electronic or paper format at the election of the client. The Broker will also maintain a copy of each Electronic Signature used to execute a transaction in accordance with applicable recording obligations under state and federal securities laws and regulations and all applicable FINRA rules and regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) An election to participate in an Electronic Signature initiative may only be used in connection with, and to the extent permitted by, the Company, and, in its sole and absolute discretion, the Company reserves the right to prohibit the use of Electronic Signature by the Broker and the Broker's clients at any time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Broker may not charge different fees or expenses to clients based upon an election to participate, or not participate, in the Electronic Signature initiative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2. Compensation of Broker.*

Except as provided in the Memorandum, which may be amended or supplemented from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Up- Front Selling Commission*. As compensation for completed sales of Non-Founder Shares and for services to be rendered by the Broker hereunder, the Placement Agent shall reallow to the Broker an up- front selling commission in an amount of up to the corresponding Class percentage set forth on **Schedule I** to this Agreement of the gross proceeds on such completed sales of Shares by the Broker, subject to reduction as provided herein or in the "Plan of Distribution" section of the Memorandum, which may be amended and supplemented from time to time. The Broker shall not receive commissions for sales of Class A or Class T Shares pursuant to the Distribution Reinvestment Plan, or for sales of any Class FA, Class D, or Class I Shares in the Offering or pursuant to the Distribution Reinvestment Plan.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Distribution and Stockholder Servicing Fee*. Except as may be provided in the "Plan of Distribution" section of the Memorandum, which the Company may be amend or supplement from time to time and subject to the Company's Distribution and Stockholder Servicing Plan, the Placement Agent may agree to reallow to the Broker, as compensation for the sale of Shares in the Offering and for ongoing stockholder services, all or a portion of the annual distribution and stockholder servicing fee (the "Distribution Fee") received by the Placement Agent as described in the Placement Agent Agreement and the Memorandum with respect to the Class T Shares and/or the Class D Shares sold in the Offering by the Broker during the term of this Agreement if the Broker has elected to sell Class T Shares or Class D Shares, as applicable, and has executed the addendum to this Agreement attached as **Schedule I** to this Agreement, which sets forth the terms and conditions of the Placement Agent's reallowance of the Distribution Fee to Broker. The Distribution Fee will be based the then-current Offering price (or, once reported, the amount of the most recent reported net asset value per Share) per Class T Share and Class D Share. The Broker shall not receive reallowance of Distribution Fees for sales of any Class FA, Class I, or Class A Shares in the Offering or pursuant to the Distribution Reinvestment Plan.

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) After the minimum offering requirement has been reached, the Broker may withhold the selling commissions and reallowance of dealer manager fees to which it is entitled from the purchase price for the Shares in the Offering and forward the balance to SS&C Technologies, Inc. (f/k/a DST Systems, Inc.), which acts as the Company's transfer agent (the "Transfer Agent") if it represents to the Placement Agent that: (i) the Broker is legally permitted to do so; and (ii) (A) the Broker meets all applicable net capital requirements under the rules of FINRA or other applicable rules regarding such an arrangement; (B) the Broker has forwarded the Subscription Agreement to the Company's Transfer Agent and received the Company's written acceptance of the subscription prior to forwarding the purchase price for the Shares, net of the commissions and dealer manager fees to which the Broker is entitled, to the Company's Transfer Agent; and (C) the Broker has verified that there are sufficient funds in the investor's account with the Broker to cover the entire cost of the subscription.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) As may be provided in the "Plan of Distribution" section of the Memorandum, which may be amended and supplemented from time to time, certain persons and entities may purchase Shares net of all or a portion of the commissions and/or the dealer manager fees. The amount of net proceeds to the Company will not be affected by reducing or eliminating commissions and dealer manager fees payable in connection with sales to investors described in this paragraph.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) No commissions or dealer manager fees will be paid to the Broker in connection with any Shares purchased through the Distribution Reinvestment Plan. Notwithstanding anything to the contrary contained herein, in no event shall total aggregate underwriting compensation payable to the Placement Agent and any Participating Broker in connection with the Offering, including, but not limited to, commissions, the dealer manager fee, and the Distribution Fee, together with any other items deemed to be underwriting compensation by FINRA in connection with this Offering, exceed ten percent (10%) of gross offering proceeds from the Offering, excluding proceeds from the Company's Distribution Reinvestment Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Placement Agent may reimburse the Broker for bona fide due diligence expenses incurred in connection with the Offering, provided that such expenses are detailed on itemized invoices and such expenses do not exceed the Company's limits on Organization and Offering Expenses, as set forth in the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. *Association with Other Dealers.*

It is expressly understood between the Placement Agent and the Broker that the Placement Agent may cooperate with other broker-dealers who are registered as broker-dealers with FINRA and duly licensed by the appropriate regulatory agency of each state in which they will offer and sell the Shares or with broker-dealers exempt from all such registration requirements. Such other participating broker-dealers may be employed by the Placement Agent as brokers on terms and conditions identical or similar to this Agreement and shall receive such rates of compensation as are agreed to between the Placement Agent and the respective other participating broker- dealers and as are in accordance with the terms of the Memorandum. The Broker understands that, to that extent, such other participating broker-dealers shall compete with the Broker in the sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. *Conditions of the Broker's Obligations.*

The Broker's obligations hereunder are subject, during the full term of this Agreement and the Offering, to (a) the performance by the Placement Agent of its obligations hereunder, and (b) the conditions that: (i) the Memorandum shall remain in effect, and (ii) no stop order shall have been issued suspending the sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. *Conditions to the Placement Agent's Obligations.*

The obligations of the Placement Agent hereunder are subject, during the full term of this Agreement and the Offering, to the conditions that: (a) the terms of the Offering set forth in the Memorandum shall remain in effect while any Shares remain unsold; (b) no stop order (or other order prohibiting or restraining the offer or sale of the Shares) shall have been issued nor proceedings therefor initiated or threatened by any state regulatory agency or the Securities and Exchange Commission; and (c) the Broker shall have satisfactorily performed all of its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. *Covenants of the Broker.*

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Broker has necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Broker is duly organized, validly existing, and in good standing under the laws of the jurisdictions in which it does business. The Broker has the requisite corporate power and authority to execute this Agreement and to perform its duties hereunder, and the execution and delivery by it of this Agreement and the consummation of the transactions herein contemplated will not result in any violation of, or be in conflict with, or constitute a default under, any agreement or instrument to which the Broker is a party or by which the Broker or its properties are bound, or any judgment, decree, order, or, to its knowledge, any statute, rule or regulation applicable to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Broker is a member of FINRA and a broker-dealer registered as such under the 1934 Act and under the securities laws of the states in which the Shares are to be offered or sold.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Broker represents that neither it, nor any of its directors, executive officers, other officers, or employees of the Broker participating in the offering of Shares that have been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares or otherwise distribute the Shares ("Collectively Distribution Participant Covered Person") is subject to any Disqualification Event (defined below) except for a Disqualification Event (i) contemplated by Rule 506(d)(2) under the Act and (ii) a description of which has already been furnished in writing to the Placement Agent prior to the date hereof. Broker further agrees to notify the Placement Agent in a writing provided in accordance with Section 11 of this Agreement prior to offering Shares of (i) any Disqualification Event relating to any Distribution Participant Covered Person not previously disclosed to the Placement Agent and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Distribution Participant Covered Person. The Broker will notify the Placement Agent in writing, prior to the offering of Shares of (i) any Disqualification Event relating to any Distribution Participant Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Distribution Participant Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. *Covenants of the Placement Agent.*

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Placement Agent has the necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Placement Agent is duly organized, validly existing, and in good standing under the laws of the jurisdictions in which it does business. The Placement Agent has the requisite corporate power and authority to execute this Agreement and to perform its duties hereunder, and the execution and delivery by it of this Agreement and the consummation of the transactions herein contemplated will not result in any violation of, or be in conflict with, or constitute a default under, any agreement or instrument to which the Placement Agent is a party or by which the Placement Agent or its properties are bound, or any judgment, decree, order, or, to its knowledge, any statute, rule or regulation applicable to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Placement Agent is a member of FINRA and a broker -dealer registered as such under the 1934 Act, and under the securities laws of the states in which the Shares are to be offered or sold.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Placement Agent shall use its best efforts to prevent the sale of the Shares through persons other than registered FINRA broker-dealers or with entities exempt from all such registration requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Placement Agent shall advise the Broker whenever and as soon as it receives or learns of any order issued by the SEC, any state regulatory agency or any other regulatory agency that suspends or prevents the offering or sale of the Shares, or receives notice of any proceedings regarding any such order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Placement Agent shall use its best efforts to prevent the issuance of any order described herein at subsection (f) hereof and to obtain the lifting of any such order if issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Placement Agent agrees to have in place and adhere to a commercially reasonable program of customer privacy in compliance with applicable laws and industry best practices designed to assure the confidentiality and security of confidential investor information, as required by Regulation S-P and other applicable laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Placement Agent shall give the Broker such number of copies of the Memorandum as the Broker may reasonably request for sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Placement Agent shall promptly notify the Broker of any amendments or supplements to the Memorandum, and shall furnish the Broker with copies of any revised Memorandum and all supplements and/or amendments to the Memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) In conjunction with the Company, on whose behalf Shares are being offered, the Placement Agent shall use its best efforts to cause the Shares to be exempt from registration under the securities laws of such states as the Company shall elect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) No Disqualification Events. With respect to Shares to be offered and sold hereunder in reliance on Rule 506, none of the Company, any director, executive officer, other officers of the Company participating in the offering, any beneficial owner (as that term is defined in Rule 13d-3 under the 1934 Act) of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Act) connected with the Company in any capacity at the time of sale of any Shares, including the Placement Agent (but, in each case, excluding the Distribution Participant Covered Persons, as defined above, as to whom no representation is made) (each, a "Company Covered Person" and, collectively, "Company Covered Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Act. The Company has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Placement Agent will notify the Broker in writing, prior to the closing date of the Offering of (i) any Disqualification Event relating to any Company Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. *Payment of Costs and Expenses.*

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All expenses incident to the preparation, printing and filing of all advertising originated by it related to the sale of the Shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All other costs and expenses incurred in connection with its sales efforts related to the sales of the Shares that are not expressly assumed by the Company in its Placement Agent Agreement with the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. *Indemnification.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Broker agrees to indemnify, defend and hold harmless the Company, the Advisor, the Placement Agent, their affiliates and their respective officers, directors, managers, trustees, employees and agents, against all losses, claims, demands, liabilities and expenses, joint or several, including reasonable legal and other expenses incurred in defending such claims or liabilities, whether or not resulting in any liability to the Company, the Advisor, the Placement Agent, their affiliates and their respective officers, directors, manager, trustees, employees or agents, which they or any of them may incur arising out of the offer or sale by the Broker, or any person acting on its behalf, of any Shares pursuant to this Agreement if such loss, claim, demand, liability, or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement of a material fact by the Broker or any person acting on its behalf, or any omission or alleged omission of a material fact by the Broker or any person acting on its behalf, other than an untrue statement, omission, or alleged omission by the Broker that is also, as the case may be, contained in or omitted from the Memorandum unless such statement or omission was based on information supplied to the Company or the Placement Agent by the Broker, or (ii) the breach by the Broker, or any person acting on its behalf, of any of the terms and conditions of this Agreement. This indemnity provision shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Placement Agent agrees to indemnify, defend and hold harmless the Broker, its officers, directors, managers, trustees, employees and agents, against all losses, claims, demands, liabilities and expenses, including reasonable legal and other expenses incurred in defending such claims or liabilities, which they or any of them may incur, including, but not limited to, alleged violations of the Act, but only to the extent that such losses, claims, demands, liabilities and expenses shall arise out of or be based upon (i) a breach or alleged breach by CNL of any of its representations, warranties or covenants in this Agreement; (ii) any untrue statement of a material fact contained in the Memorandum or in any application prepared or approved in writing by counsel to the Company and filed with any state regulatory agency in order to comply with any private, covered securities or limited offering exemptions available in such states with respect to the Shares (the "Blue Sky Applications"); or (iii) any omission or alleged omission to state therein a material fact required to be stated in the Memorandum or the Blue Sky Applications, or necessary to make such statements, and any part thereof, not misleading; provided, that any such untrue statement, omission or alleged omission is not based on information included in any such document which was supplied to the Placement Agent, the Company, the Advisor, or any officer of the Company by the Broker. This indemnity provision shall survive the termination of this Agreement.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any Indemnified Party entitled to contribution or indemnification under this Section 9 will, promptly after receipt of such notice of commencement of any action, suit, proceeding or claim against him or it in respect of which a claim for contribution or indemnification may be made against another Indemnifying Party or Indemnifying Parties, notify such other Indemnifying Party or Indemnifying Parties. No indemnifying party shall be liable under the indemnity agreements contained in subsections (a) and (b) above unless the party to be indemnified shall have notified such indemnifying party in writing promptly after the summons or other first legal process giving information of the nature of the claim shall have been served upon the party to be indemnified, but failure to notify an indemnifying party of any such claim shall not relieve it from any liabilities which it may have to the indemnified party against whom action is brought other than on account of its indemnity agreement contained in subsections (a) and (b) above. In the case of any such claim, if the party to be indemnified notified the indemnifying party of the commencement thereof as aforesaid, the indemnifying party shall be entitled to participate at its own expense in the defense of such claim. If it so elects, in accordance with arrangements satisfactory to any other indemnifying party or parties similarly notified, the indemnifying party has the option to assume the entire defense of the claim, with counsel who shall be satisfactory to such indemnified party and all other indemnified parties who are defendants in such action; and after notice from the indemnifying party of its election so to assume the defense thereof and the retaining of such counsel by the indemnifying party, the indemnifying party shall not be liable to such indemnified party under subsections (a) and (b) above for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof, other than for the reasonable costs of investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. *Term of Agreement.*

This Agreement shall become effective on the date on which this Agreement is fully executed by both the Placement Agent and the Broker. After this Agreement becomes effective, either party may terminate it at any time for any reason by giving two (2) business days' written notice to the other party; provided, however, that this Agreement shall in any event automatically terminate at the first occurrence of any of the following events: (a) the termination of the Offering as described in the Memorandum; (b) the termination and liquidation of the Company; (c) the termination of the Placement Agent Agreement between the Company and the Placement Agent; or (d) the revocation or suspension of the Broker's license or registration to act as a broker-dealer by any federal, self-regulatory or state agency and such revocation or suspension is not cured within ten (10) days from the date of such occurrence. In any event, this Agreement shall be deemed suspended during any period for which such license is revoked or suspended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. *Notices.*

All notices and communications hereunder shall be in writing and shall be deemed to have been given and delivered when deposited in the United States mail, postage prepaid, registered or certified mail, to the applicable address set forth below. Any updates to this section are effective ten (10) days from the date written notice has been received by the other party.

*If sent to the Placement Agent:*

CNL SECURITIES CORP.

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention: Legal Counsel

If sent to the Broker:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. *Successors.*

This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective legal representatives, and successors, and shall not be assigned or transferred by the Broker by operation of law or otherwise except with the written consent of the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. *Miscellaneous.*

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Nothing in this Agreement shall constitute the Broker as in association with or in partnership with the Placement Agent. Instead, this Agreement shall only authorize the Broker to sell the Shares according to the terms as expressly set forth herein; provided, further, that the Broker shall not in any event have any authority to act as the agent or broker of the Placement Agent except according to the terms expressly set forth herein. The Company shall be a third party beneficiary of Section 9(a) of this Agreement; otherwise there shall be no third party beneficiaries of this Agreement, and other than the Company with respect to Section 9(a) herein, no provision of this Agreement is intended to be for the benefit of any person or entity not a party to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Further, no third party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against either party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement embodies the entire understanding between the parties to the Agreement, and except as specified herein, no variation, modification or amendment to this Agreement shall be deemed valid or effective unless it is in writing and signed by both parties hereto.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any terms used but not defined herein shall have the meanings given to them in the Memorandum.

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

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

**IN WITNESS WHEREOF**, the parties hereto have each duly executed this Participating Broker Agreement as of the day and year above written.

---

| | |
|:---|:---|
| **BROKER:**  | **PLACEMENT AGENT**  |
| (Name of Broker)  | **[CNL SECURITIES CORP.]** |

---

By:

Print Name:   Name:   <br>

Title:   Title:<u> </u>  

**SCHEDULE I**

**FIRST ADDENDUM TO THE PARTICIPATING BROKER AGREEMENT**

Name of Broker: ___________________________

The following reflects the up-front selling commission, dealer manager fee and/or distribution and stockholder servicing fee as agreed upon between [CNL Securities Corp.] (the "Placement Agent") and the Broker, effective as of the effectiveness of the Participating Broker Agreement (the "Agreement") between the Placement Agent and the Broker in connection with the offering of Shares of CNL Strategic Residential Credit, Inc. (the "Company").

<u>Marketing Support Fee</u>

Eligibility to receive the reallowance of the dealer manager fee as a marketing support fee ("Marketing Fee") described herein is conditioned upon the Broker's compliance with one or more of the following conditions. Any determination regarding the Broker's compliance with the listed conditions will be made in good faith by the Placement Agent, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Broker has and uses internal marketing support personnel (such as telemarketers, or a
 marketing director) to assist the Placement Agent's marketing team;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The
 Broker will answer investors' inquiries concerning monthly statements, valuations,
 distribution rates, tax information, annual reports, reinvestment and repurchase rights
 and procedures, and the financial status of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The
 Broker will assist investors with reinvestments and repurchase;

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

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

<u>Distribution and Stockholder Servicing Fee</u>

The terms and conditions of the annual distribution and stockholder servicing Fee ("Distribution Fee") are subject to the Memorandum as may be amended or supplemented from time to time. If the Broker elects to sell Class T Shares and/or Class D Shares, the Placement Agent may reallow to the Broker a Distribution Fee in an amount described below, for each Class T Share or Class D Share, as applicable, sold by the Broker in the Offering during the term of this Agreement. The Distribution Fee will accrue daily and will be paid monthly in arrears as described in the Memorandum. The Broker waives any and all rights to receive compensation, including the Distribution Fee, until it is paid to and received by the Placement Agent. Payment of the Distribution Fee by the Company is subject to the terms and conditions of the Company's Distribution and Stockholder Servicing Plan filed with the Company's Registration Statement.

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

Notwithstanding the foregoing, upon the date, if any, the Placement Agent is notified that the Broker is no longer meets the above eligibility requirements of the Distribution Fee with respect to such Class T Shares or Class D Shares, as applicable, then the Broker's entitlement to the Distribution Fee related to such Class T Shares or Class D Shares, shall cease, and the Broker shall not receive the Distribution Fee for any portion of the month in which the Broker is not eligible on the last day of the month; provided, however, if there is a change in the broker-dealer of record with respect to the Class T Shares or Class D Shares, as applicable, made in connection with a change in the registration of record for the Class T Shares or Class D Shares on the Company's books and records (including, but not limited to, a reregistration due to a sale or a transfer or a change in the form of ownership of the account), then the Participating Broker shall be entitled to a pro rata portion of the Distribution Fee related to the Class T Shares or Class D Shares, as applicable, for the portion of the month for which the Participating Broker was the broker dealer of record. Thereafter, the Distribution Fee may be reallowed by the Placement Agent to another Participating Broker or other meeting the eligibility requirements of the Class T Shares or Class D Shares, if any, pursuant to a Participating Broker Agreement or similar servicing agreement with the Placement Agent that provides for such reallowance. The Placement Agent may also reallow some or all of the Distribution Fee to other broker-dealers who provide services with respect to the Class T Shares or Class D Shares pursuant to a servicing agreement with the Placement Agent to the extent such servicing agreement provides for such reallowance, all in accordance with the terms of such servicing agreement. All determinations regarding the reallowance of the Distribution Fee will be made by the Placement Agent in good faith in its sole discretion.

