Document:

Exhibit 10.2

 

Execution Version

 

ADDENDUM XVIII

TO

SPRINT PCS MANAGEMENT AGREEMENT

	Manager:	Shenandoah Personal Communications, LLC

	Service Area:	Altoona, PA BTA #12

Beckley, West Virginia BTA #35

Bluefield, West Virginia BTA #48

Charleston, West Virginia BTA #73

Charlottesville, Virginia BTA #75

Clarksburg—Elkins, West Virginia #82

Danville, Virginia BTA #104

Fairmont, West Virginia BTA #137

Hagerstown, MD-Chambersburg, PA-Martinsburg, WV BTA #179

Harrisburg, PA BTA #181

Harrisonburg, VA BTA #183

Huntington, West Virginia--Ashland, Kentucky BTA #197 (excludes Gallia County, OH or Greenup County, KY)

Lynchburg, Virginia BTA #266

Martinsville, Virginia BTA #284

Morgantown, West Virginia BTA #306

Roanoke, Virginia BTA #376

Staunton--Waynesboro, Virginia #430

Washington, DC (Jefferson County, WV only) BTA#461

Winchester, VA BTA #479

York-Hanover, PA BTA #483

This Addendum XVIII, dated as of August 10, 2015, contains certain additional and supplemental terms and provisions to that certain Sprint PCS Management Agreement and the Sprint PCS Services Agreement, each entered into as of November 5, 1999, by the same parties as this Addendum (or their predecessors in interest), excluding, however, SprintCom, Inc., a Kansas corporation (“SprintCom”), which is becoming a party to the Management Agreement by entering into this Addendum.  The Management Agreement and the Services Agreement were previously amended by Addenda I-XVII (as so amended, the “Management Agreement” and the “Services Agreement,” respectively).  The terms and provisions of this Addendum control, supersede and amend any conflicting terms and provisions contained in the Management Agreement and the Services Agreement.  Except for express modifications made in this Addendum, the Management Agreement and the Services Agreement continue in full force and effect.

 

Capitalized terms used and not otherwise defined in this Addendum have the meanings ascribed to them in the Management Agreement or the Services Agreement. Section and Exhibit 

references are to Sections and Exhibits of the Management Agreement or the Services Agreement, as applicable, unless otherwise noted.

 

Shenandoah Telecommunications Company, a Virginia corporation and the owner of all the outstanding equity in Manager (“Parent”), Gridiron Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and NTELOS Holding Corp., a Delaware corporation (“nTelos”) entered into a certain Agreement and Plan of Merger of even date herewith (“Merger Agreement”).  Subsequent to the execution of this Addendum, the transaction described in the Merger Agreement is expected to close and Merger Sub will merge with and into nTelos, with nTelos surviving the merger as a wholly owned subsidiary of Parent and a Related Party of Manager.

 

SprintCom and Manager have entered into a certain Master Agreement of even date herewith (“Master Agreement”).  The Master Agreement provides, among other things, that upon the closing of the transaction contemplated in the Merger Agreement (the “Merger Closing Date”), the Management Agreement will be amended to expand the Service Area to include a portion of the geographic area in which nTelos currently provides wireless communications services (“nTelos Expansion Area”) and to make additional spectrum available to Manager.

 

This Addendum is effective on the date written above (the “Effective Date”), except for the provisions specifically identified herein as becoming effective on the Merger Closing Date.

On the Effective Date, the parties agree as follows:

	1.	Transfer of nTelos Assets.  Within 30 days after the Merger Closing Date, Manager will cause the assets held by nTelos that are used to provide wireless services in the nTelos Expansion Area to be conveyed to Manager and to become part of the Service Area Network and will provide evidence of all such conveyances to Sprint PCS.

	2.	Amounts Payable by Manager. The last paragraph of Section 1.1 of the Management Agreement is amended to read as follows:

Subject to the terms and conditions of this agreement, including, without limitation, Sections 1.9, 9.5 and 12.1.2, Sprint PCS has the right to unfettered access to the Service Area Network to be constructed by Manager under this Agreement.  Except with respect to the payment obligations under Sections 1.4, 1.9.2, 1.10, 3.1.7, 3.8, 4.4, 9.3, 10.2, 10.4, 10.5, 10.6, 10.8, 10.9, 12.1.2 and Article XIII of this agreement, Sections 2.1.1(d), 2.1.2(b), 3.2, 3.3, 3.4, 5.1.2, 3.5 and Article VI of the Services Agreement and any payments arising as a result of any default of the parties’ obligations under this Agreement and the Services Agreement, any payments arising from the exercise of a purchase option by either party, the Fee Based on Billed Revenue described in Section 10.2.1 of this Agreement, the Prepaid Management Fee described in Section 10.2.7.3 of this Agreement, the LTE Fee described in Section 10.2.7.4 of this Agreement, the Command Center Fee described in Section 10.2.7.5 of this Agreement and the Net Service Fee, the Prepaid CPGA Fee, Prepaid CCPU Fees and LTE Data Core Services Fee described in the Services Agreement, the amounts payable by Manager under Sections 14 and 24 of Addendum XVIII to the Management Agreement and the amounts payable by Manager or Sprint PCS under Section 5 of Addendum XVIII will constitute the 

only payments between the parties under the Management Agreement, the Services Agreement and the Trademark License Agreements.

