Document:

CNL Strategic Capital, LLC S-1/A

Exhibit 10.1 

 

 

 

 SECOND AMENDED
AND RESTATED 

 

MANAGEMENT
AGREEMENT

 

 

 

     

    

    

 

TABLE
OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	Duties of the Manager	1
	2.	Company’s Responsibilities
    and Expenses Payable by the Company	5
	3.	Compensation of
    the Manager and the Sub-Manager	8
	4.	Covenants of the
    Manager	10
	5.	Limitations on Front
    End Fees	11
	6.	Other Activities
    of the Manager	11
	7.	Responsibility of
    Dual Directors, Officers and/or Employees	12
	8.	Indemnification 	12
	9.	Effectiveness, Duration
    and Termination of Agreement	14
	10.	Notices	16
	11.	Amendments	16
	12.	Severability	16
	13.	Counterparts	16
	14.	Entire Agreement;
    Governing Law	17
	15.	Waivers	17
	16.	Third Party Beneficiaries	17
	17.	Survival	17
	18.	Insurance	17
	19.	Gender	17
	20.	Titles not to Affect
    Interpretation	18
	21.	Representations,
    Warranties and Covenants of the Manager	18
	22.	Name	18
	23.	Non-Solicitation	19

 

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 THIS
SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT (the “Agreement”) made as of the 28th day of February,
2018, effective as of the date provided herein, by and between CNL STRATEGIC CAPITAL, LLC, a Delaware limited liability company
(the “Company”), and CNL STRATEGIC CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (the “Manager”). 

 

WHEREAS,
the Company is a newly organized Delaware limited liability company and intends to acquire assets permitted by the terms of its
amended and restated limited liability company agreement, as may be amended from time to time (the “LLC Agreement”);

 

WHEREAS,
the Company desires to avail itself of the experience, source of information, advice, assistance and certain facilities of the
Manager and to have the Manager undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to
the supervision of the Board (as defined below), all as provided herein;

 

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

 

 WHEREAS,
the Company and the Manager have previously entered into a Management Agreement dated as of June 30, 2017, as amended and restated
on February 7, 2018, and the parties now wish to further amend and restate such Management Agreement in its entirety by entering
into this Agreement; and 

 

WHEREAS,
the Manager is willing to undertake to render such services, subject to the supervision of the Board of Directors of the Company
(the “Board”), on the terms and conditions hereinafter set forth.

 

NOW,
THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

 

1.           Duties
of the Manager.

 

(a)          Retention
of Manager. The Company hereby employs the Manager to act as the manager to the Company and its subsidiaries and to manage
the day-to-day operations of the Company and its subsidiaries, subject at all times to the supervision of the Board, for the period
and upon the terms herein set forth:

 

(i)         in
accordance with the business objectives, policies and restrictions that are (x) set forth in the Company’s Private Placement
Memorandum dated June 30, 2017, as amended and/or supplemented from time to time (the “Offering Memorandum”);
(y) contemplated by the Company’s Registration Statement (the “Registration Statement”) on Form S-1 to
be filed with the Securities and Exchange Commission (the “SEC”), as amended from time to time; and (z) otherwise
approved or implemented by the Board;

 

(ii)        during
the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Company’s
certificate of formation and LLC Agreement, in each case as amended from time to time; and

 

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

 

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

 

(i)         provide
research and thought leadership with regard to the Company’s business and acquisition policies and operating company holdings;

 

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

 

(iii)       consult
with the officers and Board and assist the Board in the formulation and implementation of the Company’s financial policies,
and, as necessary, furnish the Board with advice and recommendations with respect to asset acquisitions and dispositions consistent
with the business objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the
Company;

 

(iv)       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 including,
without limitation, the formation and qualification of wholly owned subsidiaries and special purpose vehicles; (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.

 

(v)        determine
the composition of the Company’s businesses and other assets, the nature and timing of the changes therein and the manner
of implementing such changes;

 

(vi)       service
and monitor the Company’s assets, whether such assets are held directly or indirectly;

 

(vii)      arrange
financings and borrowing facilities for the Company;

 

(viii)     upon
request, provide the Board with periodic reports regarding prospective business opportunities;

 

(ix)       from
time to time, or at any time reasonably requested by the Board, make reports to the Board regarding (a) the Manager’s performance
of services to the Company under the terms of this Agreement, and (b) the Sub-Manager’s (defined below) performance of services
under the Sub-Management Agreement (defined below);

 

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(x)         provide
foreign currency management (including foreign currency hedging).