<u>Conversion of Class FA, Class E, Class T, Class D, and I Shares; Termination of the Distribution Fee</u>.

Payment of the Distribution Fee with respect to the Class T Shares and/or Class D Shares (as each class may be applicable) sold by the Broker in the Offering will terminate, and those Class T Shares and/or Class D Shares (as applicable) will convert into a number of Class A Shares determined by multiplying each Class T Share or Class D Share to be converted by the applicable "Conversion Rate" described in the Memorandum, on the earlier of (i) a listing of the Class A Shares on a national securities exchange; (ii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets; (iii) with respect to Class T Shares, the end of the month in which the total underwriting compensation paid by a particular stockholder's account with respect to Class T Shares purchased in the Offering is not less than 8.5% of the gross offering price of those Class T Shares purchased in in the Offering (excluding Shares purchased through our distribution reinvestment plan and those received as stock dividends) or with respect to Class D Shares, the end of the month in which the total underwriting compensation paid by a particular stockholder's account with respect to Class D Shares purchased in the Offering is not less than 8.5% of the gross offering price of those Class D Shares purchased in in the Offering (excluding Shares purchased through our distribution reinvestment plan and those received as stock dividends); and (v) the date upon which the Company's stockholder distribution and servicing fee plan adopted by the Company's board of directors terminates or is not continued for either the Class T Shares or the Class D Shares, respectively.

The Company will further cease paying the Distribution Fee on any Class T or Class D Share that is repurchased. If the Company redeems a portion, but not all of the Class T Shares held in a stockholder's account, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class T Shares that were repurchased and those Class T Shares that were retained in the account. Likewise, if a portion of the Class T Shares in a stockholder's account is sold or otherwise transferred in a secondary transaction, the total underwriting compensation limit and amount of underwriting compensation previously paid will be prorated between the Class T Shares that were transferred and the Class T Shares that were retained in the account. The Company will further cease paying the Distribution Fee on any Class T or Class D Share upon the Company's dissolution, liquidation or the winding up of the Company's affairs, or a merger or other extraordinary transaction in which the Company is a party and, with respect to Class T Shares, in which the Class T Shares as a class are exchanged for cash or other securities, or, with respect to Class D Shares, in which the Class D Shares as a class are exchanged for cash or other securities. If the Company liquidates (voluntarily or otherwise), dissolves or winds up its affairs, then, immediately before such liquidation, dissolution or winding up, the Class FA, Class E, Class T, Class D, and Class I Shares will automatically convert to Class A Shares at the applicable Conversion Rate and the Company's net assets, or the proceeds therefrom, will be distributed to the holders of Class A Shares, which will include all converted Class FA, Class E Shares, Class T Shares, Class D, and Class I Shares, in accordance with their proportionate interests.

***<u>Share Class Election</u>***

**CHECK EACH APPLICABLE OPTION BELOW IF THE BROKER ELECTS TO PARTICIPATE IN THE LISTED SHARE CLASS:**

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Founder Shares** | &nbsp;&nbsp;**Non-Founder Shares\*** | &nbsp;&nbsp;**Non-Founder Shares\*** | &nbsp;&nbsp;**Non-Founder Shares\*** |
| &nbsp;&nbsp;☐ Class FA Shares | &nbsp;&nbsp;☐ Class A Shares | &nbsp;&nbsp;☐ Class T Shares | &nbsp;&nbsp;☐ Class I Shares |
| &nbsp;&nbsp;☐ Class FA Shares | &nbsp;&nbsp;☐ Class A Share (Wrap Account) | &nbsp;&nbsp;☐ Class D Shares |  |

---

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

---

| | | |
|:---|:---|:---|
| **Non-Founder Shares\*** | **Non-Founder Shares\*** | **Non-Founder Shares\*** |
| &nbsp;&nbsp;_______<br> **(Initials)**  | &nbsp;&nbsp;**Up-Front Selling Commission of up to 6.0% of price per Class A Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker hereby agrees to the terms of the Agreement and this Schedule with respect to the Class A Shares.  |
| &nbsp;&nbsp;_______<br> **(Initials)**  | &nbsp;&nbsp;**Up-Front Selling Commission of up to 3.0% of price per Class T Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker hereby agrees to the terms of the Agreement and this Schedule with respect to the Class T Shares.  |
| &nbsp;&nbsp;_______<br> **(Initials)** | &nbsp;&nbsp;**Up-Front Marketing Fee of up to 2.5% of price per Class A Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker agrees to the terms of eligibility for the Marketing Fee set forth in the Agreement and this Schedule I for the Class A Shares. Should the Broker choose to opt out of this provision, it will not be eligible to receive the Marketing Fee and initialing is not necessary.  |
| &nbsp;&nbsp;_______<br> **(Initials)** | &nbsp;&nbsp;**Up-Front Marketing Fee of up to 1.75% of price per Class T Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker agrees to the terms of eligibility for the Marketing Fee set forth in the Agreement and this Schedule I for the Class T Shares. Should the Broker choose to opt out of this provision, it will not be eligible to receive the Marketing Fee and initialing is not necessary.  |
| &nbsp;&nbsp;**_______**<br> **(Initials)** | &nbsp;&nbsp;**Distribution Fee of up to 1.0% (Annualized Rate) of most recently published estimated NAV per Class T Share up to a total of [__]% of the price per Class T Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker agrees to the terms of eligibility for the Distribution Fee set forth in the Agreement and this Schedule I for the Class T Shares. Should the Broker choose to opt out of this provision, it will not be eligible to receive the Distribution Fee and initialing is not necessary.<br>|
| &nbsp;&nbsp;_______<br> **(Initials)** | &nbsp;&nbsp;**Distribution Fee of up to 0.5% (Annualized Rate) of most recently published estimated NAV per Class D Share up to a total of [__]% of the price per Class D Share\*\***  | &nbsp;&nbsp;By initialing here, the Broker agrees to the terms of eligibility for the Distribution Fee set forth in the Agreement and this Schedule I for the Class D Shares. Should the Broker choose to opt out of this provision, it will not be eligible to receive the Distribution Fee and initialing is not necessary.<br>|

---

\* See the Memorandum for details.

\*\* Paid on Shares of the applicable Class sold by the Broker, excluding Shares sold pursuant to the Distribution Reinvestment Plan, as provided in this Agreement and in the Memorandum. The Distribution Fee will be based on the then-current Offering price (or, once reported, the amount of the most recently reported net asset value per Share) per Class T Share and Class D Share.

*(Signature page follows)*

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

---

| | |
|:---|:---|
| BROKER | PLACEMENT AGENT FOR CNL STRATEGIC RESIDENTIAL CREDIT, INC. |
| | [CNL SECURITIES CORP.] |
| (Name of Broker) |  |

---

By:

Printed Name:   Printed Name:   <br>

Title:   Title:

## Exhibit 10.7

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.7**

**FORM OF DISTRIBUTION AND STOCKHOLDER SERVICING PLAN**

**WHEREAS,** CNL Strategic Residential Credit, Inc. (the "Company") is a newly formed real estate finance company that intends to acquire, finance, manage and dispose of a diversified portfolio of primarily U.S. performing and re-performing whole loan mortgages, mortgage servicing rights and residential mortgage-backed securities.

**WHEREAS,** the Company employs CNL Securities Corp. (the "Managing Dealer") as distributor of the securities of which it is the issuer;

**WHEREAS,** the Company and the Managing Dealer have entered into a Managing Dealer Agreement pursuant to which the Managing Dealer may engage certain other securities dealers and other distribution intermediaries in connection with the distribution and on-going services therewith; and

**WHEREAS,** the Company wishes to adopt this Distribution and Stockholder Servicing Plan (the "Plan") of the Company with respect to each class ("Class") of shares of the Company's common stock ("Shares") of the Company listed on Appendix A hereto.

**NOW, THEREFORE,** the Company hereby adopts on behalf of each Class listed on Appendix A, and the Managing Dealer hereby agrees to the terms of the Plan, on the following terms and conditions:

1. The Company shall pay to the Managing Dealer, as the dealer manager of the Shares of the Company, a distribution and servicing fee at the aggregate annual rate set forth on Appendix A with respect to each Class (the "Distribution and Servicing Fee"), provided that, at any time such payment is made, whether or not this Plan continues in effect, the making thereof will not cause the limitation upon such payments established by this Plan to be exceeded. Such fee shall be calculated and paid monthly or at such intervals as the Board shall determine, subject to any applicable law, including applicable restrictions imposed by rules of the Financial Industry Regulatory Authority ("FINRA"). In consideration of services rendered on behalf of the classes of shares and in consideration of the terms and conditions herein, the amounts for each respective Class of Shares as set forth on Appendix A shall be paid pursuant to this Plan. However, should the Company offer additional share classes in the future, payment is permitted in accordance with applicable law and FINRA rules.

2. The amounts set forth on Appendix A of this Plan may be used by the Managing Dealer to pay securities dealers and other distribution intermediaries (which may include the Managing Dealer itself) for distribution or servicing stockholder accounts, including a continuing fee as set forth herein. To the extent not used for servicing stockholder accounts, the Distribution and Servicing Fee may be paid for the Managing Dealer's services as distributor of the Shares of the Company in connection with any activities or expenses primarily intended to result in the sale of Shares of the Company, including, but not limited to, payment of compensation, including incentive compensation, to securities dealers and distribution intermediaries (which may include the Managing Dealer itself) and other financial institutions and organizations to obtain various distribution related services for the Company. The Managing Dealer is also authorized to engage in advertising, the preparation and distribution of sales literature and other promotional activities on behalf of the Company as permitted by the Managing Dealer Agreement or otherwise with the Company's written consent). To the extent such costs are subject to categories of expenses limited under applicable FINRA rules, such allocations shall be made. In addition, this Plan hereby authorizes payment by the Company of the cost of printing and distributing the Company's Memorandum (or equivalent offering document) to prospective investors and of implementing and operating the Plan, and further provided that such costs shall be categorized as described in the Company's registration statement and applicable FINRA rules. Distribution expenses also include an allocation of overhead of the Managing Dealer and accruals for interest on the amount of distribution expenses that exceed distribution fees, received by the Managing Dealer. Payments under the Plan are not tied exclusively to actual distribution and service expenses, and the payments may exceed distribution and services actually incurred.

3. This Plan shall not take effect for any Class until the Plan, together with the Managing Dealer Agreement, has been approved by votes of a majority of both (a) the Company's Board and (b) the Company's Independent Directors (as defined in the Company's charter) and who have no direct or indirect financial interest in the operation of this Plan or any agreements related to the Plan.

4. The Plan shall continue in full force and effect as to each Class of the Company for so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in paragraph 3.

5. The Managing Dealer shall provide to the Company, at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made.

6. This Plan may be terminated at any time by vote of a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of the relevant Class on not more than 30 days' written notice to any other party to the Plan, and any agreement related to the Plan shall provide that it may be terminated at any time without payment of any penalty, by vote of a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of the relevant Class on not more than 60 days' written notice to any other party to the agreement.

7. This Plan may not be amended to increase materially the Distribution and Servicing Fee for any Class unless such amendment is approved by a vote of the majority of the outstanding voting securities of the relevant Class, and no material amendment to the Plan shall be made unless approved in the manner provided for approval and annual renewal in paragraph 3 hereof.

8. Any agreement related to the Plan shall provide that it will terminate automatically in the event of its assignment. This Plan shall survive the termination of the Managing Dealer Agreement.

9. The Company shall preserve copies of this Plan and any related agreements and all reports made pursuant to paragraph 5 hereof, for a period of not less than six years from the date of this Plan, any such agreement or any such report, as the case may be, the first two years in an easily accessible place.

10. In providing services under this Plan, the Managing Dealer will comply with all applicable state and federal laws and the rules and regulations of authorized regulatory agencies, including FINRA.

11. These terms and conditions shall be governed by the laws of the State of Maryland.

Dated: [ ], 2025

**<u>Appendix A</u>**

---

| | |
|:---|:---|
| &nbsp;&nbsp;**<u>Class</u>** | &nbsp;&nbsp;**<u>Distribution and Servicing Fee</u>** |
| &nbsp;&nbsp;Class T | &nbsp;&nbsp;An annualized rate of 1.0% of per share net asset value, excluding shares issued through the distribution reinvestment plan |
| &nbsp;&nbsp;Class D | &nbsp;&nbsp;An annualized rate of 0.5% of per share net asset value, excluding shares issued through the distribution reinvestment plan |

---

## Exhibit 10.8

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.8**

**FORM OF INDEMNIFICATION AGREEMENT**

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into as of the ____ day of _____________, 2025 by and among **CNL Strategic Residential Credit, Inc**., a Maryland corporation (the "Company") and **[ ]**, a director and/or officer of the Company (the "Indemnitee").

**WITNESSETH:**

WHEREAS, damages sought against directors and officers in shareholder or similar litigation by class action plaintiffs may be substantial, and the costs of defending such actions and of judgments in favor of plaintiffs or of settlement therewith may be prohibitive for individual directors and officers, without regard to the merits of a particular action and without regard to the culpability of, or the receipt of improper personal benefit by, any named director or officer to the detriment of the corporation; and

WHEREAS, the issues in controversy in such litigation usually relate to the knowledge, motives and intent of the director or officer, who may be the only person with firsthand knowledge of essential facts or exculpating circumstances who is qualified to testify in his defense regarding matters of such a subjective nature, and the long period of time which may elapse before final disposition of such litigation may impose undue hardship and burden on a director or officer or his estate in launching and maintaining a proper and adequate defense of himself or his estate against claims for damages; and

WHEREAS, the Company is organized under the Maryland General Corporation Law (the "MGCL") and Section 2-418 of the MGCL empowers corporations to indemnify and advance expenses of litigation to a person serving as a director, officer, employee or agent of a corporation and to persons serving at the request of the corporation, while a director of a corporation, as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise or employee benefit plan, and further provides that the indemnification and advancement of expenses set forth in the MGCL are not "exclusive of any other rights, by indemnification or otherwise, to which a director may be entitled under the charter, the bylaws, a resolution of stockholders or directors, an agreement or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office"; and

WHEREAS, the Articles of Incorporation of the Company, as they may be amended or amended and restated from time to time (the "Articles of Incorporation"), provide that the Company may indemnify and hold harmless directors, advisors, or affiliates, as such terms are defined in the Articles of Incorporation; and

WHEREAS, the Board of Directors of the Company (the "Board") has concluded that it is advisable and in the best interests of the Company to enter into an agreement to indemnify in a reasonable and adequate manner the Indemnitee and to assume for itself liability for expenses and damages in connection with claims lodged against the Indemnitee for the Indemnitee's decisions and actions as a director and/or officer of the Company or any of its Subsidiaries, or as an officer of an advisor to the Company (the "Advisor", and collectively with such Subsidiaries, the "Affiliates").

NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which is acknowledged by each of the parties hereto, the parties agree as follows:

**I. DEFINITIONS**

For purposes of this Agreement, the following terms shall have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. "**Board**" shall mean the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. "**Change in Control**" shall mean a change in the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Company, or any successor in interest thereto, whether through the ownership of Voting Securities, by contract or otherwise, including but not limited to a change which would be required to be reported under Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 as in effect on the date hereof (the "Exchange Act") or as may otherwise be determined pursuant to a resolution of the Board; 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 Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange 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 (1) who were directors as of the Effective Date or (2) whose election by the Board of Directors or nomination for election by the Company's stockholders was approved or recommended (A) by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or (B) by a committee of the Board of Directors consisting of at least two-thirds of the directors then in office who were directors as of the Effective Date or, in the case of clause (A) or (B), whose election or nomination for election was previously so approved or recommended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. "**Corporate Status**" shall mean: (i) the status of a person who is or was a director or officer of the Company or any of the Affiliates, or a member of any committee of the Board; and (ii) the status of a person who, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, partner (including service as a general partner of any limited partnership), trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other incorporated or unincorporated entity or enterprise or employee benefit plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. "**Disinterested Director**" shall mean a director of the Company who neither is nor was a party to the Proceeding with respect to which indemnification and/or advance of Expenses is being sought by the Indemnitee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. "**Expenses**" shall mean expenses of Proceedings including, without limitation, all attorneys' fees, retainers, court costs, transcript costs, fees of experts, investigation fees and expenses, accounting and witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, being or preparing to be a witness in or investigating 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. "**Good Faith Act or Omission**" shall mean an act or omission of the Indemnitee reasonably believed by the Indemnitee to be in or not opposed to the best interests of the Company or the Affiliates and not: (i) one involving negligence or misconduct, or, if the Indemnitee is an independent director, one involving gross negligence or willful misconduct; (ii) one that was material to the loss or liability and that was committed in bad faith or that was the result of active or deliberate dishonesty; (iii) one from which the Indemnitee actually received an improper personal benefit in money, property or services; or (iv) in the case of a criminal Proceeding, one as to which the Indemnitee had cause to believe his or her conduct was unlawful.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. "**Liabilities**" shall mean liabilities of any type whatsoever, including, without limitation, any judgments, fines, excise taxes and penalties under the Employee Retirement Income Security Act of 1974, as amended, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or with respect to such judgments, fines, penalties or amounts paid in settlement) in connection with the investigation, defense, settlement or appeal of any Proceeding or any claim, issue or matter therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. "**MGCL**" shall mean the Maryland General Corporation Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. "**Proceeding**" shall mean any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other actual, threatened or completed proceeding whether civil, criminal, administrative or investigative, or any appeal therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. "**Trust**" shall have the meaning ascribed to it in Article IX herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. "**Trustee**" shall have the meaning ascribed to it in Article IX herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L. **"Subsidiary"** shall mean any corporation, limited liability company, partnership, business trust or other entity of which the Company, directly or indirectly, owns or controls at least fifty percent (50%) of the voting securities or economic interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. "**Undertakings**" shall have the meaning ascribed to it in Article V herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N. "**Voting Securities**" shall mean any securities of the Company that are entitled to vote generally in the election of directors.

**II. TERMINATION OF AGREEMENT**

This Agreement shall continue until, and terminate upon the later to occur of: (i) the seventh anniversary of the Indemnitee ceasing to be a director and/or officer of the Company; or (ii) the final termination of all Proceedings (including possible Proceedings) with respect to which the Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by the Indemnitee regarding the interpretation or enforcement of this Agreement.

