Document:

Form of Subcontract Agreement

  
  
  
  
  
  
  
  
  
 Exhibit 10.3 
  
 Form of Subcontract Agreement 
  

 SUBCONTRACT AGREEMENT 
  
 THIS SUBCONTRACT AGREEMENT, dated as of             , 2004 (the
“Effective Date”), is among CNL LODGING ADVISORS II CORP., a corporation organized under the laws of the State of Florida (the “Advisor”), CNL HOSPITALITY CORP., a corporation organized under the laws of the State of Florida (the
“Subadvisor”), CNL HOSPITALITY PROPERTIES II, INC., a corporation organized under the laws of the State of Maryland (the “Company”) and CNL HOSPITALITY PROPERTIES, INC., a corporation organized under the laws of the State of
Maryland (“CHP”). 
  
 W I T N E S S E T H

  
 WHEREAS, the Company and the Advisor are currently parties to
an Advisory Agreement, dated as of [            ] (the “Advisory Agreement”), which is attached hereto as Exhibit A and made a part hereof, pursuant to which the Advisor has
agreed to perform, or cause others to perform, certain services in exchange for the fees and reimbursements set forth therein; 
  
 WHEREAS, the Advisor desires to avail itself of the experience, sources of information, advice, assistance and certain facilities available to the
Subadvisor and to have the Subadvisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Advisor, all as provided herein; and 
  
 WHEREAS, the Advisor desires to enter into an agreement with the Subadvisor
to obtain the services of the Subadvisor during the term of the Advisory Agreement, and the Subadvisor desires to accept such responsibilities and duties, in accordance with the terms and provisions contained herein. 
  
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto covenant and agree as follows: 
  
 (1)    Definitions.    For purposes of this Agreement, the following terms have the definitions hereinafter indicated below. All other terms which are defined in the
Advisory Agreement shall have the same meaning herein as therein, unless the context otherwise dictates. 
  
 Cause.    With respect to the termination of this Agreement, fraud, criminal conduct, willful misconduct or willful or
negligent breach of fiduciary duty by the Subadvisor and breach of this Agreement. 
  
 Termination Date.    The date of termination of the Advisory Agreement. 
  
 (2)    Appointment.    The Company and the Advisor hereby appoint the Subadvisor to perform the services
set forth in this Agreement on the terms and conditions set forth in this Agreement, and the Subadvisor hereby accepts such appointment. 

 (3)    Duties of the Subadvisor and the Advisor. 
  
 (a)    Duties of the
Subadvisor.    The Subadvisor undertakes to use its best efforts to locate an adequate supply of suitable potential investment opportunities for the Company consistent with the investment objectives and policies of the
Company, as determined and adopted from time to time by the Directors and communicated to the Subadvisor, to formulate and evaluate the terms of each proposed investment, and make recommendations to the Advisor with respect to such proposed
investments. Subject to the supervision of the Advisor and consistent with the provisions of the Registration Statement, Articles of Incorporation and Bylaws of the Company, the Subadvisor shall, either directly or with the Advisor, perform the
above undertaking and all of advisory services enumerated in Paragraph 3 of the Advisory Agreement, with the exception of paragraphs 3(g) and 3(s) thereof. 
  
 (b)    Duties of the Advisor.    The Advisor is responsible for (i) supervising the Subadvisor with respect
to the provision of all services performed by the Subadvisor under this Agreement, and (ii) making payments to the Subadvisor for services performed under this Agreement or directing the Company to make such payments to the Subadvisor. 

 
 (4)    Authority of Subadvisor. 
  
 (a)    The Subadvisor will perform the services described
under Paragraph 3(a). The Subadvisor will present its recommendations regarding investments to the Advisor. Following the recommendation by the Investment Committee of the Advisor to the Board of Directors of the Company and the approval of an
investment by the Board of Directors of the Company (including a majority of the Independent Directors, where applicable), the Subadvisor will have the authority to make such investment on behalf of the Company. 
  
 (b)    The Subadvisor will deliver to the Advisor all
documents required by it to properly evaluate the proposed investment in the Property, Mortgage Loan or other Permitted Investment. 
  
 The prior approval of a majority of the Independent Directors and a majority of the Directors not otherwise interested in the transaction will be required
for each transaction of the Company with the Subadvisor or its Affiliates. 
  
 The Advisor or the Directors of the Company may, at any time upon the giving of notice to the Subadvisor, modify or revoke the authority set forth in this Paragraph 4. 
  
