Document:

CNL Strategic Capital, LLC S-1

Exhibit 10.2

 

CNL
STRATEGIC CAPITAL MANAGEMENT, LLC

 

and

 

LEVINE
LEICHTMAN strategic capital, llc

 

	 	 

        AMENDED
        AND RESTATED

         

        SUB-MANAGEMENT
        AGREEMENT

         
	 

 

     

     

    

 

	1.	Duties of the Sub-Manager	2
	2.	Limitations on Activities	5
	3.	Compensation of the Sub-Manager	5
	4.	Intellectual Property Rights	6
	5.	Expenses	6
	6.	Other Activities of the Sub-Manager	9
	7.	Relationship of Sub-Manager, Manager and
Company	10
	8.	Third Party Beneficiaries	10
	9.	Responsibility of Dual Directors, Officers
and/or Employees	10
	10.	Indemnification	11
	11.	Effectiveness, Duration and Termination of
Agreement	12
	12.	Notices	15
	13.	Amendment	16
	14.	Severability	16
	15.	Counterparts	16
	16.	Entire Agreement; Governing Law	17
	17.	Waivers	17
	18.	Specific Performance	17
	19.	Survival	17
	20.	Insurance	18
	21.	Gender	18
	22.	Titles not to Affect Interpretation	18
	23.	Representations, Warranties and Covenants
of the Sub-Manager	18
	24.	Representations, Warranties and Covenants
of the Manager	19
	25.	Non-Solicitation	19
	26.	Brand Usage	20
	27.	Construction	21

 

     

     

    

 

THIS
AMENDED AND RESTATED SUB-MANAGEMENT AGREEMENT (this “Agreement”), is entered into as of the 7th day of February,
2018, effective as of the date provided for herein, by and among CNL STRATEGIC CAPITAL MANAGEMENT, LLC, a Delaware limited liability
company (the “Manager”), LEVINE LEICHTMAN STRATEGIC CAPITAL, LLC, a Delaware limited liability company (the
“Sub-Manager”), and CNL Strategic Capital, LLC, a Delaware limited liability company (together with any wholly
owned subsidiaries, the “Company”).

 

RECITALS

 

WHEREAS,
the Company is a newly organized Delaware limited liability company that intends to acquire assets permitted by the terms of its
limited liability company agreement (the “LLC Agreement”) and in accordance with the business strategies, policies
and restrictions that are set forth in the Company’s Confidential Offering Memorandum dated June 30, 2017, as amended and/or
supplemented from time to time (the “Offering Memorandum”) and the Company’s Registration Statement on
Form S-1 (the “Registration Statement”) to be filed with the U.S. Securities and Exchange Commission, as amended
from time to time or as otherwise approved or implemented by the Board (as hereinafter defined);

 

WHEREAS,
the Manager entered into an Amended and Restated Management Agreement with the Company, dated as of February 7, 2018 (together
with any amendments thereto and/or any successor agreement, the “Management Agreement”) to provide various
services for the Company and its subsidiaries as set forth therein;

 

WHEREAS,
the Management Agreement permits the Manager, subject to the terms and conditions thereof and the supervision and direction of
the Company’s board of directors (the “Board”), to delegate certain of its duties thereunder to the Sub-Manager;

 

WHEREAS,
each of the Manager and Sub-Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended
(the “Advisers Act”);

 

WHEREAS,
the Manager wishes to enter into this Agreement with the Sub-Manager to secure assistance of the Sub-Manager in performing certain
of the Manager’s duties under the Management Agreement;

 

WHEREAS,
the Company has agreed to compensate the Sub-Manager for the services to be provided pursuant to this Agreement, and specifically
to provide remuneration for the performance of consulting from time to time relative to matters that arise in connection with
the Management Agreement;

 

WHEREAS,
the Manager, the Sub-Manager, and the Company have previously entered into a Sub-Management Agreement dated as of June 30, 2017,
and the parties now wish to amend and restate such Sub-Management Agreement in its entirety by entering into this Agreement; and

 

WHEREAS,
the Sub-Manager is willing to undertake to render such services to the Manager and the Company 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:

 

1.             Duties
of the Sub-Manager.

 

(a)           Retention
of Sub-Manager. The Manager hereby retains the Sub-Manager to assist the Company and the Manager in connection with the performance
of the Manager’s duties under the Management Agreement on the terms and conditions and for the period set forth in this
Agreement, in accordance with the following:

 

(i)            the
business strategies, policies and restrictions that (x) are set forth in the Offering Memorandum; and (y) are contemplated by
the Registration Statement;

 

(ii)           all
other applicable federal and state laws, rules and regulations, and the Company’s certificate of formation and limited liability
company agreement, in each case as may be amended from time to time; and

 

(iii)          such
business policies and directives as the Company may from time to time establish or issue and communicate to the Manager and the
Sub-Manager in writing.

 

(b)           Responsibilities
of Sub-Manager. Without limiting the generality of the foregoing, the Sub-Manager shall, during the term, subject to the provisions
of this agreement and the supervision of the Manager:

 

(i)      
     serve as an advisor to the Manager and the Company, as directed by the Manager, and provide support in connection with
certain of the Manager’s activities to be performed pursuant to the Management Agreement;

 

(ii)           provide
research and thought leadership with regards to the Company’s business and acquisition policies and business holdings, including
strategic advice on operational activities of the Company;

 

(iii)          investigate,
select, and, on behalf of the Manager, engage and conduct business with such persons as the Sub-Manager deems necessary to the
proper performance of its obligations hereunder, including but not limited to consultants, accountants, correspondents, lenders,
technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for
collection, insurers, insurance agents, banks, securities investment advisers, mortgagors, and any and all agents for any of the
foregoing, including affiliates of the Sub-Manager, and persons acting in any other capacity deemed by the Sub-Manager 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;

 

(iv)          consult
with the officers and the Board and, as necessary, furnish the Board with advice and recommendations with respect to asset acquisitions
and dispositions consistent with the business strategy and policies of the Company and in connection with any borrowings proposed
to be undertaken by the Company;

 

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(v)           subject
to the provisions of Section 1(c) hereof (a) locate, analyze, perform due diligence on and select potential assets; (b) structure
and negotiate the terms and conditions of transactions pursuant to which asset acquisitions and dispositions will be made; (c)
make asset acquisitions and dispositions on behalf of the Company in compliance with the business strategy and policies of the
Company; and (d) arrange for financing and refinancing and make other changes in the asset or capital structure of, and dispose
of, reinvest the proceeds from the sale of, or otherwise deal with asset acquisitions.

 

(vi)          furnish the Company and/or the Manager, as applicable, with advice and recommendations with respect to the strategic
direction of the Company, acquisition opportunities, communications with existing investors and proposed financings to be
undertaken by the Company;

 

(vii)         service
and monitor the Company’s assets, whether such assets are held directly or indirectly, including, but not limited to, the
provision of operational assistance and serving on the boards of directors of the Company’s majority owned subsidiaries;

 

(viii)        upon
reasonable request of the Board or the Manager, provide the Company and/or the Manager with reports regarding prospective business
opportunities and the strategic direction to be taken by the Company;

 

(ix)          upon
reasonable request of the Board or the Manager, make reports to the Board of its performance of services to the Manager and the
Company under this Agreement and the Sub-Administration Agreement entered into between the Sub-Manager and the Manager (the “Sub-Administration
Agreement”); provided, however, the Sub-Manager has the right to reasonably request the Manager make a similar report
to the Sub-Manager regarding its performance of services to the Company under the Management Agreement or Administrative Services
Agreement;

 

(x)           provide
the Manager and the Company with such other management, research and related services as the Manager and/or the Company may, from
time to time reasonably require in deploying the Company’s funds;

 

(xi)          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 and the Sub-Manager will assist in high leverage sales
opportunities to be mutually agreed upon;

 

(xii)         provide
reasonable sales and due diligence support as reasonably requested by the placement agent or dealer manager, including, as reasonably
required, onsite sales education for wholesalers at their location or field visits with wholesalers, key broker-dealer or registered
investment advisor accounts;

 

(xiii)        participate
in the fair valuation process for portfolio investments pursuant to valuation policies and procedures approved by the Board or
a committee thereof, including making supportable recommendations of fair values to the Manager for all investments for which
publicly observable prices are not available;

 

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(xiv)        participate
in the review of draft public financial statements and registration statements to ensure that the information presented regarding
the Sub-Manager, its affiliates and the Company’s underlying businesses is accurate and not misleading and to complete agreed-upon
disclosure certifications; and

 

(xv)         upon
reasonable request of the Manager, participate in presentations to: (a) managing dealer or placement agent wholesaling personnel;
(b) broker-dealer and registered investment adviser and other distribution intermediaries road shows; (c) educational forums;
(d) due diligence review programs conducted by third-party evaluators and due diligence officers of broker-dealers; and (e) other
marketing events and forums to facilitate the Company’s fund raising efforts.