 

(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;

 

(xii)       lead
day-to-day equity sales and marketing efforts of the Company in collaboration with the placement agent or dealer manager, as applicable;

 

(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 Company for all investments for which
publicly observable prices are not available;

 

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

 

(xv)       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 Manager’s performance of these undertakings, but subject to the restrictions contained
herein, the Company and its subsidiaries hereby delegate to the Manager, and the Manager hereby accepts, the power and authority
on behalf of the Company and its subsidiaries to effectuate its decisions relating to the Company’s assets, including the
execution and delivery of all documents relating to the Company’s assets. In the event that the Company determines to acquire
debt financing, the Manager shall arrange for such financing on the Company’s behalf, subject to the oversight and approval
of the Board. The Board may, at any time upon the giving of notice to the Manager, modify or revoke the authority set forth in
this Section 1(c).

 

(d)          Acceptance
of Appointment. The 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 limitations contained herein.

 

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(e)          Sub-Manager.
The Manager is hereby authorized to enter into a sub-management agreement (the “Sub-Management Agreement”)
with Levine Leichtman Capital Partners, Inc. or one of its affiliates with expertise in the types of assets the Company intends
to acquire (the “Sub-Manager”) pursuant to which the Manager may delegate and obtain the services of
the Sub-Manager to assist the Manager in fulfilling its responsibilities hereunder. Specifically, the Manager may retain the Sub-Manager
to recommend specific assets based upon the Company’s business objectives, policies and restrictions, and work, along with
the Manager, in sourcing, structuring, negotiating, arranging or effecting the acquisition and disposition of such assets and
monitoring assets on behalf of the Company, subject to the oversight of the Manager and the Company.

 

(i)         The
Manager shall monitor the Sub-Manager to ensure that material information discussed by management of any such Sub-Manager is communicated
to the Board, as appropriate.

 

(ii)        The
Company shall be responsible for any compensation payable and reimbursement of Reimbursable Expenses (as defined in the Sub-Management
Agreement) to the Sub-Manager under the Sub-Management Agreement.

 

(iii)       The
Sub-Manager shall be subject to the same fiduciary duties imposed on the Manager pursuant to this Agreement.

 

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

 

(g)          Record
Retention. The Manager shall maintain and keep all books, accounts and other records of the Manager that relate to activities
performed by the Manager hereunder as required under applicable law and the Advisers Act. Subject to review by and the overall
control of the Board, the Manager shall at all times have access to and maintain all books and records with respect to the Company’s
transactions and shall render to the Board such periodic and special reports as the Board may reasonably request or as may be
required under applicable federal and state law, and shall make such records available for inspection by the Board and its authorized
agents, at any time and from time to time during normal business hours. The Manager agrees that all records that it maintains
for the Company are the property of the Company and shall surrender promptly to the Company any such records upon the Company’s
request and upon termination of this Agreement pursuant to Section 9; provided that the Manager may retain a copy of such
records.

 

(h)          Bank
Accounts. The Manager may establish and maintain one or more bank accounts in its own name for the account of the Company
or in the name of the Company and may collect and deposit into any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board may approve, provided that no funds shall be comingled with the funds of the Manager;
and the Manager shall from time to time render appropriate accountings of such collections and payment to the Board and to the
auditors of the Company.

 

The
following provisions in this Section 1 shall apply for only so long as the Shares (as defined herein) of the Company are not listed
on a national securities exchange.

 

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(i)          State
Administrator. The Manager shall, upon request by an official or agency administering the securities laws of a state, province,
or commonwealth (a “State Administrator”), submit to such State Administrator the reports and statements required
to be distributed to members of the Company pursuant to this Agreement, the Offering Memorandum, the Registration Statement and
applicable federal and state law.

 

(j)          Fiduciary
Duty. It is acknowledged that the Manager shall have a fiduciary responsibility for the safekeeping and use of all funds and
assets of the Company, whether or not in the Manager’s immediate possession or control. The Manager shall not employ, or
permit another to employ, such funds or assets in any manner except for the exclusive benefit of the Company. The Manager shall
not, by entry into an agreement with any member of the Company or otherwise, contract away the fiduciary obligation owed to the
Company and the members of the Company under common law.