 (5)    Bank Accounts.    The
Subadvisor may establish and maintain one or more bank accounts in its own name for the account of the Company or in the name of the Company 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, under such terms and conditions as the Directors may approve, provided that no funds shall be commingled with the funds of the Subadvisor; and the 
  

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 Subadvisor shall from time to time render appropriate accountings of such collections and payments to the Directors and
to the auditors of the Company. 
  
 (6)    Records; Access.    The Subadvisor shall maintain appropriate records of all its activities hereunder and make such records available for inspection by the Advisor, the Directors of the
Company and by counsel, auditors and authorized agents of the Advisor and the Company, at any time or from time to time during normal business hours. The Subadvisor shall at all reasonable times have access to the books and records of the Company.

  
 (7)    Limitations on
Activities.    Anything else in this Agreement to the contrary notwithstanding, the Subadvisor shall refrain from taking any action which, in its sole judgment made in good faith, would (a) adversely affect the status of the
Company as a REIT, (b) subject the Company to regulation under the Investment Company Act of 1940, or (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Equity
Shares or its Securities, or otherwise not be permitted by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered by the Directors, in which case the Subadvisor shall notify promptly the Directors of the
Subadvisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Directors. In such event the Subadvisor shall have no liability for acting
in accordance with the specific instructions of the Directors so given. 
  
 (8)    Relationship with Directors.    Directors, officers and employees of the Subadvisor or of an Affiliate of the Subadvisor or of any corporate parents of the Subadvisor or of an Affiliate
of the Subadvisor may serve as a Director and as officers of the Company or the Advisor, except that no director, officer or employee of the Subadvisor, or of its Affiliates or a corporate parent who also is a Director or officer of the Company or
the Advisor shall receive any compensation from the Company or the Advisor for serving as a Director or officer of the Company or the Advisor other than reasonable reimbursement for travel and related expenses incurred in attending meetings of the
Directors of the Company or of the Advisor. 
  
 (9)    Fees Payable to the Subadvisor.    (a) All fees payable to the Advisor under Paragraph 9 of the Advisory Agreement shall be payable to the Subadvisor by the Advisor (or, at the
direction of the Advisor, by the Company), except that with respect to Acquisition Fees, the Subadvisor will only be paid 1.5% of the Gross Proceeds with respect to the acquisition of the Properties, Mortgage Loans or other Permitted Investments.
All Acquisition Fees and other fees payable to the Advisor under the Advisory Agreement will be payable to the Subadvisor under this Agreement. 
  
 (b)    In the event of Listing and in connection with the Advisor’s obligation under Section 9(g) of the Advisory Agreement, the
Advisor will consult with the Subadvisor in negotiating a new fee structure with the Company. 
  
 (10)    Loans from Affiliates.    If any loans are made to the Company by the Subadvisor or an Affiliate, the maximum amount of interest that may be charged by such
Affiliate shall be the 

  

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lesser of (i) 1% above the prime rate of interest charged from time to time by The Bank of New York and (ii) the rate that would be charged to the Company by
unrelated lending institutions on comparable loans for the same purpose. The terms of any such loans shall be no less favorable than the terms available between non-Affiliated Persons for similar commercial loans. 
  
 (11)    Expenses. 
  
 (a)    In addition to the compensation paid to the
Subadvisor pursuant to Paragraph 9 hereof, the Company shall pay directly or reimburse the Subadvisor for all of the costs and expenses paid or incurred by the Subadvisor in connection with the services they provide to the Company and the Advisor
pursuant to this Agreement, including, but not limited to: 
  
 (i)    the Company’s Organizational and Offering Expenses; 
  
 (ii)    Acquisition Expenses incurred in connection with the selection and acquisition of Properties or the making of Mortgage Loans or other Permitted Investments; 
  
 (iii)    the actual cost of goods and materials used by
the Company and obtained from entities not affiliated with the Subadvisor, other than Acquisition Expenses; 
  
 (iv)    interest and other costs for borrowed money, including discounts, points and other similar fees; 
  
 (v)    taxes and assessments on income or Property and
taxes as an expense of doing business; 
  
 (vi)    costs associated with insurance required in connection with the business of the Company or by the Directors; 
  
 (vii)    expenses of managing and operating Properties owned by the Company, whether payable to an Affiliate of the Company or a
non-affiliated Person; 
  
 (viii)    all
expenses in connection with payments to the Directors and meetings of the Directors and Stockholders; 
  
 (ix)    expenses associated with Listing or with the issuance and distribution of Shares and Securities, such as selling commissions
and fees, advertising expenses, taxes, legal and accounting fees, and Listing and registration fees; 
  