 

(c)           Power
and Authority. To facilitate the Sub-Manager’s performance of these duties, but subject to the restrictions contained
herein, the Manager, hereby delegates to the Sub-Manager, and the Sub-Manager hereby accepts, the power and authority to act on
behalf of the Company to effectuate its decisions relating to the Company’s assets, including the execution and delivery
of all documents relating to the Company’s assets. If the Sub-Manager deems it necessary or advisable to make, through one
or more special purpose vehicles, any acquisition or financing it is permitted hereunder to make on behalf of the Company, then
the Sub-Manager shall have authority to create, or arrange for the creation of, such special purpose vehicles and to make such
acquisition through such special purpose vehicles in accordance with applicable law and the policies and procedures as established
between the Manager and the Sub-Manager. The Manager, subject to the restrictions contained herein, also grants to the Sub-Manager,
power and authority to engage in all activities and transactions (and anything incidental thereto) that the Sub-Manager reasonably
deems appropriate, necessary or advisable to carry out its duties pursuant to this Agreement. Notwithstanding the foregoing, the
Board shall have the right to approve the acquisition of each of the Company’s investments, and the Manager shall have the
right to approve that the acquisition of each of the Company’s investments complies with the investment policy of the Company.
The Board may, at any time upon the giving of notice to the Sub-Manager, modify or revoke or cause the Manager to modify or revoke
the authority set forth in this Section 1(c).

 

(d)           Acceptance
of Appointment. The Sub-Manager hereby accepts such appointment and agrees during the term hereof to render the services described
herein for the compensation provided herein, subject to the limitation contained herein.

 

(e)           Record
Retention; Records. Each of the Manager and the Sub-Manager shall maintain appropriate records of all of its respective activities
related to the Company and make such records available for inspection by the Manager or the Sub-Manager, as applicable, auditors
and authorized agents of the Manager and the Sub-Manager, as applicable, at any time or from time to time during normal business
hours. The Sub-Manager agrees that all records that it maintains pursuant to this Agreement are property of the Company and shall
surrender promptly to the Company any such records upon the Manager’s or the Company’s request and upon termination
of this Agreement pursuant to Section 11, provided that the Sub-Manager may retain copies of such records. The Manager
shall provide the Sub-Manager such records as are reasonably necessary for the Sub-Manager to maintain the necessary back-up for
purposes of establishing its track record.

 

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(f)            Independent
Contractor Status. The Sub-Manager 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 Manager or the Company
in any way or otherwise be deemed an agent of the Manager or the Company.

 

(g)           Fiduciary
Duty. The Sub-Manager shall be subject to the same fiduciary duties imposed on the Manager pursuant to the Management Agreement.

 

2.             Limitations
on Activities. The Sub-Manager shall have no liability for acting in accordance with the instructions of the Manager or the
Company pursuant to this Agreement or any other agreement entered into with the Manager and/or the Company. Notwithstanding the
foregoing, (i) the stockholders, directors, officers, members, partners and employees of the Sub-Manager’s affiliates shall
not be liable to the Company or the Manager for any act or omission by the Sub-Manager, its managing member, members, officers,
or employees, or the stockholders, directors, officers or employees of the Sub-Manager’s affiliates, and (ii) the stockholders,
directors, officers, members, and employees of the Manager’s affiliates shall not be liable to the Sub-Manager for any act
or omission by the Manager, its managing member, members, officers, or employees, or the stockholders, directors, officers or
employees of the Manager’s affiliates

 

3.             Compensation
of the Sub-Manager.

 

(a)           General.
With respect to any fees (including, without limitation, the Base Management Fee and Incentive Fee, as such terms are defined
in the Management Agreement) earned pursuant to the Management Agreement, the Sub-Manager shall be entitled to receive from the
Company, 50% of any and all such amounts earned pursuant to Section 3 of the Management Agreement subject to any reduction or
deferral of any such fees pursuant to the terms of the Expense Support and Conditional Reimbursement Agreement currently effective
among the parties hereto (the “Expense Support Agreement”). Such amounts shall be paid monthly in arrears by the Company,
or as otherwise provided for in this Section 3 or Section 11(f) hereof, at the same time fees are paid to the Manager pursuant
to the Management Agreement, but not later than monthly in arrears.

 

(b)           Transaction
Fees. In the course of performing its services hereunder, the Sub-Manager may enter into agreements with respect to and may
charge the Company’s businesses transaction fees including, without limitation, investment banking fees, financing fees,
capital fees, arrangement fees, structuring fees, acquisition advisory fees, disposition fees, liquidation fees, break-up fees
and other similar fees in connection with the services customarily performed in the management of such businesses (“Transaction
Fees”); provided, however, that no such Transaction Fees may be charged until the effectiveness of the registration
statement in connection with a “qualified public offering” (as such term is defined in the Offering Memorandum) and
the sale of shares in such Qualified Public Offering. The Sub-Manager will be entitled to receive Transaction Fees, which, per
calendar year, are limited to:

 

(i)            Up
to $1.5 million, if the Company has less than $300 million of total assets. Any Transaction Fees received by the Sub-Manager in
excess of $1.5 million, if the Company has less than $300 million of total assets shall be paid to the Company.

 

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(ii)           Up
to $2.0 million, if the Company has greater than $300 million but less than $500 million of total assets. Any Transaction Fees
received by the Sub-Manager in excess of $2.0 million, if the Company has greater than $300 million but less than $500 million
of total assets shall be paid to the Company.

 

(iii)          Up
to $2.5 million, if the Company has greater than $500 million but less than $750 million of total assets. Any Transaction Fees
received by the Sub-Manager in excess of $2.5 million, if the Company has greater than $500 million but less than $750 million
of total assets shall be paid to the Company.

 

(iv)          Up
to $3.0 million, if the Company has greater than $750 million but less than $1.0 billion of total assets. Any Transaction Fees
received by the Sub-Manager in excess of $3.0 million, if the Company has greater than $750 million but less than $1.0 billion
of total assets shall be paid to the Company.

 

(v)           Up
to $3.5 million, if the Company has greater than $1 billion of total assets. Any Transaction Fees received by the Sub-Manager
in excess of $3.5 million shall be paid to the Company.

 

(vi)          On
a quarterly basis, the Board will receive a report of all Transaction Fees charged to the Company’s businesses by the Sub-Manager,
including the reasonable details of services actually performed for such fee. Prior to any Material Transaction Fee being charged
to any of the Company’s businesses, the Sub-Manager shall obtain the approval of a majority of the Company’s Board,
including a majority of the Company’s independent directors. For purposes of this section, “Material Transaction
Fee” shall mean any Transaction Fee that individually or as a series of related expenses, exceeds $100,000.

 

4.             Intellectual
Property Rights. The Sub-Manager 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 Manager or the Company. The Manager 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-Manager.

 

5.             Expenses.

 

(a)           Sub-Manager
Personnel. During the term of this Agreement, when and to the extent personnel of the Sub-Manager are engaged in providing
the management services hereunder, the salaries, fringe benefits, and other administrative items incurred or allocated to all
personnel of the Sub-Manager, and all expenses of such personnel related to overhead, rent or depreciation, utilities, capital
equipment, and other administrative items allocable to the provision of such services and assistance, shall be provided and paid
for by the Sub-Manager and not by the Manager or the Company.

 

(b)           Reimbursement
of Sub-Manager. Subject to the limitations set forth in Section 5(c) and any reduction or deferral of such amounts required
to be reimbursed pursuant to the Expense Support Agreement and in addition to the compensation paid to the Sub-Manager pursuant
to Section 3, the Sub-Manager shall be reimbursed by the Company for all third party out-of-pocket expenses incurred by the Sub-Manager
at the request of or on behalf of the Company or the Manager (“Reimbursable Expenses”). For purposes of this
Agreement, Reimbursable Expenses shall include, without limitation, all fees, costs, expenses, liabilities and obligations relating
to the Company’s activities, acquisitions, dispositions, financings and business (to the extent not borne or reimbursed
by a subsidiary of the Company or a potential acquisition target), including:

 

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(i)            fees
payable to third parties relating to or associated with due diligence, investment banking fees, professional fees, legal fees,
organizing, acquiring, consummating, financing, refinancing, restructuring, hedging, taking public or private the Company’s
assets or the Company’s itself, including the fees and expenses associated with performing due diligence reviews of prospective
acquisitions, including, subject to the Company’s investment policy, those opportunities not consummated (including legal,
accounting, auditing, insurance, travel, meals and entertainment, consulting, brokerage, finders’, financing, appraisal,
filing, printing, real estate title, survey, reverse breakup, termination and other fees and expenses);

 

(ii)           fees,
costs and expenses associated with the management, advising, operating, holding of the Company’s assets, including legal,
accounting, custodian, depositary, auditing, insurance (including directors and officers liability insurance), travel, meals and
entertainment, litigation and indemnification costs and expenses, judgments and settlements, consulting, brokerage, finders’,
financing, appraisal, Bloomberg listing, pricing, data, marketing and similar services, investment banking fees, filing, printing,
title, transfer, registration and other fees and expenses (including fees, costs, and expenses associated with the preparation
or distribution of the Company’s financial statements, tax returns, tax estimates, and Schedule K-1s or any other administrative,
regulatory or other Company related reporting or filing), compliance, reporting and oversight;