**III. SERVICE BY INDEMNITEE, NOTICE OF** <br> **PROCEEDINGS, DEFENSE OF CLAIMS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **Notice of Proceedings**. The Indemnitee agrees to notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. However, the Indemnitee's failure to so notify the Company shall not relieve the Company from any liability it may have to the Indemnitee under this Agreement, except to the extent that the Indemnitee's failure to so notify the Company materially prejudices the Company with respect to said Proceeding or matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **Defense of Claims**. The Company will be entitled to participate, at its own expense, in any Proceeding of which it has notice. The Company jointly with any other indemnifying party similarly notified of any Proceeding will be entitled to assume the defense of the Indemnitee therein, with counsel reasonably satisfactory to the Indemnitee; provided, however, that the Company shall not be entitled to assume the defense of the Indemnitee in any Proceeding if there has been a Change in Control or if the Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee with respect to such Proceeding. The Company will not be liable to the Indemnitee under this Agreement for any Expenses incurred by the Indemnitee in connection with the defense of any Proceeding, other than reasonable costs of investigation or as otherwise provided below, after notice from the Company to the Indemnitee of its election to assume the defense of the Indemnitee therein. The Indemnitee shall have the right to employ his own counsel in any such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Company; (ii) the Indemnitee shall have reasonably concluded that counsel employed by the Company may not adequately represent the Indemnitee and shall have so informed the Company; or (iii) the Company shall not in fact have employed counsel to assume the defense of the Indemnitee in such Proceeding, such counsel shall not in fact have assumed such defense or such counsel shall not be acting, in connection therewith, with reasonable diligence. In each such case the fees and expenses of the Indemnitee's counsel shall be advanced by the Company in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **Settlement of Claims**. The Company shall not settle any Proceeding in any manner which would impose any liability, penalty or limitation on the Indemnitee without the written consent of the Indemnitee, which consent shall not be unreasonably withheld or delayed. The Company shall not be liable to indemnify the Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected by the Indemnitee without the Company's written consent, which consent shall not be unreasonably withheld or delayed.

**IV. INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **In General**. Upon the terms and subject to the conditions set forth in this Agreement, the Company shall hold harmless and indemnify the Indemnitee against any and all Liabilities actually incurred by or for him or her in connection with any Proceeding (whether the Indemnitee is or becomes a party, a witness or is otherwise a participant in any role) to the fullest extent required or permitted by the Articles of Incorporation. For all matters for which the Indemnitee is entitled to indemnification under this Article IV, the Indemnitee shall be entitled to advancement of Expenses in accordance with Article V hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **Proceeding Other Than a Proceeding by or in the Right of the Company**. If the Indemnitee, by reason of his or her Corporate Status or alleged action or inaction in such capacity, was or is a party or is threatened to be made a party to any Proceeding (whether the Indemnitee is or becomes a party, a witness or is otherwise a participant in any role) (other than a Proceeding by or in the right of the Company or any Affiliate), the Company shall, subject to the limitations set forth in Section IV.F below, hold harmless and indemnify the Indemnitee against any and all Expenses and Liabilities actually and reasonably incurred by or for the Indemnitee in connection with the Proceeding, if the act(s) or omission(s) of the Indemnitee giving rise thereto were Good Faith Act(s) or Omission(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **Proceedings by or in the Right of the Company**. If the Indemnitee, by reason of his or her Corporate Status or alleged action or inaction in such capacity, was or is a party or is threatened to be made a party to any Proceeding (whether the Indemnitee is or becomes a party, a witness or otherwise is a participant in any role) by or in the right of the Company or any Affiliate to procure a judgment in its favor, the Company shall, subject to the limitations set forth in Section IV.F below, hold harmless and indemnify the Indemnitee against any and all Expenses actually incurred by or for the Indemnitee in connection with the investigation, defense, settlement or appeal of such Proceeding, if the act(s) or omission(s) of the Indemnitee giving rise to the Proceeding were Good Faith Act(s) or Omission(s). However, no indemnification under this Section IV.C shall be made with respect to any claim, issue or matter as to which the Indemnitee shall have been finally adjudged to be liable to the Company or any Affiliate, unless a court of appropriate jurisdiction (including, but not limited to, the court in which such Proceeding was brought) determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, regardless of whether the Indemnitee's act(s) or omission(s) were found to be a Good Faith Act(s) or Omission(s), the Indemnitee is fairly and reasonably entitled to indemnification for such Expenses, which such court shall deem proper.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. **Indemnification of a Party Who is Wholly or Partly Successful**. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of the Indemnitee's Corporate Status, a party to and is successful in, on the merits or otherwise, any Proceeding, the Indemnitee shall be indemnified by the Company to the maximum extent consistent with the Articles of Incorporation against all Expenses and Liabilities actually incurred by or for him or her in connection therewith. If the 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 hold harmless and indemnify the Indemnitee to the maximum extent consistent with the Articles of Incorporation against all Expenses and Liabilities actually and reasonably incurred by or for the Indemnitee in connection with each successfully resolved claim, issue or matter in such Proceeding. Resolution of a claim, issue or matter by dismissal, with or without prejudice, but except as provided in Section IV.F hereof, shall be deemed a successful result as to such claim, issue or matter so long as there has been no finding (either adjudicated or pursuant to Article VI hereof) that the act(s) or omission(s) of the Indemnitee giving rise thereto were not a Good Faith Act(s) or Omission(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. **Indemnification for Expenses as Witness**. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee, by reason of the Indemnitee's Corporate Status, has prepared to serve or has served as a witness in any Proceeding, or has participated in discovery proceedings or other trial preparation, the Indemnitee shall be held harmless and indemnified against all Expenses actually and reasonably incurred by or for him or her in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. **Specific Limitations on Indemnification**. In addition to the other limitations set forth in this Article IV and notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated under this Agreement to make any payment to the Indemnitee for indemnification with respect to any Proceeding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. To the extent that payment is actually made to the Indemnitee under any insurance policy or is made on behalf of the Indemnitee by or on behalf of the Company otherwise than pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. If a court in such Proceeding has entered a judgment or other adjudication which is final and has become non-appealable and establishes that a claim of the Indemnitee for such indemnification arose from: (i) a breach by the Indemnitee of the Indemnitee's duty of loyalty to the Company or its shareholders; (ii) acts or omissions of the Indemnitee for which the Indemnitee did not reasonably believe to be in or not opposed to the best interests of the Company or the Affiliates and was: (a) an act or omission involving negligence or misconduct, or, if the Indemnitee is an independent director, an act or omission involving gross negligence or willful misconduct, or (b) an act or omission that was material to the loss or liability and that was committed in bad faith or that was the result of active and deliberate dishonesty,; (iii) acts or omissions of the Indemnitee which the Indemnitee had reasonable cause to believe were unlawful; or (iv) a transaction in which the Indemnitee actually received an improper personal benefit in money, property or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Provided that there has been no Change in Control, for Liabilities in connection with Proceedings settled without the consent of the Company, which consent shall not have been unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. 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 in favor of the Indemnitee on the merits of each count involving alleged securities law violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee, finds that indemnification of the settlement and the related costs should be made, and has been advised of the position on indemnification for violations of securities laws of (A) the Securities and Exchange Commission and (B) any state securities regulatory authority in which securities of the Company were offered or sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. If such Indemnitee is a party to such Proceeding by reason of his or her status as an officer of director of the Advisor and such Proceeding is brought by a member of the Advisor against such Indemnitee arising from claims solely related to the relationship of the members as members of the Advisor.

**V. ADVANCEMENT OF EXPENSES**

Notwithstanding any provision to the contrary in Article VI hereof, the Company shall advance to the Indemnitee all Expenses which, by reason of the Indemnitee's Corporate Status, were incurred by or for the Indemnitee in connection with any Proceeding for which the Indemnitee is entitled to indemnification pursuant to Article IV hereof, in advance of the final disposition of such Proceeding, provided that all of the following are satisfied: (i) the Indemnitee was made a party to the proceeding by reason of Indemnitee's Corporate Status; (ii) the Indemnitee provides the Company with written affirmation of the Indemnitee's good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Company pursuant to Article IV hereof and (iii) the Indemnitee provides the Company with a written agreement (the "Undertaking") to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnitee did not comply with the requisite standard of conduct. The Indemnitee shall be required to execute and submit the Undertaking to repay Expenses Advanced in the form of Exhibit A attached hereto or in such form as may be required under applicable law as in effect at the time of execution thereof. The Undertaking shall reasonably evidence the Expenses incurred by or for the Indemnitee and shall contain the written affirmation by the Indemnitee, described above, of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification has been met. The Company shall advance such expenses within five (5) business days after its receipt of the Undertaking. The Indemnitee hereby agrees to repay any Expenses advanced hereunder if it is ultimately determined that the Indemnitee is not entitled to be indemnified against such Expenses. Any advances and the undertaking to repay pursuant to this Article V shall be unsecured.

**VI. PROCEDURE FOR PAYMENT OF LIABILITIES;**<br> **DETERMINATION OF RIGHT TO INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **Procedure for Payment**. To obtain indemnification for Liabilities under this Agreement, the Indemnitee shall submit to the Company a written request for payment, including with such request such documentation as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification and payment hereunder. The Secretary of the Company, or such other person as shall be designated by the Board, shall promptly advise the Board in writing of such request for indemnification. Any indemnification payment due hereunder shall be paid by the Company no later than five (5) business days following the determination, pursuant to this Article VI, that such indemnification payment is proper hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **No Determination Necessary when the Indemnitee was Successful**. To the extent the Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding referred to in Sections IV.B or IV.C above or in the defense of any claim, issue or matter described therein, the Company shall indemnify the Indemnitee against Expenses actually and reasonably incurred by or for the Indemnitee in connection with the investigation, defense or appeal of such Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **Determination of Good Faith Act or Omission**. In the event that Section VI.B above is inapplicable, the Company shall also hold harmless and indemnify the Indemnitee unless the Company proves by clear and convincing evidence to a forum listed in Section VI.D below that the act(s) or omission(s) of the Indemnitee giving rise to the Proceeding were not Good Faith Act(s) or Omission(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. **Forum for Determination**. The Indemnitee shall be entitled to select from among the following the forums in which the validity of the Company's claim under Section VI.C above that the Indemnitee is not entitled to indemnification will be heard:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. A majority of the Disinterested Directors, or, if there are fewer than three (but at least one) Disinterested Directors, all of the Disinterested Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The shareholders of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Legal counsel selected by the Indemnitee, subject to the approval of the Board, which approval shall not be unreasonably delayed or denied and which counsel shall make such determination in a written opinion.

As soon as practicable, and in no event later than thirty (30) days after written notice of the Indemnitee's choice of forum pursuant to this Section VI.D, the Company shall, at its own expense, submit to the selected forum its claim that the Indemnitee is not entitled to indemnification, and the Company shall act in the utmost good faith to give the Indemnitee a complete opportunity to defend against such claim. The fees and expenses of the forum selected in connection with making the determination contemplated hereunder shall be paid by the Company. If the Company fails to submit the matter to the selected forum within thirty (30) days of the Indemnitee's written notice or if the selected forum fails to make the requested determination within thirty (30) days of the matter being submitted to it by the Company, the determination that the Indemnitee has the right to indemnification will be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. **Right to Appeal**. Notwithstanding a determination by any forum listed in Section VI.D above that the Indemnitee is not entitled to indemnification with respect to a specific Proceeding, the Indemnitee shall have the right to apply to the court in which that Proceeding is or was pending, or to any other court of competent jurisdiction, for the purpose of enforcing the Indemnitee's right to indemnification pursuant to this Agreement. Such enforcement action shall consider the Indemnitee's entitlement to indemnification *de novo*, and the Indemnitee shall not be prejudiced by reason of a prior determination that the Indemnitee is not entitled to indemnification. The Company shall be precluded from asserting that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Company further agrees to stipulate in any such judicial proceeding that the Company is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. **Right to Seek Judicial Determination**. Notwithstanding any other provision of this Agreement to the contrary, at any time sixty (60) days after a request for indemnification has been made to the Company (or upon earlier receipt of written notice that a request for indemnification has been rejected) and before the third (3rd) anniversary of the making of such indemnification request, the Indemnitee may petition a court of competent jurisdiction, regarding whether the court has jurisdiction over or is the forum in which the Proceeding is pending, to determine whether the Indemnitee is entitled to indemnification hereunder, and such court shall have the exclusive authority to make such determination, unless and until the Indemnitee's action is dismissed or otherwise terminated before such determination is made. The court, as petitioned, shall make an independent determination of whether the Indemnitee is entitled to indemnification hereunder, without regard to any prior determination in any other forum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. **Expenses under this Agreement**. Notwithstanding any other provision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against all Expenses incurred by the Indemnitee in connection with any hearing or proceeding under this Article VI involving the Indemnitee and against all Expenses incurred by the Indemnitee in connection with any other action between the Company and the Indemnitee involving the interpretation or enforcement of the rights of the Indemnitee under this Agreement, even if it is finally determined that the Indemnitee is not entitled to indemnification in whole or in part hereunder.

**VII. PRESUMPTIONS AND EFFECT**<br> **OF CERTAIN PROCEEDINGS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **Burden of Proof**. In making a determination with respect to entitlement to indemnification hereunder, the person, persons, entity or entities making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement and the Company shall have the burden of proof of overcoming that presumption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **Effect of Other Proceedings**. The termination of any Proceeding or any claim, issue or matter therein by judgment, order or settlement shall not create a presumption that the act(s) or omission(s) giving rise to the Proceeding were not Good Faith Act(s) or Omission(s). The termination of any Proceeding by conviction, upon a plea of nolo contendere, or its equivalent, or an entry of an order of probation prior to judgment, shall create a rebuttable presumption that the act(s) or omission(s) of the Indemnitee giving rise to the Proceeding were not Good Faith Act(s) or Omission(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **Reliance as Safe Harbor**. For the purposes of any determination of whether any act or omission of the Indemnitee was a Good Faith Act or Omission, each act of the Indemnitee shall be deemed to be a Good Faith Act or Omission if the Indemnitee's action is based on the records or books of accounts of the Company, including financial statements, on information supplied to the Indemnitee by the officers of the Company in the course of their duties, on the advice of legal counsel for the Company or the independent directors or any committee thereof, or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company. The provisions of this Section VII.C shall not be exclusive or deemed to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement or under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. **Actions of Others**. The knowledge and/or actions or failure to act of any director, officer, agent or employee of the Company shall not be imputed to the Indemnitee for the purposes of determining the right to indemnification under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. **Court-Ordered Indemnification**. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. if such court determines that Indemnitee is entitled to reimbursement under 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. 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 without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

**VIII. INSURANCE**

In the event that the Company maintains officers' and directors' or similar liability insurance to protect itself and any director or officer of the Company against any expense, liability or loss, such insurance shall cover the Indemnitee to at least the same degree as each other director and/or officer of the Company.

**IX. OBLIGATIONS OF THE COMPANY**<br> **UPON A CHANGE IN CONTROL**

In the event of a Change in Control and upon written request of the Indemnitee, the Company shall establish a trust for the benefit of the Indemnitee hereunder (a "Trust"), and from time to time and upon written request from the Indemnitee, shall fund the Trust in an amount sufficient to satisfy all amounts actually paid hereunder as indemnification for Liabilities or Expenses (including those paid in advance) or which the Indemnitee reasonably determines and demonstrates, from time to time, may be payable by the Company hereunder. The amount or amounts to be deposited in the Trust shall be determined by legal counsel selected by the Indemnitee and approved by the Company, which approval shall not be unreasonably withheld. The terms of the Trust shall provide that: (i) the Trust shall not be dissolved or the principal thereof invaded without the written consent of the Indemnitee; (ii) the trustee of the Trust (the "Trustee") shall be selected by the Indemnitee; (iii) the Trustee shall make advances to the Indemnitee for Expenses within ten (10) business days following receipt of a written request therefor (and the Indemnitee hereby agrees to reimburse the Trust under the circumstances under which the Indemnitee would be required to reimburse the Company under Article V hereof); (iv) the Company shall continue to fund the Trust from time to time in accordance with its funding obligations hereunder; (v) the Trustee shall promptly pay to the Indemnitee all amounts as to which indemnification is due under this Agreement; (vi) unless the Indemnitee agrees otherwise in writing, the Trust for the Indemnitee shall be kept separate from any other trust established for any other person to whom indemnification might be owed by the Company; and (vii) all unexpended funds in the Trust shall revert to the Company upon final, nonappealable determination by a court of competent jurisdiction that the Indemnitee has been indemnified to the full extent required under this Agreement.

**X. NON-EXCLUSIVITY,**<br> **SUBROGATION AND MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **Non-Exclusivity**. The rights of the Indemnitee hereunder shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under any provision of law, the Articles of Incorporation, the Bylaws of the Company, as the same may be in effect from time to time, any agreement, a vote of shareholders of the Company or a resolution of directors of the Company or otherwise. To the extent that, during the term of this Agreement, the rights of the then-existing directors and officers of the Company are more favorable to such directors or officers than the rights currently provided to the Indemnitee under this Agreement, the Indemnitee shall be entitled to the full benefits of those more favorable rights.

No amendment, alteration, rescission or replacement of this Agreement or any provision hereof that would limit in any way the benefits and protections afforded to an Indemnitee by this Agreement shall be effective as to an Indemnitee with regards to any action or inaction undertaken by such Indemnitee in the Indemnitee's Corporate Status prior to such amendment, alteration, rescission or replacement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **Subrogation**. 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 the Indemnitee, who shall execute all required documents and take all action necessary to secure such rights, including execution of documents necessary to enable the Company to bring suit to enforce such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. **Notices**. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given: (i) if delivered by hand, by courier or by telegram and receipted for by the party to whom such notice or other communication was directed at the time indicated on such receipt; (ii) if by facsimile at the time shown on the confirmation of such facsimile transmission; or (iii) if by U.S. certified or registered mail, with postage prepaid, on the third business day after the date on which it is so mailed:

If to the Indemnitee, as shown with the Indemnitee's signature below.

If to the Company to:

CNL Strategic Residential Credit, Inc.