 (x)    expenses connected with payments of Distributions in cash or otherwise made or caused to be made by the Directors to the
Stockholders; 
  
 (xi)    expenses of
organizing, revising, amending, converting, modifying, or terminating the Company or the Articles of Incorporation; 
  

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 (xii)    expenses of maintaining communications with Stockholders, including the cost
of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities; 
  
 (xiii)    expenses related to arranging financing and negotiating and servicing the Mortgage Loans and other Permitted Investments;

  
 (xiv)    administrative service expenses
(including personnel costs; provided, however, that no reimbursement shall be made for costs of personnel to the extent that such personnel perform services in transactions for which the Subadvisor receives a separate fee) at the lesser of actual
cost or 90% of the competitive rate charged by unaffiliated persons providing similar goods and services in the same geographic location; and 
  
 (xv)    advertising and marketing expenses, expense reimbursements, audit, accounting and legal fees. 
  
 (b)    Expenses incurred by the Subadvisor on behalf of
the Company or the Advisor and payable pursuant to this Paragraph 11 shall be reimbursed no less than monthly to the Subadvisor. The Subadvisor shall prepare a statement documenting such expenses during each quarter, and shall deliver such statement
to the Company within 45 days after the end of each quarter. 
  
 (12)    Other Services.    Should the Advisor or the Directors request that the Subadvisor or any director, officer or employee thereof render services for the Advisor or the Company other than
set forth in Paragraph 3, such services shall be separately compensated at such rates and in such amounts as are agreed by the Subadvisor and Directors of the Advisor or the Independent Directors of the Company, as applicable, subject to the
limitations contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this Agreement. 
  
 (13)    Reimbursement to the Subadvisor.    The Company shall not reimburse the Subadvisor at the end of
any fiscal quarter for Operating Expenses that, in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such
year; unless the Independent Directors of the Company shall have made a finding that, based on such unusual and non-recurring factors which they deem sufficient, a higher level of Operating Expenses is justified for such year. 
  
 Within 60 days after the end of any fiscal quarter of the Company for which
total Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Subadvisor, upon request of the Advisor, shall send to the Stockholders of the Company a written disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in arriving at the conclusion that such higher Operating Expenses were justified. In the event that the Independent Directors do not determine that such excess expenses are justified, the Subadvisor and Advisor shall
reimburse the Company the amount by which the total Operating Expenses paid or incurred by the Company exceed the 2%/25% Guidelines, each paying its pro rata share based on the amount of Operating 
  

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Expenses each received during the quarter when compared to the total amount of Operating Expenses paid to both during such quarter. The Company will not
reimburse the Subadvisor for services for which the Subadvisor is entitled to compensation in the form of a separate fee. All figures used in the foregoing computation shall be determined in accordance with generally accepted accounting principles
applied on a consistent basis. 
  
 (14)    Other Activities of the Subadvisor.  
  
 (a)    Nothing herein contained shall prevent the Subadvisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including CHP and other
REITs) and the management of other programs advised, sponsored or organized by the Subadvisor or its Affiliates; nor shall this Agreement limit or restrict the right of any director, officer, employee, or stockholder of the Subadvisor or its
Affiliates to engage in any other business or to render services of any kind to any other partnership, corporation, firm, individual, trust or association. The Subadvisor may, with respect to any investment in which the Company is a participant,
also render advice and service to each and every other participant therein. The Subadvisor shall promptly disclose to the Advisor and the Directors on an ongoing basis the existence of any condition or circumstance, existing or anticipated, of which
it has knowledge, which creates or could create a conflict of interest between the Subadvisor’s obligations to the Advisor or the Company and its obligations to or its interest in any other partnership, corporation, firm, individual, trust or
association. The Subadvisor has disclosed the conflict of interest which exists with respect to CHP. 
  
 (b)    The Subadvisor shall be required to use its best efforts to present an adequate number of suitable investments to the Advisor,
which are consistent with the investment policies and objectives of the Company, but neither the Subadvisor nor any Affiliate of the Subadvisor shall be obligated generally to present any particular investment opportunity to the Advisor even if the
opportunity is of character which, if presented to the Company, could be taken by the Company, subject to the rights of first offer set forth in Paragraph 14(d). 
  