 

(iii)          all
fees, costs, expenses, liabilities and obligations attributable to liquidating, selling or disposing of the Company’s businesses
or investments or the Company itself, including expenses and fees in connection with identifying and evaluating purchasers, and
negotiating and finalizing terms of a sale, disposition or liquidation;

 

(iv)          valuing
assets, including expenses and fees payable to third parties with respect to the valuation of the Company’s investments;

 

(v)           subject
to the Company’s investment policy, all fees, costs, expenses, liabilities and obligations incurred by the Sub-Manager relating
to acquisition and disposition opportunities for the Company not consummated (including legal, accounting, auditing, insurance,
travel, meals and entertainment, consulting, brokerage, finders’, financing, appraisal, filing, printing, real estate title,
survey, reverse breakup, termination and other fees and expenses);

 

(vi)          brokerage
commissions for the Company’s assets; and

 

(vii)         all
fees, costs and expenses incurred in connection with the organization, management, operation, monitoring, dissolution, liquidation
and final winding-up of any special purpose vehicles authorized by Section 1(c) hereof, as well as any Organization and Offering
Expenses (as defined in the Management Agreement), to the same extent as such expenses would be reimbursable to the Manager pursuant
to Section 2 of the Management Agreement had such expenses been incurred by the Manager.

 

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(c)           Periodic
Reimbursement.

 

(i)            Reimbursable
Expenses incurred by the Sub-Manager on behalf of the Company or the Manager and payable pursuant to this Section 5 shall be reimbursed
no less than monthly to the Sub-Manager by the Company. Such reimbursement shall be made in cash to the Sub-Manager within 30
calendar days following the Manager’s delivery to the Company of the statement required by Section 2(c) of the Management
Agreement (the “Reimbursement Statement”) therefor, except to the extent the Sub-Manager elects otherwise pursuant
to Section 5(d) hereof.

 

(ii)           The
Company shall reimburse the Sub-Manager for the Company’s Organization and Offering Expenses incurred by the Sub-Manager.
Notwithstanding the foregoing, the Company shall reimburse the Sub-Manager for Organization and Offering Expenses it may incur
on the Company’s or the Manager’s behalf but only to the extent that (1) the total amount of all Organization and
Offering Expenses is reasonable and (2) solely in connection with the Public Offering, the aggregate reimbursement would not cause
the selling commissions, any dealer manager fees, the distribution fees and the Organization and Offering Expenses borne by the
Company to exceed 15.0% of gross proceeds from the Public Offering pursuant to the Registration Statement as of the date of the
reimbursement.

 

(iii)          Notwithstanding
the foregoing, the Sub-Manager acknowledges and agrees that it, will be responsible for the payment of 50% of the portion of the
Company’s aggregate Organization and Offering Expenses that exceeds (A) 1.0% of the cumulative gross proceeds from the offering
to which the Offering Memorandum relates and (B) 1.5% of the cumulative gross proceeds from the offering to which the Registration
Statement relates (the “Public Offering”), in each case, without recourse against or reimbursement by the Company.
For the avoidance of doubt, the Sub-Manager’s obligation to pay a portion of the Company’s Organization and Offering
Expenses pursuant to this section shall be calculated on a cumulative basis at the time such Organization and Offering Expenses
are due and payable under this Agreement, as compared to the cumulative gross proceeds from the Public Offering at such time.

 

(d)           Deferred
Reimbursements. The Sub-Manager shall have the right, in its sole discretion, by written instruction in accordance with this
Section 5(d), to elect to waive or defer all or a portion of the reimbursement of the Reimbursable Expenses that would otherwise
be paid to it. No later than three business days prior to the Manager delivering to the Company the Reimbursement Statement, the
Sub-Manager shall provide written instructions to the Manager with respect to the Sub-Manager’s election to waive or defer
any portion of the Reimbursable Expenses. The Manager shall include such written instructions in the Reimbursement Statement delivered
to the Company and shall take all other actions necessary to cause the Company to pay such reimbursement directly to the Sub-Manager
in accordance with the Sub-Manager’s instructions.

 

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6.             Other
Activities of the Sub-Manager.

 

(a)            The
services of the Sub-Manager to the Manager and the Company are not exclusive, and, subject to any other agreements with the Manager,
including the Exclusivity Agreement by and between the respective parent companies of the Manager and Sub-Manager, dated as of
February 7, 2018 (the “Exclusivity Agreement”), the Sub-Manager may engage in any other business or render
the same, similar or different services to others including, without limitation, businesses that may directly or indirectly compete
with the Manager or the Company, so long as its services to the Manager and the Company hereunder are not impaired thereby. Subject
to the Exclusivity Agreement, the Sub-Manager and its affiliates shall have the right to:

 

(i)            directly
or indirectly engage in or invest in any business (including, without limitation, any business activities or lines of business
that are the same as or similar to those pursued by, or competitive with, the Company);

 

(ii)           directly
or indirectly do business with any client or customer of the Company;

 

(iii)          not
present potential transactions, matters or business opportunities to the Company, and to pursue, directly or indirectly, any such
opportunity for itself, and to direct any such opportunity to another person, subject to the Company’s and the Sub-Manager’s
allocation policy.

 

(b)           Subject
to the Exclusivity Agreement, nothing in this Agreement shall limit or restrict the right of any manager, partner, shareholder
(including its shareholders and the owners of its shareholders), officer or employee of the Sub-Manager 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 (including fees for serving as a director of, or providing consulting
services to, one or more of the middle market companies the Company may own or control, subject to applicable law).

 

(c)           The
Sub-Manager (including its managers, partners, shareholders (including the owners of its shareholders), officers or employees
of the Sub-Manager assume no responsibility under this Agreement other than to render the services called for hereunder. In consideration
of the foregoing, the Sub-Manager hereby agrees to provide the Manager (and the Company if the Manager deems necessary or appropriate
in its reasonable discretion) with prior written notice and an opportunity to review and comment on any modifications to the Sub-Manager’s
allocation policy that would materially or adversely impact the Company, its allocation policy or any prospective or current transaction
or origination opportunities for the Company.

 

(d)           Notwithstanding
anything herein to the contrary, the Sub-Manager hereby acknowledges that it has the same and equal fiduciary duty to the Company
as it does to its other various clients and accounts (the “Advisory Clients”). In connection therewith, the
Manager hereby acknowledges that the Sub-Manager and its affiliated directors, managers, partners, members, officers and employees
and other affiliates (“Affiliated Persons”) perform investment advisory services for the Advisory Clients and
further acknowledges that the Sub-Manager and Affiliated Persons may (i) give advice and take action with respect to any of its
other Advisory Clients that may differ from advice given or the timing or nature of action taken with respect to any Advisory
Client, so long as it is consistent with the provisions of the Sub-Manager’s allocation policy and its obligations hereunder,
and (ii) subject to the Exclusivity Agreement and its obligations hereunder, engage in activities that overlap with or compete
with those in which the Company and its subsidiaries, directly or indirectly, may engage. The Company, on its own behalf and on
behalf of its subsidiaries, hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate
in, any business opportunity which may be a corporate opportunity for an Advisory Client to the extent such opportunity has been
determined in good faith by the Sub-Manager not to be allocated to the Company, all in accordance with the Company’s and
the Sub-Manager’s allocation policy.

 

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(e)            The
Manager acknowledges that, subject to the Company’s investment policy and its obligations hereunder, the Sub-Manager shall
not have any obligation to recommend for purchase or sale any securities or loans which its principals, affiliates or employees
may purchase or sell for its or their own accounts or for any other client or account if, in the opinion of the Sub-Manager, such
transaction or investment appears unsuitable, impractical or undesirable for the Manager (on behalf of the Company).

 

7.             Relationship
of Sub-Manager, Manager and Company. The Manager and the Sub-Manager are not partners or joint venturers with each other or
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.

 

8.             Third
Party Beneficiaries. Except for the Company (with respect to Sections 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 18, 19, 20,
23, 24 and 26) and any Indemnified Parties (as defined below), the Company and such Indemnified Parties 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.

 

9.             Responsibility
of Dual Directors, Officers and/or Employees.

 

If
any person who is a manager, partner, member, officer or employee of the Sub-Manager is or becomes a director, officer and/or
employee of the Company and/or its subsidiaries and acts as such in any business of the Company and/or its subsidiaries, then
such manager, partner, member, officer and/or employee of the Sub-Manager shall be deemed to be acting in such capacity solely
for the Company and/or its subsidiaries, and not as a manager, partner, member, officer or employee of the Sub-Manager or under
the control or direction of the Sub-Manager, even if paid by the Sub-Manager.

 

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10.           Indemnification.