 

	3.	Service Area.  Effective on the Merger Closing Date, Manager’s existing Service Area (the “Legacy Service Area”) is hereby expanded to include the nTelos Expansion Area, which area is more particularly described in the attached Exhibit A.

	4.	Build Out Area.  Effective on the Merger Closing Date, the current Build Out Plan Table, Build Out Plan Description and Build Out Plan Map attached as Schedule 2.1 to the Management Agreement are amended to include the Build Out Plan Table, Build Out Plan Description and Build Out Plan Map described in the attached Exhibit B. Manager will, at its sole cost and expense, update, configure and thereafter maintain and support the nTelos Expansion Area as part of the Service Area Network in accordance with (a) the attached Build Out Plan Table, Build Out Plan Description and Build Out Plan Map, (b) all Program Requirements adopted by Sprint PCS, and (c) all applicable federal and local laws and regulations (the “nTelos Update”). As long as network performance meets or exceeds all applicable Network Program Requirements, Manager will not be required to modify the configuration of any cell sites in the nTelos Expansion Area that exist on the Merger Closing Date where nTelos has already deployed 4G LTE service using a dual base station configuration.  Manager may also continue to deploy the dual base station configuration for all cell sites in the nTelos Expansion Area where engineering, site leasing, permitting, zoning, or construction work has already started as of the Merger Closing Date.  All other cell sites to be constructed in the nTelos Expansion Area will be constructed by Manager using the single base station model deployed during Network Vision Updates.  Manager shall have the option to consolidate the existing nTelos switching locations.  Sprint PCS will support a switch consolidation and interconnect with the switching location(s) in the nTelos Expansion Area in the same manner as Sprint PCS does for the existing Shentel switch locations in the Legacy Service Area, unless otherwise mutually agreed upon in writing by Manager and Sprint PCS.  Manager will use its best efforts to complete the nTelos Update by May 31, 2018 or sooner if required due to license requirements (the “nTelos Target Completion Date”), it being understood that matters that are not within the reasonable control of Manager, including, without limitation, availability of equipment and determinations of governmental authorities with respect to zoning and land use, but excluding financial inability, may affect Manager’s ability to complete the build out of the nTelos Expansion Area by the nTelos Target Completion Date.  If Manager fails to complete the build out of the nTelos Expansion Area by the nTelos Target Completion Date, it will continue to use best efforts to achieve completion as soon as practicable thereafter.

 

	5.	2.5 GHz Spectrum Update. Commencing on the Effective Date, Manager will, at its sole cost and expense, update, configure and thereafter maintain and support the Service Area Network including the nTelos Expansion Area to enable and provide the use of 2.5 GHz spectrum technology and services in accordance with (a) the build plan attached hereto as Exhibit C (“2.5 GHz Build Plan”), (b) all Program Requirements adopted by Sprint PCS, and (c) all applicable federal and local laws and regulations (the “2.5 GHz Spectrum Update”).  The Parties acknowledge that the attached 2.5 GHz Build Plan will be supplemented by Manager no later than December 31, 2016 to include the nTelos Expansion Area and will be

subject to Sprint PCS approval. As part of the 2.5 GHz Spectrum Update, Manager will update and configure a minimum of 250 base stations in the aggregate in the Legacy Service Area and the nTelos Expansion Area (the exact number and location of which will be mutually determined by Manager and Sprint PCS) to be capable of providing 2.5 GHz spectrum services in the 2.5 GHz Spectrum Range (as hereinafter defined). Manager will deploy the 2.5 GHz Spectrum Update in a manner consistent in quality, design and performance with Sprint PCS’ deployment of its own corresponding 2.5 GHz update in areas with similar demographics and geographic characteristics. Manager will use its best efforts to complete the 2.5 GHz Spectrum Update (a) for the Legacy Service Area by the later of December 31, 2016 or sooner if required due to license requirements; and (b) for the nTelos Expansion Area, by the later of December 31, 2018 or sooner if required due to license requirements (collectively, the “2.5GHz Target Completion Date”); provided, however, if adequate spectrum in the Spectrum Deficient Areas (as defined below) has not been obtained by December 31, 2015, Manager has a commercially reasonable period after the adequate spectrum has been obtained in the Spectrum Deficient Areas (but in no event longer than the time period required to meet any applicable licensing requirements) to complete the 2.5 GHz Spectrum Update in the Spectrum Deficient Areas. If Manager fails to complete the 2.5 GHz Spectrum Update by the 2.5 GHz Target Completion Date, it will continue to use best efforts to achieve completion as soon as practicable thereafter.