 

2.           Company’s
Responsibilities and Expenses Payable by the Company.

 

(a)          Costs.
Subject to the limitations on reimbursement of the Manager as set forth in Sections 2(b) and 2(c) below and any reduction or deferral
of such amounts required to be reimbursed pursuant to any Expense Support and Conditional Reimbursement Agreement currently effective
among the parties hereto (the “Expense Support Agreement”) and in addition to the compensation paid to the
Manager and the Sub-Manager pursuant to Section 1(e)(ii) and Section 3, the Company, either directly or through reimbursement
to the Manager and the Sub-Manager pursuant to the Sub-Management Agreement, shall bear all fees, costs, expenses, liabilities
and obligations relating to the Company’s activities, acquisitions, dispositions, financings and business of its operations
and transactions, including (without limitation) fees and expenses relating to:

 

(i)         expenses
deemed to be “organization and offering expenses” of the Company for purposes of Conduct Rule 2310(a)(12) of the Financial
Industry Regulatory Authority (for purposes of this Agreement, such expenses, exclusive of commissions, any placement agent fee,
any dealer manager fee, the distribution fee and any discounts, are hereinafter referred to as “Organization and Offering
Expenses”) including, without limitation, fees and expenses associated with marketing efforts;

 

(ii)        effecting
sales of the Company’s limited liability company interests (“Shares”) and other securities;

 

(iii)       the
Base Management Fee and the Total Return Incentive Fee (each as defined in Section 3(a) hereof);

 

(iv)       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);

 

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

 

(vi)       fees,
costs, expenses, liabilities and obligations attributable to selling, disposing of or liquidating businesses or investments, including
expenses and fees payable to third parties in connection with identifying and evaluating purchasers, and negotiating and finalizing
terms of a sale, disposition or liquidation;

 

(vii)      business
expenses, including expenses and fees associated with the holding of or operating a business or owning its assets;

 

(viii)     transfer
agent fees;

 

(ix)       fees,
costs and expenses associated with the management, advising, operating, holding of the Company’s assets, including legal,
accounting (to the extent not handled under the Administrative Services Agreement), 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), the Company’s compliance and reporting obligations, and oversight;

 

(x)        federal
and state registration fees;

 

(xi)       federal,
state and local taxes;

 

(xii)      independent
directors’ fees and expenses; costs of proxy statements, shareholders’ reports and notices;

 

(xiii)     fidelity
bond, directors and officers/errors and omissions liability insurance and other insurance premiums;

 

(xiv)     direct
costs such as printing, mailing and long distance telephone and staff; fees and expenses associated with independent audits and
outside legal costs;

 

(xv)      costs
associated with the Company’s reporting and compliance obligations under applicable federal and state securities law;

 

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

 

(xvii)    all
other expenses incurred by the Manager and the Sub-Manager in performing its obligations subject to the limitations included in
this Agreement.

 

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(b)          Limitations
on Reimbursement of Expenses. Excluded from the allowable reimbursement hereunder shall be:

 

(i)         Overhead,
rent or depreciation, utilities, capital equipment, and other administrative items of the Manager; and

 

(ii)        salaries,
fringe benefits and other administrative items incurred or allocated to any executive officer or board member of the Manager or
the Sub-Manager (or any individual performing such services), any executive officer or board member of the Company who is also
an executive officer, board member of employee of the Manager or the Sub-Manager, or a holder of 10% or greater equity interest
in the Manager or the Sub-Manager (or any person having the power to direct or cause the direction of the Manager or the Sub-Manager,
whether by ownership of voting securities, by contract or otherwise).

 

(c)          Periodic
Reimbursement.

 

(i)         Third-party
out-of-pocket expenses incurred by the Manager on behalf of the Company and payable pursuant to this Section 2 shall be reimbursed
no less than monthly to the Manager. The Manager shall prepare a statement (the “Reimbursement Statement”)
documenting such expenses of the Company and the calculation of the reimbursement and shall deliver such statement to the Company
prior to full reimbursement. Such reimbursement shall be made in cash within 30 calendar days following the Manager’s delivery
to the Company of the Reimbursement Statement therefor. The Manager may elect, in its sole discretion, to defer or waive all or
a portion of such reimbursement. Any portion of such deferred reimbursement not taken as to any period shall be deferred without
interest and may be taken by the Manager in any other period prior to the occurrence of a Liquidity Event (as such term is defined
in the LLC Agreement) as the Manager may determine in its sole discretion.

 

(ii)        The
Manager acknowledges and agrees that it will be responsible for the payment of the Company’s Organization and Offering Expenses
to the extent they exceed (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. Notwithstanding the foregoing, the
Company shall reimburse the Manager for Organization and Offering Expenses it may incur on the Company’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 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. For the avoidance of doubt, the Manager’s obligation
to pay 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. 