 

(a)           Indemnification.
The Sub-Manager (and its respective officers, managers, partners, shareholders, agents, employees, controlling persons and any
other person or entity affiliated with the Sub-Manager) shall not be liable to the Manager or any of its subsidiaries or the Company
or any of its subsidiaries or shareholders for any action taken or omitted to be taken by the Sub-Manager in connection with the
performance of any of its duties or obligations under this Agreement, 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 the
Manager and its subsidiaries and the Company shall, as applicable, indemnify, defend and protect the Sub-Manager (and its respective
officers, managers, partners, shareholders, agents, employees, controlling persons and any other person or entity affiliated with
the Sub-Manager, 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, as specifically provided herein) arising out of or otherwise based upon the performance of any of the Sub-Manager’s
duties or obligations under this Agreement. 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 Manager or any of its subsidiaries to which the Indemnified
Parties would otherwise be subject by reason of negligence or misconduct in the performance of the Sub-Manager’s duties
and obligations under this Agreement.

 

(b)           The
Sub-Manager shall indemnify the Manager and the Company (and their respective officers, managers, partners, members, agents employees,
controlling persons and any other person or entity affiliated with the Manager or the Company, as applicable) for any losses that
the Manager and the Company (and their respective officers, managers, partners, members, agents employees, controlling persons
and any other person or entity affiliated with the Manager or the Company, as applicable) may sustain primarily as a result of
the Sub-Manager’s willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of its duties
under this Agreement or violation of applicable law, including without limitation, the federal and state securities laws.

 

(c)           Limitation
on Indemnification. Notwithstanding Section 10(a) or Section 10(b), the Manager and its subsidiaries and the Company shall
not provide for indemnification of the Indemnified Parties for any liability or loss suffered by the Indemnified Parties, nor
shall the Manager or its subsidiaries or the Company provide that any of the Indemnified Parties be held harmless for any loss
or liability suffered by the Manager and its subsidiaries or the Company, unless all of the following conditions are met:

 

(i)            the
Indemnified Party has determined, in good faith, that the course of conduct which caused the loss or liability was in the best
interests of the Manager and its subsidiaries or the Company, as applicable;

 

(ii)           the
Indemnified Party was acting on behalf of or performing services for the Manager and its subsidiaries or the Company, as applicable;

 

(iii)          such
liability or loss was not the result of negligence or misconduct by the Indemnified Party; and

 

(iv)          such
indemnification or agreement to hold harmless is recoverable only out of the Manager’s net assets or the Company’s
net assets, as applicable, and not from members of the Company.

 

    - 11 -

     

    

 

Furthermore,
notwithstanding anything to the contrary, the Indemnified Party shall not be indemnified for any losses, liabilities or expenses
arising from or out of an alleged violation of federal or state securities laws unless one or more of the following conditions
are met:

 

(v)           there
has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular
indemnitee;

 

(vi)          such
claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee;
or

 

(vii)         a
court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification
of the settlement and related costs should be made, and the court of law considering the request for indemnification has been
advised of the position of the SEC and 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.

 

(d)           Advancement
of Funds. The Company and/or the Manager, as applicable, 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:

 

(i)            The
legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company or the
Manager;

 

(ii)           The
Indemnified Party undertakes to repay the advanced funds to the Company or the Manager, as applicable, 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

 

(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.

 

11.           Effectiveness,
Duration and Termination of Agreement.

 

(a)           Term
and Effectiveness. This Agreement shall become effective upon the effectiveness of the Management Agreement. Thereafter, the
parties agree that this Agreement shall automatically be extended concurrently with the Management Agreement and upon approval
of the Board.

 

(b)           Termination.
This Agreement may be terminated at any time, without the payment of any penalty, (i) by the Manager for Cause, (ii) upon a vote
by the Board requiring the Company to terminate this Agreement, by the Manager upon 120 days’ written notice to the Sub-Manager,
or (iii) by the Sub-Manager upon 120 days’ written notice to the Company and the Manager.

 

    - 12 -

     

    

 

For
the purposes of this Agreement, the appointment of the Sub-Manager will be considered to have been terminated for “Cause”
if the termination or non-renewal of this Agreement is the result of (A) any fraud, Criminal Conduct, willful misconduct, willful
breach of fiduciary duty by the Sub-Manager as determined by a court of competent jurisdiction to the extent that the Board has
determined that such conduct has materially and adversely effected the Company, (B) a material breach of this Agreement of any
nature whatsoever by the Sub-Manager, which breach is not cured within ninety (90) days of written notice given to the Sub-Manager
specifying in reasonable detail the nature of the alleged breach or (C) the Sub-Manager assigns this Agreement or a Sub-Manager
Change of Control Event occurs and such assignment or Change of Control Event, as applicable, does not constitute a Permitted
Sub-Manager Assignment.

 

For
purposes of this Agreement, “Criminal Conduct” includes a misappropriation of funds committed by the Sub-Manager
or an affiliate thereof with respect to the Company or if a member of the senior management team of the Sub-Manager whose services
are material to the Company has been convicted or entered a plea of guilt or nolo contendere of any felony or a violation
of any Federal or State securities laws.

 

For
purposes of this Agreement, “Permitted Sub-Manager Assignment” means the assignment of this Agreement by the
Sub-Manager or the occurrence of a Sub-Manager Change of Control Event, in each case after obtaining the consent of the Company,
which consent shall be approved by a majority of the Company’s independent directors.

 

For
purposes of this Agreement, “Sub-Manager Change of Control Event” means (i) a sale, merger, equity issuance
or similar transaction, whether directly or indirectly, involving the Sub-Manager or its equity holders in which the indirect
and direct equity holders of the Sub-Manager immediately prior to such transaction would own, in the aggregate, less than 50%
of the total combined voting power of all classes of capital stock of the surviving entity normally entitled to vote for the election
of directors or managers of the surviving entity, or (ii) the sale by the Sub-Manager of all or substantially all of the Sub-Manager’s
assets in one transaction or in a series of related transactions, or (iii) any transaction or combination of transactions as a
result of which the person(s) in control of the Sub-Manager, whether directly or indirectly, as of the date of this Agreement
cease to be in control of the Sub-Manager; provided, however, (a) a Sub-Manager Change of Control Event shall not be deemed to
have occurred, if such transaction involves a sale, transfer or similar transaction from any direct or indirect equity holder(s)
of the Sub-Manager as of the date of this Agreement to another direct or indirect equity holder(s) of the Sub-Manager as of the
date of this Agreement, or (b) as a result of a change in the executive officers of the Manager.

 

(c)           In
the event the Management Agreement is terminated (i) by the Company for Cause (as such term is defined in the Management Agreement)
or (ii) due to the Manager’s inability to perform its duties as manager under the Management Agreement due to bankruptcy,
insolvency, reorganization, receivership or similar situation, the Sub-Manager shall attorn to the Company, and the Sub-Manager
and the Company agree that this Agreement shall continue in full force and effect as a direct management agreement between the
Company and the Sub-Manager upon all of the terms and conditions set forth in this Agreement and the compensation provisions of
Section 3 of the Management Agreement shall be incorporated into this Agreement. The provisions of this Agreement regarding attornment
by the Sub-Manager shall be self-operative and effective without the necessity of execution of any new document on the part of
any party hereto or the respective heirs, legal representatives, successors or assigns of any such party. The Sub-Manager agrees,
however, to execute and deliver upon the request of the Company or the Board, any reasonable instrument or certificate as may
be necessary or appropriate to evidence such attornment, including a new management agreement for the Company.

 

    - 13 -

     

    

 

(d)          
Not for Cause Termination; Resignation. If (A) (i) the Company terminates or does not renew the engagement of the Manager
under the Management Agreement, other than for Cause or (ii) the Company terminates or does not renew the engagement of the Sub-Manager
under this Agreement, other than for Cause (each, a “Not for Cause Termination” and such terminated or not
renewed party, the “Terminated Party”), the Terminated Party shall promptly notify the other party hereto (such
party, the “Non-Terminated Party”) in writing of such termination or non-renewal. The Non-Terminated Party,
upon receiving written notice from the Terminated Party, shall promptly resign by sending written notice to the Company of its
intent to terminate the Management Agreement or this Agreement, as applicable, 120 days from the Company’s receipt of such
notice, which notice shall be sent by the Non-Terminated Party no later than five (5) business days following its receipt of the
Terminated Party’s notice. Upon the effectiveness of such resignation, neither the Non-Terminated Party or the Terminated
Party nor any of their respective successors or assigns (by merger, consolidation, purchase of assets, or similar transaction)
or successor or assigns of any of their affiliates (as such term is defined under applicable SEC rules, including by merger, consolidation,
purchase of assets, or similar transaction) shall serve the Company in any capacity, directly or indirectly, for a period of ten
years; provided, however, if the Non-Terminated Party does not resign as required by this Section 11(d), the Company shall terminate
the Management Agreement or this Agreement, as applicable and shall not hire or engage the non-terminated party or any of its
successors or assigns (by merger, consolidation, purchase of assets, or similar transaction) or successor or assigns of any of
its affiliates (as such term is defined under applicable SEC rules, including by merger, consolidation, purchase of assets, or
similar transaction) in any capacity, directly or indirectly, for a period of ten years. Each of the Manager and the Sub-Manager
agree to vigorously contest any such Not for Cause Termination of the other party.