 

Beginning on the Effective Date, Sprint PCS will make available to Manager in the Legacy Service Area the 2.5 GHz spectrum that is either licensed to or leased by Sprint PCS or a Related Party of Sprint PCS (“2.5 GHz Spectrum Lease”) as designated in the attached Exhibit D (the “2.5 GHz Spectrum”), subject to any applicable regulatory approvals or licensee consent.  In addition, Sprint PCS will exercise commercially reasonable efforts to obtain adequate spectrum in the Winchester, Virginia; Harrisonburg, Virginia; and Martinsburg, West Virginia markets (“Spectrum Deficient Areas”) to allow Manager to provide 2.5 GHz spectrum services and will make available to Manager any spectrum that it obtains in such markets promptly following the date of acquisition of such spectrum. Beginning on the Merger Closing Date, Sprint PCS will make available to Manager adequate spectrum in the 2.5 GHz Spectrum Range necessary to allow Manager to provide 2.5 GHz spectrum services in the nTelos Expansion Area. Nothing stated herein shall require Sprint PCS to renew any 2.5 GHz Spectrum Lease if Sprint PCS determines in its reasonable sole discretion after consultation with Manager that such 2.5 GHz Spectrum Lease is not needed to meet the 2.5 GHz Build Plan or future expected demand.  In addition, if any 2.5 GHz Spectrum Lease is subject to renewal and the renewal lease rate exceeds the rate Sprint PCS or a Related Party of Sprint PCS pays as of the Effective Date (“Current Lease Rate”), (a) Sprint PCS will pay for any incremental increase up to 50% of the Current Lease Rate, (b) Manager will reimburse Sprint PCS for any incremental increase in excess of 50% of the Current Lease Rate up to and including 100% of such incremental increase, and (c) Sprint PCS and Manager will share equally in any incremental increase in excess of 100% of the Current Lease Rate and Manager will reimburse Sprint PCS for its share of such additional increase.

 

	6.	Waiver.  The build out obligations set forth in Sections 4 and 5 of this Addendum supersede any contrary provisions in the Management Agreement and, to the extent applicable, 

Manager hereby specifically waives any rights under Sections 2.5 and 9.3 of the Management Agreement to decline to implement changes to Program Requirements associated with the build out obligations described in Sections 4 and 5 of this Addendum. It is understood and agreed that the although the provisions of Section 2.5 and 9.3 of the Management Agreement are waived with respect to the build out obligations set forth in Sections 4 and 5 of this Addendum, other changes to Program Requirements not relating to such build out obligations will be subject to Section 2.5 and 9.3 of the Management Agreement, to the extent applicable.

 

	7.	Exclusivity. Section 2.3(a) of the Management Agreement is deleted in its entirety and replaced with the following:

2.3 Exclusivity

(a)    Subject only to the exceptions set forth in Section 2.3(a)-(d), Manager will be the only person or entity that is a manager, operator or provider of wireless services for Sprint PCS and its Related Parties in the Service Area as set forth in the attached Exhibit D.  Such exclusivity shall continue following the Effective Date with respect to the Legacy Service Area, and shall commence on the Merger Closing Date with respect to the nTelos Expansion Area.

The amount of spectrum in the 800 MHz Spectrum Range made available to Manager by Sprint PCS may vary between BTAs based on re-banding schedules, conflicts with local incumbents, regulatory approvals, and other factors. Sprint PCS will notify Manager in writing of specific spectrum availability in each BTA as additional portions of the 800 MHz Spectrum Range become available.  Manager agrees to comply with all FCC rules related to interference mitigation in the 800 MHz Spectrum Range.  Sprint PCS will notify Manager in writing of specific 2.5 GHz Spectrum availability in each BTA as determined by Sprint PCS in accordance with Section 5 of Addendum XVIII as of the Effective Date and thereafter as additional portions of the 2.5 GHz Spectrum Range become available.  Manager agrees to comply with all FCC rules related to interference mitigation and all FCC rules related to spectrum leasing in the 2.5 GHz Spectrum Range.  The rights to manage, operate and provide wireless services utilizing the spectrum ranges set forth in Exhibit D are collectively referred to as the “Exclusive Rights.” Neither Sprint PCS nor any of its Related Parties will permit any other person or entity to manage, operate or provide wireless services for Sprint PCS and/or its Related Parties in the Service Area in violation of the Exclusive Rights, except that Sprint PCS and its Related Parties may enter into roaming arrangements with other parties and Sprint PCS and its Related Parties may offer or may enter into arrangements with third parties to offer unlicensed Wi-Fi, satellite, wireless backhaul and fixed wireless broadband wireless services in the Service Area using spectrum not now or in the future used or to be used in providing Sprint PCS service.