 (c)    Except as described in Paragraph 14(d) in the event that the Subadvisor or its Affiliates is
presented with a potential investment which might be made by the Company and by another investment entity which the Subadvisor or its Affiliates advises or manages, the Subadvisor and its Affiliates shall consider the investment portfolio of each
entity, cash flow of each entity, the effect of the acquisition on the diversification of each entity’s portfolio, rental payments during any renewal period, the estimated income tax effects of the purchase on each entity, the policies of each
entity relating to leverage, the funds of each entity available for investment and the length of time such funds have been available for investment. In the event that an investment opportunity becomes available which is suitable for both the Company
and a public or private entity with which the Subadvisor or its Affiliates are Affiliated, then the entity which has had the longest period of time elapse since it was offered an investment opportunity will first be offered the investment
opportunity. For purposes of this conflict resolution procedure, an investment opportunity will be considered “offered” to the Company when an opportunity is presented to the Board of Directors for its consideration. 
  

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 (d)    Notwithstanding Paragraph 14(c), if and when an investment opportunity comes
to the attention of CHP, the Subadvisor or the Company and such opportunity consists of the acquisition of a “luxury” resort or an “upper upscale” property (as such terms or comparable terms are then defined in the Smith Travel
Report, its successor report, or a comparable industry report (the “Smith Travel Report”)), CHP will have a right of first offer to acquire such investment. If and when an investment opportunity comes to the attention of CHP, the
Subadvisor or the Company and such opportunity consists of the acquisition of an economy, mid-scale or upscale property as such terms or comparable terms are then defined in the Smith Travel Report, the Company shall have the right of first offer to
acquire such investment. If the investment opportunity consists of a portfolio of properties and more than 50% of the revenues from such properties during the immediately preceding twelve months was generated by properties falling into (i) the upper
upscale or luxury segments, then CHP shall have the right of first offer with respect to such portfolio; or (ii) the economy, midscale or upscale segments, then the Company shall have the right of first offer with respect to such portfolio. These
rights of first offer apply to an acquisition of property whether directly or indirectly through the acquisition of interests in an entity owning or acquiring such property. 
  
 In each instance, the Subadvisor shall give written notice (the “ROFO Notice”) to each of CHP and the Company
regarding the investment opportunity, which notice shall indicate the party who is entitled to exercise the right of first offer with respect to such investment opportunity (the “ROFO Party”). Within 30 business days of its receipt of the
ROFO Notice, the ROFO Party may elect to exercise its right of first offer to pursue the investment opportunity by delivering to the Subadvisor its written acceptance of the right of first offer (the “Acceptance”), which Acceptance shall
set forth its intent to pursue the acquisition of the investment opportunity. In the event such Acceptance is not received by the Subadvisor within the 30 business day acceptance period, then the right of first offer to which the ROFO Party was
entitled shall terminate. In addition, if the ROFO Party elects to exercise its right of first offer and timely delivers an Acceptance to the Subadvisor but fails to enter into a definitive contract to acquire the investment opportunity within two
months after delivering the Acceptance, then the right of first offer to which the ROFO Party is entitled shall terminate. In any situation in which the right of first offer terminates, the Subadvisor shall give written notice to the party who was
not originally entitled to exercise the right of first offer (the “Non-ROFO Party”), of the termination of the rights of the ROFO Party, and the Non-ROFO party shall then be entitled to pursue the acquisition of the investment opportunity.
The provisions of this Paragraph 14(d) shall survive the termination of this Agreement and shall continue to be in effect until the dissolution of either CHP or the Company. 
  
 (e)    The parties understand that CNL Income Properties, Inc. has agreed to provide CHP with a right of
first offer with respect to certain hotel properties. To the extent that such properties are offered to CHP those properties will be subject to the rights of first offer contained hereunder under Paragraph 14(d). 
  

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 (15)    Relationship of Advisor and the
Subadvisor.    Neither the Advisor and the Subadvisor, nor the Subadvisor and the Company are 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. 
  
 (16)    Term.    The term of this Agreement shall commence on the Effective Date and shall expire concurrently with the expiration of the Advisory Agreement. This Agreement will be renewed
automatically upon renewal of the Advisory Agreement for the same renewal period of the Advisory Agreement. 
  
 (17)    Termination. 
  
 (a)    Automatic Termination of the Advisory Agreement.    In the event the Advisory
Agreement is terminated for any reason, this Agreement will automatically terminate concurrently therewith. 
  
 (b)    Termination by Parties.    This Agreement may be terminated upon 60 days written notice
without Cause or penalty, by any of the Company, the Advisor or the Subadvisor, or by the mutual consent of all of the foregoing parties (by a majority of the Independent Directors of the Company, a majority of the Board of Directors of the Advisor,
Subadvisor or CHP, as the case may be). 
  