450 South Orange Avenue

Orlando, FL 32801

Attention: General Counsel

With copies to:

CNL Residential Credit Manager, LLC

c/o CNL Financial Group, LLC

450 South Orange Avenue

Orlando, FL 32801

Attention: General Counsel

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. **Governing Law**. The parties agree that this Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of Maryland, without application of the conflict of laws principles thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. **Binding Effect**. Except as otherwise provided in this Agreement, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns. The Company shall require any successor or assignee (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of its respective assets or business and by written agreement in form and substance reasonably satisfactory to the Indemnitee, to expressly assume and agree to be bound by and perform this Agreement in the same manner and to the same extent as the Company would be required to perform absent such succession or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. **Waiver**. No termination, cancellation, modification, amendment, deletion, addition or other change in this Agreement or any provision hereof, or waiver of any right or remedy herein, shall be effective for any purpose unless specifically set forth in a writing signed by the party or parties to be bound thereby. The waiver of any right or remedy with respect to any occurrence on one occasion shall not be deemed a waiver of such right or remedy with respect to such occurrence on any other occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. **Entire Agreement**. This Agreement constitutes the entire agreement and understanding among the parties hereto in reference to the subject matter hereof; provided, however, that the parties acknowledge and agree that the Amended and Restated Articles of Incorporation of the Company contain provisions on the subject matter hereof and that this Agreement is not intended to, and does not, limit the rights or obligations of the parties hereto pursuant to such instruments. This Agreement supersedes any prior agreement entered into between the parties with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. **Titles**. The titles to the articles and sections of this Agreement are inserted for convenience only and should not be deemed a part hereof or affect the construction or interpretation of any provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. **Invalidity of Provisions**. Every provision of this Agreement is severable, and the invalidity or unenforceability of any term or provision shall not affect the validity or enforceability of the remainder of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. **Pronouns and Plurals**. Where applicable, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. **Counterparts**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one agreement binding on all the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L. **Reports to Stockholders**. To the extent required by the MGCL, the Company shall report in writing to its stockholders 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 stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

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

---

| | |
|:---|:---|
| CNL Strategic Residential Credit, Inc., a Maryland corporation | CNL Strategic Residential Credit, Inc., a Maryland corporation |
| By: |  |
| Name: | Chirag J. Bhavsar |
| Title: | Chief Executive Officer |
|  | <u>,</u> as INDEMNITEE |
| Name: | **[ ]** |
| Address: | 450 S. Orange Avenue |
|  | Orlando, FL 32801 |

---

**EXHIBIT A**

**FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED**

The Board of Directors of CNL Strategic Residential Credit, Inc.

Re: <u>Undertaking to Repay Expenses Advanced</u>

Ladies and Gentlemen:

The undertaking is being provided pursuant to that certain Indemnification Agreement dated the ____ day of __________, 20__, by and between CNL Strategic Residential Credit, Inc. and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advancement 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. During the period of time to which the Proceeding relates I was — [name of office(s) held] of CNL Strategic Residential Credit, Inc. Pursuant to Article IV of the Indemnification Agreement, the Company is obligated to reimburse me for Expenses that are actually and reasonably incurred by or for me in connection with the Proceeding, provided that I execute and submit to the Company an Undertaking in which I: (i) undertake to repay any Expenses paid by the Company on my behalf, together with the applicable legal rate of interest thereon, if it shall be ultimately determined that I am not entitled to be indemnified thereby against such Expenses; (ii) affirm my good faith belief that I have met the standard of conduct necessary for indemnification; and (iii) reasonably evidence the Expenses incurred by or for me.

[Description of expenses incurred by or for Indemnitee]

The letter shall constitute my undertaking to repay to the Company any Expenses paid by it on my behalf, together with the applicable legal rate of interest thereon, in connection with the Proceeding if it is ultimately determined that I am not entitled to be indemnified with respect to such Expenses as set forth above. I hereby affirm my good faith belief that I have met the standard of conduct necessary for indemnification and that I am entitled to such indemnification.

---

| |
|:---|
| Signature |
| Name |
| Date |

---

## Exhibit 10.9

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.9**

**FORM OF ESCROW AGREEMENT**

**THIS ESCROW AGREEMENT** (the "<u>Agreement</u>") is made and entered into as of [___________], 2025, by and among CNL Strategic Residential Credit, Inc., a Maryland corporation (the "<u>Company</u>"), UMB Bank, N.A. (the "<u>Escrow Agent</u>") and CNL Securities Corp. (the "<u>Placement Agent</u>"). This Agreement shall be effective as provided in Section 1 below.

**WHEREAS,** CNL Residential Credit Manager, LLC, a Delaware limited liability company, is serving as the adviser (the "<u>Advisor</u>") of the Company; and

**WHEREAS**, the Company is offering up to $250,000,000 ("<u>Maximum Offering Amount</u>") of shares of common stock of the Company (the "<u>Shares</u>") to investors (the "<u>Offering</u>") pursuant to the Company's Private Placement Memorandum, as supplemented and amended from time to time (the "<u>Memorandum</u>"), dated [___________________], 2025 (the "<u>Offering Date</u>"); and

**WHEREAS**, the Company is initially offering up to $100,000,000 of its Class FA Shares ("<u>Founder Shares</u>") and, once the minimum offering requirement of $25,000,000 ("<u>Minimum Offering Requirement</u>") in Founder Shares is satisfied and the Company has completed the initial closing of its Founder Shares (the "<u>Initial Closing</u>"), the Company will continue to offer up to $100,000,000 of its Founder Shares; and

**WHEREAS**, once the Company has completed the Initial Closing, the Company may, in its sole discretion, also begin to offer any combination of Class A Shares, Class T Shares, Class D Shares or Class I Shares (collectively, "<u>Non-Founder Shares</u>"); and

**WHEREAS**, the Company proposes to offer and sell, on a best-efforts basis through the Placement Agent and selected broker-dealers that are registered with the Financial Industry Regulatory Authority or that are exempt from such broker-dealer registration (the Placement Agent and such selected broker-dealers are hereinafter referred to collectively as the "<u>Soliciting Dealers</u>") and registered investment advisers registered under the Investment Advisers Act of 1940, as amended, or under applicable state laws, ("<u>Registered Investment Advisors</u>"); and

**WHEREAS**, the Company intends to conduct its Offering until the earlier of: (i) the date the Company has sold the Maximum Offering Amount or (ii) two years from the start of the Offering; provided, however, that the Company, in its sole discretion, may extend the Offering on a perpetual basis; and

**WHEREAS**, prior to the Initial Closing, subscriptions for Founder Shares will initially be made through irrevocable capital commitment in connection with subscriber's executed subscription agreement and will be payable through a capital call, of which, such subscribers will be required to make Payment (defined below) of the purchase price of Founder Shares up to the amount of their respective capital commitments in their executed subscription agreement upon delivery of a notice (a "<u>Capital Call Notice</u>") which shall specify: (i) the amount of the capital call (the "<u>Capital Call Amount</u>"); (ii) the portion of the Capital Call Amount to be paid by the investor, which will include the subscription amount and the number of Founder Shares to be purchased by such investor; (iii) the date on which the capital call amount is due ("<u>Capital Call Date</u>"); and (iv) the payee, mailing address and escrow account, to which to send the subscription proceeds.

**WHEREAS,** after the Initial Closing, subscriptions for Founder Shares and, if offered, Non-Founder Shares, will be payable upon subscription, of which, a subscriber must deliver, in addition to the subscriber's executed subscription agreement, the full amount of its subscription, subject to discounts, as applicable (i) by check in U.S. dollars, (ii) by wire transfer of immediately available funds in U.S. dollars, or (iii) as otherwise agreed to in writing by the Company and the Escrow Agent (collectively, the "<u>Payment</u>").

**WHEREAS**, the Company will hold monthly closings, which are expected to be the last business day of each month after the Initial Closing until all shares to be issued in the Offering have been sold or until the Offering terminates; (provided that each of these monthly closings shall be referred to as a "Closing" and, collectively, as the "<u>Closings</u>"); and

**WHEREAS**, the Company desires to establish an escrow account, as further described herein, into which funds received from subscribers will be deposited (i) in connection with the Initial Closing for Founders Shares subscriptions and (ii) after the Initial Closing for Founder Shares and, if offered, Non-Founder Shares, until the next monthly Closing date, and, the Escrow Agent is willing to serve as escrow agent for such account upon the terms and conditions herein set forth; and

**WHEREAS**, the Escrow Agent has engaged DST Systems Inc. (the "<u>Processing Agent</u>" or "<u>DST</u>") to receive and facilitate subscriptions into and out of an escrow account, as further described herein, and to serve as the record keeper, maintaining on behalf of the Escrow Agent the ownership records for the Escrow Account (as defined below); and

**WHEREAS**, in so acting, DST shall be acting solely in the capacity of agent for the Escrow Agent and not in any capacity on behalf of the Company or the Placement Agent, nor shall the Company or the Placement Agent have any interest, other than that provided in this Agreement, in assets in Processing Agent's possession as the agent of the Escrow Agent; and

**WHEREAS**, the parties acknowledge that the Company has engaged the Processing Agent as transfer agent on the Company's behalf; and

**NOW, THEREFORE**, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Establishment of Escrow Account</u>. On or prior to the commencement of the Offering, the Company shall
 establish a non-interest-bearing deposit account with the Escrow Agent, which deposit
 account shall be entitled "Escrow Account for the Benefit of Subscribers to Shares
 of CNL STRATEGIC RESIDENTIAL CREDIT, INC." (the " <u>Escrow Account</u> ").
 This Agreement shall be effective as of the date first written above (the " <u>Effective Date")</u>. All monies deposited in the Escrow Account are hereinafter referred
 to as the " <u>Escrowed Funds</u>." The Company will cause the Soliciting
 Dealers and Registered Investment Advisors to instruct subscribers to make Payments for
 subscriptions payable to the order of "**UMB Bank, N.A., Escrow Agent for CNL Strategic Residential Credit, Inc."** until such time (if any) as the Escrowed
 Funds are deliverable to the Company pursuant to the provisions of Section 4(a) below.
 From and after such time, Payments may be made payable to the Escrow Agent (as indicated
 above). Any Payments received prior to the time, if any, that the Escrowed Funds are
 deliverable to the Company pursuant to the provisions of Section 4(a) below that are
 made payable to a party other than the Escrow Agent shall be returned to the Soliciting
 Dealer or Registered Investment Advisor that submitted the Payment. In such case, the
 Soliciting Dealer will collect the proceeds of the subscribers' Payments and issue
 a Payment made payable to the order of the Escrow Agent for the aggregate amount of the
 subscription proceeds, which payments shall be deposited the same as other Payments pursuant
 to Section 2 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Deposits into the Escrow Account</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Completed
 subscription agreements and checks in payment for the purchase price shall be remitted
 to the address designated for the receipt of such agreements and funds; and, drafts,
 wires or Automated Clearing House ("ACH") payments shall be transmitted directly
 to the Escrow Account. The Processing Agent will promptly deliver all monies received
 in good order from subscribers (or from the Placement Agent or other Soliciting Dealers
 transmitting monies and subscriptions from subscribers) for the payment of Shares to
 the Escrow Agent for deposit in the Escrow Account. Until such time that the Escrowed
 Funds are deliverable to the Company pursuant to the provisions of Section 4(a) below,
 the Escrow Agent agrees to cause the Processing Agent to maintain a written account of
 each subscription, which account shall set forth, among other things, the following information:
 (i) the subscriber's name and address, (ii) the number of Shares purchased by such
 subscriber, and (iii) the amount paid or due in connection with a capital commitment
 by such subscriber for such Shares. The Company, the Escrow Agent and the Processing
 Agent are aware and understand that, during the escrow period prior to the Initial Closing,
 none of them is entitled to any funds received into the Escrow Account, and no amounts
 deposited in the Escrow Account shall become the property of the Company, its affiliates,
 the Escrow Agent or the Processing Agent, or be subject to the debts or offsets of the
 Company, its affiliates, the Escrow Agent or the Processing Agent. As used herein, the
 term " <u>Business Day</u> " means any day that is not a Saturday, Sunday or
 a day on which commercial banks in Kansas City, Missouri are closed in recognition of
 a federal or state holiday.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Collection Procedure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Escrow Agent is hereby instructed by the Company to forward each Payment for Federal
 Reserve Bank clearing and upon collection of the proceeds of each Payment, to deposit
 the collected proceeds into the Escrow Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 Escrow Agent will timely notify the Company and the Processing Agent of any Payment returned
 unpaid. Any Payment returned unpaid to the Escrow Agent shall be returned to the Soliciting
 Dealer or Registered Investment Advisor that submitted the Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In
 the event that the Company, the Advisor, or any agent acting on behalf of the Company
 rejects any subscription for Shares and the funds for such subscription have already
 been collected by the Escrow Agent, the Escrow Agent shall, upon receipt from the Company
 of written notice of such rejection, promptly issue a refund payment to be returned to
 the rejected or withdrawing subscriber. If the Escrow Agent has not yet collected funds
 for such subscription but has submitted such subscription for clearing, the Escrow Agent
 shall promptly issue a payment in the amount of such Payment to be returned to the rejected
 or withdrawing subscriber only after the Escrow Agent has cleared such funds. If the
 Escrow Agent has not yet submitted the Payment relating to the subscription of the rejected
 or withdrawing subscriber, the Escrow Agent shall promptly remit such Payment to be returned
 to the drawer of the Payment submitted by or on behalf of the subscriber.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In
 the event that funds are deposited into the Escrow Account in error, the Escrow Agent
 shall notify the Company and the Processing Agent in writing of any such error and promptly
 issue a refund payment to be returned to the appropriate party only after the Payment
 has cleared.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Distribution of Escrowed Funds</u>. Upon receipt of a written notice from the Company to the Escrow
 Agent by 3:00 p.m. Eastern Time and contingent upon the prior day's notification
 by the Company to the Escrow Agent of the Company's best efforts at an estimate
 of the amount of funds anticipated to be released from the Escrow Account, the Escrow
 Agent will release that day from the Escrow Account to the Company (or otherwise will
 release within one Business Day following receipt by Escrow Agent of such notice), all
 Escrowed Funds therein as provided herein below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject
 to the fourth sentence of this Section 4(a), if at any time subscriptions and payment
 for the Minimum Offering Requirement have been received from investors then upon the
 instruction to have the Initial Closing, the Escrow Agent shall deliver all or a portion
 of the Escrowed Funds to the Company from time to time, as the Company shall direct in
 writing as provided in this Section 4(a). An affidavit or certification from an officer
 of the Company to the Escrow Agent stating that at least the Minimum Offering Requirement
 has been timely sold, shall constitute sufficient evidence for the purpose of this Agreement
 that such event has occurred (the " <u>Subscription Affidavit</u> "). The Subscription
 Affidavit shall indicate (i) the date on which at least the Minimum Offering Requirement
 sold and the Initial Closing date, which shall also be the " <u>Break Escrow Date</u> "
 and (ii) the actual total number of Shares sold as of the Break Escrow Date. Thereafter,
 the Company shall instruct the Escrow Agent to release from the Escrow Account to the
 Company such amount of Escrowed Funds therein on each monthly Closing date as directed
 by the Company pursuant to written instructions the Company shall provide to the Escrow
 Agent from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If
 the Escrow Agent has not received a Subscription Affidavit and the Escrowed Funds do
 not become deliverable to the Company pursuant to Section 4(a) above and the Escrow Agent
 receives written notice from the Company that the Offering has been terminated, the Escrow
 Agent shall return the Escrowed Funds for further delivery to the Soliciting Dealer or
 Registered Investment Advisor that submitted the Payment in amounts equal to the subscription
 amount theretofore paid by respective subscribers, without deduction, penalty or expense
 to the subscriber. The purchase money returned to each subscriber shall also be free
 and clear of any and all claims of the Company, the Processing Agent, the Escrow Agent,
 the Soliciting Dealers or any of their creditors. The Escrow Agent shall notify the Processing
 Agent, the Company and the Placement Agent of any such return of subscription amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Post Break Escrow Period.</u> From and after the Break Escrow Date (the " <u>Post Break Escrow Period</u> "), the Escrow Agent shall periodically transfer to the Company
 Escrowed Funds pursuant to standing written instructions from the Company in delivered
 to the Escrow Agent and the Processing Agent from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) With
 respect to any disbursement made to or at the direction of the Company under this Section
 4, the Company certifies it shall review any wire instructions set forth herein to confirm
 such wire instructions are accurate, and agrees it will not seek recourse from the Escrow
 Agent as a result of losses incurred by it for making the disbursement in accordance
 with its instructions herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Intentionally omitted</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Intentionally omitted</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Liability Escrow Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In
 performing any of their duties under this Agreement, or upon the claimed failure to perform
 their duties hereunder, the Processing Agent and Escrow Agent shall not be liable to
 anyone for any damages, losses, or expenses that they may incur as a result of either
 agent so acting, or failing to act; provided, however, the Escrow Agent shall be liable
 for damages arising out of its negligence or willful misconduct under this Agreement
 and Processing Agent shall be liable for damages arising out of its negligence or willful
 misconduct. The Escrow Agent shall be entitled to seek the advice of legal counsel in
 the event of any dispute or question as to the construction of any of the provisions
 hereof or its duties hereunder and may rely upon any such advice or opinion of counsel.
 Accordingly, neither the Processing Agent nor the Escrow Agent shall incur any liability
 with respect to (i) any action taken or omitted to be taken in good faith upon advice
 of its counsel that is given with respect to any questions relating to their duties and
 responsibilities hereunder, or (ii) any action taken or omitted to be taken in reliance
 upon any document, including any written notice or instructions provided for in this
 Agreement, not only as to its due execution and to the validity and effectiveness of
 its provisions but also as to the truth and accuracy of any information contained therein,
 if the Processing Agent and/or the Escrow Agent shall in good faith believe such document
 to be genuine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 Company hereby agrees to indemnify and hold harmless the Processing Agent and Escrow
 Agent from and against any and all losses, claims, damages, liabilities and expenses,
 including, without limitation, reasonable costs of investigation and counsel fees and
 disbursements that may be incurred by either of them resulting from any act or omission
 of the Company or arising from the Escrow Agent's acceptance of its appointment
 hereunder or performance of its duties in accordance with this Agreement; provided, however,
 that the Company shall not indemnify the Processing Agent or the Escrow Agent for any
 losses, claims, damages, or expenses arising directly out of such agent's negligence
 or willful misconduct under this Agreement. The provisions of this section shall survive
 the termination of this Agreement and any resignation or removal of the Escrow Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If
 a dispute ensues between any of the parties hereto that, in the opinion of the Escrow
 Agent, is sufficient to justify its doing so, the Escrow Agent shall be entitled to tender
 into the registry or custody of any court of competent jurisdiction, all money or property
 in its hands under the terms of this Agreement, and to file such legal proceedings as
 it deems appropriate, and shall thereupon be discharged from all further duties under
 this Agreement. Any such legal action may be brought in any such court as the Escrow
 Agent shall determine to have jurisdiction thereof. The Company shall indemnify the Processing
 Agent and/or Escrow Agent against their reasonable court costs and attorneys' fees
 incurred in filing such legal proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Inability to Deliver</u>. In the event that Payments for subscriptions are not cleared through
 normal banking channels according to the regular Federal Reserve Bank clearing schedule,
 the Escrow Agent will cause the Processing Agent to promptly notify the Company of such
 event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notice</u>.
 All notices, requests, demands and other communications or deliveries required or permitted
 to be given hereunder shall be in writing and shall be deemed to have been duly given
 if delivered personally, given by facsimile confirmed by telephone call or deposited
 for mailing, first class, postage prepaid, registered or certified mail, as follows:

If to the subscribers for Shares: To their respective addresses as specified in their subscription agreements.

If to the Company: CNL Strategic Residential Credit, Inc.

Post Office Box 4920

Orlando, Florida 32802-4920

or

CNL Strategic Residential Credit, Inc.

CNL Center at City Commons

450 South Orange Avenue, Suite 1400

Orlando, Florida 32801

Attention: General Counsel

If to the Escrow Agent: UMB Bank, N.A.

Corporate Trust & Escrow Services

928 Grand Blvd., 12th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106

Attention: Lara L. Stevens

Facsimile: (816) 860-3029

If to the Processing Agent: DST Systems Inc.

