Document:

Exhibit 10.1

 

FORM OF SUBSCRIPTION ESCROW AGREEMENT

 

THIS SUBSCRIPTION ESCROW
AGREEMENT dated as of             , 2013 (this “Agreement”), is entered into among Realty Capital Securities, LLC (the “Dealer
Manager”), Phillips Edison – ARC Grocery Center REIT II, Inc. (the “Company”) and UMB Bank,
N.A., as escrow agent (the “Escrow Agent”).

 

WHEREAS, the Company intends to raise
funds from Investors (as defined below) pursuant to a public offering (the “Offering”) for gross proceeds of
not less than $2,000,000 (the “Minimum Amount”) nor more than $2,000,000,000 from the sale of shares
of common stock, par value $0.01 per share, of the Company (the “Securities”), pursuant to the registration
statement on Form S-11 of the Company (No. 333-190588) (as amended, the “Offering Document”) a copy of which
is attached as Exhibit A hereto.

 

WHEREAS, the Company desires to establish
an escrow account with the Escrow Agent for funds contributed by the Investors with the Escrow Agent in accordance with the Offering
Document, to be held for the benefit of the Investors and the Company until such time as (i) in the case of subscriptions received
from residents of Pennsylvania (“Pennsylvania Investors”), aggregate subscriptions from all other Investors
equal $100,000,000 (the “Pennsylvania Minimum Amount”), (ii) in the case of subscriptions received from residents
of Washington (“Washington Investors”), aggregate subscriptions from all other Investors equal $20,000,000
(the “Washington Minimum Amount”) and (iii) in the case of subscriptions received from all other Investors,
aggregate subscriptions from all Investors equal the Minimum Amount, in each case in accordance with the terms and subject to the
conditions of this Agreement.

 

WHEREAS, the Escrow
Agent is willing to accept appointment as escrow agent only for the express duties set forth herein.

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

 

1.          Proceeds
to be Escrowed. On or before the first date of the Offering, the Company shall establish an escrow account with the Escrow
Agent to be invested in accordance with Section 9 hereof entitled “ESCROW ACCOUNT FOR THE BENEFIT OF INVESTORS OF
COMMON STOCK OF PHILLIPS EDISON – ARC GROCERY CENTER REIT II, INC.” (including such abbreviations as may be required
to comply with the Escrow Agent’s systems) (the “Escrow Account”). All checks, wire transfers and other
funds received from subscribers of Securities (“Investors”, which term shall also include Pennsylvania Investors
and Washington Investors unless the context otherwise requires) in payment for the Securities (“Investor Funds”)
will be delivered to the Escrow Agent within one (1) business day following the day upon which such Investor Funds are received
by the Company or its agents, and shall, upon receipt by the Escrow Agent, be retained in escrow by the Escrow Agent and invested
as stated herein. During the term of this Agreement, the Company or its agents shall cause all checks received by and made payable
to it in payment for the Securities to be endorsed in favor of the Escrow Agent and delivered to the Escrow Agent for deposit in
the Escrow Account.

 

The Company shall,
and shall cause its agents to, cooperate with the Escrow Agent in separately accounting for Investor Funds from Pennsylvania Investors
and Washington Investors in the Escrow Account, and the Escrow Agent shall be entitled to rely upon information provided by the
Company or its agents in this regard.

 

The Escrow Agent shall
have no duty to make any disbursement, investment or other use of Investor Funds until and unless it has good and collected funds.
If any checks deposited in the Escrow Account are returned or prove uncollectible after the funds represented thereby have been
released by the Escrow Agent, then the Company shall promptly reimburse the Escrow Agent for any and all costs incurred for such,
upon request, and the Escrow Agent shall deliver the returned checks to the Company. The Escrow Agent shall be under no duty or
responsibility to enforce collection of any check delivered to it hereunder. The Escrow Agent reserves the right to deny, suspend
or terminate participation by an Investor to the extent the Escrow Agent deems it advisable or necessary to comply with applicable
laws or to eliminate practices that are not consistent with the purposes of the Offering.

 

    	 

    	 

    

 

2.          Investors.
Investors will be instructed by the Dealer Manager or any soliciting dealers retained by the Dealer Manager in connection with
the Offering (the “Soliciting Dealers”) to remit the purchase price in the form of checks (hereinafter “instruments
of payment”) payable to the order of, or funds wired in favor of, “UMB BANK, N.A., ESCROW AGENT FOR PHILLIPS EDISON
– ARC GROCERY CENTER REIT II, INC.” Any checks made payable to a party other than the Escrow Agent shall be returned
to the Dealer Manager or Soliciting Dealer that submitted the check. By 12:00 p.m. (EST) the next business day after receipt
of instruments of payment from the Offering, the Company or the Dealer Manager shall furnish the Escrow Agent with a list of the
Investors who have paid for the Securities showing the name, address, tax identification number, the amount of Securities subscribed
for purchase, the amount paid and whether such Investors are Pennsylvania Investors or Washington Investors. The information comprising
the identity of Investors shall be provided to the Escrow Agent in substantially the format set forth in the list of investors
attached hereto as Exhibit B (the “List of Investors”). The Escrow Agent shall be entitled to conclusively
rely upon the List of Investors in determining whether Investors are Pennsylvania Investors or Washington Investors, and shall
have no duty to independently determine or verify the same.

 

When a Soliciting Dealer’s
internal supervisory procedures are conducted at the site at which the subscription agreement and the check for the purchase of
Securities were initially received by Soliciting Dealer from the subscriber, such Soliciting Dealer shall transmit the subscription
agreement and such check to the Escrow Agent by the end of the next business day following receipt of the check for the purchase
of Securities and subscription agreement. When, pursuant to such Soliciting Dealer’s internal supervisory procedures, such
Soliciting Dealer’s final internal supervisory procedures are conducted at a different location (the “Final Review
Office”), such Soliciting Dealer shall transmit the check for the purchase of Securities and subscription agreement to
the Final Review Office by the end of the next business day following Soliciting Dealer’s receipt of the subscription agreement
and the check for the purchase of Securities. The Final Review Office will, by the end of the next business day following its receipt
of the subscription agreement and the check for the purchase of Securities, forward both the subscription agreement and such check
to the Escrow Agent. If any subscription agreement solicited by a Soliciting Dealer is rejected by the Dealer Manager or the Company,
then the subscription agreement and check for the purchase of Securities will be returned to the rejected subscriber within ten
(10) business days from the date of rejection.

 

All Investor Funds
deposited in the Escrow Account shall not be subject to any liens or charges by the Company or the Escrow Agent, or judgments or
creditors’ claims against the Company, until and unless released to the Company as hereinafter provided. The Company understands
and agrees that the Company shall not be entitled to any Investor Funds on deposit in the Escrow Account and no such funds shall
become the property of the Company, or any other entity except as released to the Company pursuant to Sections 3, 4,
or 5 hereto. The Escrow Agent will not use the information provided to it by the Company for any purpose other than to fulfill
its obligations as Escrow Agent hereunder. The Company and the Escrow Agent will treat all Investor information as confidential.
The Escrow Agent shall not be required to accept any Investor Funds which are not accompanied by the information on the List of
Investors.

 

3.          Disbursement
of Funds. Once proceeds from the sale of Securities equal the Minimum Amount (excluding proceeds from Pennsylvania Investors
and Washington Investors), the Company shall notify the Escrow Agent of the same in writing. Further, if the Minimum Amount has
not been sold on or prior to the Termination Date, the Company shall notify the Escrow Agent in writing of such. At the end of
the third business day following the Termination Date (as defined in Section 6), the Escrow Agent shall notify the Company
of the amount of the Investor Funds received. If the Minimum Amount has been obtained on or before the Termination Date, the Escrow
Agent shall promptly notify the Company and, upon receiving acknowledgement of such notice and written instructions from the Company’s
Chief Executive Officer, Co-President or Chief Financial Officer to disburse the Investor Funds, subject to this Section 3,
the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Escrow Account, except for amounts
payable by the Company to the Escrow Agent pursuant to Exhibit D to this Agreement that remain outstanding. The Escrow Agent
agrees that funds in the Escrow Account shall not be released to the Company until and unless the Escrow Agent receives written
instructions to release the funds from the Company’s Chief Executive Officer, Co-President or Chief Financial Officer.