	8.	Competing Transaction.  Section 2.3(d)(ii) of the Management Agreement is deleted in its entirety and replaced with the following:

 

(ii)                  Notwithstanding anything in this Agreement to the contrary, if Sprint PCS or any Related Party of Sprint PCS publicly announces the signing of a definitive agreement with respect to any merger, tender or exchange offer, acquisition or other business combination transaction that would result in Sprint PCS or a Related Party of Sprint PCS acquiring, being acquired by, merging with or otherwise combining with an entity or entities (the “Acquired Entity”) that is operating a wireless network and providing wireless services that overlaps with any part of the Service Area (a “Competing Transaction” and, the portion of any overlap, a “Competing Network”)), regardless of whether such Competing Transaction constitutes a breach under this Agreement and without either Sprint PCS or Manager acknowledging that the Competing Transaction would constitute a breach, Manager agrees not to file any claim or action against Sprint PCS or its Related Parties with respect to such Competing Transaction so long as:

		(A)	the competing businesses are operated on an independent, stand-alone and status quo basis;

		(B)	Sprint PCS and its Related Parties do not take any action relating to the abandonment or material diminution of (i) the Sprint PCS brands used in connection with the operation of the Sprint PCS Network prior to such Competing Transaction, unless Manager is granted the right to use any successor or replacement brands under the same terms and conditions as Manager’s use of the Licensed Marks under the Trademark License Agreements, or (ii) the Sprint PCS Products and Services or the Sprint PCS Network; and

		(C)	neither Sprint PCS nor, after the closing of the Competing Transaction, the Acquired Entity implements any marketing or advertising campaign that is targeted to Customers in the Service Area with the intention of encouraging those Customers to switch to the Acquired Entity’s network.  This subsection is not intended to preclude Sprint PCS, the Acquired Entity or their Related Parties from running television ads, print ads, radio ads, billboards or other general forms of marketing that may reach Customers in the Service Area as part of the general public, provided that such marketing is not specifically targeted at only Customers in the Service Area.

The conditions described in (A), (B) and (C) above are referred to as the “Operating Requirements.”

For a period ending 180 days after the closing of the Competing Transaction, Sprint PCS or its Related Parties will negotiate in good faith with Manager the terms and conditions of a mutually acceptable addendum to this Agreement addressing the Competing Transaction.  If Sprint PCS or its Related Parties and Manager are unable to enter into a mutually acceptable addendum during such 180 day period, then the Acquired Entity may continue to operate the Competing Network in the Service Area. Manager agrees not to file any claim or action against Sprint PCS or its Related Parties with respect to such Competing Transaction so long as the Operating Requirements continue to be met.  However, Sprint PCS must provide 

Manager not less than 90 days advance written notice if Sprint PCS subsequently determines that:

 

		(A)	it is going to take any action to abandon or materially diminish the nationwide Sprint PCS Network existing prior to consummation of the Acquired Entity Transaction, including converting from a CDMA/LTE Network to a non-compatible network technology used by the Acquired Entity (a “Network Technology Conversion”);

 

		(B)	to (i) retire or materially diminish use of the Sprint Brand or Brands in favor of brands used by the Acquired Entity; (ii) retire or materially diminish the Acquired Entity brand or brands in favor of the Sprint brand; or (iii) implement a new brand or brands that will be jointly used by Sprint PCS and the Acquired Entity (a “Brand Conversion”); or

 

		(C)	it will be discontinuing operating the competing businesses on an independent, stand-alone and status quo basis and will commence operating all or material portions of the business on a combined basis (“Combination Conversion”).

 

Upon delivery of a notification of either a Network Technology Conversion, a Brand Conversion, or a Combination Conversion (or any combination thereof),Sprint PCS will not be deemed to be in default under the Management Agreement, the Services Agreement or any License Agreement arising from the event described in such notice (provided that Sprint PCS complies with its obligations described below in this Section 2.3(d)(ii)) and Manager agrees not to file any claim or action against Sprint PCS or its Related Parties with respect to such Conversion Notice or the actions described in the Conversion Notice.  The Parties acknowledge, agree and specifically intend that notwithstanding anything to the contrary contained in the Management Agreement, the Services Agreement or any License Agreement, upon delivery of a Conversion Notice, the process of negotiation and the series of options set forth in in the remainder of this subparagraph 2.3(d)(ii) shall service as the sole and exclusive procedure for resolving the disposition or ongoing nature of the relative interests of Sprint PCS and Manager under the Management Agreement, the Services Agreement and the License Agreements.  Immediately following the delivery of a Conversion Notice, Sprint PCS and Manager will negotiate in good faith for a period of 90 days the terms of an addendum to this Agreement, which would include mutually agreeable terms and conditions relating to such a conversion, including without limitation:

 

		(X)	In the case of a Network Technology Conversion, Manager’s conversion of its network to be compatible with the Sprint PCS Network (as such network will be converted) pursuant to plans and specifications, performance standards and a timeline mutually agreed to by the parties. Sprint PCS will use commercially reasonable efforts to facilitate discussions between the Acquired Entity and Manager concerning the purchase by Manager of the network assets and customers of the Acquired Entity (including transfer of subscribers) located within the Service Area.