 

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3.           Compensation
of the Manager and the Sub-Manager. During the Initial Term and any Renewal Term (each as defined in Section 9(a) hereof),
the Company shall pay or cause to be paid to the Manager, and the Sub-Manager pursuant to Section 1(e)(ii), a base management
fee (“Base Management Fee”) and total return incentive fee (“Total Return Incentive Fee”)
as hereinafter set forth subject to any reduction or deferral of any Base Management Fee amounts or Total Return Incentive Fee
amounts pursuant to the terms of the Expense Support Agreement.

 

 (a)          Base
Management Fee. The Base Management Fee shall be calculated for each share class at an annual rate of (i) for the Company’s
Class A shares, Class I Shares, Class D, and Class T Shares (collectively, the “Non-Founder Shares”), 2% of
the product of (x) the Company’s Average Gross Assets and (y) the ratio of non-founder share average Adjusted Capital for
a particular class to total average Adjusted Capital (as defined below) and (ii) for the Company’s Class FA Shares, 1% of
the product of (x) the Company’s Average Gross Assets and (y) the ratio of outstanding Class FA Share average Adjusted Capital
to total average Adjusted Capital, in each case excluding cash, and will be payable monthly in arrears. The Base Management Fee
for a certain month shall be calculated based on the average value of the Company’s gross assets at the end of that month
and the immediately preceding calendar month and shall be due and payable no later than thirty (30) calendar days following the
end of the applicable month. For purposes of the Base Management Fee, the average Adjusted Capital for an applicable class is
computed on the daily Adjusted Capital for such class for the actual number of days in such applicable month. 

 

For
purposes of this Agreement, “Average Gross Assets” means the arithmetic average of the Company’s Gross
Asset Value as of the last day of (1) a calendar month and (2) the immediately preceding calendar month. For purposes of this
Agreement, “Gross Asset Value” means, with respect to any date, the sum of the values of all of the Company’s
assets (excluding cash) as used in determining net asset value pursuant to the Company’s valuation policy as of such date.

 

For
purposes of this Agreement, “Adjusted Capital” is defined as cumulative proceeds generated from sales of shares
of a particular share class (inclusive of proceeds from the sale of shares pursuant to the distribution reinvestment plan), net
of sales load (upfront sales commissions and upfront dealer manager fees), if any, reduced for the full amounts paid for share
repurchases pursuant to the Company’s share repurchase program, if any, for such class.

 

(b)          Total
Return Incentive Fee. The Total Return Incentive Fee shall be based on the Total Return to Shareholders (as defined below)
for each share class of the Company in any calendar year, payable annually in arrears. The Total Return Incentive Fee will be
calculated and will accrue on a quarterly basis, to the extent that it is earned. The Company will perform a final reconciliation
of the Total Return Incentive Fee calculation at the completion of each calendar year and the Total Return Incentive Fee shall
be due and payable to Manager no later than ninety (90) calendar days following the end of the applicable calendar year. The Company
shall pay the Manager a Total Return Incentive Fee for each share class calculated as follows:

 

(i)         Annual
Preferred Return. No Total Return Incentive Fee for any calendar year in which the Total Return to Shareholders of a particular
share class of the Company for such calendar year does not exceed 7%, which is referred to as the “Annual Preferred Return.”

 

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(ii)          Non-Founder
Shares.

 

(A)          100%
of the Total Return to Shareholders payable with respect to each particular share class of Non-Founder Shares, calculated at each
share-class level based on the Total Return to Shareholders on Non-Founder Shares, if any, that exceeds the Annual Preferred Return,
but is less than or equal to 8.75%, or the “Non-Founder Breakpoint,” in any calendar year. This portion of the Total
Return Incentive Fee is referred to as the “Non-Founder Catch Up.”

 

(B)          20%
of the Total Return to Shareholders with respect to each particular share class of Non-Founder Shares, calculated at each share-class
level based on the Total Return to Shareholders on Non-Founder Shares, if any, that exceeds the Non-Founder Breakpoint.

 

(iii)         Class
FA Shares.

 

(A)          100%
of the Total Return to Shareholders payable with respect to the Company’s Class FA Shares, calculated based on the Total
Return Shareholders on Class FA Shares, if any, that exceeds the Annual Preferred Return, but is less than or equal to 7.777%,
or the “Founder Breakpoint,” in any calendar year. This portion of the Total Return Incentive Fee is referred to as
the “Founder Catch Up”.