333 W. 11<sup>th</sup> Street, 5<sup>th</sup> Floor

Kansas City, MO 64105

Attention: (1) President and (2) General Counsel

Facsimile: _____________________

If to the Placement Agent: CNL Securities Corp. c/o CNL Capital Markets, LLC

CNL Center at City Commons

450 South Orange Avenue, Suite 1300

Orlando, Florida 32801

Attention: Corporate Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Fees to Escrow Agent</u>. In consideration of the services to be provided by the Escrow Agent
 hereunder, the Company agrees to pay the fees and related expenses to the Escrow Agent
 as outlined in <u>Attachment I</u> hereto. Additionally, should it become necessary for
 the Escrow Agent to perform extraordinary services in furtherance of the services to
 be provided by the Escrow Agent hereunder, the Escrow Agent shall be entitled to reasonable
 additional compensation therefore and reimbursement for reasonable out-of-pocket expenses,
 including, but not limited to, reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Third Party Beneficiaries</u>. The Processing Agent shall be a third party beneficiary under
 this Agreement, entitled to enforce any rights, duties or obligations owed to it under
 this Agreement notwithstanding the terms of any other agreements between the Processing
 Agent and any party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Termination of the Escrow Agreement</u>. This Agreement, except for Sections 7, 14 and this Section 12,
 which shall continue in effect, shall terminate upon written notice from the Company
 to the Escrow Agent. Unless otherwise provided, final termination of this Agreement shall
 occur on the date that all funds held in the Escrow Account are distributed either (a)
 to subscribers and the Company has informed the Escrow Agent in writing to close the
 Escrow Account or (b) to a successor escrow agent upon written instructions from the
 Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Patriot Act Compliance; OFAC Search Duties</u>. The Company shall provide to Escrow Agent upon
 the execution of this Agreement any documentation requested and any information reasonably
 requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended
 from time to time and the Bank Secrecy Act of 1970, as amended from time to time. The
 Escrow Agent, or its agent, shall complete an OFAC search, in compliance with its policy
 and procedures, of each subscription check and shall inform the Company if a subscription
 check fails the OFAC search.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This
 Agreement shall be interpreted, construed and enforced in all respects in accordance
 with the laws of the State of Missouri applicable to contracts to be made and performed
 entirely in said state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 section headings contained herein are for reference purposes only and shall not in any
 way affect the meaning or interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This
 Agreement sets forth the entire agreement and understanding of the parties with regard
 to this escrow transaction and supersedes all prior agreements, arrangements and understandings
 relating to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This
 Agreement may be amended, modified, superseded or cancelled, and any of the terms or
 conditions hereof may be waived, only by a written instrument executed by each party
 hereto or, in the case of a waiver, by the party waiving compliance. The failure of any
 party at any time or times to require performance of any provision hereof shall in no
 manner affect the right at a later time to enforce the same. No waiver in any one or
 more instances by any party of any condition, or of the breach of any term contained
 in this Agreement, whether by conduct or otherwise, shall be deemed to be, or construed
 as, a further or continuing waiver of any such condition or breach, or a waiver of any
 other condition or breach of any other terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) This
 Agreement may be executed simultaneously in two or more counterparts, each of which shall
 be deemed an original, but all of which together shall constitute one and the same instrument.
 Copies, telecopies, facsimiles, electronic files and other reproductions of original
 executed documents shall be deemed to be authentic and valid counterparts of such original
 documents for all purposes, including the filing of any claim, action, or suit in the
 appropriate court of law. In addition, the transaction described herein may be conducted
 and related documents may be stored by electronic means.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The
 Escrow Agent may rely conclusively on and shall not be required to make any independent
 inspection or investigation in connection therewith any electronic communication, resolution,
 certificate, statement, instrument, opinion, report, notice, request, direction, consent,
 order, affidavit, letter, telegram or paper or other document received by it, provided
 for under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This
 Agreement shall inure to the benefit of the parties hereto and their respective administrators,
 successors, and assigns. Except as set forth in Section 16, the Escrow Agent shall not
 assign (voluntarily, by operation of law or otherwise) this Agreement or any right, interest
 or benefit under this Agreement without the prior written consent of the other parties
 hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) If
 any one or more of the provisions contained in this Agreement shall, for any reason,
 be held to be invalid, illegal or unenforceable in any respect by a court of competent
 jurisdiction, then to the maximum extent permitted by law, such invalidity, illegality
 or unenforceability shall not affect any other provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Representation of the Company</u>. The Company hereby acknowledges that the status of the Processing
 Agent and the Escrow Agent with respect to the offering of the Shares is that of agent
 solely of the Company only for the limited purposes herein set forth, and hereby agrees
 it will not represent or imply that the Processing Agent or Escrow Agent, by serving
 as the escrow agent or processing agent hereunder or otherwise, has investigated the
 desirability or advisability of an investment in the Shares, or has approved, endorsed
 or passed upon the merits of the Shares, nor shall the Company use the name of the Processing
 Agent or Escrow Agent in any manner whatsoever in connection with the offer or sale of
 the Shares, other than by acknowledgement that it has agreed to serve as processing agent
 or escrow agent for the limited purposes herein set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Resignation of Escrow Agent or Processing Agent</u>. At any time the Processing Agent or Escrow Agent
 may resign by notifying the Company. Such resignation shall become effective on the earlier
 to occur of (i) the acceptance by a successor Processing Agent or Escrow Agent or (ii)
 ninety (90) days following the date upon which such notice was mailed. Upon the effective
 date of such resignation in accordance with clause (ii) of this Section 16, all Escrowed
 Funds then held by the Escrow Agent hereunder shall be delivered by it to the Company
 or such successor Escrow Agent, as directed in writing by the Company. To the extent
 no successor has been appointed, the Escrow Agent shall be entitled to petition a court
 of proper jurisdiction to appoint a successor. Until such time as the Processing Agent
 or Escrow Agent has resigned in accordance herewith, the Processing Agent or Escrow Agent
 shall perform its duties hereunder in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Force Majeure</u>. No party hereto shall be responsible for any failure or delay in the performance
 of its obligations under this Agreement arising out of or caused, directly or indirectly,
 by circumstances beyond its reasonable control, including without limitation, acts of
 God, earthquakes, fires, floods, wars, civil or military disturbances, sabotage, epidemics,
 riots, interruptions, loss or malfunctions of utilities, communication service, accidents,
 labor disputes, acts of civil or military authority, or governmental actions.

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

---

| |
|:---|
| CNL Strategic Residential Credit, Inc. |
| By: |
| By: |

---

Name:

Title:

---

| |
|:---|
| UMB BANK, N.A. |
| By: |
| Name: Lara L. Stevens |
| Title: Vice President |

---

CNL Securities Corp. <br>By:  

Name:

Title:

**ATTACHMENT I**

**Escrow Agent Fee Schedule**

**Acceptance Fee** 

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Review escrow agreement, establish account | $2000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DST Agency Engagement | $250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Annual Escrow Agent Fee** | $2500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactional Fees** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outgoing Wire Transfer | $35 each |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daily BAI Recon File to DST | $75 per month |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wire Ripping to DST | $200 per month |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overnight Delivery/Mailings | $16.50 each |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous Expenses\* | $100 per quarter (est.) |

---

Acceptance fee will be payable at the initiation of the escrow. The Annual Escrow Agent Fee and Transaction Fees will be billed quarterly in arrears. Other fees and expenses will be billed as incurred.

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate.

\*All expenses related to the administration of the Escrow Agreement such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.

## Exhibit 10.10

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.10**

**FORM OF SEED STOCK PURCHASE AGREEMENT**

**THIS SEED STOCK PURCHASE AGREEMENT** (this *"Agreement")* is made as of the ___day of ___, 2025, by and between **CNL Strategic Residential Credit, Inc., a Maryland Corporation**, a Maryland Corporation (the *"Company"),* and **CNL Residential Credit Manager, LLC.** *("Purchaser").*

**WHEREAS**, the Company desires to issue, and Purchaser desires to acquire, shares of common stock of the Company as herein described, on the terms and conditions hereinafter set forth;

**NOW, THEREFORE**, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Purchase and Sale of Stock**. Purchaser hereby agrees to purchase from the Company, and the
 Company hereby agrees to sell to Purchaser_____
 shares of the Class E Shares of common stock of the Company (the *"Stock")* at
 $25.00 per share, for an aggregate purchase price of _____
 payable in cash.

The closing hereunder, including payment for and delivery of the Stock, shall occur at the offices of the Company immediately following the execution of this Agreement, or at such other time and place as the parties may mutually agree.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Limitations on Transfer**. Purchaser shall not assign, hypothecate, donate, encumber or otherwise
 dispose of any interest in the Stock except in compliance with applicable securities
 laws. Purchaser hereby further acknowledges that Purchaser may be required to hold the
 Stock purchased hereunder indefinitely. During the period of time during which Purchaser
 holds the Stock, the value of the Stock may increase or decrease, and any risk associated
 with the Stock and such fluctuation in value shall be borne by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Restrictive Legends**. Any certificates representing the Stock shall have endorsed thereon legends
 in substantially the following forms (in addition to any other legend which may be required
 by other agreements between the parties hereto):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. THE
 SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
 ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
 ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
 REQUIRED; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any
 legend required by applicable state "blue sky" securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Investment Representations.** In connection with the purchase of the Stock, Purchaser represents
 to the Company the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Purchaser
is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Stock. Purchaser is purchasing the Stock as an investment for Purchaser's
own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning
of the Securities Act of 1933, as amended (the *"Act").* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Purchaser
 understands that the Stock has not been registered under the Act by reason of a specific
 exemption therefrom, which exemption depends upon, among other things, the bona fide
 nature of Purchaser's investment intent as expressed herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Purchaser
 further acknowledges and understands that the Stock must be held indefinitely unless
 the Stock is subsequently registered under the Act or an exemption from registration
 with respect to such subsequent transfer is available. Purchaser understands that any
 certificates evidencing the Stock will be imprinted with the legend(s) set forth above
 which prohibit(s) the transfer of the Stock unless the Stock is registered or registration
 is not required in the opinion of counsel for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Purchaser
 is familiar with the provisions of Rule 144 under the Act, as in effect from time to
 time, which, in substance, permit limited public resale of "restricted securities"
 acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such
 issuer), in a non-public offering subject to the satisfaction of certain conditions.
 The Stock may be resold by Purchaser in certain limited circumstances subject to the
 provisions of Rule 144, which requires, among other things: (i) the availability of certain
 public information about the Company and (ii) the resale occurring following the required
 holding period under Rule 144 after Purchaser has purchased, and made full payment of
 (within the meaning of Rule 144), the securities to be sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Purchaser
 further understands that at the time Purchaser wishes to sell the Stock there may be
 no public market upon which to make such a sale, and that, even if such a public market
 then exists, the Company may not satisfy the current public information requirements
 of Rule 144, and that, in such event, Purchaser would be precluded from selling the Stock
 under Rule 144 even if it satisfies the minimum holding period requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Purchaser
 has substantial knowledge regarding, and experience in, financial and business matters,
 including knowledge and experience in investing in and evaluating transactions of securities
 in companies similar to the Company. Purchaser is capable of evaluating the risks and
 merits of its investment in the Stock and has the capacity to protect its own interests.
 Without limiting the generality of the foregoing, Purchaser acknowledges and agrees that
 the Company has not conducted any business to date, and that it may never successfully
 conduct a business, and that an investment in the Company and the Stock is highly speculative
 and subject to substantial risks, including the loss of the entire investment.

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Miscellaneous**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **Successors and Assigns**. This Agreement shall inure to the benefit of the successors and assigns
 of the Company and, subject to the restrictions on transfer herein set forth, be binding
 upon Purchaser, Purchaser's successors, and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **Governing Law; Venue**. This Agreement shall be governed by and construed in accordance with
 the laws of the State of Maryland. The parties agree that any action brought by either
 party to interpret or enforce any provision of this Agreement shall be brought in, and
 each party agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate
 state or federal court for the district encompassing the Company's principal place of
 business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **Counterparts**.
 This Agreement may be executed in two or more counterparts, each of which shall be deemed
 an original and all of which together shall constitute one instrument. Facsimile signatures
 on counterparts of this Agreement are hereby authorized and shall be acknowledged as
 if such facsimile signatures were an original execution.

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

---

| | |
|:---|:---|
| **COMPANY** | **COMPANY** |
| **CNL Strategic Residential Credit, Inc.** | **CNL Strategic Residential Credit, Inc.** |
| By: |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Chirag J. Bhavsar |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Chief Executive Officer |
| **PURCHASER** | **PURCHASER** |
| **CNL Residential Credit Manager, LLC** | **CNL Residential Credit Manager, LLC** |
| By: |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Tammy J. Tipton |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Chief Financial Officer |

---

## Exhibit 10.11

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.11**

**FORM OF SEED STOCK PURCHASE AGREEMENT**

**THIS SEED STOCK PURCHASE AGREEMENT** (this *"Agreement")* is made as of the ___ of ___, 2025, by and between **CNL Strategic Residential Credit, Inc., a Maryland Corporation**, a Maryland Corporation (the *"Company"),* and **Balbec Capital Holdings, L.P.** *("Purchaser").*

**WHEREAS**, the Company desires to issue, and Purchaser desires to acquire, shares of common stock of the Company as herein described, on the terms and conditions hereinafter set forth;

**NOW, THEREFORE**, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Purchase and Sale of Stock**. Purchaser hereby agrees to purchase from the Company, and the
 Company hereby agrees to sell to Purchaser, _____shares
 of the Class E Shares of common stock of the Company (the *"Stock")* at
 $25.00 per share, for an aggregate purchase price of _____
 payable in cash.

The closing hereunder, including payment for and delivery of the Stock, shall occur at the offices of the Company immediately following the execution of this Agreement, or at such other time and place as the parties may mutually agree.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Limitations on Transfer**. Purchaser shall not assign, hypothecate, donate, encumber or otherwise
 dispose of any interest in the Stock except in compliance with applicable securities
 laws. Purchaser hereby further acknowledges that Purchaser may be required to hold the
 Stock purchased hereunder indefinitely. During the period of time during which Purchaser
 holds the Stock, the value of the Stock may increase or decrease, and any risk associated
 with the Stock and such fluctuation in value shall be borne by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Restrictive Legends**. Any certificates representing the Stock shall have endorsed thereon legends
 in substantially the following forms (in addition to any other legend which may be required
 by other agreements between the parties hereto):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. THE
 SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
 ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
 ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
 REQUIRED; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any
 legend required by applicable state "blue sky" securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Investment Representations.** In connection with the purchase of the Stock, Purchaser represents
 to the Company the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Purchaser
is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Stock. Purchaser is purchasing the Stock as an investment for Purchaser's
own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning
of the Securities Act of 1933, as amended (the *"Act").* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Purchaser
 understands that the Stock has not been registered under the Act by reason of a specific
 exemption therefrom, which exemption depends upon, among other things, the bona fide
 nature of Purchaser's investment intent as expressed herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Purchaser
 further acknowledges and understands that the Stock must be held indefinitely unless
 the Stock is subsequently registered under the Act or an exemption from registration
 with respect to such subsequent transfer is available. Purchaser understands that any
 certificates evidencing the Stock will be imprinted with the legend(s) set forth above
 which prohibit(s) the transfer of the Stock unless the Stock is registered or registration
 is not required in the opinion of counsel for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Purchaser
 is familiar with the provisions of Rule 144 under the Act, as in effect from time to
 time, which, in substance, permit limited public resale of "restricted securities"
 acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such
 issuer), in a non-public offering subject to the satisfaction of certain conditions.
 The Stock may be resold by Purchaser in certain limited circumstances subject to the
 provisions of Rule 144, which requires, among other things: (i) the availability of certain
 public information about the Company and (ii) the resale occurring following the required
 holding period under Rule 144 after Purchaser has purchased, and made full payment of
 (within the meaning of Rule 144), the securities to be sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Purchaser
 further understands that at the time Purchaser wishes to sell the Stock there may be
 no public market upon which to make such a sale, and that, even if such a public market
 then exists, the Company may not satisfy the current public information requirements
 of Rule 144, and that, in such event, Purchaser would be precluded from selling the Stock
 under Rule 144 even if it satisfies the minimum holding period requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Purchaser
 has substantial knowledge regarding, and experience in, financial and business matters,
 including knowledge and experience in investing in and evaluating transactions of securities
 in companies similar to the Company. Purchaser is capable of evaluating the risks and
 merits of its investment in the Stock and has the capacity to protect its own interests.
 Without limiting the generality of the foregoing, Purchaser acknowledges and agrees that
 the Company has not conducted any business to date, and that it may never successfully
 conduct a business, and that an investment in the Company and the Stock is highly speculative
 and subject to substantial risks, including the loss of the entire investment.

**5.** **Miscellaneous**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **Successors and Assigns**. This Agreement shall inure to the benefit of the successors and assigns
 of the Company and, subject to the restrictions on transfer herein set forth, be binding
 upon Purchaser, Purchaser's successors, and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **Governing Law; Venue**. This Agreement shall be governed by and construed in accordance with
 the laws of the State of Maryland. The parties agree that any action brought by either
 party to interpret or enforce any provision of this Agreement shall be brought in, and
 each party agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate
 state or federal court for the district encompassing the Company's principal place of
 business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **Counterparts**.
 This Agreement may be executed in two or more counterparts, each of which shall be deemed
 an original and all of which together shall constitute one instrument. Facsimile signatures
 on counterparts of this Agreement are hereby authorized and shall be acknowledged as
 if such facsimile signatures were an original execution.

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

---

| | | |
|:---|:---|:---|
| **COMPANY** | **COMPANY** | **COMPANY** |
| **CNL Strategic Residential Credit, Inc.** | **CNL Strategic Residential Credit, Inc.** | **CNL Strategic Residential Credit, Inc.** |
| By: |  |  |
|  | Name: | Chirag J. Bhavsar |
|  | Title: | Chief Executive Officer |
| **PURCHASER** | **PURCHASER** | **PURCHASER** |
| **Balbec Capital Holdings, L.P.** | **Balbec Capital Holdings, L.P.** | **Balbec Capital Holdings, L.P.** |
| By: |  |  |
|  | Name: | Jeff Padden |
|  | Title: | Manager |

---

## Exhibit 10.12

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.12**

**FORM OF MASTER SERVICING AGREEMENT**

This **MASTER SERVICING AGREEMENT** (this "<u>Agreement</u>") is made as of ____ by and among **PRP ADVISORS, LLC,** a Delaware limited liability company ("<u>Master Servicer</u>") and CNL Strategic Residential Credit, Inc., a Maryland corporation(the "<u>Owner</u>").

W I T N E S S E T H :

WHEREAS, the Master Servicer performs ongoing due diligence, management, consulting and valuation services for funds and investment trusts and vehicles acquiring, holding for investment and hypothecating residential mortgage loans and properties; and

WHEREAS, Owner desires to hereby engage Master Servicer and Master Servicer desires to hereby accept such engagement to perform the services detailed herein with respect to the Assets of Owner in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereby agree as follows:

**ARTICLE I<br>DEFINITIONS**

**Section 1.01. Defined Terms**. In addition, the following terms shall have the meanings assigned to them below:

"Accepted Master Servicing Practices": With respect any Mortgage Loan, those mortgage master servicing practices of prudent mortgage master servicing institutions which master service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related underlying property securing such Mortgage Loan is located, to the extent applicable to the Master Servicer.