 

		(Y)	In the case of a Brand Conversion notice, Manager’s right to use any successor or replacement brands on the same terms and conditions as Manager’s use of the Licensed Marks under the Trademark License Agreements.

If Sprint PCS and Manager have not negotiated a mutually acceptable addendum within such 90 day period, then for a period of 60 days thereafter, Sprint PCS has and may elect to exercise an option to purchase the Operating Assets on the same terms and conditions and utilizing the same process and schedule available to Sprint PCS under Section 11.6.1 of the Agreement upon an Event of Termination by providing written notice to Manager, provided that the amount paid to Manager for the Operating Assets is 90% of the Entire Business Value.  Manager agrees that if Sprint PCS makes such election and proceeds to purchase the Operating Assets, Manager will be deemed to have waived any and all claims for breach of this Agreement and other claims arising out of or relating to the Competing Transaction, other than seeking enforcement of this Section of the Agreement.

If Sprint PCS does not timely exercise its option to purchase the Operating Assets, then for a period of sixty (60) days thereafter, Manager has and may elect to exercise an option to purchase the Competing Network in the Service Area by providing written notice of such election to Sprint PCS.  Manager agrees that if Manager makes such election and proceeds to purchase the Competing Network in the Service Area, Manager will be deemed to have waived any and all claims for breach of this Agreement and other claims arising out of or relating to the Competing Transaction, other than seeking enforcement of this Section.

The purchase price for the Competing Network is the lesser of (a) seventy five percent (75%) of the Cost Per Subscriber (as defined below) multiplied by the number of the Acquiring Entity’s prepaid and postpaid subscribers using the Competing Network, excluding, however any customers of any resellers using the Competing Network or (b) the current appraised value of the Competing Network, determined using the same process and assumptions used for determining the Entire Business Value of Manager’s wireless business in the Service Area pursuant to Section 11.7 of this Agreement except that (w) the valuation of the Competing Network will be based on the assumption that the Competing Network will be operated by Manager as part of the Service Area Network under the terms of the Management Agreement, the Services Agreement, and the Trademark License Agreements; (x) references to Sprint PCS Products and Services will be deemed to refer to wireless products and services offered by the Acquired Entity using the Competing Network, (y) references to the Brand will be deemed to refer to the trademarks, trade names and service marks used or to be used in connection with the operation of the Competing Network and (z) the Operating Assets will include the right to use the wireless spectrum owned or leased by the Acquired Entity and used in the Competing Network upon terms substantially equivalent to the terms of the Management Agreement. The Cost per Subscriber for the Competing Network means the Enterprise Value of the Acquired Entity as of the closing date of the Competing Transaction divided by the total number of prepaid and postpaid subscribers of the Acquired Entity, excluding, however, any customers of resellers using the Competing Network. The Enterprise Value of the Acquired Entity is determined by adding the total market value of the equity of the Acquired Entity (calculated as fully diluted shares outstanding of the Acquired Entity multiplied by the implied share price being paid in the 

Competing Transaction) to the book value of the total debt and preferred stock of the Acquired Entity and subtracting Acquired Entity’s cash and cash equivalents.  Contemporaneously with the closing of Manager’s purchase of the Competing Network, Sprint PCS and Manager will enter negotiate in good faith an amendment to the Management Agreement and the Service Agreement containing such terms as may be necessary and reasonably acceptable to the parties to reflect the addition of the Competing Network to the Service Area and will enter into a new trademark and service mark licensing agreement substantially similar to the License Agreements if wireless products and services are marketed under the trademarks and service marks of the Acquired Entity.

 

If Manager elects to purchase the Competing Network, Manager must cause Parent to  exercise commercially reasonable efforts to obtain the maximum debt financing available to Parent on commercially reasonable terms to finance such purchase; provided, however, Parent will not be obligated to enter into any financing arrangement that would be likely to lead to a downgrading of Manager’s credit rating by more than one level by both Moody’s and Standard & Poor’s (including gradations within rating categories as well as between categories). If Parent is unable to obtain sufficient debt financing for the Purchase Price after exercising commercially reasonable efforts to do so, Sprint PCS (or a Related Party of Sprint PCS) will accept a promissory note from Parent for the difference between the purchase price of the Competing Network minus the debt financing that Parent was able to obtain to purchase the Competing Network, up to a maximum of eighty percent (80%) of the purchase price for the Competing Network. The promissory note will be secured by a perfected first priority security interest in the assets comprising the Competing Network, provided that such security interest would not breach any existing debt covenants that Parent entered into prior to the announcement of the Competing Transaction. If any such existing debt covenants would be breached by providing a first priority security interest in the Competing Network but would not be breached by a junior security interest, Sprint PCS is entitled to receive a junior security interest.  The promissory note will have a term of 60 months, with interest due and payable annually in advance, with a final payment due at the end of the sixtieth month equal to the outstanding principal balance, all accrued but unpaid interest and any other amounts due under the note or any security agreement.  The interest rate on the promissory note will be the greater of (a) the prevailing market interest rate for Parent or (b) 50 basis points above Sprint Corporation’s indicative borrowing rate. Parent’s market rate will be established by obtaining bids from three investment banking companies.  Manager and Sprint PCS will each select one of the investment banking companies and will jointly select the third investment banking company.  Manager will be responsible for all costs charged by the investment banking companies relating to obtaining bids.  If the highest interest rate offered by the investment bankers is within 50 basis points of the lowest interest rate offered by the investment bankers, then the interest rate for the promissory note will be the arithmetic mean of the three interest rates offered.  If two of the interest rates offered by the investment bankers are within 50 basis points of one another and the third interest rate offered is not within 50 basis points of the other interest rates offered, then the interest rate for the promissory note will be the arithmetic mean of the two most closely aligned interest rates offered.  If none of the interest rates offered are within 100 basis points of the other two interest rates offered, then the interest rate for the promissory note will be the middle value of the interest rates offered.  The promissory note will be due and payable in full upon any