 

(B)        
10% of the Total Return to Shareholders with respect to Class FA Shares, calculated based on the Total Return to Shareholders
on Class FA Shares, if any, that exceeds the Founder Breakpoint.

 

 For
purposes of this Agreement, the “Total Return to Shareholders” for any calendar quarter is calculated for each
share class as the change in the net asset value for such share class plus total distributions for such share class calculated
based on the average Adjusted Capital for such class as of each calendar quarter end. For purposes of the Total Return Incentive
Fee, the average Adjusted Capital for an applicable class is computed on the daily Adjusted Capital for such class for the actual
number of days in such applicable quarter. The Annual Preferred Return, the Non-Founder Breakpoint and the Founder Breakpoint
are also adjusted for the actual number of days in each calendar year, measured as of each calendar quarter end. 

 

 For
purposes of calculating the Total Return to Shareholders, the change in net asset value is subject to a High Water Mark. For
purposes of this Agreement, the “High Water Mark” is equal to the highest year-end net asset value, for
each share class of the Company since inception, adjusted for any special distributions resulting from the sale of Company
assets, provided such adjustment is approved by the Company’s board of directors. If, as of each calendar year end, the
net asset value for the applicable share class is (A) above the High Water Mark, then, for such calendar year, the Total
Return to Shareholders calculation will include the increase in net asset value for such share class in excess of the High
Water Mark, and (B) if the net asset value for the applicable share class is below the High Water Mark, for such calendar
year, (i) any increase in the per share net asset value will be disregarded in the calculation of Total Return
to Shareholders for such share class while (ii) any decrease in the per share net asset value will be included the
calculation of Total Return to Shareholders for such share class. For the year ending December 31, 2018, the High Water Mark
will be $24.75. 

 

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(c)          Waiver
or Deferral of Fees. The Manager shall have the right to elect to waive or defer all or a portion of the Base Management Fee
and/or Total Return Incentive Fee that would otherwise be paid to it (in addition to any portion of such Base Management Fee and/or
Total Return Incentive Fee reduced or deferred pursuant to the terms of the Expense Support Agreement) only upon written consent
of the Sub-Manager. Prior to the payment of any fee to the Manager, the Company shall obtain written instructions from the Manager
(with the written consent of the Sub-Manager) with respect to any waiver or deferral of any portion of such fees. Any portion
of a deferred fee payable to the Manager and not paid over to the Manager with respect to any calendar month, quarter or year
shall be deferred without interest and may be paid over in any such other month prior to the occurrence of a liquidity event,
as the Manager may determine (with the written consent of the Sub-Manager) upon written notice to the Company.

 

(d)          Detailed
Calculation Policy and Examples. The fees payable to the Manager as set forth in this Agreement shall be calculated using
detailed calculation procedures mutually agreed upon by the Manager and the Sub-Manager, and shall be consistent with the calculation
of such fees as set forth in this Section 3 and as set forth in the Examples included on Exhibit A hereto. For the avoidance
of doubt, the Manager and the Sub-Manager have entered into the Sub-Management Agreement of even date herewith (with the approval
of the Company) that provides, among other things, that the Sub-Manager will receive from the Company 50% of all fees payable
to the Manager under this Section 3.

 

(e)          Other
Fees. The Manager and its affiliates and the Sub-Manager may receive other compensation in connection with the performances
of their services hereunder from parties other than the Company. Such compensation may include transaction fees from the companies
the Company invests in as further described in the Offering Memorandum, the Registration Statement and the Sub-Management Agreement.

 

4.           Covenants
of the Manager.

 

(a)          Reports
to State Administrators. The Manager shall, upon written request of any State Administrator, submit any of the reports and
statements to be prepared and distributed by it pursuant to this Section 4 to such State Administrator.

 

(b)          Reserves.
In performing its duties hereunder, the Manager shall cause the Company to provide for adequate reserves for normal replacements
and contingencies (but not for payment of fees payable to the Manager hereunder) by causing the Company to retain a reasonable
percentage of proceeds from offerings and revenues.

 

(c)          Recommendations
Regarding Reviews. From time to time and not less than quarterly, the Manager must review the Company’s accounts to
determine whether cash distributions are appropriate.

 

(d)          Temporary
Investments. The Manager shall, in its sole discretion, temporarily place proceeds from offerings by the Company into short
term, highly liquid assets which may include obligations of, or obligations guaranteed by, the U.S. government or bank money-market
accounts or certificates of deposit of national or state banks that have deposits insured by the Federal Deposit Insurance Corporation
(including certificates of deposit of any bank acting as a depository or custodian for any such funds) that can be readily sold,
with appropriate safety of principal.