 

    	 

    	 

    

 

If the Company notifies
the Escrow Agent in writing that the Minimum Amount has not been obtained prior to the Termination Date, the Escrow Agent shall,
promptly following the Termination Date, but in no event more than ten (10) business days after the Termination Date, refund to
each Investor by check, funds deposited in the Escrow Account, or shall return the instruments of payment delivered to Escrow Agent
if such instruments have not been processed for collection prior to such time, directly to each Investor at the address provided
on the List of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable
to each Investor’s investment in accordance with the terms and conditions specified herein, except that in the case of Investors
who have not provided an executed Form W-9 or substitute Form W-9 (or the applicable substitute Form W-8 for foreign investors),
the Escrow Agent shall withhold the applicable percentage of the earnings attributable to those Investors in accordance with Internal
Revenue Service (“IRS”) regulations. Notwithstanding the foregoing, the Escrow Agent shall not be required to
remit any payments until funds represented by such payments have been collected by the Escrow Agent.

 

If the Escrow Agent
receives written notice from the Company that the Company intends to reject an Investor’s subscription, the Escrow Agent
shall pay to the applicable Investor(s), within a reasonable time not to exceed ten (10) business days after receiving notice of
the rejection, by first class United States Mail at the address provided on the List of Investors, or at such other address as
shall be furnished to the Escrow Agent by the Investor in writing, all collected sums paid by the Investor for Securities and received
by the Escrow Agent, together with the interest earned on such Investor Funds (determined in accordance with the terms and conditions
specified herein).

 

4.          Disbursement
of Proceeds for Pennsylvania Investors. Notwithstanding the foregoing, proceeds from Pennsylvania Investors will not count
towards meeting the Minimum Amount for purposes of Section 3. Proceeds received from Pennsylvania Investors will not be
released from the Escrow Account until the Pennsylvania Minimum Amount is obtained. If the Pennsylvania Minimum Amount is obtained
at any time prior to the Termination Date, the Escrow Agent shall promptly notify the Company and, upon receiving acknowledgement
of such notice and written instructions from the Company’s Chief Executive Officer, Co-President or Chief Financial Officer,
the Escrow Agent shall disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing proceeds
from Pennsylvania Investors, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit D to this
Agreement that remain outstanding. The Escrow Agent agrees that the Pennsylvania Minimum Amount in the Escrow Account shall not
be released to the Company until and unless the Escrow Agent receives written instructions to release the funds from the Company’s
Chief Executive Officer, Co-President or Chief Financial Officer.

 

If the Pennsylvania
Minimum Amount has not been obtained prior to the Termination Date, upon written instructions from the Company’s Chief Executive
Officer, Co-President or Chief Financial Officer, the Escrow Agent shall promptly refund to each Pennsylvania Investor by check
funds deposited in the Escrow Account, or shall return the instruments of payment delivered to Escrow Agent if such instruments
have not been processed for collection prior to such time, directly to each Pennsylvania Investor at the address provided on the
List of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable to each
Pennsylvania Investor’s investment in accordance with the terms and conditions specified herein, except that in the case
of Investors who have not provided an executed Form W-9 or substitute Form W-9, the Escrow Agent shall withhold the applicable
percentage of the earnings attributable to those Investors in accordance with IRS regulations. Notwithstanding the foregoing, the
Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected by Escrow
Agent.

 

If the Escrow Agent
is not in receipt of evidence of subscriptions accepted on or before the close of business on such date that is 120 days after
the date that the Company first accepts a subscription from a Pennsylvania Investor (which date the Company or the Dealer Manager
will provide to the Escrow Agent in writing) (the “Initial Escrow Period”), and instruments of payment dated
not later than that date, for the purchase of Securities providing for total purchase proceeds from all nonaffiliated sources that
equal or exceed the Pennsylvania Minimum Amount, the Escrow Agent shall promptly notify the Company. Thereafter, the Company or
its agents shall send to each Pennsylvania Investor by certified mail within ten (10) calendar days after the end of the Initial
Escrow Period a notification substantially in the form of Exhibit F. If, pursuant to such notification, a Pennsylvania Investor
requests the return of his or her Investor Funds within ten (10) calendar days after receipt of the notification (the “Request
Period”), the Escrow Agent shall promptly refund directly to each Pennsylvania Investor the collected funds deposited
in the Escrow Account on behalf of such Pennsylvania Investor or shall return the instruments of payment delivered, but not yet
processed for collection prior to such time, to the address provided on the List of Investors, upon which the Escrow Agent shall
be entitled to rely, together with interest income earned as determined in accordance with the terms and conditions specified herein
(which interest shall be paid within five business days after the first business day of the succeeding month). Notwithstanding
the above, if the Escrow Agent has not received an executed Form W-9 or substitute Form W-9 for such Pennsylvania Investor, the
Escrow Agent shall thereupon remit an amount to such Pennsylvania Investor in accordance with the provisions hereof, withholding
the applicable percentage for backup withholding in accordance with IRS regulations, as then in effect, from any interest income
earned on Investor Funds (determined in accordance with the terms and conditions specified herein) attributable to such Pennsylvania
Investor. However, the Escrow Agent shall not be required to remit such payments until the Escrow Agent has collected funds represented
by such payments.

 

    	 

    	 

    

 

The Investor Funds
of Pennsylvania Investors who do not request the return of their Investor Funds within the Request Period shall remain in the Escrow
Account for successive 120-day escrow periods (each a “Successive Escrow Period”), each commencing automatically
upon the termination of the prior Successive Escrow Period, and the Company and Escrow Agent shall follow the notification and
payment procedure set forth above with respect to the Initial Escrow Period for each Successive Escrow Period until the occurrence
of the earliest of (i) the Termination Date, (ii) the receipt and acceptance by the Company of subscriptions for the purchase of
Securities with total purchase proceeds that equal or exceed the Pennsylvania Minimum Amount and the disbursement of the Escrow
Account on the terms specified herein, and (iii) all funds held in the Escrow Account having been returned to the Pennsylvania
Investors in accordance with the provisions hereof.

 

5.          Disbursement
of Proceeds for Washington Investors. Notwithstanding the foregoing, proceeds from Washington Investors will not count towards
meeting the Minimum Amount for purposes of Section 3. Proceeds received from Washington Investors will not be released from
the Escrow Account until the Washington Minimum Amount is obtained. If the Washington Minimum Amount is obtained at any time prior
to the Termination Date, the Escrow Agent shall promptly notify the Company and, upon receiving acknowledgement of such notice
and written instructions from the Company’s Chief Executive Officer, Co-President or Chief Financial Officer, the Escrow
Agent shall disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing proceeds from Washington
Investors, except for amounts payable by the Company to the Escrow Agent pursuant to Exhibit D to this Agreement that remain
outstanding. The Escrow Agent agrees that the Washington Minimum Amount in the Escrow Account shall not be released to the Company
until and unless the Escrow Agent receives written instructions to release the funds from the Company’s Chief Executive Officer,
Co-President or Chief Financial Officer.

 

If the Washington Minimum
Amount has not been obtained prior to the Termination Date, upon written instructions from the Company’s Chief Executive
Officer, Co-President or Chief Financial Officer, the Escrow Agent shall promptly refund to each Washington Investor by check funds
deposited in the Escrow Account, or shall return the instruments of payment delivered to Escrow Agent if such instruments have
not been processed for collection prior to such time, directly to each Washington Investor at the address provided on the List
of Investors. Included in the remittance shall be a proportionate share of the income earned in the account allocable to each Washington
Investor’s investment in accordance with the terms and conditions specified herein, except that in the case of Investors
who have not provided an executed Form W-9 or substitute Form W-9, the Escrow Agent shall withhold the applicable percentage of
the earnings attributable to those Investors in accordance with IRS regulations. Notwithstanding the foregoing, the Escrow Agent
shall not be required to remit any payments until funds represented by such payments have been collected by Escrow Agent.