 (18)    Assignment to an Affiliate.    This Agreement may not be assigned by the Advisor or Subadvisor without the consent of the Company. The Subadvisor may assign any rights to receive fees
or other payments under this Agreement without obtaining the approval of the other parties. 
  
 (19)    No Subcontracts with Affiliates.    The Subadvisor may not subcontract with an Affiliate or nonaffiliate for all or a portion of the services and duties to
be performed under this Agreement without the consent of the Advisor and the Company. 
  
 (20)    Payments to and Duties of Subadvisor Upon Termination.    Payments to the Subadvisor pursuant to this Paragraph 20 shall be subject to the 2%/25% Guidelines to
the extent applicable. 
  
 (a)    Upon
termination of this Agreement, the Subadvisor shall not be entitled to compensation for further services hereunder except that 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 Subadvisor prior to termination of this Agreement, exclusive of disputed items arising out of possible unauthorized transactions. 
  
 (b)    Upon termination of this Agreement, the Subadvisor
shall be entitled to payment of the Performance Fee if performance standards satisfactory to a majority of the Board of Directors, including a majority of the Independent Directors, have been met when considering the 
  

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performance of the Subadvisor in comparison with (a) its performance for other entities, and (b) the performance of other advisors for similar entities. If
Listing has not occurred, the Performance Fee, if any, shall equal 10% of the amount, if any, by which (i) the appraised value of the assets of the Company on the Termination Date, less the amount of all indebtedness secured by such assets, plus the
total Distributions paid to stockholders from the Company’s inception through the Termination Date, exceeds (ii) Invested Capital plus an amount equal to the Stockholders’ 8% Return from inception through the Termination Date. The
Subadvisor shall be entitled to receive all accrued but unpaid compensation and expense reimbursements in cash within 30 days of the Termination Date. All other amounts payable to the Subadvisor in the event of a termination shall be evidenced by a
promissory note and shall be payable from time to time. 
  
 (c)    The Performance Fee shall be paid in 12 equal quarterly installments without interest on the unpaid balance, provided, however, that no payment will be made in any quarter in which such payment would jeopardize
the Company’s REIT status, in which case any such payment or payments will be delayed until the next quarter in which payment would not jeopardize such REIT status. Notwithstanding the preceding sentence, any amounts which may be deemed payable
at the date the obligation to pay the Performance Fee is incurred which relate to the appreciation of the Company’s assets shall be an amount which provides compensation to the terminated Subadvisor only for that portion of the holding period
for the Company’s assets during which the Subadvisor provided services to the Company. 
  
 (d)    If Listing occurs, the Performance Fee, if any, payable thereafter will be as negotiated between the Company and the Subadvisor. The Subadvisor shall not be entitled to payment of the
Performance Fee in the event this Agreement is terminated because of failure of the Company and the Advisor to establish, pursuant to Paragraph 9(g) of the Advisory Agreement, a fee structure appropriate for a perpetual-life entity at such time, if
any, as Listing occurs. The Performance Fee, to the extent payable at the time of Listing, will not be payable in the event the Subordinated Incentive Fee is paid. 
  
 (e)    The Subadvisor shall promptly upon termination: 
  
 (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; 
  
 (ii)    deliver to the Advisor and the Directors of the Company 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 Advisor or the Directors; 
  
 (iii)    deliver to the Directors all assets, including
Properties, Mortgage Loans, and other Permitted Investments, and documents of the Company and the Advisor then in the custody of the Subadvisor; and 
  

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 (iv)    cooperate with the Company, its Directors and the Advisor to provide an
orderly management transition. 
  
 (21)    Liability.    Except as otherwise provided herein or in the Articles of Incorporation of the Company, the Subadvisor and its officers, directors, stockholders and employees shall be
held harmless for any liabilities, claims, damages and losses suffered by the Company or the Advisor.  
  
 (22)    Indemnification by the Advisor and the Company.    The Company and the Advisor shall jointly and
severally indemnify and hold harmless the Subadvisor 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 (which expenses may be advanced), to the extent such liabilities, claims, damages or losses and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by
the laws of the State of Maryland or the Articles of Incorporation of the Company. Notwithstanding the foregoing, the Subadvisor shall not be entitled to indemnification or be held harmless pursuant to this Paragraph 22 for any activity for which
the Subadvisor shall be required to indemnify or hold harmless the Company or the Advisor pursuant to Paragraph 23. Any indemnification of the Subadvisor may be made only out of the net assets of the Company and not from Stockholders. 
  