 

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5.            Limitations
on Front End Fees.

 

The
following provisions in this Section 5 shall apply (i) beginning on the effectiveness of a registration statement in connection
with a Qualified Public Offering (as such term is defined in the Offering Memorandum) and (ii) for only so long as the shares
of the Company are not listed on a national securities exchange.

 

(a)          Limitations
on Front End Fees. Notwithstanding anything herein to the contrary:

 

(i)         All
fees and expenses paid by any party for any services rendered to organize the Company and to acquire assets for the Company (“Front
End Fees,” as such term is defined in the LLC Agreement) shall be reasonable and shall not exceed 18% of the gross offering
proceeds, regardless of the source of payment. Any reimbursement to the Manager or any other person for deferred organizational
and offering expenses, including any interest thereon, if any, will be included within this 18% limitation.

 

(ii)        The
Manager shall commit at least eighty-two percent (82%) of the gross offering proceeds towards the investment or reinvestment of
assets and reserves as set forth in Section 4(b) above on behalf of the Company. The remaining proceeds may be used to pay Front
End Fees.

 

6.           Other
Activities of the Manager. The services of the Manager to the Company are not exclusive, and, subject to any agreements with
a Sub-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”),
and the Code of Business Conduct and Ethics of the Company, including the conflicts of interest policy included therein, the 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 us, so long as its services to the Company hereunder are not impaired thereby, and,
subject to any agreement with a Sub-Manager, including the Exclusivity Agreement, and the Code of Business Conduct and Ethics
of the Company, including the conflicts of interest policy included therein, nothing in this Agreement shall limit or restrict
the right of any manager, partner, member (including its members and the owners of its members), officer or employee of the 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); provided, however, that the Manager shall notify the Company prior to being engaged to serve
as a manager to a fund or another company that has a similar business strategy to the Company’s business strategy. The Manager
assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors,
officers, employees and members of the Company are or may become interested in the Manager and its affiliates, as directors, officers,
employees, partners, members, managers or otherwise, and that the Manager and its directors, officers, employees, partners, stockholders,
members and managers, and the Manager’s affiliates are or may become similarly interested in the Company and/or its subsidiaries
as members or otherwise.

 

    11

    

    

 

7.            Responsibility
of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, member, officer or employee of the
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 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 Manager or under the control or direction of the Manager, even if paid by the Manager.

 

8.            Indemnification.

 

 (a)          Indemnification.
The Manager and the Sub-Manager (and their respective officers, managers, partners, members, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Manager or Sub-Manager) shall not be liable to the Company or
any of its subsidiaries, to the Board, or the Company’s or any subsidiary’s members, stockholders or partners for
any action taken or omitted to be taken by the Manager or Sub-Manager in connection with the performance of any of its duties
or obligations under this Agreement or otherwise as a manager or sub-manager of the Company, and the Company and its subsidiaries
shall indemnify, defend and protect the Manager and Sub-Manager (and their respective officers, managers, partners, members, agents,
employees, controlling persons and any other person or entity affiliated with the Manager or 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 Manager’s or Sub-Manager’s duties or
obligations under this Agreement or otherwise as a manager of the Company. Notwithstanding the preceding sentence of this paragraph
to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or
be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Company or any of its subsidiaries,
to the Board, or the Company’s or any subsidiary’s members, shareholders or partners to which the Indemnified Parties
would otherwise be subject by reason of negligence or misconduct in the performance of the Manager’s or Sub-Manager’s
duties and obligations, as applicable, under this Agreement. 

 

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

 

    12

    

    

 

(c)          Limitations
on Indemnification. Notwithstanding Section 8(a) or Section 8(b) to the contrary, the Company and its subsidiaries shall not
provide for indemnification of the Indemnified Parties for any liability or loss suffered by the Indemnified Parties, nor shall
the Company or its subsidiaries provide that any of the Indemnified Parties be held harmless for any loss or liability suffered
by the Company and its subsidiaries, 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 Company and its subsidiaries;

 

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

 

(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 Company’s net assets and not from members of
the Company.

 

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 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;

 

    13

    

    

 

(ii)        The
Indemnified Party undertakes to repay the advanced funds to the Company, together with the applicable legal rate of interest thereon,
in cases in which the Indemnified Party is not found to be entitled to indemnification; and

 

(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.