 

6.          Term
of Escrow. The “Termination Date” shall be the earliest of: (i) , 2014, the one year anniversary of the
date the Offering Document was initially declared effective by the SEC, if the Minimum Amount has not been obtained prior to such
date; (ii) the date on which all funds held in the Escrow Account are distributed to the Company or to Investors pursuant to Section
3 and to Pennsylvania Investors and Washington Investors, pursuant to Sections 4 and 5, respectively, and the
Company has informed the Escrow Agent in writing to close the Escrow Account; (iii) the date the Escrow Agent receives written
notice from the Company that it is abandoning the sale of the Securities; and (iv) the date the Escrow Agent receives notice from
the SEC or any other federal regulatory authority that a stop or similar order has been issued with respect to the Offering Document
and has remained in effect for at least twenty (20) days. After the Termination Date, the Company and its agents shall not deposit,
and the Escrow Agent shall not accept, any additional amounts representing payments by prospective Investors.

 

    	 

    	 

    

 

7.          Duty
and Liability of the Escrow Agent. The sole duty of the Escrow Agent shall be to receive Investor Funds and hold them subject
to release, in accordance herewith, and the Escrow Agent shall be under no duty to determine whether the Company or the Dealer
Manager is complying with requirements of this Agreement, the Offering or applicable securities or other laws in tendering the
Investor Funds to the Escrow Agent. No other agreement entered into between the parties, or any of them, shall be considered as
adopted or binding, in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement may be referred to
herein or deposited with the Escrow Agent or the Escrow Agent may have knowledge thereof, including specifically but without limitation,
the Offering Document or any other document related to the Offering (including the subscription agreement and exhibits thereto),
and the Escrow Agent’s rights and responsibilities shall be governed solely by this Agreement. The Escrow Agent shall not
be responsible for or be required to enforce any of the terms or conditions of the Offering Document or any other document related
to the Offering (including the subscription agreement and exhibits thereto) or other agreement between the Company and any other
party. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request,
consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or
other document, and its sole responsibility shall be to act only as expressly set forth in this Agreement. Concurrent with the
execution of this Agreement, the Company and the Dealer Manager shall each deliver to the Escrow Agent an authorized signers form
in the form of Exhibit C or Exhibit C-1 to this Agreement, as applicable. The Escrow Agent shall be under no obligation
to institute or defend any action, suit or proceeding in connection with this Agreement unless first reasonably indemnified to
its satisfaction. The Escrow Agent may reasonably consult counsel of its own choice with respect to any question arising under
this Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel,
except as otherwise provided herein. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except
to the extent that a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct
was the primary cause of loss. The Escrow Agent is acting solely as escrow agent hereunder and owes no duties, covenants or obligations,
fiduciary or otherwise, to any other person by reason of this Agreement, except as otherwise stated herein, and no implied duties,
covenants or obligations, fiduciary or otherwise, shall be read into this Agreement against the Escrow Agent. In the event of any
disagreement between any of the parties to this Agreement, or between any of them and any other person, including any Investor,
resulting in adverse claims or demands being made in connection with the matters covered by this Agreement, or in the event that
the Escrow Agent is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply
with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such
doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure
or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until (i) the rights of all interested
parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have
been adjudged and all doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified
thereof in writing signed by all such persons. Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the order,
judgment, decree or levy of any court, whether with or without jurisdiction and the Escrow Agent is hereby authorized in its sole
discretion to comply with and obey any such orders, judgments, decrees or levies. If any controversy should arise with respect
to this Agreement, the Escrow Agent shall have the right, at its option, to institute an interpleader action in any court of competent
jurisdiction to determine the rights of the parties. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR
ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN
IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION. The parties
hereto agree that the Escrow Agent has no role in the preparation of the Offering Document or any other document related to the
Offering (including the subscription agreement and exhibits thereto) and makes no representations or warranties with respect to
the information contained therein or omitted therefrom. The Escrow Agent shall have no obligation, duty or liability with respect
to compliance with any federal or state securities, disclosure or tax laws concerning the Offering Document or any other document
related to the Offering (including the subscription agreement and exhibits thereto) or the issuance, offering or sale of the Securities.
The Escrow Agent shall have no duty or obligation to monitor the application and use of the Investor Funds once transferred to
the Company, that being the sole obligation and responsibility of the Company.

 

    	 

    	 

    

 

8.          Escrow
Agent’s Fee. The Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached
hereto as Exhibit D, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder
is intended as full compensation for the Escrow Agent’s services as contemplated by this Agreement; provided, however,
that if (i) the conditions for the disbursement of funds under this Agreement are not fulfilled, (ii) the Escrow Agent renders
any material service not contemplated in this Agreement, (iii) there is any assignment of interest in the subject matter of this
Agreement, (iv) there is any material modification hereof, (v) if any material controversy arises hereunder, or (vi) the Escrow
Agent is made a party to any litigation pertaining to this Agreement, or the subject matter hereof, then the Escrow Agent shall
be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney’s
fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Company. The Company’s
obligations under this Section 8 shall survive the resignation or removal of the Escrow Agent and the assignment or termination
of this Agreement.

 

9.          Investment
of Investor Funds. The Investor Funds shall be deposited in the Escrow Account in accordance with Section 1. The Escrow
Agent is hereby directed to invest all funds received under this Agreement, including principal and interest in, the UMB Bank Money
Market Deposit Account, as directed in writing in the form of Exhibit E to this Agreement. The Escrow Agent shall invest
the Investor Funds in alternative investments in accordance with written instructions as may from time to time be provided to the
Escrow Agent and signed by the Company. In the absence of written investment instructions from the Company to the contrary, the
Escrow Agent is hereby directed to invest the Investor Funds in the UMB Bank Money Market Deposit Account. Notwithstanding the
foregoing, Investor Funds shall not be invested in anything other than “Short Term Investments” in compliance with
Rule 15c2-4 of the Securities Exchange Act of 1934, as amended. The following are not permissible investments: (a) money market
mutual funds; (b) corporate debt or equity securities; (c) repurchase agreements; (d) banker’s acceptance; (e) commercial
paper; and (f) municipal securities. Any interest received by the Escrow Agent with respect to the Investor Funds, including reinvested
interest shall become part of the Investor Funds, and shall be disbursed pursuant to Section 3 and for Pennsylvania Investors
and Washington Investors, pursuant to Sections 4 and 5, respectively.

 

The Escrow Agent shall
be entitled to sell or redeem any such investments as necessary to make any payments or distributions required under this Agreement.
The Escrow Agent shall have no responsibility or liability for any loss which may result from any investment made pursuant to this
Agreement, or for any loss resulting from the sale of such investment. The parties acknowledge that the Escrow Agent is not providing
investment supervision, recommendations, or advice.

 

On or prior to the
date of this Agreement, the Company shall provide the Escrow Agent with a certified tax identification number by furnishing an
appropriate IRS form W-9 or W-8 (or substitute form W-9 or W-8) and other forms and documents that the Escrow Agent may reasonably
request, including without limitation a tax form for each Investor. The Company understands that if such tax reporting documentation
is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, to
withhold a portion of any interest or other income earned on the Investor Funds pursuant to this Agreement. For tax reporting purposes,
all interest and other income from investment of the Investor Funds shall, as of the end of each calendar year and to the extent
required by the IRS, be reported as having been earned by the party to whom such interest or other income is distributed, in the
year in which it is distributed.

 

The Company agrees
to indemnify and hold the Escrow Agent harmless from and against any taxes, additions for late payment, interest, penalties and
other expenses that may be assessed against the Escrow Agent on or with respect to any payment or other activities under this Agreement
unless any such tax, addition for late payment, interest, penalties and other expenses shall be determined by a court of competent
jurisdiction to have been caused by the Escrow Agent’s gross negligence or willful misconduct. The terms of this Section
shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.