 (23)    Indemnification by the
Subadvisor.    The Subadvisor shall indemnify and hold harmless the Company and the Advisor from contract or other liability, claims, damages, taxes or losses and related expenses including reasonable attorneys’ fees
(which expenses may be advanced), to the extent that such liabilities, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Subadvisor’s bad faith, fraud, misconduct, or
negligence, but the Subadvisor shall not be held responsible for any action of the Advisor and the Directors of the Company in following or declining to follow any advice or recommendation given by the Subadvisor. 
  
 (24)    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 
  

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communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to whom it is given, and shall be given by being delivered
by hand or by overnight mail or other overnight delivery service to the addresses set forth herein: 
  

			
	 To the Advisor:
	  	CNL Lodging Advisors II Corp.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
		
	 To the Subadvisor:
	  	CNL Hospitality Corp.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
		
	 To the Company:
	  	CNL Hospitality Properties II, Inc.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
		
	 To CHP:
	  	CNL Hospitality Properties, Inc.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801

  
 Any of the parties may
at any time give notice in writing to any other party of a change in its address for the purposes of this Paragraph 24. 
  
 (25)    Modification.    This Agreement shall not be changed, modified, terminated, or discharged, in whole
or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees. 
  
 (26)    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. 
  
 (27)    Construction.    The
provisions of this Agreement shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of Florida applicable to contracts to be made and performed entirely in said state. 
  
 (28)    Entire
Agreement.    This Agreement and the Advisory Agreement contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous
agreements, understandings, inducements and 
  

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conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 
  
 (29)    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. 
  
 (30)    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. 
  
 (31)    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. 
  
 (32)    Survival.    All agreements hereunder which specifically provide that they survive the termination hereof or which require performance after the termination of this Agreement shall
survive the termination of this Agreement, including but not limited to the agreements under Paragraphs 13, 20, 21, 22 and 23. 
  
 (33)    Execution in Counterparts.    This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. 
  

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

			
	 	 	 CNL LODGING ADVISORS II CORP.

		
	 	 	 By:
                                        
                    
 Name:
 Its:

		
	 	 	 CNL HOSPITALITY CORP.

		
	 	 	 By:
                                        
                    
 Name:
 Its:

		
	 	 	 CNL HOSPITALITY PROPERTIES II, INC.

		
	 	 	 By:
                                        
                    
 Name:
 Its:

		
	 	 	 CNL HOSPITALITY PROPERTIES, INC.

		
	 	 	 By:
                                        
                    
 Name:
 Its:

  

 13Form of Indemnification Agreement

 Exhibit 10.6 
  
 FORM OF INDEMNIFICATION AGREEMENT 

 INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of the
         day of             , 2004, by and among CNL Hospitality Properties II, Inc., a Maryland corporation (the “Company”)
and                     , a director and/or officer of the Company (the “Indemnitee”). 
  
 WITNESSETH: 
  
 WHEREAS, the interpretation of ambiguous statutes, regulations, articles of
incorporation and bylaws regarding indemnification of directors and officers may be too uncertain to provide such directors and officers with adequate notice of the legal, financial and other risks to which they may be exposed by virtue of their
service as such; and 
  
 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 said section, subject to certain limitations 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 shall 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 reasonable and prudent for the Company contractually to obligate itself to indemnify in a 

  

 
reasonable and adequate manner the Indemnitee and to assume for itself maximum liability for expenses and damages in connection with claims lodged against
Indemnitee for Indemnitee’s decisions and actions as a director and/or officer of the Company and any of its Subsidiaries or Affiliates, and/or an officer and/or directors CNL Lodging Advisors II Corp. and CNL Hospitality Corp., collectively
the advisor to the Company (such Subsidiaries and Affiliates being herein referred to as 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: 
  
 A.
“Board” shall mean the Board of Directors of the Company. 
  
 B. “Change in Control” shall mean a change in the ownership or power to direct the Voting Securities of the Company or the acquisition by a person not affiliated with the Company of the ability to
direct the management of the Company. 
  
 C. “Corporate
Status” shall mean 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 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. 
  
 D. “Disinterested Director” shall mean a director of the Company who neither is nor was a party to the Proceeding in respect of which
indemnification is being sought by the Indemnitee. 
  
 E.
“Expenses” shall mean without limitation expenses of Proceedings including 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, investigating or being or preparing to be a witness in a Proceeding. 
  
 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
other than (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 

  

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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
her conduct was unlawful. 
  
 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 in respect of 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. 
  
 H.
“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. 
  
 I. “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 death of the Indemnitee; (ii) the final termination of all
Proceedings (including possible Proceedings) in respect of 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; or (iii) the amendment of the Articles of Incorporation of the Company to expressly include an indemnity of its officers to the extent herein provided. 
  