 

9.            Effectiveness,
Duration and Termination of Agreement.

 

(a)          Term
and Effectiveness. This Agreement shall become effective as of the earlier of (i) the date that the Company has its initial
closing, as such term is defined in the Offering Memorandum, or (ii) the date that the Company meets the minimum offering requirement
as such term is defined in the Registration Statement, and shall remain in effect for one year (the “Initial Term”),
and thereafter shall continue automatically for successive annual periods (a “Renewal Term”); provided that
such continuance is specifically approved at least annually by the vote of a majority of the Company’s independent directors.

 

(b)          Termination.
This Agreement may be terminated at any time, without the payment of any penalty (i) immediately by the Company for Cause (as
defined below) or (ii) by either party upon 120 days written notice; provided that termination by the Company will require
a vote of the Board.

 

With
respect to the termination of this Agreement, “Cause” is defined as (a) fraud, Criminal Conduct, willful misconduct
or willful breach of fiduciary duty by the 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 Manager, which breach is not cured within ninety (90) days of notice given to the Manager specifying
the nature of the alleged breach, or (c) the Manager assigns this Agreement or a Manager Change of Control Event occurs and such
assignment or Manager Change of Control Event, as applicable, does not constitute a Permitted Manager Assignment.

 

With
respect to the termination of this Agreement, “Criminal Conduct” includes a misappropriation of funds committed
by the Manager or an Affiliate thereof with respect to the Company or if a member of the senior management team of the 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 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 Manager Change of Control Event shall not be deemed to have occurred, (a) 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. 

 

(c)          Assignment.
This Agreement shall not be assigned by the Manager other than pursuant to a Permitted Manager Assignment. This Agreement shall
not be assigned by the Company without the prior written consent of the Manager, except 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.

 

(d)          Payments
to and Duties of Manager upon Termination.

 

(i)           After
the termination of this Agreement, the Manager shall not be entitled to compensation for further services provided hereunder except
that it shall be entitled to receive from the Company within 90 days after the effective date of such termination all unpaid reimbursements
and all earned but unpaid fees payable to the Manager prior to termination of this Agreement.

 

(ii)          The
Manager shall promptly upon termination:

 

(A)          Deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by
it, covering the period following the date of the last accounting furnished to the Board;

 

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

 

(C)          Cooperate
with the Company’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.

 

(e)          Survival.
The provisions of Section 9 of this Agreement shall remain in full force and effect, and the Manager shall remain entitled
to the benefits thereof, notwithstanding any termination of this Agreement.

 

    15

    

    

 

10.          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 (3) days after being mailed by registered or certified mail (postage prepaid, return receipt requested),
or (iv) one day after sending an e-mail provided such e-mail is followed by deposit with Federal Express or similar overnight
courier no later than the following day. 

 

(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 10:

 

	To the
    Board and to the Company:	CNL Strategic
    Capital, LLC
	 	CNL Center at City
    Commons
	 	450 South Orange Avenue
	 	Orlando, Florida 32801
	 	Attn:  General
    Counsel
	 	Email:   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
	 	Email:   tammy.tipton@cnl.com;
    holly.greer@cnl.com

 

11.          Amendments.
This Agreement shall not be amended, changed, modified or discharged, in whole or in part, except by an instrument in writing
signed by the parties hereto, or their respective successors or permitted assignees. The Company acknowledges that the Company
and the Manager have agreed pursuant to the terms of the Sub-Management Agreement to not (a) amend, modify or waive, in whole
or in part, this Agreement without the prior written consent of the Sub-Manager, or (b) waive or defer any Base Management Fee
or Incentive Fee due and payable to the Manager under the terms of this Agreement without the prior written consent of the Sub-Manager.

 

12.          Severability.
If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity
or unenforceability shall not affect the remainder hereof.

 

13.          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

    

    

 

14.          Entire
Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes all prior agreements,
understandings and arrangements with respect to the subject matter hereof. Notwithstanding the place where this Agreement may
be executed by any of the parties hereto, this Agreement shall be construed in accordance with the laws of the State of Delaware,
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.

 

15.          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.

 

16.          Third
Party Beneficiaries. Except for the Sub-Manager (with respect to Section 1, 2, 3, 5, 8, 11 and 18) and any Indemnified Party,
such Sub-Manager and Indemnified Party, each being an intended beneficiary of this Agreement, this Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein shall give or be construed to give any person, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.

 

17.          Survival.
The provisions of Sections 8, 9, 14, 22, 23 and this Section 17 shall survive the termination of this Agreement.