 

10.          Notices.
All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission
if sent by facsimile/email transmission bearing an authorized signature to the facsimile number/email address given below, and
written confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal
Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service, or (d) on the
fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed, return receipt requested, to the party as follows:

 

    	 

    	 

    

 

If to the Company:

 

Phillips Edison – ARC Grocery Center REIT II,
Inc.

11501
Northlake Drive

Cincinnati, Ohio 45249

Fax: (513) 965-5660

Attention: R. Mark Addy, Co-President and Chief Operating Officer

 

with a copy to:

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036-8299

Telephone: (212) 969-3000

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

 

If to the Dealer Manager:

 

Realty Capital Securities, LLC

Three Copley Place

Suite 3300

Boston, Massachusetts 02116

Attention: Louisa H. Quarto, President

 

with a copy to:

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036-8299

Telephone: (212) 969-3000

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

 

and:

 

Phillips Edison – ARC Grocery Center REIT II,
Inc.

11501
Northlake Drive

Cincinnati, Ohio 45249

Fax: (513) 965-5660

Attention: R. Mark Addy, Co-President and Chief Operating Officer

 

If to Escrow Agent:

 

UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106

Attention: Lara Stevens, Corporate Trust

Telephone: (816) 860-3017

Facsimile: (816) 860-3029

Email: lara.stevens@umb.com

 

Any party may change its address for purposes
of this Section by giving the other party written notice of the new address in the manner set forth above.

 

    	 

    	 

    

 

11.         Indemnification
of Escrow Agent. The Company and the Dealer Manager hereby agree to, jointly and severally, indemnify, defend and hold harmless
the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable
counsel fees and expenses, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against
the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless
such loss, liability, cost, damage or expense is finally determined by a court of competent jurisdiction to have been primarily
caused by the gross negligence or willful misconduct of the Escrow Agent. The terms of this Section shall survive the termination
of this Agreement and the resignation or removal of the Escrow Agent.

 

12.         Successors
and Assigns. Except as otherwise provided in this Agreement, no party hereto shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other parties hereto and any such attempted assignment without such prior written
consent shall be void and of no force and effect. This Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties hereto. Any corporation or association into which the Escrow Agent may be converted or merged,
or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the successor Escrow Agent under this
Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution
or filing of any instrument or paper or the performance of any further act.

 

13.         Governing
Law; Jurisdiction. This Agreement shall be construed, performed, and enforced in accordance with, and governed by, the internal
laws of the State of New York, without giving effect to the principles of conflicts of laws thereof.

 

14.         Severability.
If any provision of this Agreement is declared by any court or other judicial or administrative body to be null, void, or unenforceable,
said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain
in full force and effect.

 

15.         Amendments;
Waivers. This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties, or conditions
hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving
compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or warranty
contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver
of any such condition, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement.
The Company and the Dealer Manager agree that any requested waiver, modification or amendment of this Agreement shall be consistent
with the terms of the Offering.

 

16.         Entire
Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the escrow
contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with
regard to such escrow.

 

17.         Section
Headings. The section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

 

18.         Counterparts.
This Agreement may be executed (including by facsimile transmission) in counterparts, each of which shall be deemed an original,
but all of which shall constitute the same instrument.

 

19.         Resignation.
The Escrow Agent may resign upon 30 days’ advance written notice to the parties hereto. If a successor escrow agent is not
appointed by the Company within the 30-day period following such notice, the Escrow Agent may petition any court of competent jurisdiction
to name a successor escrow agent, or may interplead the Investor Funds with such court, whereupon the Escrow Agent’s duties
hereunder shall terminate.

 

    	 

    	 

    

 

20.         References
to Escrow Agent. Other than the Offering Document, any of the other documents related to the Offering (including the subscription
agreement and exhibits thereto) and any amendments thereof or supplements thereto, no printed or other matter in any language (including,
without limitation, notices, reports and promotional material) which mentions the Escrow Agent’s name or the rights, powers,
or duties of the Escrow Agent shall be issued by the Company or the Dealer Manager, or on the Company’s or the Dealer Manager’s
behalf, unless the Escrow Agent shall first have given its specific written consent thereto. Notwithstanding the foregoing, any
amendment or supplement to the Offering Document or any other document related to the Offering (including the subscription agreement
and exhibits thereto) that revises, alters, modifies, changes or adds to the description of the Escrow Agent or its rights, powers
or duties hereunder shall not be issued by the Company or the Dealer Manager, or on the Company’s or Dealer Manager’s
behalf, unless the Escrow Agent has first given specific written consent thereto.

 

21.         Patriot
Act Compliance; OFAC Search Duties. The Company shall provide to the Escrow Agent upon the execution of this Agreement any
documentation requested and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001,
as amended from time to time. The Escrow Agent, or its agent, shall complete a search with the Office of Foreign Assets Control
(“OFAC Search”), in compliance with its policy and procedures, of each subscription check for the purchase of
Securities and shall inform the Company if a subscription check for the purchase of Securities fails the OFAC Search.

 

 IN WITNESS
WHEREOF, the parties hereto have caused this Subscription Escrow Agreement to be executed the date and year first set forth above.

 

PHILLIPS EDISON – ARC GROCERY CENTER
REIT II, INC.

 

	By:	 	 
	 	Name: R. Mark Addy	 
	 	Title: Co-President and Chief Operating Officer
	 	 	 
	REALTY CAPITAL SECURITIES, LLC	 
	 	 	 
	By:	 	 
	 	Name: Louisa H. Quarto	 
	 	Title: President	 
	 	 	 
	UMB BANK, N.A., as Escrow Agent	 
	 	 	 
	By:	 	 
	 	Name: Lara L. Stevens	 
	 	Title: Vice President	 

 

    	 

    	 

    

 

Exhibit A

 

Copy of Offering Document

 

    	 

    	 

    

 

Exhibit B

 

List of Investors

 

Pursuant to the Subscription Escrow Agreement
dated as of             , 2013, among Realty Capital Securities, LLC, Phillips Edison – ARC Grocery Center REIT II, Inc. (the “Company”),
and UMB Bank, N.A. (the “Escrow Agent”), the Company hereby certifies that the following Investors have paid
money for the purchase of shares of the Company’s common stock, par value $0.01, and the money has been deposited with the
Escrow Agent:

 

		1.	Name
of Investor

Address

Tax Identification Number

Amount of Securities subscribed for

Amount of money paid and deposited with Escrow Agent

Is Investor a resident of Pennsylvania (Yes or No)?

Is Investor a resident of Washington (Yes or No)?

 

		2.	Name
of Investor

Address

Tax Identification Number

Amount of Securities subscribed for

Amount of money paid and deposited with Escrow Agent

Is Investor a resident of Pennsylvania (Yes or No)?

Is Investor a resident of Washington (Yes or No)?

 

	Dated:	 	 

 

PHILLIPS EDISON – ARC GROCERY CENTER
REIT II, INC.

 

	By:	 	 
	 	Name: 	 
	 	Title: 	 

 

    	 

    	 

    

 

Exhibit C

 

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

Account Name:

 

Account Number:

 

The specimen signatures shown below are
the specimen signatures of the individuals who have been designated as Authorized Representatives of Phillips Edison – ARC
Grocery Center REIT II, Inc. and are authorized to initiate and approve transactions of all types for the above-mentioned account
on behalf of Phillips Edison – ARC Grocery Center REIT II, Inc.