"*Asset"* means each Mortgage Loan, Mortgage Asset, and REO Property purchased by the Owner or any of its subsidiaries and managed by Master Servicer under this Agreement.

"*Asset Pool*" shall mean one or more pools of Assets.

"*Asset Proceeds*" means, with respect to an Asset, any and all payments, revenues, income, receipts, collections, recoveries and other proceeds or assets received net of identified nonsufficient funds with respect to such Asset, including (without limitation) (a) payments of principal, interest, fees, late charges, insufficient funds charges, guaranty payments and any interest thereon, credit insurance payments and other cash receipts on account of such Asset, (b) court-awarded reimbursements of fees, costs and expenses, (c) legal fees, credit insurance costs, guaranty fees and other amounts recovered on account of such Asset, to the extent the obligation giving rise thereto has previously been paid or is otherwise not due and payable with any such receipts, (d) settlements, compromises, liquidations, foreclosure proceeds, dispositions, sales, transfers or other proceeds, whether cash or otherwise, received as a result of or in any way in connection with collection activities related to such Asset or in connection with the sale, resale, transfer, putback or disposition of such Asset, and (e) payments, fees, rebates, refunds, commissions, rake-offs, discounts or deductions, whether cash or otherwise, received as a result of or in any way in connection with collection activities related to such Asset or in connection with the sale, disposition or transfer of such Asset.

*"Business Day*" shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

"*Custodian*" means U.S. Bank National Association, Computershare Trust Company, N.A. and any other successor custodian under the Custody Agreement.

"*Custody Agreement*" shall mean a custody agreement, by and among Agent, Trust, certain affiliates of the Trust and the applicable Custodian thereunder, as amended, restated, supplemented, extended or renewed from time to time.

*"Externally Prepared Information*" shall have the meaning specified in Section 5.01(l) hereof.

"*Management Fee*" has the meaning set forth in Section 3.01 below.

"*Material Adverse Effect*" shall mean a material adverse effect on (a) the condition (financial or otherwise), properties or operations of Master Servicer, or (b) the ability of the Master Servicer to perform any of their respective obligations under this Agreement.

"*Mortgage Asset*" means any other Mortgage investments other than Mortgage Loans, that are related to residential real property in the United States of America, including, without limitation, Mortgage Servicing Rights.

"*Mortgage Loan*" means a residential or commercial mortgage loan, which is secured by a senior or junior lien on a residential real property in the United States of America, including, without limitation, a single family mortgage loan.

"*Person*": Any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof, or any other entity of whatever nature.

"*REO Property*" means real property owned that previously secured a Mortgage Loan and has been acquired through foreclosure or deed in lieu of foreclosure or otherwise in connection with a defaulted Mortgage Loan.

"*Servicing Agreement*" means an agreement between the Trust, certain affiliates of the Trust (as applicable) and a Servicer to perform certain duties with respect to the Assets.

"*Servicer*" means a third party Person, which may be an attorney or an REO service provider, that is engaged by the Master Servicer, Owner, the Trust and/or an affiliate of the Trust to perform certain duties with respect to the Assets.

"*Termination Event*" has the meaning given in Section 6.01 hereof.

"*Trust*" means the statutory trust, common law trust or any other local entity formed by Owner to hold the Assets.

**ARTICLE II<br>SERVICES**

**Section 2.01. Appointment of the Master Servicer**. Owner hereby appoints, and Master Servicer hereby accepts such appointment, as the master servicer of the Assets with such general management responsibilities as herein set forth. Subject to the provisions of any Servicing Agreement, and the documents executed in connection therewith, Master Servicer shall oversee administration and servicing of all Assets from time to time and shall have full power and authority, to the extent not limited hereunder, to do or cause to be done, by and through the applicable Servicer, any and all things in connection with such servicing, administration and collection as may be necessary or desirable to optimize the recoverable value from such Assets. In the performance of its duties and responsibilities under this Agreement, the Master Servicer may engage or cause the applicable Servicer to engage third-party subservicers in accordance with the terms of this Agreement as well as attorneys to commence collection actions, foreclosure proceedings and/or the like. In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with the Accepted Master Servicing Practices and this Agreement, subject to the prior sentence and, in certain circumstances, to the oversight of the Owner as set forth herein. Furthermore, the Master Servicer shall consult with the Servicers as necessary from time to time to carry out the Master Servicer's obligations hereunder, shall receive and review all reports, information and other data provided to the Master Servicer by the Servicers and shall enforce the obligations of the Servicers to perform and observe the covenants, obligations and conditions to be performed or observed by the Servicers under the Servicing Agreements. The Master Servicer shall independently monitor each Servicer's servicing activities with respect to each Mortgage Loan serviced by such Servicer, reconcile the reports and other data provided to the Master Servicer pursuant to the previous sentence on a monthly basis and coordinate corrective adjustments to the related Servicer's and Master Servicer's records, and based on such reconciled and corrected information, prepare the Master Servicer's monthly report and any other information and statements required hereunder; **provided**, **that**, in the event that any portion of the Master Servicer's reconciliation of such reports and other data is based upon Mortgage Loan data provided by a third party, the Master Servicer shall be entitled to reasonably rely on and shall have no obligation to independently confirm or verify such data. In addition, the Master Servicer shall track default steps/milestones to supervise compliance and ongoing performance of the Servicers and work with the applicable Servicer throughout the default process to determine the best servicing strategy and resolve exceptions, including managing timely and appropriate resolution and to analyze such Servicer's performance.

**Section 2.02. Duties**. Without limiting the generality of Section 2.01, Master Servicer shall: (i) source, perform due diligence, and assist in the acquisition of Assets; (ii) monitor the performance of each Servicer of the Assets and maintain appropriate records; and (iii) manage the modification, forebearance, foreclosure, or other loss mitigation efforts of Assets purchased by Owner.

**Section 2.03. Documents Evidencing Assets**. To the extent delivered to a Trust or the Owner by an Asset Pool seller, Master Servicer shall ensure that the Trust deposit with the Custodian, in accordance with the Custody Agreement, each document evidencing or relating to an Asset and shall deliver copies (which may be in electronic form) of each document to the Servicer, as may be reasonably requested.

**Section 2.04. Subservicing**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Master Servicer may appoint or cause to be appointed by the applicable Servicer, pursuant to a written agreement, one or more subservicers to perform the servicing and collection duties; *provided, however*, no appointment of any subservicer for collection activities, litigation or other purposes by the Master Servicer shall relieve the Master Servicer of any of its duties or responsibilities under this Agreement, including, without limitation, its monitoring and reporting responsibilities hereunder. Master Servicer may provide a separate list of Servicers for Owner to approve in advance and which shall be deemed approved by the Owner upon execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Other than the Servicers which shall be deemed approved by the Owner upon execution of this Agreement, the Master Servicer may not engage a Servicer or subservicer without the prior written consent of the Owner. If the Master Servicer desires to engage a Servicer or subservicer, the Master Servicer will give the Owner written notice of the proposed appointment of such proposed Servicer or subservicer, and request the Owner's consent, at least five Business Days prior to the date of the proposed appointment. Such notice and approval may be given in writing or by email or fax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the extent that the Master Servicer, in the performance of its duties and responsibilities under this Asset Management Agreement, engages subservicers directly, the Master Servicer shall be responsible for the compensation of such subservicers and shall also have responsibility for monitoring and managing the activities and actions of each such subservicer and ensuring that such activities and actions are in compliance with provisions of this Agreement.

**Section 2.05. Power and Authority**. In overseeing the Servicer and in connection with its general obligations as set forth in Section 2.01 and Section 2.02, the Owner shall furnish the Master Servicer or the Servicer with any powers of attorney or other documents which the Master Servicer may reasonably request and which the Owner may reasonably approve in order to take such steps as the Master Servicer deems necessary, appropriate or expedient to carry out its overseeing of the servicing, administration and collection activities under this Agreement.

**Section 2.06. Authority To Settle and Dispose of Assets**. Notwithstanding anything to the contrary contained in this Agreement, the Master Servicer may, with the consent of Owner:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Approve the Servicer's settlement of a Mortgage Loan with its obligor (a "<u>Settlement</u>") provided:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Settlement constitutes an arm's-length transaction in compliance with Section 2.07 hereof (provided that such Section shall not prohibit payment of the otherwise applicable Management Fee);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Settlement does not result in receipt by the Master Servicer or any Affiliate of any commission, fee or other compensation in violation of Section 2.08 hereof (provided that such Section shall not prohibit payment of the otherwise applicable Management Fee);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Settlement results in the realization (prior to payment of any applicable Management Fee) of an amount that is at least consistent with pool collection practices of the Master Servicer in the ordinary course of business. If any Settlement realization will not be consistent with such represented practices, the Master Servicer must provide Owner with a written explanation for the discrepancy prior to agreement to the Settlement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) dispose of or otherwise liquidate any Assets provided that such disposal or liquidation results in Asset Proceeds reaching certain minimums as determined by the Owner;

*provided, that* any amounts received on account of any action taken in accordance with this Section shall constitute Asset Proceeds and shall be deposited into the applicable Servicer's collection account and disbursed in accordance with the provisions of Section 2.09 hereof.

**Section 2.07. Arm's-Length Transactions**. Notwithstanding any provision in this Agreement to the contrary, the Master Servicer will conduct all activities and all sales, transfers and dispositions relating to the Assets on an arm's-length basis and so as to cause all collections and all consideration received upon the sale, transfer or disposition of an Asset to (a) become and constitute Asset Proceeds, and (b) be distributed as Asset Proceeds in accordance with this Agreement.

**Section 2.08. No Commissions or Rebates on Dispositions or Collections**. Notwithstanding any provision in this Agreement to the contrary, the Master Servicer shall not accept or receive or agree to accept or receive, or allow any Affiliate to accept or receive or agree to accept or receive, any rebate, refund, commission, fee, kickback or rake-off, whether cash or otherwise and whether paid by or originating with the obligor under a Mortgage Loan or any other party (including, but not limited to, brokers and agents), as a result of or in any way in connection with activities related to any asset or in connection with the sale, disposition, transfer or servicing of any Asset, other than payment of the Management Fee (and the payment of any applicable servicing fees to Servicer).

**Section 2.09. Accounts; Deposit to Collection Account**. The Master Servicer covenants and agrees that it will (a) transfer from the Master Servicer's account into the Servicer's account all Asset Proceeds for each Asset Pool received by the Master Servicer within two (2) Business Days following receipt by the Master Servicer of cleared funds for such Asset Proceeds, and (b) not commingle any other funds which are not Asset Proceeds. All income on amounts held in the Master Servicer's account collected with respect to the Assets with its own funds and assets or with any moneys will constitute Asset Proceeds.

**ARTICLE III<br>MANAGER FEES; REIMBURSEMENT OF EXPENSES**

**Section 3.01. Master Servicing Fees**. The Owner shall pay Master Servicer an annual servicing fee of two and a half tenths of one percent (0.25%) per annum of the gross asset value of the Assets (the "**Service Fee**"), which shall be paid quarterly in arrears.

**Section 3.02. Intentionally Deleted**.

**Section 3.03. Third Party Expenses; Nonreimbursable Expenses**. Owner shall be responsible for payment of all third party due diligence costs and expenses related to acquisition, monitoring or disposition of the Assets. Master Servicer shall be responsible for, and it is understood and agreed that Master Servicer shall not be reimbursed for, any overhead expenses of the Master Servicer, salaries, wages or other compensation of employees of the Master Servicer or travel and other expenses incurred by any employees of the Master Servicer without the prior written consent of Owner.

**ARTICLE IV<br>ACCOUNTING, STATEMENTS AND REPORTS**

**Section 4.01. Books and Records**. The Master Servicer (or Servicer) shall keep detailed, complete and accurate books and records pertaining to each Asset and the related Asset Pool setting forth the status of such Asset, the amount and application of any funds received on account of such Asset or other realization upon such Asset, complete notes and documentation of all servicing, administration and collection efforts and activities with respect to such Asset and all information necessary to prepare the calculations and reports for the Asset Pool. The Master Servicer shall make periodic reports in accordance with this Article IV. To the extent that the Master Servicer has placed any of the Assets with a subservicer or has engaged directly any attorney or REO property manager to commence any collection actions, foreclosure proceedings and/or the like, the Master Servicer shall cause each such subservicer to keep detailed, complete and accurate books and records pertaining to such Assets. Such books and records may not be destroyed or otherwise disposed of except as provided herein and as allowed by applicable laws, regulations or decrees.

**Section 4.02. Periodic Reporting**. Master Servicer shall provide to the Owner any such reports as it shall reasonably request.

**Section 4.03. Inspection Rights**. At any time and from time to time during regular business hours, the Master Servicer shall permit, and shall cause each subservicer which is servicing any of the Assets to permit, the Owner or their respective agents, representatives or designees, at the sole cost and expense of such requesting party, (a) to examine or make copies of abstracts from all books, records and documents (including, without limitation) computer tapes and disks and constituting Asset Documents or otherwise in any way relating to any Asset or the Master Servicer's or any subservicer's servicing and collection activities and procedures with respect thereto, (b) to visit the offices and properties of the Master Servicer, Servicer or any subservicer for purposes of examining such materials or the Master Servicer's or any Servicers or subservicer's procedures, processes and activities relating to the exercise of its duties hereunder and (c) to discuss matters relating to Assets or the servicing, collection or liquidation thereof or the performance by the Master Servicer, Servicer or any subservicer with respect thereto with any officers or employees having knowledge of any such matters.

**ARTICLE V<br>REPRESENTATIONS, WARRANTIES AND COVENANTS**

**Section 5.01. Representations and Warranties of the Master Servicer**. The Master Servicer hereby represents and warrants to the Owner as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Master Servicer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each of the states where an underlying property securing a Mortgage Loan is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Master Servicer. The Master Servicer has all requisite power and authority to carry out its business as presently conducted and as proposed to be conducted and to enter into and discharge its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution and delivery by the Master Servicer of this Agreement and performance and compliance by the Master Servicer with the terms of this Agreement have been duly authorized by all necessary action on the part of the Master Servicer and will not violate the Master Servicer 's organizational documents or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which the Master Servicer is a party or by which it or its properties may be bound or affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement constitutes the valid, legal and binding obligations of the Master Servicer, enforceable against it in accordance with their respective terms. All requisite limited liability company action has been taken by the Master Servicer to make this Agreement valid and binding upon the Master Servicer in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No litigation, proceeding or material investigation is pending or, to the best of the Master Servicer's knowledge, threatened against the Master Servicer, the consequences of which would prohibit its entering into this Agreement, materially impair the ability of the Master Servicer to perform under the terms of this Agreement, or that result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Master Servicer has no ownership interest in the Assets or the Asset Proceeds and the Master Servicer has not granted, or attempted to grant, to any other Person any security interest in the Assets or the Asset Proceeds, and no financing statement naming the Master Servicer as debtor and covering the Assets or the Asset Proceeds is on file in any office. The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Master Servicer and will not result in the breach of any term or provision of the limited liability company agreement or organizational documents of the Master Servicer or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which the Master Servicer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Master Servicer or its property is subject.

**Section 5.02. Covenants of the Master Servicer**. The Master Servicer hereby covenants and agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Master Servicer will preserve and maintain its legal existence and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business and shall conduct its business in an orderly, efficient and regular manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Master Servicer will (i) comply with its obligations under this Agreement in all material respects; and (ii) cause all collections and all consideration received upon the sale, transfer or disposition of an Asset to become and constitute Asset Proceeds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Master Servicer will not create, or attempt to create, any pledge, lien, security interest, assignment or transfer upon or in any of the Assets or the Asset Proceeds or assign or otherwise convey, or attempt to assign or otherwise convey, any right to receive collections or other income with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Master Servicer will not sell, lease, assign, transfer or otherwise dispose of all or a substantial part of its assets (whether in one transaction or in a series of transactions) to any other Person and will not liquidate, dissolve or suspend its business operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Master Servicer will not accept or receive or agree to accept or receive any rebate, refund, commission, fee (other than the Management Fees), kickback or rake-off, whether cash or otherwise and whether paid by or originating with the obligor of a Mortgage Loan or REO Property, any subservicer or any other party (including, but not limited to, brokers and agents), as a result of or in any way in connection with collection activities related to any Asset or in connection with the sale, disposition, transfer or servicing of any Asset.

**ARTICLE VI<br>TERMINATION; TRANSFER OF SERVICING; INDEMNITY**

**Section 6.01. Termination Events**. Any material breach of any covenant or agreement of the Master Servicer contained in this Agreement and the continuance of such default for more than 10 Business Days following receipt by the Master Servicer of notice of such default from the applicable party shall constitute a termination event under this Agreement (each, a "<u>Termination Event</u>").

**Section 6.02. Removal of the Master Servicer**. Immediately upon the occurrence of a Termination Event, the Owner, upon no more than thirty (30) days written notice to the Master Servicer may terminate this Agreement with respect to any or all Asset Pools managed by the Master Servicer, whereupon the Master Servicer shall be removed from its duties and obligations as under this Agreement with respect to such Asset Pool or Asset Pools.

**Section 6.03. Effect of Removal of the Master Servicer**. Upon termination of this Agreement with respect to any Asset Pool pursuant to Section 6.02, the Master Servicer shall not be entitled to any Management Fees with respect to an Asset Pool for which this Agreement is terminated after the date of such termination. Upon termination of this Agreement with respect to a given Asset Pool or Asset Pools, the Master Servicer shall, at its expense, promptly deliver and/or use commercially reasonable efforts to cause to be delivered to Owner all books and records that the Master Servicer and/or any Servicer or Subservicer has maintained with respect to such Asset Pool or Asset Pools, including, without limitation, all Asset Documents then in the possession of the Master Servicer related to such Asset Pool or Asset Pools. Any Asset Proceeds received by the Master Servicer with respect to an Asset Pool no longer serviced by the Master Servicer hereunder after removal of such servicing responsibilities shall be remitted by the Master Servicer directly and immediately to the Owner.

**Section 6.04. Indemnity by the Master Servicer**. The Master Servicer agrees to indemnify, defend and hold harmless the Owner and its respective trustees, directors, officers, employees, agents, designees, successors and assigns from and against any and all claims, losses, liabilities, damages, penalties, fines, forfeitures, legal and accounting fees and all other fees or costs of any kind, judgments or expenses resulting from or arising out of any failure of the Master Servicer to comply with its obligations hereunder in all material respects or out of claims, actions or proceedings brought against the Owner by any third party as a result of or based upon actions or inactions by the Master Servicer in the performance of its obligations under this Agreement (provided that such action or inaction was not undertaken at the direction of the indemnified party), *provided*, *however*, such indemnity shall not include any such losses resulting from unlawful collection actions undertaken by a Servicer or from the willful misconduct or gross negligence of the Owner. The foregoing indemnification shall survive the assignment or termination of this Agreement, and the resignation or removal of the Master Servicer.