 III. SERVICE BY INDEMNITEE, NOTICE OF 
 PROCEEDINGS, DEFENSE OF CLAIMS 
  
 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, but the Indemnitee’s omission to so notify the Company shall not relieve the Company from any liability which it may have to the Indemnitee under this
Agreement. 
  
 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 

  

 - 3 - 

 
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 or such counsel shall not, in fact, have assumed such defense or such counsel
shall not be acting, in connection therewith, with reasonable diligence; and in each such case the fees and expenses of the Indemnitee’s counsel shall be advanced by the Company in accordance with this Agreement. 
  
 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; provided, however, that the Indemnitee will not unreasonably withhold or delay consent to any proposed settlement.
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

  
 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 in connection with any Proceeding (whether the Indemnitee is or becomes a party, a
witness or otherwise is a participant in any role) to the fullest extent required or permitted by the Articles of Incorporation and by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time
to time permit. For all matters for which the Indemnitee is entitled to indemnification under Article IV, the Indemnitee shall be entitled to advancement of Expenses in accordance with Article V hereof. 
  
 B. Proceeding other Than a Proceeding by or in the Right of the
Company. If the Indemnitee 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) (other than a Proceeding by or in the right of
the Company or any Affiliate) by reason of Indemnitee’s Corporate Status, or by reason of alleged action or inaction by Indemnitee in any such capacity, the Company shall, subject to the limitations set forth in Section IV.F below, hold
harmless and indemnify 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). 
  
 C. Proceedings by or in the
Right of the Company. If the Indemnitee 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 by reason of Indemnitee’s Corporate Status, or by reason of any action or inaction by Indemnitee in any such capacity, the Company 

  

 - 4 - 

 
shall, subject to the limitations set forth in Section IV.F. below, hold harmless and indemnify Indemnitee against any and all Expenses actually incurred by
or for 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); except that no
indemnification under Section IV.C. shall be made in respect of 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) shall determine 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. 
  
 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, on the merits or otherwise, in any Proceeding, the Indemnitee shall be
indemnified by the Company to the maximum extent consistent with applicable law, against all Expenses and Liabilities actually incurred by or for him 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 applicable law, against all
Expenses and Liabilities actually and reasonably incurred by or for 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,
except as provided in subsection 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). 
  
 E. Indemnification for Expenses of 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 in
connection therewith. 
  
 F. Specific Limitations on
Indemnification. In addition to the other limitations set forth in 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: 
  
 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. 
  
 2. If a court in such Proceeding has entered a judgment or
other adjudication which is final and has become nonappealable and establishes that a claim of the 

  

 - 5 - 

 
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 that are not Good Faith Acts or Omissions or which are 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. 
  
 3. If there has been no Change in Control, for Liabilities in connection with Proceedings settled without the consent of the Company which
consent, however, shall not be unreasonably withheld. 
  
 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 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 and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws. 
  
 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 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 service as a director or officer of the
Company; (ii) the Indemnitee provides the Company with written affirmation of Indemnitee’s good faith belief that Indemnitee has met the standard of conduct necessary for indemnification by the Company pursuant to Article IV hereof; (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; and (iv) the legal proceeding was initiated by a third party who is not a stockholder of the Company or, if by a stockholder of the Company acting in his or her capacity as such, a
court of competent jurisdiction approves such advancement. 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 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 the receipt by the Company of the Undertaking. The Indemnitee hereby agrees to repay any
Expenses advanced hereunder if it shall ultimately be 

  

 - 6 - 

 
determined that the Indemnitee is not entitled to be indemnified against such Expenses. Any advances and the undertaking to repay pursuant to Article V shall
be unsecured. 
  
 VI. PROCEDURE FOR PAYMENT OF LIABILITIES;

 DETERMINATION OF RIGHT TO INDEMNIFICATION 
  
 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 of Directors, promptly upon receipt of a request for indemnification shall advise the Board of Directors, in writing, of
such request. Any indemnification payment due hereunder shall be paid by the Company no later than five (5) business days following the determination, pursuant to Article VI, that such indemnification payment is proper hereunder. 
  
 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 Indemnitee in connection with the investigation, defense or appeal of such Proceeding. 
  
 C. Determination of Good Faith Act or Omission. In the event that Section VI.B. is inapplicable, the Company also shall hold harmless and indemnify
the Indemnitee unless the Company shall prove 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).