 

	Name/Title	Specimen Signature
	 	 
	Jeffrey S. Edison 	 
	Chief Executive Officer	Signature
	 	 
	R. Mark Addy	 
	Co-President and Chief Operating Officer	Signature
	 	 
	John B. Bessey 	 
	Co-President and Chief Investment Officer	Signature
	 	 
	Devin I. Murphy	 
	Chief Financial Officer, Treasurer and Secretary	Signature

 

    	 

    	 

    

 

Exhibit C-1

 

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

Account Name:

 

Account Number:

 

The specimen signatures shown below are
the specimen signatures of the individuals who have been designated as Authorized Representatives of Realty Capital Securities,
LLC and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Realty Capital
Securities, LLC.

 

	Name/Title	Specimen Signature
	 	 
	Edward M. Weil, Jr.	 
	Chief Executive Officer	Signature
	 	 
	Louisa H. Quarto	 
	President	Signature
	 	 
	John H. Grady	 
	Chief Operating Officer and Chief Compliance Officer	Signature

 

    	 

    	 

    

 

Exhibit D

 

ESCROW FEES AND EXPENSES

 

Acceptance Fee

 

Review escrow agreement, establish account $3,000

DST Agency Engagement (if applicable) $250

 

Annual Fees

 

Annual Escrow Agent $2,500

BAI Files $50 per month

Outgoing Wire Transfer $15 each

Daily Recon File to Transfer Agent $2.50 per Bus. Day

Web Exchange Access $15 per month

Overnight Delivery/Mailings $16.50 each

IRS Tax Reporting $10 per 1099

 

Fees specified are for the regular, routine
services contemplated by the Subscription Escrow Agreement, and any additional or extraordinary services, including, but not limited
to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence,
will be charged based upon time required at the then standard hourly rate. In addition to the specified fees, all expenses related
to the administration of the Subscription Escrow Agreement (other than normal overhead expenses of the regular staff) such as,
but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will
be reimbursable.

 

Acceptance fee and first year Annual Escrow
Agent fee will be payable at the initiation of the escrow. Thereafter, the Annual Escrow Agent fees will be billed in advance and
transactional fees will be billed in arrears. Other fees and expenses will be billed as incurred.

 

    	 

    	 

    

 

Exhibit E

 

Agency and Custody Account Direction

For Cash Balances

UMB Bank Money Market Deposit Accounts

 

Direction to use the following UMB Bank
Money Market Deposit Accounts for Cash Balances for the escrow account (the “Account”) created under the Subscription
Escrow Agreement to which this Exhibit E is attached.

 

You are hereby directed to deposit, as
indicated below, or as we shall direct further in writing from time to time, all cash in the Account in the following money market
deposit account of UMB Bank, N.A. (“Bank”):

 

UMB Bank Money Market Deposit Account (“MMDA”)

 

We understand that amounts on deposit in
the MMDA are insured, subject to the applicable rules and regulations of the Federal Deposit Insurance Corporation (the “FDIC”),
in the basic FDIC insurance amount of $250,000 per depositor, per insured bank. This includes principal and accrued interest up
to a total of $250,000.

 

We acknowledge that we have full power
to direct investments in the Account.

 

We understand that we may change this direction
at any time and that it shall continue in effect until revoked or modified by us by written notice to you.

 

Phillips Edison – ARC Grocery Center
REIT II, Inc.

 

	By:	 	 	 
	 	Signature	 	 
	 	 	 	 
	 	 	 
	Date	 	 

 

    	 

    	 

    

 

Exhibit F

 

[Form of Notice to Pennsylvania Investors]

 

You have tendered a subscription to purchase
shares of common stock of Phillips Edison – ARC Grocery Center REIT II, Inc. (the “Company”). Your subscription
is currently being held in escrow. The guidelines of the Pennsylvania Securities Commission do not permit the Company to accept
subscriptions from Pennsylvania residents until an aggregate of $100,000,000 of gross offering proceeds have been received by the
Company. The Pennsylvania guidelines provide that until this minimum amount of offering proceeds is received by the Company, every
120 days during the offering period Pennsylvania Investors may request that their subscription be returned. If you wish to continue
your subscription in escrow until the Pennsylvania minimum subscription amount is received, nothing further is required.

 

If you wish to terminate your subscription
for the Company’s common stock and have your subscription returned please so indicate below, sign, date, and return to the
Escrow Agent, UMB Bank, N.A. at 1010 Grand Blvd., 4th Floor, Mail Stop: 1020409, Kansas City, Missouri 64106, Attn: Lara Stevens,
Corporate Trust.

 

I hereby terminate my prior subscription
to purchase shares of common stock of Phillips Edison – ARC Grocery Center REIT II, Inc. and request the return of my subscription
funds. I certify to Phillips Edison – ARC Grocery Center REIT II, Inc. that I am a resident of Pennsylvania.

 

	Signature:	 
	 	 
	Name:	 
	 	(please print)
	 	 
	Date:	 

 

Please send the subscription refund to:Exhibit 10.4

 

PHILLIPS EDISON ― ARC GROCERTY
CENTER REIT II, INC.

 

2013 INDEPENDENT DIRECTOR STOCK PLAN

 

    	 

    	 

    

 

PHILLIPS EDISON ― ARC GROCERTY
CENTER REIT II, INC.

 

2013 INDEPENDENT DIRECTOR STOCK PLAN

 

	ARTICLE 1 PURPOSE	1
	 	 
	1.1. GENERAL	1
	 	 
	ARTICLE 2 DEFINITIONS	1
	 	 
	2.1. DEFINITIONS	1
	 	 
	ARTICLE 3 EFFECTIVE TERM OF PLAN	4
	 	 
	3.1. EFFECTIVE DATE	4
	 	 
	3.2. TERMINATION OF PLAN	4
	 	 
	ARTICLE 4 ADMINISTRATION	4
	 	 
	4.1. COMMITTEE	4
	 	 
	4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE	4
	 	 
	4.3. AUTHORITY OF COMMITTEE	4
	 	 
	4.4. AWARD CERTIFICATES	5
	 	 
	ARTICLE 5 SHARES SUBJECT TO THE PLAN	5
	 	 
	5.1. NUMBER OF SHARES	5
	 	 
	5.2. SHARE COUNTING	5
	 	 
	5.3. STOCK DISTRIBUTED	5
	 	 
	ARTICLE 6 ELIGIBILITY	6
	 	 
	6.1. GENERAL	6
	 	 
	ARTICLE 7 RESTRICTED STOCK	6
	 	 
	7.1. GRANT OF RESTRICTED STOCK	6
	 	 
	7.2. ISSUANCE AND RESTRICTIONS	6
	 	 
	7.3. FORFEITURE	6
	 	 
	7.4. DELIVERY OF RESTRICTED STOCK	6
	 	 
	ARTICLE 8 PROVISIONS APPLICABLE TO AWARDS	6
	 	 
	8.1. TERM OF AWARD	6
	 	 
	8.2. FORM OF PAYMENT FOR AWARDS	6
	 	 
	8.3. LIMITS ON TRANSFER	6
	 	 
	8.4. BENEFICIARIES	7
	 	 
	8.5. STOCK TRADING RESTRICTIONS	7
	 	 
	8.6. ACCELERATION UPON DEATH OR DISABILITY	7
	 	 
	8.7. ACCELERATION UPON A CHANGE IN CONTROL	7

 

    	i

    	 

    

 

	8.8. ACCELERATION FOR ANY REASON	 
	 	 
	8.9. FORFEITURE EVENTS	 
	 	 
	8.10. SUBSTITUTE AWARDS	 
	 	 
	ARTICLE 9 CHANGES IN CAPITAL STRUCTURE	 
	 	 
	9.1. MANDATORY ADJUSTMENTS	 
	 	 
	9.2. DISCRETIONARY ADJUSTMENTS	 
	 	 
	ARTICLE 10 AMENDMENT, MODIFICATION AND TERMINATION	 
	 	 
	10.1. AMENDMENT, MODIFICATION AND TERMINATION	 
	 	 
	10.2. AWARDS PREVIOUSLY GRANTED	 
	 	 
	10.3. COMPLIANCE AMENDMENTS	 
	 	 
	ARTICLE 11 GENERAL PROVISIONS	 
	 	 
	11.1. RIGHTS OF PARTICIPANTS	 
	 	 
	11.2. WITHHOLDING	 
	 	 
	11.3. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE	 
	 	 
	11.4. UNFUNDED STATUS OF AWARDS	 
	 	 
	11.5. RELATIONSHIP TO OTHER BENEFITS	 
	 	 
	11.6. EXPENSES	 
	 	 
	11.7. TITLES AND HEADINGS	 
	 	 
	11.8. GENDER AND NUMBER	 
	 	 
	11.9. FRACTIONAL SHARES	 
	 	 
	11.10. GOVERNMENT AND OTHER REGULATIONS	 
	 	 
	11.11. GOVERNING LAW	 
	 	 
	11.12. ADDITIONAL PROVISIONS	 
	 	 
	11.13. NO LIMITATIONS ON RIGHTS OF COMPANY	 
	 	 
	11.14. INDEMNIFICATION	 

 

    	ii

    	 

    

 

PHILLIPS EDISON ― ARC GROCERTY
CENTER REIT II, INC.