payment default of more than 10 days, the dissolution or liquidation of the Manager or Parent, or the sale of Manager or Parent (including, without limitation, a change of control or sale of substantially all of Manager’s or Parent’s assets).  The promissory note may be repaid, in whole or part, from time to time, without penalty.  All other terms of the promissory note and security agreement will be on commercially reasonable and customary terms for similar types of financings.

 

If Manager does not timely elect to purchase the Competing Network in the Service Area during such 60 day period, within two (2) years after the expiration of such period Sprint PCS must cause the Acquired Entity to either sell or otherwise convey its network assets in the Service Area and transfer the subscribers of its branded service in the Service Area to an entity that is not a Related Party of Sprint PCS on such terms and conditions as the Acquired Entity deems appropriate (including to a party that may compete with Manager in the Service Area) or decommission the Acquired Entity’s network assets in the Service Area.

	9.	Reduction in Certain Fees.  From and after the Effective Date, the monthly amounts that Sprint PCS is entitled to retain as a Prepaid Management Fee and/or a Fee Based on Billed Revenue will be reduced in the amounts and for the time period provided in Section 2.1 of the Master Agreement.

	10.	Other Fees and Payments. Effective January 1, 2016, Section 10.4 is hereby deleted in its entirety and replaced with the following:

10.4              Other Fees and Payments.

10.4.1 Net Service Fee Inclusions.  The parties will make no settlement payments to each other with respect to Terminating or Originating Access Fees, software, interconnect and long distance, and fees for services rendered by a third party vendor pursuant to Section 2.2 of the Services Agreement, which fees and payments will be deemed to be included in the Net Service Fee payable pursuant to the Services Agreement.  If one party mistakenly pays an amount that the other party is obligated to pay, then the other party will reimburse the paying party, as long as the paying party identifies the mistake and notifies the receiving party within 9 calendar months after the date on which the paying party makes the mistaken payment.

10.4.2.  Inter-Service Area Fee.  For the three year period from January 1, 2016 to December 31, 2018, Manager and Sprint PCS have determined that the monthly Inter Service Area Fee that Sprint PCS owes to Manager exceeds the monthly Inter-Service Area that Manager owes Sprint PCS by $1,500,000.00 per month (“Monthly Inter-Service Area Payment”).  The Monthly Inter-Service Area Payment will be included as an amount payable to Manager in the monthly statement provided to Manager in accordance with Section 10.11.2 of this Agreement and will be paid to Manager in accordance with Section 10.12 of this Agreement.

 

The parties will reset the Monthly Inter-Service Area Fee after the expiration of the initial three year period and after every subsequent three year period with, for example, the second 

pricing period beginning on January 1, 2019 and ending on December 31, 2021. The Monthly Inter-Service Area Fee will be reset based on: (a) the use of the Service Area Network by Customers with an NPA-NXX not assigned to the Service Area Network; (b) the use of the Sprint PCS Network excluding the Service Area Network by Customers with an NPA-NXX assigned to the Service Area Network; and (c) Manager’s and Sprint PCS’s respective network costs incurred in producing and delivering a minute or kilobyte of use.  The process for resetting the Monthly Inter-Service Area Fee is as follows:

		(i)	On or before the first day of September immediately preceding the expiration of the then current pricing period, Sprint PCS will provide Manager with the formula that it will use to calculate its network costs incurred in producing and delivering a minute or kilobyte of use.  Manager shall, within 30 days following receipt of such formula, calculate its network costs incurred in producing and delivering a minute or kilobyte of use using the formula provided by Sprint PCS and provide such network cost to Sprint PCS.  On or before the fifteenth day of October immediately preceding the expiration of the then current pricing period, Sprint PCS will give Manager a proposal for the Monthly Inter-Service Area Payment for the subsequent pricing period based on the costs described above and the usage for the twelve month period commencing on October 1st of the calendar year preceding the year in which the notice of a new proposed Monthly Inter-Service Area Payment is being provided.  For example, for the initial reset of the Monthly Inter-Service Area Fee: (x) Sprint PCS must provide the formula on or before September 1, 2018; (y) Manager must provide its costs on or before October 1, 2018; and (z) Sprint PCS must provide a proposal based on such costs and the usage experienced by the parties for the 12 month period from October 1, 2017 to September 30, 2018 on or before October 15th, 2018.  Manager’s representative and Sprint PCS’ representative will begin discussions regarding the proposed Monthly Inter-Service Area Fee within 20 days after Manager receives the proposed Monthly Inter-Service Area Fee from Sprint PCS.  Each party will provide the other party with copies of excerpts of any books, records and supporting information in the providing party’s possession as may be reasonably necessary or appropriate to support a determination of the appropriate Monthly Inter-Service Area Fee for a subsequent period.

		(ii)	If the parties do not agree on the Monthly Inter-Service Area Fee within 30 days after discussions begin, then the parties may escalate the discussion to an officer in Sprint’s Business Development group (or an officer in any replacement group) and Manager’s Chief Executive Officer, Chief Operating Officer, or Chief Financial Officer.

		(iii)	If the parties cannot agree on the Monthly Inter-Service Area Fee within 20 days after the escalation proceed begins, then the parties will submit the determination of the Monthly Inter-Service Area Fee to binding arbitration under Section 14.2 of the Management Agreement, excluding the escalation process set forth in Section 14.1.

 

		(iv)	If the Monthly Inter-Service Area Fee is submitted to arbitration, the Monthly Inter-Service Area Fee proposed by Sprint PCS will apply starting at the expiration of the then current pricing period and will continue thereafter unless modified by the final 

decision of the arbitrator. If the arbitrator imposes a Monthly Inter-Service Area Fee that is different than the one then in effect, the imposed Monthly Inter-Service Area Fee will be applied as of the commencement of the then current pricing period. If on application of the new Monthly Inter-Service Area Fee, one party owes the other party any amount after taking into account payments the other party has already made, then the owing party will pay the other party within 30 days of the date of the final arbitration order.

 

10.4.3.  Reseller Customer Fees.  Sprint PCS will pay to Manager the fees collected by Sprint PCS from the resellers for the Reseller Customer’s use of the Service Area Network within 30 days following receipt of such fees from the Reseller Customer.

	11.	Initial Term. Section 11.1 of the Management Agreement is deleted and replaced with the following:

11.1                        Initial Term.  This Agreement commences on the date of execution and, unless terminated earlier in accordance with the provisions of this Section 11, continues until November 5, 2029 (the “Initial Term”).

	12.	Maximum Term.  Section 11.2 of the Management Agreement is amended to delete the following language:  “(for a maximum of 45 years including the Initial Term).”

	13.	Entire Business Value.  Section 11.7 of the Management Agreement is deleted in its entirety and replaced with the following:

11.7                        Determination of Entire Business Value.

 

11.7.1                  Appointment of Appraisers.  Sprint PCS and Manager must each designate an independent appraiser within 30 days after giving the Purchase Notice under Exhibit 11.8.  Sprint PCS and Manager will direct the two appraisers to jointly select a third appraiser within 15 days after the day the last of them is appointed.  Each appraiser must be an expert in the valuation of wireless telecommunications businesses.  Sprint PCS and Manger must direct the three appraisers to each determine, within 45 days after the appointment of the last appraiser, the Entire Business Value.  Sprint PCS and Manager will each bear the costs of the appraiser appointed by it, and they will share equally the costs of the third appraiser.

11.7.2                   Manager’s Operating Assets.  For purposes of determining the Entire Business Value (as hereinafter defined), the following assets shall be included in the Operating Assets (as defined in the Schedule of Definitions):

		(a)	network assets, including all personal property, real property interests in cell sites and switch sites, leasehold interests, collocation agreements, easements, and rights-of-way;

		(b)	all of the real, personal, tangible and intangible property and contract rights that Manager owns or uses in conducting the business of providing the Sprint 

PCS Products and Services (including, without limitation, Manager’s right to use the LTE Data Core and to use Brands under the Trademark License Agreements), including the goodwill resulting from Manager’s customer base;

 

		(c)	sale and distribution assets primarily dedicated (i.e., at least 80% of the revenue is derived from the sale of Sprint PCS Products and Services) to the sale by Manager of Sprint PCS Products and Services.  For example, a retail store that derives at least 80% of its revenue from the sale of Sprint PCS Products and Services is an Operating Asset.  A store that derives 65% of its revenue from Sprint PCS Products and Services is not an Operating Asset;

		(d)	customers using the Sprint PCS Products and Services;

		(e)	handset inventory;

		(f)	books and records of the wireless business, including all engineering drawings and designs and financial records; and

		(g)	all contracts used by Manager in operating the wireless business including backhaul service agreements, service contracts, interconnection agreements, distribution agreements, software license agreements, equipment maintenance agreements, sale agency agreements, and contracts with all equipment suppliers.