 

(e)           Assignment.
This Agreement shall not be assigned by the Sub-Manager other than pursuant to a Permitted Sub-Manager Assignment. This Agreement
shall not be assigned by the Company or the Manager without the prior written consent of the Sub-Manager, except (i) in the case
of assignment by the Company, to an organization which is a successor (by merger, consolidation, purchase of assets, or similar
transaction) to the Company, in which case such successor organization shall be bound under this Agreement and by the terms of
such assignment in the same manner as the Company is bound under this Agreement, or (ii) in the case of the Manager, in the event
of a Permitted Manager Assignment, in which case such successor organization shall be bound under this Agreement and by the terms
of such assignment in the same manner as the Manager is bound under this Agreement.

 

For
purposes of this Agreement “Permitted Manager Assignment” means the assignment of this Agreement by the Manager
or the occurrence of a Manager Change of Control Event, in each case after obtaining the consent of the Company, which consent
shall be approved by a majority of the Company’s independent directors.

 

    - 14 -

     

    

 

For
purposes of this Agreement, “Manager Change of Control Event” means (i) a sale, merger, equity issuance or
similar transaction, whether directly or indirectly, involving the Manager or its equity holders in which the indirect and direct
equity holders of the Manager immediately prior to such transaction would own, in the aggregate, less than 50% of the total combined
voting power of all classes of capital stock of the surviving entity normally entitled to vote for the election of directors or
managers of the surviving entity, or (ii) the sale by the Manager of all or substantially all of the Manager’s assets in
one transaction or in a series of related transactions, or (iii) any transaction or combination of transactions as a result of
which the person(s) in control of the Manager, whether directly or indirectly, as of the date of this Agreement cease to be in
control of the Manager; provided, however, (a) a Manager Change of Control Event shall not be deemed to have occurred, if such
transaction involves a sale, transfer or similar transaction from any direct or indirect equity holder(s) of the Manager as of
the date of this Agreement to another direct or indirect equity holder(s) of the Manager as of the date of this Agreement, or
(b) as a result of a change in the executive officers of the Manager.

 

(f)            Payments
to and Duties of Sub-Manager upon Termination or Non-Renewal.

 

(i)            After
the termination or non-renewal of this Agreement, the Sub-Manager shall not be entitled to compensation for further services hereunder
except it shall be entitled to receive from the Manager or the Company within ninety (90) days of such termination or non-renewal
all unpaid reimbursements and all earned but unpaid fees payable to the Sub-Manager prior to the termination of this Agreement
consistent with the terms of the Exclusivity Agreement.

 

(ii)           The
Sub-Manager shall promptly upon termination:

 

(A)          Deliver
to the Company and the Manager 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 Manager;

 

(B)          Deliver
to the Company all assets and documents of the Company then in custody of the Sub-Manager; and

 

(C)          Cooperate
with the Company’s and/or the Manager’s reasonable request to provide an orderly management transition, including
payment of the cost of such termination as required by Section 13.4 of the Company’s Limited Liability Company Operating
Agreement, as amended.

 

(g)           Survival.
The provisions of this Section 11 shall remain in full force and effect, and the Sub-Manager shall remain entitled to the benefits
thereof, notwithstanding any termination of this Agreement.

 

12.           Notices.

 

(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 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.

 

    - 15 -

     

    

 

(b)          
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 12:

 

	 	To
    the Company:	CNL
    Strategic Capital LLC
	 	 	CNL
    Center at City Commons
	 	 	450
    South Orange Avenue
	 	 	Orlando,
    Florida 32801
	 	 	Attn:
    General Counsel
	 	 	E-mail:
    dwolmer@llcp.com; holly.greer@cnl.com
	 	 	 
	 	To
    the Manager:	CNL
    Strategic Capital Management, LLC
	 	 	CNL
    Center at City Commons
	 	 	450
    South Orange Avenue
	 	 	Orlando,
    Florida 32801
	 	 	Attn:
    Chief Financial Officer and General Counsel
	 	 	E-mail:
    tammy.tipton@cnl.com; holly.greer@cnl.com
	 	 	 
	 	To
    the Sub-Manager:	Levine
    Leichtman Strategic Capital, LLC
	 	 	335
    North Maple Drive, Suite 130
	 	 	Beverly
    Hills, CA 90210
	 	 	Attn:
    General Counsel
	 	 	E-mail: dwolmer@llcp.com

 

13.           Amendment.
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. The Manager and the Company hereby acknowledge and agree
that (a) the Management Agreement may not be amended, modified or waived, in whole or in part, including Section 3 thereof, without
the prior written consent of the Sub-Manager, and (b) the Manager and the Company may not waive
or defer any Base Management Fee or Incentive Fee due and payable to the Manager under the Management Agreement without
the prior written consent of the Sub-Manager, which consent shall not be unreasonably withheld.

 

14.           Severability.
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 hereof.

 

15.           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.

 

    - 16 -

     

    

 

16.           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, provided that the Exclusivity 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 New York, without regard to principles of conflict of laws that
would result in the application of the laws of another jurisdiction, 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 New York County, New York. 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.

 

17.           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.

 

18.           Specific
Performance.

 

Each
of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the
parties agrees that the other parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other
remedy to which they may be entitled, at law or in equity. Notwithstanding the foregoing, each party hereby acknowledges and agrees
that the specific performance right set forth in this Section 18 shall apply solely and exclusively to the rights and obligations
of the parties in Section 11(d) and 13 of this Agreement.

 

19.           Survival.
The provisions of Sections 10, 11, 16, 17, 18, 25 and this Section 19 shall survive the termination of this Agreement.

 

    - 17 -

     

    

 

20.           Insurance.
Pursuant to the terms of the Management Agreement, the Company has agreed to acquire and maintain a directors and officers liability
insurance policy or similar insurance policy, which shall name the Manager and the Sub-Manager as an additional insured party
(each an “Additional Insured Party” and collectively the “Additional Insured Parties”),
with coverage of at least $10 million. Such insurance policy shall include reasonable coverage from a reputable insurer and shall
be reviewed by the Board on an annual basis and adjusted, if appropriate, for the size of the Company’s portfolio. Pursuant
to the terms of the Management Agreement, the Company has agreed to make all premium payments required to maintain such policy
in full force and effect and to provide the Manager and the Sub-Manager written notice upon receipt of any notice of: (a) any
default under such policy; (b) any pending or threatened termination, cancellation or non-renewal of such policy or (c) any coverage
limitation or reduction with respect to such policy. The Manager agrees to take all steps necessary to enforce the Company’s
obligations under Section 18 of the Management Agreement.

 

21.           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.

 

22.           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.

 

23.           Representations,
Warranties and Covenants of the Sub-Manager. The Sub-Manager represents, warrants and covenants to the Manager and the Company
as follows:

 

(a)            The
Sub-Manager 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.

 

(b)           The
execution, delivery and performance by the Sub-Manager of this Agreement is within the Sub-Manager’s powers and has been
duly authorized by all necessary actions and no action by or in respect of, or filing with, any governmental body, agency or official
is required on the part of the Sub-Manager for the execution, delivery or performance of this Agreement by the Sub-Manager. The
execution, delivery and performance of this Agreement by the Sub-Manager does not violate, contravene or constitute a default
under (i) any provision of any applicable law, rule or regulation, (ii) the Sub-Manager’s organizational documents, or (iii)
any agreement, judgment, injunction, order, decree or other instruments binding upon the Sub-Manager or any of the Sub-Manager’s
property.

 

(c)            The
Sub-Manager 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 Sub-Manager in order for the Sub-Manager to perform the services contemplated by this Agreement.

 

(d)           The
Sub-Manager 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 business
strategy, guidelines, strategy, 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 Manager communicates to the Sub-Manager in writing,
provided that the Manager will promptly notify the Sub-Manager in writing of changes to the matters identified in (ii) or (iii)
above, to the extent the Manager is informed of such changes pursuant to the Management Agreement.

 

    - 18 -

     

    

 

24.           Representations,
Warranties and Covenants of the Manager. The Manager represents, warrants and covenants to the Sub-Manager and the Company
as follows:

 

(a)           The
Manager 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.

 

(b)           The
execution, delivery and performance by the Manager of this Agreement and the Management Agreement is within the Manager’s
powers and has been duly authorized by all necessary actions on the part of the Manager and no action by or in respect of, or
filing with, any governmental body, agency or official is required on the part of the Manager for the execution, delivery or performance
of this Agreement or the Management Agreement by the Manager. The execution, delivery and performance of this Agreement and the
Management Agreement by the Manager does not violate, contravene or constitute a default under (i) any provision of any applicable
law, rule or regulation, (ii) the Manager’s organizational documents, (iii) the Management Agreement, or (iv) any agreement,
judgment, injunction, order, decree or other instruments binding upon the Manager or any of the Manager’s property.

 

(c)            The
Manager 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 Manager in order for the Manager to perform the obligations contemplated by this Agreement.