**ARTICLE VII<br>MISCELLANEOUS**

**Section 7.01. Severability Clause**. Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate in good faith to develop a structure the economic effect of which is as nearly as possible the same as the economic effect of this Agreement without regard to such invalidity.

**Section 7.02. Notices**. Any notices, consents, directions, demands or other communications given under this Agreement (unless otherwise specified herein) shall be in writing and shall be deemed to have been duly given when delivered in person or by overnight delivery at, or telecopied to the respective addresses or telecopy numbers, as the case may be, to such other address or telecopy numbers as any such party shall give notice in writing to the other parties pursuant to this Section 7.02. Any such demand, notice or communication hereunder shall be deemed to have been duly given when received by the other party or parties at the addresses described above, or such other address as may hereafter be furnished to the other party or parties by like notice and shall be deemed to have been received on the date delivered to or received at the premises of the addresses.

**Section 7.03. Reserved**.

**Section 7.04. Assignment**. The rights and obligations of the Master Servicer under this Agreement shall not be assigned without the prior written consent of the Owner.

**Section 7.05. Governing Law**. This Agreement shall be governed by and construed both as to validity and enforceability in accordance with the laws of the state of Delaware without giving effect to the conflicts of law provisions thereof.

**Section 7.06. Amendments**. This Agreement may be amended from time to time by a written instrument signed by the Master Servicer and the Owner, and no waiver of any of the terms hereof by any party shall be effective unless it is in writing and signed by the other parties.

**Section 7.07. Integration**. This Agreement comprises the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to such subject matter, superseding all prior oral or written understandings.

**Section 7.08. Agreement Effectiveness**. This Agreement shall become effective upon delivery of fully executed counterparts hereof to each of the parties hereto.

**Section 7.09. Counterparts**. This Agreement may be executed in any number of counterparts, including by facsimile, each of which shall be deemed to be an original and together shall constitute and be one and the same instrument. This Agreement shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, scanned, photocopied or other electronically imaged manual signature, or (iii) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the Uniform Commercial Code/UCC (collectively, "Signature Law"), in each case to the extent applicable. Each faxed, scanned, photocopied or other electronically imaged manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, photocopied or other electronically imaged manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.

[Signature page follows]

IN WITNESS WHEREOF, the undersigned have caused this Master Servicing Agreement to be executed by their authorized officer as of the day and year first above written.

---

| |
|:---|
| **PRP Advisors, LLC** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **CNL Strategic Residential Credit, Inc.,** a Maryland corporation |
| By: |
| Name: |
| Title: |

---

## Exhibit 10.13

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**Exhibit 10.13**

**<u>SERVICE AGREEMENT</u>**

**THIS SERVICE AGREEMENT** ("<u>Agreement</u>") is made and entered into as of the <u>29<sup>th</sup></u> day of May, 2025 (the "<u>Effective Date</u>"), by and between CNL Capital Markets, LLC, a Florida limited liability company ("<u>CCM</u>"), and CNL Residential Credit Manager, LLC, a Delaware limited liability company (the "<u>Administrator</u>").

**WHEREAS**, CNL Strategic Residential Credit, Inc. (the "<u>Fund</u>") proposes to offer and sell up to $250,000,000 shares of common stock of the Fund (the "<u>Shares</u>") pursuant to a private placement offering (the "<u>Offering</u>") that is intended to qualify for an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, (the "<u>Act</u>") and Rule 506(b) of Regulation D promulgated thereunder, and an exemption from registration under various state securities laws; and

**WHEREAS**, the Fund is initially offering up to $100,000,000 of Class FA Shares, and once the minimum offering requirement of $25,000,000 in Shares is satisfied, the Fund may choose to have an initial closing for the Class FA Shares, and the Fund, in its sole and absolute discretion, may begin to offer any combination of Class A Shares, Class T Shares, Class D Shares or Class I Shares up to the remaining maximum amount of the offering; and

**WHEREAS**, the Administrator is entering into this Agreement individually and on behalf of the Fund and references in this Agreement to actions, representations, warranties, and agreements of the Administrator shall refer to actions, representations, warranties, and agreements of the Administrator, either individually or on behalf of the Fund, as applicable; and

**WHEREAS**, the Administrator desires to retain CCM to act as an agent on its behalf and on behalf of the Fund to provide certain services to the Fund in connection with the Offering and thereafter, as set forth herein, and CCM is willing and desires to accept such retention, all upon the terms and conditions set forth in this Agreement.

**NOW, THEREFORE**, in consideration of the terms and conditions hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed between CCM and Administrator (collectively, the "<u>Parties</u>"), as follows:

1. Appointment and Third Party Agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. *Transfer Agent Services.* Subject to and in accordance with the terms and conditions herein set forth, the Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Fund for purposes of negotiating and executing on a Transfer Agency and Service Agreement with a duly registered transfer agent, SS&C GIDS, Inc., a Delaware corporation ("<u>SS&C</u>"), or their successor in CCM's sole discretion, for the purposes of obtaining transfer agent, registrar, paying agent and redemption agent services for the term of this Agreement (the "<u>TASA Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. *Electronic Account Services.* Subject to and in accordance with the terms and conditions herein set forth, the Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Fund for purposes of negotiating and executing on behalf of the Fund an agreement with an investor and financial professional online account and data access and service provider, SS&C GIDS, Inc., a Delaware corporation, or their successor in CCM's sole discretion, for the term of this Agreement (the "<u>SS&C Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. *Financial Technology Services.* Subject to and in accordance with the terms and conditions herein set forth, the Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Fund for purposes of negotiating and executing on behalf of the Fund an agreement with financial technology service providers, such as Alternative Investment Exchange, LLC, SEI Investments Company (Altigo), +Subscribe, and Institutional Capital Network, Inc., for the term of this Agreement (the "<u>FinTech Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. *Alternative Investment Product Services*. Subject to and in accordance with the terms and conditions herein set forth, the Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Fund for purposes of negotiating and executing on behalf of the Fund an agreement with the National Securities Clearing Corporation ("<u>NSCC</u>"), or their successor in CCM's sole discretion, (the "<u>NSCC Agreement</u>") for the purposes of participation in the Alternative Investment Product platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. *Additional Agency.* The Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Fund for purposes of negotiation and execution on behalf of the Administrator of any and all agreements ancillary to or required for completion of the services set forth in <u>Exhibit "A"</u> attached hereto, which is made a part hereof, as amended from time to time (collectively, the "<u>Services</u>") in addition to the TASA Agreement, the SS&C Agreement, the FinTech Agreement, and the NSCC Agreement (the TASA Agreement, the SS&C Agreement, the NSCC Agreement, and these ancillary agreements, if any, collectively referred to as the "<u>Service Agreements</u>"), including without limitation the "<u>Communication Services</u>" and "<u>Financial Technology Services</u>" as set forth therein. CCM's signature on any Service Agreement shall be fully binding upon the Fund (and, for such purpose, the Fund hereby constitutes and appoints CCM the Fund's true and lawful attorney-in-fact), and the Administrator grants CCM the right to act on behalf of the Fund pursuant to such Service Agreements and to provide such related services as may be reasonably required, and each act or omission of CCM under or pursuant to such Service Agreements is hereby adopted by the Administrator on behalf of the Fund as authorized and shall be binding on the Fund as if the Fund had acted or omitted to act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. *Acceptance.* CCM hereby accepts the appointment as agent and agrees to perform, or cause to be performed, the Services in accordance with the terms and conditions hereinafter set forth. In connection with the TASA Agreement and the SS&C Agreement and all services provided thereunder, CCM shall be considered as the Administrator's agent, and shall not be deemed to provide such services. The Administrator also acknowledges and accepts the terms and fees associated with the Service Agreements.

**2. Services and Terms**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. CCM shall perform, or cause to be performed, the Services, pursuant to Administrator's reasonable policies and procedures applicable to such Services as timely provided in writing to CCM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. CCM shall enter into the Service Agreements as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. CCM shall determine the levels and priorities applicable to the Services and related actions taken in connection therewith, but shall in all cases performing Services within a commercially reasonable time as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. In the event an investor, broker-dealer, registered investment adviser registered under the Investment Advisers Act of 1940 or under applicable state securities laws, or financial professional contacts CCM regarding any of the issues set forth in <u>Exhibit "B"</u> attached hereto, which is made a part hereof, CCM shall refer such investor, broker-dealer, registered investment adviser or financial advisor to another party per the written instructions of the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Administrator hereby agrees that CCM shall have full discretion to engage subcontractors, its affiliates, and third-party service providers to perform, and assist CCM with the performance of, any and all of its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. It is intended that CCM be deemed an independent service provider and that no employment relationship shall be created between Administrator on the one hand and CCM or CCM's employees, agents or subcontractors on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Nothing in this Agreement shall in any way be deemed to restrict the right of CCM to perform services for any other person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to Administrator or any other person or entity, including without limitation any investor not specifically undertaken by CCM hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Administrator agrees to use reasonable efforts to provide CCM (1) advance written notice in the event that there are any administrative changes to Administrator's or the Fund's governing documents, business practices or the Offering which changes would have an impact on the Services provided pursuant to this Agreement, including, but not limited to, changes to Fund's dividend reinvestment plan, redemption plan, commissions and fees (including discounts) paid on sales of shares, distribution and stockholder servicing fees, offering prices of shares, classes of shares being offered, investor suitability standards, the states where shares are offered, distribution rates or declaration and payable dates, introduction of new securities offerings, and changes in business practices pertaining to certification of shares, book entry, electronic delivery of information to stockholders; and (2) prompt notice of Fund's filing of a registration statement or any other form with the SEC, and any amendments thereto, that affect the Services provided by CCM pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. CCM agrees to maintain policies and procedures reasonably designed to prevent violations of applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Within the sixty (60) day period after the effective date of this Agreement, the parties hereto shall confer, diligently and in good faith, to agree upon (1) the operational service level standards that shall be measured under this Agreement, if any, and (2) the ongoing reports to the Administrator to be provided under this Agreement, if any, and/or as they arise, including compliance reporting.

3. Compensation
 and Payment of Third-Party Pass-Through Fees

As consideration for the provision of the Services under this Agreement, to the extent utilized, in the reasonable judgement of the parties, Administrator shall cause the Fund to pay fees, expenses, and payments paid directly to third parties for services provided to the Administrator on behalf of the Fund and Fund in connection with a Service Agreement ("<u>Service Agreement Fees</u>"), FinTech Agreement ("<u>Financial Technology Services Fees</u>") and Communication Services ("<u>Communication Services Fees</u>"), as more particularly set forth herein. In full consideration for the provision of the services provided by the Administrator pursuant to this Agreement, the parties acknowledge that there shall be no separate fee paid to the Administrator or CCM in connection with the services provided. Administrator agrees use its best efforts to cause the Fund to timely pay any and all Service Agreement Fees, Financial Technology Services Fees, and Communication Services Fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Service
 Agreement Fees

Service Agreement Fees are pass through fees billed directly to the Fund (passed through the Administrator) by the third-party providing a Service under a Service Agreement. The Administrator, and not the Fund, is exclusively responsible for their timely payment, and for any fees or costs associated with any late payments. In the event of a disputed payment, CCM will cooperate with Administrator to resolve the matter in accordance with the terms of the applicable Service Agreement. Certain Service Agreements, including but not limited to the TASA Agreement, will contain fee and pricing features that are determined (1) based on actual specific performance of Services for the Fund; and (2) based upon aggregate numbers of investor accounts served by all CCM Fund clients that are beneficiaries of a given Service Agreement, including but not limited to the Fund (the "<u>Platform Size Benefits</u>"). Administrator acknowledges that CCM cannot control fluctuations in the aggregate number of Administrator accounts that determine the calculation of Platform Size Benefits. CCM will provide an annual report to the Fund's Manager detailing all Service Agreements, including the fees charged in each and changes to the prior year fees and/or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Communication
 Services Fees

Communication Services Fees include pass through fees billed directly to the Fund by a third-party providing Communication Services, either under a Service Agreement or at the request of CCM in connection with its completion of the Communication Services. The Administrator, and not the Fund, is exclusively responsible for their timely payment, and for any fees or costs associated with any late payments. In the event of a disputed payment, CCM will cooperate with Administrator to resolve the matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Financial
 Technology Services Fees

Financial Technology Services Fees include pass through fees billed directly to the Fund by a third party providing Financial Technology Services, either under a Service Agreement or at the request of CCM in connection with its completion of the Financial Technology Services. The Administrator, and not the Fund, is exclusively responsible for their timely payment, and for any fees or costs associated with any late payments. In the event of a disputed payment, CCM will cooperate with Administrator to resolve the matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Payment
 Schedule

All reimbursable amounts due and payable pursuant to any Service Agreement under this Agreement, including all exhibits thereto, shall be due and payable to CCM by Fund within thirty (30) calendar days of request for reimbursement by CCM, except for any fees or expenses that are subject to good faith dispute. In the event of such a dispute, only that portion of the fee or expense subject to the good faith dispute may be withheld. Administrator shall notify CCM in writing within thirty (30) calendar days following the receipt of each invoice if an Administrator is disputing any amounts in good faith together with a statement specifying the portion of fees or expenses being withheld and a reasonably detailed explanation of the reasons for withholding such fees or expenses. If Administrator does not provide such notice of dispute within the required time, the invoice will be deemed accepted. Whenever Administrator withholds payment of a disputed portion of any invoice, the parties hereto will negotiate expeditiously and in good faith to resolve any such disputes within thirty (30) calendar days of the original notice of dispute. Administrator shall settle such disputed amounts within ten (10) calendar days of the day on which the parties hereto agree on the amount to be paid by payment of the agreed amount. If no agreement is reached, such disputed amounts shall be settled as may be required by law or legal process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Late
 Payments

If any undisputed amount in an invoice (for reimbursable fees or reimbursable expenses hereunder) is not paid when due, CCM may, after prior written notice to the Administrator, charge such undisputed amount against any monies held under this Agreement on behalf of the applicable Administrator. Without limiting the foregoing, if any undisputed amount in an invoice of CCM (for reimbursable fees or reimbursable expenses) is not paid when due, or if any disputed amount in an invoice of CCM (for reimbursable fees or reimbursable expenses) is not paid when due and is subsequently determined to have been due, Administrator shall pay CCM interest thereon (from due date to the date of payment) at a per annum rate equal to one percent (1.0%) plus the Prime Rate (that is, the base rate on corporate loans posted by large domestic banks) published by the *The Wall Street Journal* (or, in the event such rate is not so published, a reasonable equivalent published rate selected by CCM) on the first day of the publication during the month when such amount was due. Notwithstanding any other provision hereof, such interest rate shall be no greater than permitted under applicable provisions of law.

4. Confidentiality
 of Records

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. As used herein, "<u>Fund Data</u>" means all information and facts owned by the Fund or collected on behalf of the Administrator, including, without limitation, any technical, business or investor information, of any kind, or in any form, format or medium (including, without limitation, all interrelated, unique data items or records in one or more computer files). CCM shall keep confidential any Fund Data it receives, maintains, processes or otherwise accesses while providing the Services contemplated herein and will use such Fund Data solely for performing its obligations under this Agreement. CCM will not release Fund Data except as otherwise provided for in Section 4 or with the consent of Administrator. Notwithstanding the above, CCM may release Fund Data to its nominees, subcontractors or third-party service providers, including providers under the Service Agreements (the "<u>Third Parties</u>"), provided that each such Third Party shall be required by CCM to agree to comply with the terms of confidentiality in this Agreement or other substantially similar terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Administrator will provide CCM with such information as CCM may reasonably require in order to comply with its duties under this Agreement. CCM will maintain such reports and records as Administrator may reasonably require and for such length of time as required by applicable laws, rules and regulations, and as set forth by Administrator's record retention policies, but at least as long as required by the record retention policy of CCM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. All records, data files, material, reports and other data received pursuant to this Agreement are the property of Administrator, are confidential and will be delivered to Administrator upon Administrator's demand at Administrator's expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Both CCM and the Administrator shall have in place and comply with reasonable privacy and confidentiality policies and/or procedures in order to comply with all applicable privacy laws, rules and regulations and to safeguard all Fund Data. Such policies and/or procedures shall be available for review by either CCM or the Administrator upon request to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Notwithstanding anything to the contrary in this Agreement, CCM may disclose this Agreement and any amendments, terminations and renewals thereof to: (i) third party due diligence firms and their broker-dealer clients, upon such due diligence firm's request, to facilitate the review of Administrator's offerings in connection with the sale thereof; or (ii) upon the advice of counsel; or (iii) as may be required by applicable laws, rules and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. CCM is authorized to disclose information concerning Fund Data to its affiliates and to Third Parties as may be necessary solely in connection with the administration of or performance of this Agreement as set forth herein, to CCM's internal and external auditors, accountants and counsel, and to any other person or entity when so advised by counsel where CCM may incur liability for failing to do, including as may be required under applicable laws, rules and regulations or based upon requests by regulators or other government agencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Except for the agreement to exert reasonable efforts to attempt to correct failures of any third party to operate in material compliance with the operational and confidentiality requirements provided herein and in their respective service agreements, CCM makes no warranty that errors or failures will not occur or that they may be resolved. Except as expressly stated herein or for an incident arising from CCM's gross negligence or willful misconduct, CCM expressly disclaims responsibility for breaches of confidentiality or for loss of confidential data and Administrator Data by third parties.