 

2013 INDEPENDENT DIRECTOR STOCK PLAN

 

ARTICLE 1

PURPOSE

 

1.1.
GENERAL. The purpose of the Phillips Edison ― ARC Grocery Center REIT II, Inc. 2013 Independent Director Stock
Plan (the “Plan”) is to promote the success, and enhance the value, of Phillips Edison ― ARC Grocery Center REIT
II, Inc. (the “Company”), by linking the personal interests of directors of the Company to those of Company stockholders.
The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services
of directors upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from time to time to selected directors of the Company.

 

ARTICLE 2

DEFINITIONS

 

2.1.
DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase
does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1
unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

 

		(a)	“Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more
intermediaries controls, is controlled by or is under common control with, the Company, as determined by the Committee.

 

		(b)	“Award” means any Restricted Stock or any other right or interest relating to Stock or cash, granted to a Participant
under the Plan.

 

		(c)	“Award Certificate” means a written document, in such form as the Committee prescribes from time to time, setting
forth the terms and conditions of an Award. Award Certificates may be in the form of individual award agreements or certificates
or a program document describing the terms and provisions of an Award or series of Awards under the Plan. The Committee may provide
for the use of electronic, internet or other non-paper Award Certificates, and the use of electronic, internet or other non-paper
means for the acceptance thereof and actions thereunder by a Participant.

 

		(d)	“Beneficial Owner” shall have the meaning given such term in Rule 13d-3 of the General Rules and Regulations
under the 1934 Act.

 

		(e)	“Board” means the Board of Directors of the Company.

 

		(f)	“Change in Control” means and includes the occurrence of any one of the following events but shall specifically
exclude a Public Offering:

 

		(i)	individuals who, on the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of such Board, provided that any person becoming a director after the Effective Date and whose election
or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be
an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election
Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the
Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy
Contest, shall be deemed an Incumbent Director; or

 

    	1

    	 

    

 

		(ii)	any person becomes a Beneficial Owner, directly or indirectly, of either (A) 25% or more of the then-outstanding shares
of common stock of the Company (“Company Common Stock”) or (B) securities of the Company representing 25% or more
of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of directors
(the “Company Voting Securities”); provided, however, that for purposes of this subsection (ii), the
following acquisitions of Company Common Stock or Company Voting Securities shall not constitute a Change in Control: (w) an
acquisition directly from the Company, (x) an acquisition by the Company or a Subsidiary, (y) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (z) an acquisition pursuant to
a Non-Qualifying Transaction (as defined in subsection (iii) below); or

 

		(iii)	the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction
involving the Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially
all of the Company’s assets (a “Sale”) or the acquisition of assets or stock of another corporation or other
entity (an “Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially
all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly,
more than 25% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such
Reorganization, Sale or Acquisition (including, without limitation, an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving
Entity”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition,
of the outstanding Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no person
(other than (x) the Company or any Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any
employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or
indirectly, of 25% or more of the total common stock or 25% or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors
of the Surviving Entity were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement
providing for such Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or

 

		(iv)	approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

		(g)	“Code” means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references
to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar
provision.

 

		(h)	“Committee” means the committee of the Board described in Article 4.

 

    	2

    	 

    

 

		(i)	“Company” means Phillips Edison ― ARC Grocery Center REIT II, Inc., a Maryland corporation, or any successor
corporation.

 

		(j)	“Continuous Status as a Participant” means the absence of any interruption or termination of service as a director
of the Company. Whether military, government or other service or other leave of absence shall constitute a termination of Continuous
Status as a Participant shall be determined in each case by the Committee at its discretion, and any determination by the Committee
shall be final and conclusive.

 

		(k)	“Disability” of a Participant means that the Participant (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and
health plan covering employees of the Participant’s employer. In the event of a dispute, the determination of whether a Participant
is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such
Disability relates.

 

		(l)	“Effective Date” has the meaning assigned such term in Section 3.1.

 

		(m)	“Eligible Participant” means an independent director of the Company.

 

		(n)	“Exchange” means any national securities exchange on which the Stock may from time to time be listed or traded.

 

		(o)	“Fair Market Value,” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price
on such Exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on
the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on an Exchange, the mean between
the bid and offered prices as quoted by the applicable interdealer quotation system, provided that if the Stock is not quoted on
such interdealer quotation system or it is determined that the fair market value is not properly reflected by such quotations,
Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance
with Code Section 409A.

 

		(p)	“Parent” means a corporation, limited liability company, partnership or other entity which owns or beneficially
owns a majority of the outstanding voting stock or voting power of the Company.

 

		(q)	“Participant” means an independent director of the Company who has been granted an Award under the Plan; provided
that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant
to Section 8.4 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant
under applicable state law and court supervision.

 

		(r)	“Person” means any individual, entity or group, within the meaning of Section 3(a)(9) of the 1934 Act and as used
in Section 13(d)(3) or 14(d)(2) of the 1934 Act.

 

		(s)	“Plan” means the Phillips Edison ― ARC Grocery Center REIT II, Inc. 2013 Independent Director Stock Plan,
as amended from time to time.

 

		(t)	“Public Offering” shall occur on the closing date of a public offering of any class or series of the Company’s
equity securities pursuant to a registration statement filed by the Company under the 1933 Act.

 

    	3

    	 

    

 

		(u)	“Restricted Stock” means Stock granted to a Participant under Article 7 that is subject to certain restrictions
and to risk of forfeiture.

 

		(v)	“Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution pursuant to
Section 9.1, the term “Shares” shall also include any shares of stock or other securities that are substituted
for Shares or into which Shares are adjusted pursuant to Section 9.1.

 

		(w)	“Stock” means the $0.01 par value common stock of the Company and such other securities of the Company as may be
substituted for Stock pursuant to Section 9.1.

 

		(x)	“Subsidiary” means any corporation, limited liability company, partnership or other entity of which a majority
of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company.

 

		(y)	“1933 Act” means the Securities Act of 1933, as amended from time to time.

 

		(z)	“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

ARTICLE 3

EFFECTIVE TERM OF PLAN

 

3.1.
EFFECTIVE DATE. The Plan shall be effective as of the date it is approved by both the Board and the stockholders
of the Company (the “Effective Date”).

 

3.2.
TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary of the Effective Date unless earlier terminated
as provided herein. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date
of termination, which shall continue to be governed by the applicable terms and conditions of this Plan.

 

ARTICLE 4

ADMINISTRATION

 

4.1.
COMMITTEE. The Plan shall be administered by the Conflicts Committee (as defined in the Company’s Charter)
or a subcommittee thereof. Either of which is referred to herein as the “Committee.”