 

(d)           The
Manager 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 business
strategy, guidelines, strategy, 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.

 

(e)            The
Manager and the Company have duly entered into the Management Agreement pursuant to which the Company authorized the Manager to
enter into this Agreement.

 

25.           Non-Solicitation.

 

(a)           Non-Solicitation
of the Manager’s Employees. During the period commencing on the date hereof and ending one year following the termination
of this Agreement, the Sub-Manager shall not, without the Manager’s prior written consent, directly or indirectly, (a) solicit
or encourage any person to leave the employment or other service of the Manager, or (b) hire, on behalf of the Sub-Manager or
any other person or entity, any person who has left the employment of the Manager within the one year period following the termination
of that person’s employment with respect to the Manager. During the period commencing on the date hereof through and ending
one year following the termination of this Agreement, the Sub-Manager will not, whether for its own account or for the account
of any other person, firm, corporation, or other business organization, intentionally interfere with the relationship of the Manager
with, or endeavor to entice away from the Manager, any person who during the term of the Agreement is, or during the preceding
one-year period, was a partner, joint venturer or client of the Manager.

 

    - 19 -

     

    

 

(b)           Non-Solicitation
of the Sub-Manager’s Employees. During the period commencing on the date hereof and ending one year following the termination
of this Agreement, the Manager shall not, without the Sub-Manager’s prior written consent, directly or indirectly, (a) solicit
or encourage any person to leave the employment or other service of the Sub-Manager, or (b) hire, on behalf of the Manager or
any other person or entity, any person who has left the employment of the Sub-Manager within the one year period following the
termination of that person’s employment with respect to the Sub-Manager. During the period commencing on the date hereof
through and ending one year following the termination of this Agreement, the Manager will not, whether for its own account or
for the account of any other person, firm, corporation, or other business organization, intentionally interfere with the relationship
of the Sub-Manager with, or endeavor to entice away from the Sub-Manager, any person who during the term of the Agreement is,
or during the preceding one-year period, was a partner, joint venturer or client of the Sub-Manager.

 

26.           Brand
Usage. The Sub-Manager conducts its business under, owns all rights to, and has proprietary interests in the names “Levine
Leichtman,” “Levine Leichtman Capital Partners,” and “Levine Leichtman Strategic Capital” as well
as the trademark “LL” and the “LL” design (collectively, the “Brand”). 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-Manager services are being
provided to the Company under the terms of this Agreement. The Sub-Manager hereby grants a non-exclusive, non-transferable, and
non-sublicensable license to the Manager and the Company for the use of the Brand solely as permitted in the foregoing sentence.
The Manager agrees to control the use of such Brand in accordance with the standards and policies as established between the Manager
and the Sub-Manager. The Sub-Manager reserves the right to terminate this license immediately upon written notice for any reason,
including if the usage is not in compliance with the standards and policies. Notwithstanding the foregoing, the term of the license
granted under this Section shall be for the term of this Agreement only, including renewals and extensions, and the right to use
the Brand as provided herein shall terminate immediately upon the termination of this Agreement or the relationship between the
Manager and the Sub-Manager. The Company and the Manager each agree that the Sub-Manager is the sole owner of the Brand, and any
and all goodwill in the Brand arising from the Company’s use shall inure solely to the benefit of the Sub-Manager. Without
limiting the foregoing, this license shall have no effect on the Company’s ownership rights of the works within which the
Brand shall be used.

 

    - 20 -

     

    

 

27.           Construction.
The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, state, local, or foreign statue or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. As used herein: (a) words in the singular shall be
held to include the plural and vice versa; (b) the terms “hereof,” “herein,” and “herewith”
and words of similar import shall, unless otherwise stated be construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement; (c) the terms “include,” “includes” and “including” and words
of like import will be deems to be followed by the words “without limitation;” (d) unless the context otherwise requires,
the word “or” is not exclusive; and (e) unless the context otherwise requires, any reference to a “party”
means the Manager, on the one hand, and the Sub-Manager, on the other hand.

 

[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

 

    - 21 -

     

    

 

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

 

	 	CNL STRATEGIC CAPITAL MANAGEMENT, LLC
	 	 	 
	 	By:	/s/Tammy
    J. Tipton
	 		Name: Tammy J.
    Tipton
	 		Title: Chief Financial
    Officer
	 	 	 
	 	LEVINE LEICHTMAN STRATEGIC CAPITAL, LLC
	 	 	 
	 	By:	/s/David Wolmer
	 		Name: David Wolmer
	 		Title: Vice President

 

Agreed
and acknowledged for the purpose of its rights and obligations under Sections 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 18, 19,
20 and 26 only:

 

CNL
Strategic Capital, LLC

  

	By:	/s/ Chirag
    J. Bhavsar	 
	 	Name: Chirag
    J. Bhavsar	 
	 	Title: Chief Executive Officer	 

 

[Signature
Page to Sub-Management Agreement]CNL Strategic Capital, LLC S-1

Exhibit 10.3

 

 

FORM OF ESCROW AGREEMENT 

 

This ESCROW AGREEMENT
(this “Agreement”) is dated this [___] day of [________], 2018, by and among CNL Strategic Capital, LLC, a Delaware
limited liability company (the “Company”), UMB Bank, N.A. (the “Escrow Agent”) and CNL Securities
Corp. (the “Managing Dealer”), (collectively, the “Parties”). This Agreement shall be effective
as of the effective date of the Company’s registration statement filed with the Securities and Exchange Commission containing
the Prospectus (as defined below) (the “Effective Date”).

 

WHEREAS,
the Company proposes to offer and sell, on a best-efforts basis through the Managing Dealer, in its capacity as the managing dealer,
and selected broker-dealers that are registered with the Financial Industry Regulatory Authority or intermediaries that are exempt
from such broker-dealer registration (the Managing Dealer and such intermediaries are hereinafter referred to collectively as the
“Participating Broker-Dealers”), the Company’s shares of Class A, Class T, Class D, and Class I
limited liability interests (the “Shares”), on a best-efforts basis, for at
least $2,000,000 and up to $1,100,000,000 of gross offering proceeds (including the shares of its Class A, Class T and Class I
common stock to be offered and sold pursuant to the Company’s dividend reinvestment plan), at an initial purchase price of
up to $27.32 per Class A share, $26.25 per Class T share, $25.00 per Class D and $25.00 per Class I share (the “Offering”)
pursuant to an offering prospectus as amended from time to time and filed with the Securities and Exchange Commission as part of
a registration statement file no. 333-[ ], including amended for additional share classes (hereinafter the “Prospectus”);
and

 

WHEREAS, the Company
has agreed that the subscription price paid by subscribers for Shares (with interest) will be promptly refunded in full to such
subscribers if subscriptions and payment for an aggregate of at least $2,000,000 in Shares of the Company in the Offering or in
separate private offering transactions have not been received on or before the date that is one year from the Effective Date (the
“Outside Date”); and

 

WHEREAS, the Company
has also engaged the Escrow Agent to act as escrow agent in connection with the Company’s private offering (the “Private
Offering”) pursuant to the Escrow Agreement dated June [ ], 2017 (the “Private Offering Escrow Agreement”);
and

 

WHEREAS, the Company
desires to establish an escrow account for the Offering as further described herein in which funds received from subscribers will
be deposited in such account 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 had engaged DST Systems, Inc. (“DST”) to receive, examine for “good order” and facilitate subscriptions
into the Escrow Account as further described herein and to act as record keeper, maintaining on behalf of the Escrow Agent the
ownership records for the escrow account (the “Processing Agent”); and

 

WHEREAS, in so acting,
DST shall be acting solely in the capacity as the Processing Agent for the Escrow Agent and not in any capacity on behalf of the
Company or the Managing Dealer, nor shall the Company or the Managing Dealer 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, in order to
subscribe for Shares, a subscriber must deliver an executed subscription agreement in substantially the form attached as an exhibit
to the registration statement encompassing the Prospectus, along with the full amount of its subscription, subject to volume discounts
or other discounts, as applicable: (i) by check in U.S. dollars or (ii) by wire transfer of immediately available funds in U.S.
dollars (collectively, the “Subscription Payment”). The Company or the Managing Dealer shall instruct any Participating
Broker-Dealers that any such wire transfers shall be in accordance with the instructions provided on Exhibit B hereto.