5. Limitation of Liability; Indemnification

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Limitation of Liability

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Subject to any limitations imposed by the Fund's charter, CCM shall not be liable for any Losses (as defined in Section 5.B.1.) or action taken or omitted or for any loss or injury resulting from CCM's (including, but not limited to, its agents, nominees and/or subcontractors) or third party service providers' performance or failure to perform their respective duties hereunder in the absence of gross negligence or willful misconduct on their respective parts. Subject to any limitations imposed by the Fund's charter (or equivalent), and except to the extent of CCM's gross negligence or willful misconduct or for any violation of any federal securities law or any "blue sky" or state securities law, in no event shall CCM be liable to the Fund, Administrator, any investor, or any third party (i) for acting in accordance with Administrator's instructions or instructions from any entity or individual reasonably believed by CCM to be an agent of Fund; (ii) for special, consequential or punitive damages; (iii) for the acts or omissions of its correspondents, designees, agents, subagents; or (iv) any Losses (as defined in Section 5.B.1.) due to forces beyond the reasonable control of CCM, including without limitation, strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services. With respect to any Losses (as defined in Section 5.B.1.) incurred as a result of the acts or the failure to act by any correspondents, designees, agents, subagents, sub-agents, contractors or sub-contractors, CCM shall take appropriate action, as determined by CCM in its sole discretion, to recover such Losses from such correspondents, designees, agents, sub-agents, contractors or sub-contractors, and CCM's sole responsibility and liability to the Fund, Administrator and investors shall be limited to such amounts, if any, recovered from same less any costs and expenses incurred by CCM in any such recovery efforts. Except with respect to Losses resulting from CCM's gross negligence or willful misconduct, with respect to any and all Losses howsoever arising from or in connection with this Agreement or the performance of CCM's (or its nominees', subcontractors' or third-party service providers') duties hereunder, the enforcement of this Agreement and disputes between the Parties hereto or otherwise related to CCM's performance hereunder, CCM's sole responsibility and aggregate liability to Fund or Administrator shall not exceed the amount of reimbursable fees paid by Administrator to CCM (exclusive of costs and expenses incurred by CCM) pursuant to Section 3 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Notwithstanding any provisions of this Agreement to the contrary, unless CCM has actual knowledge indicating otherwise, CCM shall be under no duty or obligation to inquire into, and shall not be liable for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The
 legality of the issue, purchase, sale, redemption or transfer of any securities, the sufficiency
 of the amount to be paid or received in connection therewith, or the authority of Fund to
 request such issuance, purchase, sale, redemption or transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The
 legality of the declaration of any dividend by Fund, or the legality of the issue of any
 securities in payment of any stock dividend;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. The
legality of any recapitalization or readjustment of the securities; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. The
legality or accuracy of any tax reporting, withholding or cost basis reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Third
 Party Information

CCM shall have no responsibility for the accuracy of any information that has been provided by or obtained from third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Trustee
 or Fiduciary

Nothing contained herein shall cause CCM to be deemed a trustee or fiduciary for or on behalf of Fund, any investor, or any other person. The Services provided by CCM hereunder are in addition to the services provided by CCM under any other agreements, if applicable, between the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Indemnification

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Administrator agrees, to the extent permitted by the Fund's charter (or equivalent) and applicable federal and state law (including, but not limited to, federal and state securities law), to indemnify, defend and hold harmless CCM, and when appropriate, its agents, nominees and subcontractors, and their respective officers, directors, partners, employees, associated persons, agents and control persons against any and all losses, claims, damages, liabilities and expenses, including reasonable legal (including attorneys' fees), and other expenses incurred in investigating or defending such claims or liabilities (collectively referred to herein as "<u>Losses</u>"), joint or several, whether or not resulting in any liability to such persons, to which they or any of them may become subject, insofar as such Losses (or actions in respect thereof) arise out of or are based upon this Agreement or the performance of their duties hereunder, the enforcement of this Agreement and disputes between the Parties hereto or otherwise related to their performance hereunder. Provided, however, that nothing contained herein shall require that CCM (or its agents, nominees and subcontractors) be indemnified for Losses to the extent they are caused by its (or its agents', nominees' and subcontractors', respectively) gross negligence or willful misconduct. Nothing contained herein shall limit or in any way impair the right of CCM to indemnification under any other provision of this Agreement. For purposes of this Section B, "<u>control persons</u>" with respect to an entity, means those persons who possess, directly or indirectly, the power to direct or cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. CCM agrees, to the extent permitted by applicable federal and state law (including, but not limited to, federal and state securities law) to indemnify, defend and hold harmless the Fund and the Administrator, and their respective officers, directors, partners, employees, associated persons, agents and control persons, from and against any and all Losses, joint or several, whether or not resulting in any liability to such persons, to which they or any of them may become subject, insofar as such Losses (or actions in respect thereof) arise out of or are based upon this Agreement or the performance of their duties hereunder, the enforcement of this Agreement and disputes between the Parties hereto or otherwise related to their performance hereunder. Provided, however, that nothing contained herein shall require that Fund and Administrator (or its agents, nominees and subcontractors) be indemnified for Losses except to the extent they are caused by the gross negligence or willful misconduct of CCM (or its agents, nominees and subcontractors). Nothing contained herein shall limit or in any way impair the right of Fund or the Administrator to indemnification under any other provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The parties hereto agree that CCM may assign to Fund or Administrator, at the Fund's or Administrator's request, any and all rights of subrogation CCM may have against any third party vendors, correspondents, agents, sub-agents, contractors, sub-contractors or consultants as and in full satisfaction of any obligation of indemnity CCM may have to Fund or Administrator under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Any party entitled to contribution or indemnification will, promptly after receipt of such notice of commencement of any action, suit, proceeding or claim against him or it in respect of which a claim for contribution or indemnification may be made against another indemnifying party or indemnifying parties, notify such other indemnifying party or indemnifying parties. Failure to so notify such other indemnifying party or indemnifying parties shall not relieve such other indemnifying party or indemnifying parties from any other obligation it or they may have hereunder or otherwise, unless the indemnifying party has been materially prejudiced in its ability to defend the action as a result of such delay. If such other indemnifying party or indemnifying parties are so notified, such other indemnifying party or indemnifying parties shall be entitled to participate in the defense of such action, suit, proceeding or claim at its or their own expense or in accordance with arrangements satisfactory to all parties who may be required to contribute. After notice from such other indemnifying party or indemnifying parties to the indemnified party entitled to contribution or indemnification of its or their acknowledgement of its or their obligations hereunder and its or their election to assume its or their own defense, the indemnifying party or indemnifying parties so electing shall not be liable for any legal or other expenses of litigation subsequently incurred by the indemnified party entitled to indemnification or contribution in connection with the defense thereof, other than the reasonable costs of investigation. No party shall be required to contribute or provide indemnification with respect to the settlement amount of any action or claim settled without its consent, which shall not be unreasonably withheld.

**6. Representations, Warrants and Covenants of CCM**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. CCM hereby represents, warrants and covenants during the full term of this Agreement, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. It is duly organized and validly existing under the laws of Florida with full power and authority to conduct its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. It has the power and authority to enter into and perform this Agreement; and the execution and delivery of this Agreement by CCM has been duly and validly authorized by all necessary action. This Agreement constitutes the valid and binding agreement of CCM, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors' rights generally and by general equitable principles. CCM is not in violation of its articles of organization or limited liability company operating agreement or in default under any agreement or instrument the effect of which violation or default would be material to CCM. None of: (i) the execution and delivery by CCM of this Agreement; (ii) the consummation by CCM of any of the transactions herein or therein contemplated; and (iii) the compliance by CCM with the provisions hereof or thereof, does or will conflict with or result in a breach of any term or provision of the articles of organization or limited liability company operating agreement of CCM or conflict with, result in a breach, violation or acceleration of, or constitute a default under, the terms of any agreement or instrument to which CCM is a party or by which it is bound or, to the knowledge of CCM, any statute, order or regulation applicable to CCM of any court, regulatory body, administrative agency or governmental body having jurisdiction over CCM. CCM is not a party to, bound by or in breach or violation of any agreement or instrument or, to the knowledge of CCM, subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it that materially and adversely affects, or may in the future materially and adversely affect: (i) the ability of CCM to perform its obligations under this Agreement; or (ii) the business, operations, financial conditions, properties or assets of CCM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. There are no actions or proceedings against, or investigations of, CCM pending or, to the knowledge of CCM, threatened, before any court, arbitrator, administrative agency or other tribunal: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement; or (iii) that might materially and adversely affect the performance by CCM of its obligations under, or the validity or enforceability of, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. CCM will, during the full term of this Agreement, abide by all applicable provisions of its governing instruments, as the same may be amended.

7. Representations,
 Warrants and Covenants of Administrator

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Administrator hereby represents, warrants and covenants during the full term of this Agreement, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. It is duly organized and validly existing under the laws of Delaware with full power and authority to conduct its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. It has the power and authority to enter into and perform this Agreement on behalf of the Fund; and the execution and delivery of this Agreement by Administrator has been duly and validly authorized by all necessary action. This Agreement constitutes the valid and binding agreement of Administrator, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors' rights generally and by general equitable principles. Administrator is not in violation of its certificate of formation or limited liability company agreement or in default under any agreement or instrument the effect of which violation or default would be material to Administrator. None of: (i) the execution and delivery by Administrator of this Agreement; (ii) the consummation by Administrator of any of the transactions herein or therein contemplated; and (iii) the compliance by Administrator with the provisions hereof or thereof, does or will conflict with or result in a breach of any term or provision of the charter of Administrator of Fund or conflict with, result in a breach, violation or acceleration of, or constitute a default under, the terms of any agreement or instrument to which the Fund or Administrator is a party or by which it is bound or, to the knowledge of Administrator, any statute, order or regulation applicable to Administrator of any court, regulatory body, administrative agency or governmental body having jurisdiction over Administrator. Administrator is not a party to, bound by or in breach or violation of any agreement or instrument or, to the knowledge of Administrator, subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it that materially and adversely affects, or may in the future materially and adversely affect: (i) the ability of Administrator to perform its obligations under this Agreement; or (ii) the business, operations, financial conditions, properties or assets of Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. There are no actions or proceedings against, or investigations of, Administrator pending or, to the knowledge of Administrator, threatened, before any court, arbitrator, administrative agency or other tribunal: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement; or (iii) that might materially and adversely affect the performance by Administrator of its obligations under, or the validity or enforceability of, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Administrator acknowledges that CCM (1) is not a registered transfer agent under Section 17A(c) of the Securities Exchange Act of 1934, as amended, and is not acting as a fiduciary or in the capacity of a transfer agent; and (2) is not a member of the Financial Industry Regulatory Authority (FINRA) and is not acting as a broker or dealer in connection with performing Services for the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Administrator will, during the full term of this Agreement, abide by all applicable provisions of its governing instruments, as the same may be amended.

8. Term
 and Termination

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The initial term of this Agreement shall commence on the Effective Date as noted above and shall expire on December 31, 2025. Upon the expiration of such initial term or any renewal thereof, this Agreement shall then automatically be renewed for consecutive one (1) year periods (each such renewal, a "Renewal Term"). Renewal Terms exactly align with a given calendar year. Notwithstanding the above, the Agreement may otherwise be terminated earlier as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. By either CCM or Administrator, after having given the other party at least sixty (60) calendar days advance written notice of its intent to terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. In the event that CCM shall fail to perform material services hereunder and such failure may result in a material adverse effect on Administrator's business, Administrator may terminated this Agreement immediately on written notice to CCM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In the event that this Agreement is terminated, regardless of the reason for such termination, CCM agrees to cooperate with Administrator to provide for an orderly transfer of functions to the successor service provider.

9. Survival
 of Terms

The provisions of Section 4 (Confidentiality of Records), and Section 5 (Limitation of Liability; Indemnification), Section 9 (Survival of Terms) and Section 13 (Governing Law and Venue) shall survive any termination of this Agreement.

10. Notices

Unless otherwise provided herein, all notices or other communications under this Agreement must be in writing and signed by an authorized officer (or such other persons as either party shall specify in written notice to the other).

All such notices shall be deemed given and received when delivered by hand or facsimile transmission in conjunction with a transmission confirmation, or after three (3) days following placement in the U.S. mail addressed to the other party, first class certified mail, or via overnight courier service, at the applicable address set forth in this Section.

If sent to CCM:

CNL CAPITAL MARKETS, LLC. CNL Center at City Commons 450 South Orange Avenue Suite 1300 Orlando, Florida 32801 Attention: General Counsel

If sent to the Administrator:

CNL Residential Credit Manager, LLC. CNL Center at City Commons 450 South Orange Avenue Suite 1400 Orlando, Florida 32801 Attention: Chief Financial Officer

11. Nonwaiver

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

12. Assignment

Except for the assignment by CCM (i) to a successor corporation upon the merger or consolidation of CCM, (ii) to an affiliate of CCM, or (iii) upon the sale of all or substantially all of CCM's business of providing services similar to the Services, this Agreement shall not be assigned by any party hereto without the prior written consent of the other party hereto. The Fund shall be a third party beneficiary of this Agreement; otherwise there shall be no third party beneficiaries of this Agreement, and other than the Fund herein, no provision of this Agreement is intended to be for the benefit of any person or entity not a party to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Further, no third party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against either party to this Agreement except the Fund.

13. Governing
 Law and Venue

This Agreement shall be construed in accordance with the applicable laws of the State of Florida, excluding the choice of law provisions thereof. Any aggrieved party may proceed to enforce its rights in the appropriate action at law or in equity. Venue for all suits arising out of this Agreement shall lie exclusively in the courts of Orange County, Florida. By execution of this Agreement, each party hereby submits itself to the in personam jurisdiction of all courts of Orange County, Florida, and waives any right they may have to seek any change of jurisdiction or venue.

14. Severability

In the event any provision of this Agreement shall for any reason be held to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable provision, which, being valid, legal and enforceable, comes closest to the intention of the Parties.

**15.** **Use of CCM's Name** 

Administrator shall obtain the prior written consent of CCM for any reference to CCM or to services to be furnished by CCM in any communication or document, except as required to be disclosed in any document filed with the SEC; provided that CCM shall have no responsibility or liability for the content of any such communication or document.

**16.** **Headings** 

The section and paragraph headings contained herein are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

**17.** **Counterparts** 

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

**18.** **Attorneys' Fees** 

Unless otherwise contemplated in this Agreement, the parties hereto agree to pay their own attorneys' fees and costs as may be incurred in negotiating, preparing and drafting this Agreement, whether the same is finally entered into and executed or not.

19. Amendment;
 Entire Agreement

No modification, amendment, supplement to or waiver of this Agreement or any of its provisions shall be binding upon CCM or Administrator unless made in writing and duly signed by authorized officers of each of CCM and Administrator. This Agreement constitutes the entire understanding between the parties hereto, and all prior or contemporaneous correspondence, conversations or memoranda are merged in, replaced by and without effect on this Agreement.

*(signature page follows)*

IN WITNESS WHEREOF, the Parties have duly executed this Service Agreement as of the date first written above.

---

| | |
|:---|:---|
| <br> **CNL CAPITAL MARKETS, LLC ("CCM")** | <br> **CNL CAPITAL MARKETS, LLC ("CCM")** |
| By: | /s/ Tammy Tipton |
| Name: | Tammy J. Tipton |
| Title: | Chief Financial Officer |
| <br> **CNL RESIDENTIAL CREDIT MANAGER, LLC. ("ADMINISTRATOR")** | <br> **CNL RESIDENTIAL CREDIT MANAGER, LLC. ("ADMINISTRATOR")** |
| By: | /s/ Chirag Bhavsar |
| Name: | Chirag J. Bhavsar |
| Title: | CEO  |

---

**<u>EXHIBIT "A"</u>**

**<u>Services</u>**

● Answer and resolve all incoming administrative or servicing calls

● Provide personnel to assist with processing share subscriptions

● Negotiate and set up interactive voice response strategy & call flows

● Respond to incoming phone calls, e-mails, faxes, web, and mail correspondence relating to administrative services

● Develop, maintain and/or seek approvals for or consultative services on administrative forms (hard copy or electronic) required for daily operations (including the subscription agreement; investor, financial professional or custodian administrative form changes; Transfer on death forms; Distribution Reinvestment Program forms; Share Repurchase forms

● Ensuring updated investor forms are posted to <u>www.cnlsecurities.com</u> or other web venues as they become applicable (e.g. Vision) and facilitating the accurate dissemination of these documents to the Fund websites

● Oversee and administer e-delivery program for investor communications including tax forms, monthly data feeds to broker-dealers, quarterly statements, proxies and annual reports, as applicable

● Facilitate, oversee and act as a liaison to the transfer agent on behalf of the Fund for the following non-exclusive list of services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Facilitate
 contracting, pricing and service level agreement negotiation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of transfer agents, technology vendors, telephone vendors, printers, statement companies,
 DTCC, and qualified plan custodians.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Facilitate
 new product / new offering procedures as they pertain to systems and technologies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of investor-qualified plan custodian calls

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of distributions processing and communications

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of commissions processing and communications

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of rescissions processing and communications

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Processing
 of redemptions and tracking and communication of the same

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of deposit processing

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of ownership transfer, resales and secondary market oversight, if applicable, such as tracking
 trends, unusual activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of tax form generation and, where applicable; organizing the printing, mailing, re-printing,
 and electronic availability of the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 and development of Vision, Digital Investor (f/k/a FAN Web) (Financial professional and Investor
 transactional websites) and FAN Mail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Facilitation
 and servicing of investments by foreign investors, if allowable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversight
 of various statement coordination, including account, distribution and confirmation statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Ensure
 invoice reconciliation from various vendors (by providing confirmation that vendors are adhering
 to the contracted pricing & terms)

● Provide analysis and consultative services, as needed, regarding transfer agent, custodial fund clearing services and related strategies

● Provide Fund support, as needed, for business or regulatory purposes (including position reports and investor counts)

● Facilitate, but not undertake, customer and advisor oversight of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Transfer
 agent compliance and regulatory issues (SEC, FINRA, OFAC, Privacy Acts, and the Electronic
 Transactions Act and/or E-SIGN regulations)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Blue
 sky matters (including communication and reporting to prevent blue sky violations)

● Internal & external client services training on processes and procedures

● Perform outbound research and problem resolution calls (as it pertains to not-in-good-order "NIGO" issues)

● Responding to all escalated issues including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Investor
 and financial professional phone calls

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o New
 business and maintenance issues and cures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Lost
 shareholder / escheatment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o TIN
 certifications / IRS B & C notices

● Maintenance and supervision of Vision and CNL Securities Corp. website log-in's (as applicable)

● Act as liaison to clearing firms, custodians and broker-dealers, including set up, problem-resolution, running reports, and reconciliations

● Executive Management & Ad-hoc reports

● Generation of investor & financial professional communications and provide consultation regarding the same

● Facilitation of systems enhancement / development and provide consultation regarding the same

● Development and maintenance of a data bridge for sales and tax reporting

● Assist in negotiation and continued oversight of custodial accounts and /or escrow arrangements

● Assist in the printing and mailing of offering documents where requested by the Administrator or the Fund.

● Financial Technology Services

● Communications Services as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Oversee
 communications sent by SS&C or other service providers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Development
 of fund investor stationery

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Development
 of operational forms and instructions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Development
 and implementation of branding

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Creation
 of budget & planning for the next year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Development
 of Fund biographies

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Provide
 investor relations/communications services

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. General
 communication traffic coordination

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Corporate
 restructuring

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Coordinate
 and administer proxy firm and related services, as applicable, including solicitation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Coordinate
 approvals, print & distribute/mail (as needed):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Valuation
 letters

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Tender
 offers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Notice
 of deemed distribution approach

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Distribution
 declaration

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Draft,
 coordinate approvals, print & distribute:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Annual
 and quarterly reports

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Cover
 letter & envelopes for prospectus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Error
 letters

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Statement
 updates (i.e. statement messages, tax messages)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Crisis
 and other communications as needed

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Q&A's

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Manage
 and/or communicate through corporate events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Name
 changes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Liquidation
 events

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Lawsuits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Tax
 issues

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. FP
 e-mails (announcements, press releases, etc.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Other
 matters as they arise

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Manage
 platform communications:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Monthly
 e-newsletter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Arrange
 conference calls to BD/FP community

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Coordinate
 and maintain investor section of Fund website

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Post
 forms & filings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Arrange
 and test Digital Investor (f/k/a FanWeb) and other links

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Maintain/communicate
 other content as needed

**<u>EXHIBIT "B"</u>**

**<u>Administrator Service Escalations to Administrator and Its Designee</u>**

● Legal requests

● Requests for shareholder lists

● Redemption requests when forms are received after the deadline

● Rescission requests

● Foreign investor approvals

● Questionable resales

● Some transfers requiring legal back up

## Exhibit 21.1

[CNL Strategic Residential Credit, Inc. 10-12G](cnlrcred-1012g_060225.htm)

**EXHIBIT 21.1**

**<u>LIST OF SUBSIDIARIES</u>**

None.