 

4.2.
ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time
to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such
other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and all decisions and determinations by the Committee with
respect to the Plan are final, binding, and conclusive on all parties. Each member of the Committee is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any
Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive
compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 

4.3.
AUTHORITY OF COMMITTEE. Except as provided in Section 4.1 and 4.2 hereof, the Committee has the exclusive power,
authority and discretion to:

 

		(a)	Grant Awards;

 

		(b)	Designate Participants;

 

		(c)	Determine the type or types of Awards to be granted to each Participant;

 

    	4

    	 

    

 

		(d)	Determine the number of Awards to be granted and the number of Shares or dollar amount to which an Award will relate;

 

		(e)	Determine the terms and conditions of any Award granted under the Plan;

 

		(f)	Prescribe the form of each Award Certificate, which need not be identical for each Participant;

 

		(g)	Decide all other matters that must be determined in connection with an Award;

 

		(h)	Establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer
the Plan;

 

		(i)	Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable
to administer the Plan;

 

		(j)	Amend the Plan or any Award Certificate as provided herein; and

 

		(k)	Adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of
non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the benefits of Awards
granted to Participants located in such other jurisdictions and to meet the objectives of the Plan.

 

4.4.
AWARD CERTIFICATES. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such
provisions, not inconsistent with the Plan, as may be specified by the Committee.

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

 

5.1.
NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2 and Section 9.1, the aggregate number of
Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 200,000.

 

5.2.
SHARE COUNTING. Shares covered by an Award shall be subtracted from the Plan share reserve as of the date of grant,
but shall be added back to the Plan share reserve in accordance with this Section 5.2.

 

		(a)	To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued or forfeited
Shares subject to the Award will again be available for issuance pursuant to Awards granted under the Plan.

 

		(b)	Shares withheld from an Award or delivered by a Participant to satisfy minimum tax withholding requirements will again be available
for issuance pursuant to Awards granted under the Plan.

 

		(c)	To the extent that the full number of Shares subject to an Award is not issued for any reason, including by reason of failure
to achieve maximum performance goals, only the number of Shares issued and delivered shall be considered for purposes of determining
the number of Shares remaining available for issuance pursuant to Awards granted under the Plan.

 

		(d)	Substitute Awards granted pursuant to Section 8.10 of the Plan shall not count against the Shares otherwise available
for issuance under the Plan under Section 5.1.

 

5.3.
STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and
unissued Stock, treasury Stock or Stock purchased on the open market.

 

    	5

    	 

    

 

ARTICLE 6

ELIGIBILITY

 

6.1.
GENERAL. Awards may be granted only to Eligible Participants.

 

ARTICLE 7

RESTRICTED STOCK

 

7.1.
GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards of Restricted Stock to Participants in such
amounts and subject to such terms and conditions as may be selected by the Committee. An Award of Restricted Stock shall be evidenced
by an Award Certificate setting forth the terms, conditions, and restrictions applicable to the Award.

 

7.2.
ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such restrictions on transferability and other restrictions
as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive
dividends or distributions on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines
at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Certificate or any special Plan document
governing an Award, the Participant shall have all of the rights of a stockholder with respect to the Restricted Stock. Unless
otherwise provided in the applicable Award Certificate, Awards of Restricted Stock will be entitled to full dividend and distribution
rights and any dividends or distributions paid thereon will be paid or distributed to the holder no later than the end of the calendar
year in which the dividends or distributions are paid to stockholders or, if later, the 15th day of the third month following the
date the dividends or distributions are paid to stockholders.

 

7.3.
FORFEITURE. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter,
upon termination of Continuous Status as a Participant during the applicable restriction period or upon failure to satisfy a performance
goal during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited.

 

7.4.
DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant at the time of grant
either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation,
the Company or one or more of its employees) designated by the Committee, a stock certificate or certificates registered in the
name of the Participant. If physical certificates representing shares of Restricted Stock are registered in the name of the Participant,
such certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted
Stock.

 

ARTICLE 8

PROVISIONS APPLICABLE TO AWARDS

 

8.1.
TERM OF AWARD. The term of each Award shall be for the period as determined by the Committee.

 

8.2.
FORM OF PAYMENT FOR AWARDS. Except as otherwise provided in this Plan, payment of Awards will be made in Stock. In
addition, payment of Awards may include such terms, conditions, restrictions and/or limitations, if any, as the Committee deems
appropriate, including, in the case of Awards paid in the form of Stock, restrictions on transfer and forfeiture provisions. Further,
payment of Awards may be made in the form of a lump sum, or in installments, as determined by the Committee.

 

    	6

    	 

    

 

8.3.
LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted
Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution; provided,
however, that the Committee may (but need not) permit other transfers (other than transfers for value) where the Committee concludes
that such transferability (a) does not result in accelerated taxation and (b) is otherwise appropriate and desirable,
taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable
to transferable Awards.

 

8.4.
BENEFICIARIES. Notwithstanding Section 8.3, a Participant may, in the manner determined by the Committee, designate
a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s
death. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all
terms and conditions of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award
Certificate otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary
has been designated or survives the Participant, payment shall be made to the Participant’s estate. Subject to the foregoing,
a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with
the Committee.

 

8.5.
STOCK TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions
as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules
of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to
the Stock.

 

8.6.
ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Certificate or any special Plan
document governing an Award, upon the termination of a person’s Continuous Status as a Participant by reason of death or
Disability all time-based vesting restrictions on that Participant’s outstanding Awards shall lapse as of the date of termination.

 

8.7.
ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise provided in the Award Certificate or any special Plan
document governing an Award, upon the occurrence of a Change in Control, all time-based vesting restrictions on outstanding Awards
shall lapse.

 

8.8.
ACCELERATION FOR ANY REASON. Regardless of whether an event has occurred as described in Section 8.6 or 8.7
above, the Committee may in its sole discretion at any time determine that all or a part of the time-based vesting restrictions
on all or a portion of the outstanding Awards shall lapse as of such date as the Committee may, in its sole discretion, declare.
The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its discretion pursuant
to this Section 8.8. Notwithstanding anything in the Plan, including this Section 8.8, the Committee may not accelerate
the payment of any Award if such acceleration would violate Section 409A(a)(3) of the Code.

 

8.9.
FORFEITURE EVENTS. The Committee may specify in an Award Certificate that the Participant’s rights, payments
and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence
of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to violation of material Company or Affiliate policies, breach of noncompetition, confidentiality
or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company or any Affiliate.

 

8.10.
SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in substitution for stock and stock-based awards
held by employees or directors of another entity who become directors of the Company as a result of a merger or consolidation of
the former entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the
former employing corporation. The Committee may direct that the substitute Awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances.

 

    	7

    	 

    

 

ARTICLE 9

CHANGES IN CAPITAL STRUCTURE

 

9.1.
MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its stockholders that
causes the per-share value of the Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights
offering, or large nonrecurring cash dividend), the authorization limits under Section 5.1 shall be adjusted proportionately,
and the Committee shall make such adjustments to the Plan and Awards as it deems necessary, in its sole discretion, to prevent
dilution or enlargement of rights immediately resulting from such transaction. Action by the Committee may include: (a) adjustment
of the number and kind of shares that may be delivered under the Plan; (b) adjustment of the number and kind of shares subject
to outstanding Awards; (c) adjustment of the measure to be used to determine the amount of the benefit payable on an Award;
and (d) any other adjustments that the Committee determines to be equitable. Without limiting the foregoing, in the event
of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or consolidation
of the outstanding Stock into a lesser number of Shares, the authorization limits under Section 5.1 shall automatically be
adjusted proportionately, and the Shares then subject to each Award shall automatically, without the necessity for any additional
action by the Committee, be adjusted proportionately without any change in the aggregate purchase price therefor.

 

9.2.
DISCRETIONARY ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving
the Company (including, without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or
any transaction described in Section 9.1), the Committee may, in its sole discretion, provide (a) that Awards will be
settled in cash rather than Stock, (b) that Awards will become immediately vested and will expire after a designated period
of time, (c) that Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted
in connection with such transaction, (d) that outstanding Awards may be settled by payment in cash or cash equivalents equal
to the excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the transaction, over the
price of the Award, or (e) any combination of the foregoing. The Committee’s determination need not be uniform and may
be different for different Participants whether or not such Participants are similarly situated.