 

     

     

    

 

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:

 

		1.	Effective Date. This Agreement shall be effective on the date of this Agreement (the “Effective
Date”).

 

		2.	Establishment of Escrow Account. On or prior to the commencement of the Effective Date,
the Company shall establish a deposit account with the Escrow Agent (the “Escrow Account”). All monies deposited in
the Escrow Account, together with any interest earned thereon, are hereinafter referred to as the “Escrowed Funds.”
The initial escrow period (the “Initial Escrow Period”) shall commence upon the effectiveness of this Agreement and
shall continue until the earlier of (i) the date upon which the Escrow Agent receives written confirmation from the Company that
the Company has raised an aggregate of at least $2,000,000 of gross proceeds either (a) in the Offering or (b) in separate private
offering(s) of the Company’s shares occurring prior to or concurrent with the Offering (the “Minimum Proceeds”),
(ii) the Outside Date, or (iii) the date upon which the Escrow Agent receives written confirmation from the Company of the termination
of the Offering prior to the receipt of the Minimum Proceeds. The Initial Escrow Period together with the Post Escrow Break Period
(as defined in Section 5(b)) shall collectively be referred to as the “Escrow Period.” The Escrow Account shall be
an interest bearing account until notified by the Company after which time the Escrow Account shall not be an interest-bearing
account and at such time all amounts deposited into the Escrow Account shall be held un-invested. Upon meeting the minimum offering
period and breaking the Initial Escrow period, all interest earned on the Escrowed Funds shall be held separate and allocated to
the Company.

 

		3.	Deposits into the Escrow Account and Transmission of Subscription Documents.

 

		(a)	Deposits
                                         in Escrow Account. During the Escrow Period, persons subscribing to purchase Shares
                                         will be instructed by the Company and the Participating Broker-Dealers to make
                                         checks for subscriptions payable to the order of “UMB Bank, N.A., as EA for CNL
                                         Strategic Capital, LLC” or any variation thereof permitting a deposit in the Escrow
                                         Account if accompanied by a corresponding subscription agreement. Completed subscription
                                         agreements and checks in payment for the purchase price shall be remitted to the Processing
                                         Agent at the address designated for the receipt of such agreements and funds; and, drafts
                                         or wires 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 Managing
                                         Dealer or other Participating Broker-Dealers transmitting monies and subscriptions from
                                         subscribers) for the payment of Shares to the Escrow Agent for deposit in the Escrow
                                         Account no later than the end of the business day on which such monies are received by
                                         the Processing Agent. Any Subscription Payments received prior to the time, if any, that
                                         the Escrowed Funds are deliverable to the Company, and that are made payable to a party
                                         other than the Escrow Agent shall be promptly returned to the Participating Broker-Dealer
                                         who submitted the Subscription Payment. Completed subscription agreements and checks
                                         shall be delivered by the Participating Broker-Dealer to the Processing Agent no later
                                         than the close of business on the first business day following their receipt by the Participating
                                         Broker-Dealers; provided, however, if the Participating Broker-Dealers receives subscription
                                         agreements and checks at a branch office and final supervisory review is conducted at
                                         a different location (the “Final Review Office”), then the branch office
                                         shall transmit the subscription agreements and checks to the Final Review Office by the
                                         close of business on the first business day following their receipt by the branch office
                                         and the Final Review Office shall review the subscription agreements and check to ensure
                                         their proper execution and form and, if they are acceptable, deliver the subscription
                                         agreements and the funds to the Processing Agent by the close of business on the first
                                         business day after their receipt by the Final Review Office. All Escrowed Funds shall
                                         be held in the Escrow Account until such funds are disbursed in accordance with Section
                                         5. Prior to the disbursement
                                         of Escrowed Funds, none of the Escrow Agent, the Processing Agent or the Company 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, nor be subject to the debts or offsets of the Company, its affiliates,
                                         the Escrow Agent, the Processing Agent or Participating Broker-Dealers. 

 

    2 

     

    

 

		(b)	Subscription Agreements. 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 subscription amount paid by such subscriber
for such Shares.

 

		4.	Collection Procedure for Subscription Payments.

 

		(a)	The Escrow Agent is hereby instructed by the Company to forward each Subscription Payment for Federal
Reserve Bank clearing and upon collection of the proceeds of each Subscription Payment, to deposit the collected proceeds into
the Escrow Account.

 

		(b)	The Escrow Agent will timely notify the Company and the Processing Agent in writing via mail, email
or facsimile of any Subscription Payment returned to the subscriber, and the Escrow Agent is authorized to debit the Escrow Account
in the amount of such returned Subscription Payment and direct the Processing Agent to delete the appropriate account from the
records maintained by the Processing Agent.

 

		(c)	In the event that the Company 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 or the Processing Agent of written notice of such rejection, promptly cause the issuance of a refund payment by
bank check to the rejected or withdrawing subscriber, with interest or income thereon, if applicable. If the Escrow Agent has not
yet collected funds for such subscription but has submitted such subscription for clearing, the Escrow Agent shall promptly cause
the issuance of a payment by bank check in the amount of such Subscription Payment to the rejected or withdrawing subscriber only
after the Escrow Agent has cleared such funds. If the Escrow Agent has not yet submitted the Subscription Payment relating to the
subscription of the rejected or withdrawing subscriber, the Escrow Agent shall promptly cause such Subscription Payment to be remitted
to the drawer of the Subscription Payment submitted by or on behalf of the subscriber.

 

    3 

     

    

 

		(d)	In the event that money is deposited into the Escrow Account in error, the Escrow Agent shall notify
the Company and the Processing Agent in writing via mail, email or facsimile of any such error and promptly cause the issuance
of a refund payment by bank check to the appropriate party only after the Subscription Payment has cleared.

 

		5.	Distribution of Escrowed Funds.

 

		(a)	Break Escrow – Initial Closing

 

(i) Upon receipt of the Break Escrow
Letter (as defined in Section 5(a)(ii) from the Company to the Escrow Agent and the Processing Agent by 3:00 P.M. Eastern Time
that the Company has raised the Minimum Proceeds, and contingent upon the prior day’s notification by the Company to the
Escrow Agent and the Processing Agent of the Company’s best efforts at an estimate of the amount of Escrowed Funds anticipated
to be released from the Escrow Account, the Escrow Agent will release such Escrowed Funds that day from the Escrow Account to the
Company’s designated account.

 

(ii) A letter from an officer of
the Company to the Processing Agent and the Escrow Agent certifying that the Minimum Proceeds have been timely subscribed shall
constitute sufficient evidence for the purpose of this Agreement that such event has occurred (the “Break Escrow Letter”).
The current form of the Break Escrow Letter is attached hereto as Exhibit C. The Break Escrow Letter shall indicate (i)
the date on which the Company has raised the Minimum Proceeds (the “Break Escrow Date”) and (ii) the wire amount, in
U.S. dollars, which represents the amount of subscriptions determined to be in good and proper order “Good Order Funds”),
and (iii) the Company’s designated account for such released Escrowed Funds.

 

(iii) If the Escrow Agent has not
received a Break Escrow Letter on or prior to the Outside Date, the Escrow Agent shall cause the Escrowed Funds to be promptly
returned to the respective subscribers in amounts equal to the subscription amount theretofore paid by each of them, with interest
and without deduction, penalty or expense to the subscriber. The Escrow Agent shall notify the Processing Agent, the Company and
the Managing Dealer of any such return of subscription amounts. The purchase money returned to each subscriber shall be free and
clear of any and all claims of the Company, the Processing Agent, the Escrow Agent, the Participating Broker-Dealers or any of
their creditors.

 

		(b)	Post Escrow Break Period. From and after the Break Escrow Date (the “Post Escrow Break Period”),
the Escrow Agent shall periodically transfer to the Company’s designated account, the Escrowed Funds pursuant to standing
instructions from the Company as agreed among the Company, the Escrow Agent and the Processing Agent from time to time.

 

		(c)	The Company hereby directs the Escrow Agent to provide, and agrees to provide the Processing Agent
with all electronic files and information needed by the Processing Agent to maintain ownership records for the Company’s
common stock.

 

    4 

     

    

 

		6.	Liability of Escrow Agent and Processing Agent.

 

		(a)	In performing any of their respective duties under this Agreement, or upon the claimed failure
to perform their respective duties hereunder, the Escrow Agent and the Processing Agent shall not be liable to anyone for any damages,
losses, or expenses that either may incur as a result of either so acting, or failing to act; provided, however, the Escrow Agent
shall be liable for damages, losses, and expenses, including, without limitation, reasonable costs of investigation and counsel
fees and disbursements that may be incurred by the Company arising out of its or the Processing Agent’s negligence or willful
misconduct under this Agreement. The Escrow Agent may consult with counsel in the event of any dispute or question as to the construction
of any of the provisions hereof or its duties hereunder, provided the Escrow Agent has, to the extent permitted by law, given advanced
written notice to the Company. 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 believe such document to be genuine. In no event shall the Escrow Agent be liable for incidental,
indirect, special, consequential or punitive damages of any kind whatsoever (including but not limited to lost profits), even if
the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

		(b)	The Company hereby agrees to indemnify and hold harmless the Escrow Agent and the Processing Agent
(each, an “Indemnitee”) 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 performance of its obligations under
this Agreement; provided, however, that the Company shall not indemnify either Indemnitee for any such losses, claims,
damages, or expenses arising out of such Indemnitee’s negligence or willful misconduct.

 

		(c)	If any dispute ensues between or among 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 proceedings
may be brought in any such court as the Escrow Agent shall determine has jurisdiction. The Company shall indemnify the Escrow Agent
or Processing Agent against their reasonable court costs and attorneys’ fees incurred in filing such legal proceedings.