 

18.          Insurance.
The Company shall acquire and maintain a directors and officers liability insurance policy or similar insurance policy, which
shall name the Manager and the Sub-Manager each as an additional insured party (each an “Additional Insured Party”
and collectively the “Additional Insured Parties”). Such insurance policy shall include reasonable coverage
from a reputable insurer and have a minimum coverage limit of $10 million and shall be reviewed by the Board on an annual basis
and adjusted, if appropriate, for the size of the Company’s portfolio. The Company shall make all premium payments required
to maintain such policy in full force and effect; provided, however, each Additional Insured Party, if any, shall
pay to the Company, in advance of the due date of such premium, its allocated share of the premium. Irrespective of whether the
Manager or the Sub-Manager is named as an Additional Insured Party on such policy, the Company shall provide the Manager and the
Sub-Manager with 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.

 

19.          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.

 

    17

    

    

 

20.          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.

 

21.          Representations,
Warranties and Covenants of the Manager. The Manager represents, warrants and covenants to 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 is within the Manager’s powers and has been duly authorized
by all necessary actions on the part of the Manager and its members and managers and no action by or in respect of, or filing
with, any governmental body, agency or official is required on the part of the Manager for the execution, delivery or performance
of this Agreement by the Manager. The execution, delivery and performance of this 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 limited liability
company operating agreement or certificate of formation, or (iii) 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 services 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
objectives, 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 Company communicates to the Manager in writing,
provided that the Company will promptly notify the Manager in writing of changes to the matters identified in (ii) or (iii) above.

 

22.          Name.
The Manager has proprietary interests in the name “CNL”. Accordingly, and in recognition of this right, if at any
time the Company ceases to retain the Manager or an affiliate thereof to perform any of the services of the Manager, the Board
will, promptly after receipt of written request from the Manager, (a) cease to conduct business under or use the name “CNL”
or any diminutive thereof, and (b) change the name of the Company to a name that does not contain the name “CNL” or
any other word or words that might, in the sole discretion of the Manager, be susceptible of indication of some form of relationship
between the Company and the Manager or any affiliate thereof. Consistent with the foregoing, it is specifically recognized that
the Manager or one or more of its affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist
other investment vehicles and financial and service organizations having “CNL” as a part of their name, all without
the need for any consent (and without the right to object thereto) by the Company or its Board. The Company’s right to use
the name “CNL” and any associated trademarks, trade names, service marks, and other intellectual property is subject
to the terms of the Brand License Agreement among CNL Intellectual Properties, Inc., a Florida corporation, as licensor, and the
Manager and the Company, as licensee, and the terms of that agreement shall supersede any inconsistent terms of this Agreement.

 

    18

    

    

 

23.          Non-Solicitation.
During the period commencing on the date hereof and ending one year following the termination of this Agreement, the Company 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 Company 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 Company 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.

 

[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

 

    19

    

    

 

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

	 	 	 
	 	CNL
    STRATEGIC CAPITAL, LLC
	 	 
	 	By:	/s/
    Chirag     J. Bhavsar
	 	 	Name:  Chirag
    J. Bhavsar
	 	 	Title:    Chief
    Executive Officer
	 	 	 
	 	CNL
    STRATEGIC CAPITAL MANAGEMENT, LLC
	 	 	 
	 	By:	/s/
    Tammy     J. Tipton
	 	 	Name:  Tammy
    J. Tipton
	 	 	Title:    Chief
    Financial Officer

 

[Signature
Page to Management Agreement]

 

     

    

    

 

EXHIBIT
A – Fee CalculationsCNL Strategic Capital, LLC S-1/A

Exhibit 10.2

 

CNL
STRATEGIC CAPITAL MANAGEMENT, LLC

 

and

 

LEVINE
LEICHTMAN strategic capital, llc

 

	 	 

         SECOND
        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
SECOND AMENDED AND RESTATED SUB-MANAGEMENT AGREEMENT (this “Agreement”), is entered into as of the 28th 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 a Second Amended and Restated Management Agreement with the Company, dated as of February 28, 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,
as amended and restated on February 7, 2018 and the parties now wish to further 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;

 

    - 2 -

     

    

 

(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;

 

    - 3 -

     

    

 

(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.

 

    - 4 -

     

    

 

(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.

 

    - 5 -

     

    

 

(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:

 

    - 6 -

     

    

 

(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.

 

    - 7 -

     

    

 

(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.

 

    - 8 -

     

    

 

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.

 

    - 9 -

     

    

 

(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.

 

    - 10 -

     

    

 

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, 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]

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