 

ARTICLE 10

AMENDMENT, MODIFICATION AND TERMINATION

 

10.1.
AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend,
modify or terminate the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable
opinion of the Board or the Committee, either (a) materially increase the number of Shares available under the Plan, (b) expand
the types of awards under the Plan, (c) materially expand the class of participants eligible to participate in the Plan, (d) materially
extend the term of the Plan, or (e) otherwise constitute a material change requiring stockholder approval under applicable
laws, policies or regulations or the applicable listing or other requirements of an Exchange, then such amendment shall be subject
to stockholder approval; and provided, further, that the Board or Committee may condition any other amendment or modification on
the approval of stockholders of the Company for any reason, including by reason of such approval being necessary or deemed advisable
(a) to comply with the listing or other requirements of an Exchange, or (b) to satisfy any other tax, securities or other
applicable laws, policies or regulations.

 

    	8

    	 

    

 

10.2.
AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding
Award without approval of the Participant; provided, however:

 

		(a)	Subject to the terms of the applicable Award Certificate, such amendment, modification or termination shall not, without the
Participant’s consent, reduce or diminish the value of such Award determined as if the Award had been vested, cashed in or
otherwise settled on the date of such amendment or termination; and

 

		(b)	No termination, amendment, or modification of the Plan shall adversely affect any Award previously granted under the Plan,
without the written consent of the Participant affected thereby. An outstanding Award shall not be deemed to be “adversely
affected” by a Plan amendment if such amendment would not reduce or diminish the value of such Award determined as if the
Award had been vested, cashed in or otherwise settled on the date of such amendment.

 

10.3.
COMPLIANCE AMENDMENTS. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, the Board
may amend the Plan or an Award Certificate, to take effect retroactively or otherwise, as deemed necessary or advisable for the
purpose of conforming the Plan or Award Certificate to any present or future law relating to plans of this or similar nature (including,
but not limited to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder. By
accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 10.3 to any Award
granted under the Plan without further consideration or action.

 

ARTICLE 11

GENERAL PROVISIONS

 

11.1.
RIGHTS OF PARTICIPANTS.

 

		(a)	No Participant or any Eligible Participant shall have any claim to be granted any Award under the Plan. Neither the Company,
its Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly, and determinations made
under the Plan may be made by the Committee selectively among Eligible Participants who receive, or are eligible to receive, Awards
(whether or not such Eligible Participants are similarly situated).

 

		(b)	Nothing in the Plan, any Award Certificate or any other document or statement made with respect to the Plan, shall interfere
with or limit in any way the right of the Company to terminate any Participant’s service as a director, at any time, nor
confer upon any Participant any right to continue as a director of the Company, whether for the duration of a Participant’s
Award or otherwise.

 

		(c)	Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Affiliate
and, accordingly, subject to Article 10, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive
discretion of the Committee without giving rise to any liability on the part of the Company or any of its Affiliates.

 

		(d)	No Award gives a Participant any of the rights of a stockholder of the Company unless and until Shares are in fact issued to
such person in connection with such Award.

 

    	9

    	 

    

 

11.2.
WITHHOLDING. The Company shall have the authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation)
required by law to be withheld with respect to any lapse of restriction or other taxable event arising as a result of the Plan.
With respect to withholding required upon any taxable event under the Plan, the Committee may, at the time the Award is granted
or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by withholding from the
Award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required
to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. All such elections shall
be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

 

11.3.
SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

 

		(a)	General. It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt
from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Certificates
shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan
or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees
or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other
taxpayer as a result of the Plan or any Award.

 

		(b)	Definitional Restrictions. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, to the
extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A
of the Code would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) would be
effected, under the Plan or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant’s
Disability or separation from service, such amount or benefit will not be payable or distributable to the Participant, and/or such
different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change
in Control, Disability or separation from service meet any description or definition of “change in control event”,
“disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be available under such definition). This provision does
not prohibit the vesting of any Award upon a Change in Control, Disability or separation from service, however defined.
If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on
the next earliest payment or distribution date or event specified in the Award Certificate that is permissible under Section 409A.
If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made
in the same form as would have applied absent such designated event or circumstance.

 

		(c)	Allocation among Possible Exemptions. If any one or more Awards granted under the Plan to a Participant could qualify
for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed
the dollar limit permitted for the separation pay exemptions, the Company (acting through the Committee or the Head of Human Resources)
shall determine which Awards or portions thereof will be subject to such exemptions.

 

		(d)	Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any Award Certificate to the contrary,
if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A
of the Code would otherwise be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s
separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any
permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii)
(conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

 

    	10

    	 

    

 

		(i)	the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately
following the Participant’s separation from service will be accumulated through and paid or provided on the first day of
the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within
30 days after the Participant’s death) (in either case, the “Required Delay Period”); and

 

		(ii)	the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required
Delay Period.

 

For purposes of this Plan, the term “Specified Employee”
has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that,
as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule
of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or any committee of the
Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company,
including, if applicable, this Plan.

 

11.4.
UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation.
With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate
shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. This Plan
is not intended to be subject to the Employment Retirement Income Security Act of 1974, as amended.

 

11.5.
RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits
under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate
unless provided otherwise in such other plan.

 

11.6.
EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

11.7.
TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and
in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

 

11.8.
GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include
the feminine; the plural shall include the singular and the singular shall include the plural.

 

11.9.
FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether
cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.

 

11.10.
GOVERNMENT AND OTHER REGULATIONS.

 

		(a)	Notwithstanding any other provision of the Plan, no Participant who acquires Shares pursuant to the Plan may, during any period
of time that such Participant is an affiliate of the Company (within the meaning of the rules and regulations of the Securities
and Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale is made (i) pursuant to an effective
registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an appropriate
exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933
Act.

 

		(b)	Notwithstanding any other provision of the Plan, if at any time the Committee shall determine that the registration, listing
or qualification of the Shares covered by an Award upon any Exchange or under any foreign, federal, state or local law or practice,
or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with,
the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased, delivered or received pursuant
to such Award unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained
free of any condition not acceptable to the Committee.

 

    	11

    	 

    

 

Any Participant receiving or purchasing Shares pursuant to an
Award shall make such representations and agreements and furnish such information as the Committee may request to assure compliance
with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or deliver any certificate
or certificates for Shares under the Plan prior to the Committee’s determination that all related requirements have been
fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act or applicable state or
foreign law or to take any other action in order to cause the issuance and delivery of such certificates to comply with any such
law, regulation or requirement.

 

11.11.
GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed
in accordance with and governed by the laws of the State of Maryland.

 

11.12.
ADDITIONAL PROVISIONS. Each Award Certificate may contain such other terms and conditions as the Committee may determine;
provided that such other terms and conditions are not inconsistent with the provisions of the Plan.

 

11.13.
NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the
Company to make adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve,
liquidate, sell or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the Company,
for proper corporate purposes, to draft or assume awards, other than under the Plan, to or with respect to any person. If the Committee
so directs, the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify,
upon the condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms
of an Award granted to such Participant and specified by the Committee pursuant to the provisions of the Plan.

 

11.14.
INDEMNIFICATION. Each person who is or shall have been a member of the Committee, or of the Board shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from
any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction
of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf,
unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided
by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company’s Articles of Amendment and Restatement, as amended, or bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

    	12

    	 

    

 

The foregoing is hereby acknowledged as being the Phillips Edison
― ARC Grocery Center REIT II, Inc. 2013 Independent Director Stock Plan as adopted by the Board on November 7, 2013 and by
the sole stockholder on November 7, 2013.

 

	 	PHILLIPS EDISON ― ARC GROCERY CENTER REIT II, INC.
	 	 
	 	By:	/s/ R. Mark Addy
	 	Name:	R. Mark Addy
	 	Title:	Co-President and Chief Operating Officer

 

    	13

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