 

		7.	Inability to Deliver. In the event that any Subscription 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 promptly to notify the Company of such event.

 

    5 

     

    

 

		8.	Notice. 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 Capital, LLC 
	 	CNL Center at City Commons
	 	 
	 	450 South Orange Avenue
	 	Orlando, Florida 32801
	 	Attention: President
	 	Copy to: Legal Counsel
	 	Facsimile: (407) 540-7000
	 	 
	If to the Escrow Agent:	UMB Bank, N.A.
	 	Corporate Trust & Escrow Services
	 	1010 Grand Blvd., 4th Floor
	 	Mail Stop: 1020409
	 	Kansas City, Missouri 64106
	 	Attention: Lara L. Stevens
	 	Facsimile: (816) 860-3029
	 	 
	If to the Processing Agent:	DST Systems, Inc.
	 	210 W. 10th Street
	 	Kansas City, MO 64105
	 	Attention: CNL Strategic Capital, LLC
	 	Facsimile: 877-694-1116 
	 	 
	If to the Managing Dealer:	CNL Securities Corp.
	 	CNL Center at City Commons
	 	450 South Orange Avenue
	 	Orlando, Florida 32801
	 	Attention: Deputy General Counsel
	 	Facsimile: (407) 423-2894

  

		9.	Fees to Escrow Agent. In consideration of the services to be provided by the Escrow Agent
hereunder, the Company agrees to pay the fees and expenses to the Escrow Agent as outlined in Schedule I hereto which
Schedule I permits reasonable fees for the performance of extraordinary services and reimbursement for reasonable extraordinary
costs in the event that it should become necessary for the Escrow Agent to perform extraordinary services not contemplated by this
Agreement and the Escrow Agent shall, to the extent permitted by law make its best efforts to provide prior written notice before
the incurrence of any such expenses. 

 

		10.	Third Party Beneficiaries. 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.

 

    6 

     

    

 

		11.	Termination of the Escrow Agreement. This Agreement, except for Sections 6, 14 and this
Section 11, 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 the Company or 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.

 

		12.	Patriot Act Compliance; OFAC Search Duties. The Company shall provide to Escrow Agent upon
the execution of this Agreement Forms W-9 and any other 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 Managing Dealer shall provide, at
the request of the Escrow Agent any documentation reasonably requested to comply with the USA Patriot Act of 2001, 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.

 

		13.	Confidentiality.

 

		(a)	The Company and the Managing Dealer each agree 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. The Escrow Agent agrees
it has and shall maintain a commercially reasonable program of customer privacy. The Escrow Agent agrees to treat investor information
as confidential and will promptly notify the Company of any breaches of security or loss of confidential customer information in
respect of investors in the Company.

  

		(b)	The Escrow Agent and Processing Agent shall keep strictly confidential all investor information
sent to it unless such material is required to be disclosed pursuant to any applicable law, regulation, judicial or administrative
order, decree or subpoena, or request by a regulatory organization having authority pursuant to the law. If the Escrow Agent is
compelled—in the absence of a protective order or other remedy—to disclose the investor information, the Escrow Agent
may without liability disclose the investor information that is required but must provide notice to the Company and exercise commercially
reasonable efforts (at the sole expense of the Company) to preserve the confidential treatment of the investor information. Despite
the foregoing, however, nothing in this Agreement prohibits, prevents, or limits the Escrow Agent from disclosing any subscriber
information, without notice to or consent of the Company, if the disclosure is made to a supervisory or governmental authority
or a self-regulatory organization in the course of any examination, inquiry, or audit of the Company or an investor or any of the
Company’s or investor’s representatives or businesses, provided that, to the extent permitted by law, the Escrow Agent
has given notice to the Company of such requirements.

 

    7 

     

    

 

		14.	General.

 

		(a)	This Agreement shall be interpreted, construed and enforced in all respects in accordance with
the internal laws of the State of Delaware applicable to contracts to be made and performed entirely in said state.

 

		(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.

 

		(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.
The parties acknowledge that the parties have entered into Private Offering Escrow Agreement and that such agreement: (i) covers
subject matter that is separate and distinct subject matter from this Agreement, (ii) was entered into by each party with mutual
and sufficient consideration than the consideration for this Agreement, and (iii) should not be integrated with this Agreement.

 

		(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. Notwithstanding the foregoing, Exhibit B and Exhibit C, which is incorporated in and attached hereto, may be modified
without such written instrument. Rather, Exhibit B and Exhibit C may be amended through the mutual agreement of all parties hereto
as expressed via written fax or email. 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 of the breach
of any other terms of this Agreement.

 

		(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, 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 where acceptable under applicable
law.

 

		(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.

 

		(g)	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. Subject to
the foregoing, this Agreement shall be fully binding upon, inure to the benefit of, and be enforceable by, the parties hereto and
their respective successors and permitted assigns.

 

    8 

     

    

 

		(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.

 

		(i)	This Agreement shall not be construed against the party preparing it and shall be construed as
if all parties had jointly prepared this Agreement and it shall be deemed their joint work product. As a result, any rule of construction
that a document is to be construed against the drafting party shall not be applicable.

 

		15.	Representation of the Company. 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 Escrow Agent or Processing 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 Escrow
Agent or Processing 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 Escrow Agent or Processing Agent for the limited purposes herein set forth.

 

		16.	Resignation of Escrow Agent or Processing Agent. At any time, the 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
Escrow Agent or (ii) sixty (60) days following the date upon which notice was mailed. Upon the effective date of such resignation
all amounts then held by the Escrow Agent hereunder shall be delivered by it to such successor Escrow Agent as has been designated
in writing by the Company. To the extent no successor has been appointed, the Escrow Agent shall be entitled to return such funds
to the Company. Until such time as the Escrow Agent has resigned in accordance herewith, the Escrow Agent shall perform its duties
hereunder in accordance with the terms of this Agreement.

 

		17.	Force Majeure. 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 such party’s
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.

 

(Signature Page follows)

 

    9 

     

    

 

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

 

	 	CNL STRATEGIC CAPITAL, LLC
	 	 	 
	 	By:	 
	 	Name:
	 	Title:	Authorized Signatory
	 	 	 
	 	UMB BANK, N.A.
	 	 	 
	 	By:	 
	 	Name:	Lara L. Stevens
	 	Title:	Vice President
	 	 	 
	 	CNL SECURITIES CORP.
	 	 	 
	 	By:	
         

	 	Name:	 
	 	Title:	Authorized Signatory

 

    10 

     

    

 

SCHEDULE I

  

Escrow Agent Fee Schedule

  

	Acceptance Fee	 
	Review escrow agreement, establish account	$1,000
	DST Agency Engagement	$250
	 	 
	Annual Fee	 
	Annual Escrow Agent	$2,000
	 	 
	Quarterly Fees	 
	Outgoing Wire Transfer	$15 each
	Daily BAI Recon File to DST	$3.75 per Bus Day
	Daily Wire Ripping to DST	$10 per Bus Day
	Web Exchange Access	$15 per month
	Overnight Delivery/Mailings	$16.50 each

 

Acceptance fee and first year Annual fee
will be payable at the initiation of the escrow. Thereafter, the Quarterly Fees will be billed quarterly in arrears and the Annual
fee will be billed annually in advance. 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 (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage,
shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.

 

     

     

    

 

EXHIBIT A

 

Prospectus dated [__________]

 

     

     

    

 

EXHIBIT B

 

Wiring Instructions 

 

UMB Bank, N.A. 

ABA No: 

Acct No: 

Acct Name: UMB Bank, N.A., as EA for CNL Strategic Capital,
LLC

 

     

     

    

 

EXHIBIT C

  

_______________, 201_ 

UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106 

Facsimile: (816) 860-3029

Attention: [__________] 

  

		Re:	CNL Strategic Capital, LLC (the “Company”)

 

Break Escrow Date: _________________, 2018 

 

Dear Ladies and Gentlemen:

 

The undersigned signatory hereby certifies
to you the following, pursuant to Section 5(a) of the Escrow Agreement among the Company and therein defined Escrow Agent and
Managing Dealer dated as of [___________], 2018 (the “Escrow Agreement”): 

 

1.       He
is the Chief Financial Officer of the Company;

 

2.       At
least $2,000,000 in shares of common stock (the “Shares”) of the Company subscribed for in one or more offerings as
of _______________, 201___ (the “Break Escrow Date”), and $___________ represents the amount good order funds that
have been subscribed in the Company’s offering. The investors who submitted subscriptions that were accepted on or before
the Break Escrow Date should be admitted as shareholders of the Company as of the Break Escrow Date. Thereafter, investors should
be admitted as shareholders at such time as their funds are released from the Escrow Account upon written authorization received
by the Escrow Agent from the Issuer. The Company also instructs the Escrow Agent that as of the Break Escrow Date, the Escrow Account
shall not be an interest-bearing account.

  

Please contact the undersigned should
you have any questions at (407) _____________. 

 

Very truly yours, 

CNL Strategic Capital, LLC 

By:

  

Chief Financial Officer

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