  
 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: 
  
 1. A quorum of the Board consisting of Disinterested
Directors; 
  
 2. The shareholders of the
Company; 
  
 3. Legal counsel selected by the
Indemnitee, subject to the approval of the Board, which approval shall not be unreasonably delayed or denied, which counsel shall make such determination in a written opinion; or 
  
 4. A panel of three arbitrators, one of whom is selected by the Company, another of whom is selected by the
Indemnitee and the last of whom is selected jointly by the first two arbitrators so selected. 
  
 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 Section VI.D., the Company shall, at its own 

  

 - 7 - 

 
expense, submit to the selected forum in such manner as the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemnitee
is not entitled to indemnification, and the Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to defend against such claim. The fees and expenses of the selected forum in connection with making the
determination contemplated hereunder shall be paid by the Company. If the Company shall fail to submit the matter to the selected forum within thirty (30) days after the Indemnitee’s written notice or if the forum so empowered to make the
determination shall have failed to make the requested determination within thirty (30) days after the matter has been submitted to it by the Company, the requisite determination that the Indemnitee has the right to indemnification shall be deemed to
have been made. 
  
 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.

  
 F. Right to Seek Judicial Determination.
Notwithstanding any other provision of this Agreement to the contrary, at any time after 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, whether or not the court has jurisdiction over, or is the forum in which is
pending, the Proceeding, to determine whether the Indemnitee is entitled to indemnification hereunder, and such court thereupon shall have the exclusive authority to make such determination, unless and until such court dismisses or otherwise
terminates the Indemnitee’s action without having made such determination. 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 as provided hereby. 
  
 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 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. 
  

 - 8 - 

 VII. PRESUMPTIONS AND EFFECT 
 OF CERTAIN PROCEEDINGS 
  
 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 to overcome that presumption. 
  
 B. Effect of other Proceedings. The termination of any Proceeding or of 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, or 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). 
  
 C. Reliance as Safe Harbor. For 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, or on information supplied to the Indemnitee by the officers of the Company in the course of their duties, or on the advice of legal counsel for the Company 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 deemed to be exclusive or 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. 
  
 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 purposes of determining the right to indemnification under this Agreement. 
  
 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 
 UPON
A CHANGE IN CONTROL 
  
 In the event of a Change in Control,
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, 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 

  

 - 9 - 

 
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
promptly shall 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 due 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, 
 SUBROGATION AND MISCELLANEOUS 
  
 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, and 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 such more favorable rights. 
  
 No amendment, alteration, rescission or replacement of this Agreement or any provision hereof which would in any way limit the benefits and protections
afforded to an Indemnitee hereby shall be effective as to such Indemnitee with respect to any action or inaction by such Indemnitee in the Indemnitee’s Corporate Status prior to such amendment, alteration, rescission or replacement. 

 
 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 documents required and take all action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights. 
  

 - 10 - 

 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 said notice or other communication shall have been 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 Hospitality Properties II, Inc. 
 450 South Orange Avenue 
 Orlando, FL 32801

 Attention:                     ,
President 
 Facsimile No. (407) 423-2894 
  
 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. 

 
 D. Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the substantive laws of the State of Maryland, without application of the conflict of laws principles thereof. 
  
 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, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to be bound by and to 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. 
  
 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. 
  
 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. 
  
 H. Titles. The titles to the articles and sections of this Agreement are inserted for convenience of reference only and should not be deemed a part hereof or affect the construction or interpretation of any
provisions hereof. 
  
 I. Invalidity of Provisions. Every
provision of this Agreement is severable, and the invalidity or unenforceability of any term or provision shall not effect the validity or enforceability of the remainder of this Agreement. 
  

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 J. Pronouns and Plurals. Whenever the context may require, 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. 
  

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

			
	CNL HOSPITALITY PROPERTIES II, INC.
		
	 By:
	 	 
	 Name:
	 	Robert A. Bourne
	 Title:
	 	Chief Executive Officer and President
	
	                                       
              , as INDEMNITEE

		
	 Name:
	 	 
	 Title:
	 	 
	 Address:
	 	 450 South Orange Avenue
 Orlando, Florida 32801

	 Facsimile No.: (407)
                                        
            

  

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 EXHIBIT A 
  

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED 
  
 The Board of Directors of CNL Hospitality 
 Properties II, Inc. 
  

	 	Re:	Undertaking to Repay Expenses Advanced 

  
 Ladies and Gentlemen: 
  
 The undertaking is being provided pursuant to that certain Indemnification Agreement dated the      day of
                    , 2004, by and among CNL Hospitality Properties II, 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 Hospitality Properties II, 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

  

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