For the avoidance of doubt, references in this Section 11.7 to “Sprint PCS Products and Services” shall also include products and services that have been not been designated as Sprint PCS Products and Services, but which Manager and Sprint PCS have agreed to treat as Sprint PCS Products and Services for purposes of the Management Agreement.

11.7.3                   Entire Business Value.  Utilizing the valuation principles set forth below and in Section 11.7.4, “Entire Business Value” means the fair market value of Manager’s wireless business in the Service Area, valued on a going concern basis.

		(a)	The fair market value is based on the price a willing buyer would pay a willing seller for the entire on-going business in a change of control transaction.

		(b)	The appraiser will use the then-current customary means of valuing a wireless telecommunications business.

		(c)	The business is conducted under the Brands and existing agreements between the parties and their respective Related Parties.

		(d)	Manager has continued access to the spectrum and the frequencies actually used by Manager under this Agreement.

 

		(e)	The valuation will not include any value for the business represented by Manager’s Products and Services or any business not directly related to Sprint PCS Products and Services.

11.7.4 Calculation of Entire Business Value. The Entire Business Value to be used to determine the purchase price of the Operating Assets under this agreement is as follows:

		(a)	If the highest fair market value determined by the appraisers is within 10% of the lowest fair market value, then the Entire Business Value used to determine the purchase price under this agreement will be the arithmetic mean of the three appraised fair market values.

		(b)	If two of the fair market values determined by the appraisers are within 10% of one another and the third value is not within 10% of the other fair market values, then the Entire Business Value used to determine the purchase price under this agreement will be the arithmetic mean of the two more closely aligned fair market values.

		(c)	If none of the fair market values is within 10% of the other two fair market values, then the Entire Business Value used to determine the purchase price under this agreement will be the middle value of the three fair market values.

	14.	Transfer of Sprint PCS Network.  Section 17.15.5 of the Management Agreement is deleted in its entirety and replaced with the following:

17.15.5                Transfer of Sprint PCS Network.  Sprint PCS may sell, transfer or assign the Sprint PCS Network and, in connection therewith its rights and obligations under this agreement, the Services Agreement and any related agreements, to a third party without Manager’s consent so long as the third party assumes the rights and obligations under this agreement (including, without limitation, the obligations under Sections 2.3(a) and 2.3(d)(ii)) and the Services Agreement and any related agreements and agrees to provide the same level of service and support.  Manager agrees that Sprint PCS and Sprint PCS’ Related Parties will be released from any and all obligations under and with respect to any and all such agreements upon such sale, transfer or assignment in accordance with this section 17.15.5, without the need for Manager to execute any document to effect such release.

 

Except for (i) intercompany transfers among Sprint’s Related Parties and (ii) any transfer of the Licenses that is part of a sale, transfer, or assignment of the entire Sprint PCS Network in accordance with the preceding paragraph (collectively, the “Permitted Transfers”), neither Sprint PCS nor any Related Party of Sprint PCS may sell, transfer or assign any of the Licenses or any spectrum under the Licenses unless (x) Sprint PCS determines that the Licenses or any spectrum under the Licenses are not necessary to enable Manager to provide service to current and future Customers in the Service Area, as determined by Sprint PCS in its sole discretion after consultation with Manager and (y) for any Licenses or any spectrum under the Licenses that are being used by Manager, Sprint PCS provides adequate replacement spectrum generally equivalent to the spectrum then being used by Manager.

 

	15.	Settlements.  Sprint PCS or a Related Party of Sprint PCS currently has postpaid and prepaid subscribers in the nTelos Expansion Area using the nTelos wireless network pursuant to a certain Amended and Restated Resale Agreement by and among West Virginia PCS Alliance, L.C.; Virginia PCS Alliance, L.C.;  Ntelos, Inc.; and Sprint Spectrum L.P. and its Designated Affiliates, effective May 1, 2014.  (“Sprint/nTelos Subscribers”).  As of the Merger Closing Date, the Sprint/nTelos Subscribers are deemed to be either Customers or Prepaid Subscribers in the Manager Service Area and fees and credits relating to the former Sprint/nTelos Subscribers will be settled in accordance with the Management Agreement (including specifically Section 10 of the Management Agreement) and Manager will pay Sprint Spectrum for services in accordance with the Services Agreement (including specifically Section 3 of the Services Agreement and the one-time LTE Data Core Fee of $9.23 per Sprint/nTelos Subscriber).   An estimated one-time LTE Data Core Fee for the Sprint/nTelos Subscribers and the Converted nTelos Subscribers (as described in the next paragraph) will be paid within 10 days following the Merger Closing Date, based on Sprint PCS’ and Manager’s estimation as of the Merger Closing Date of the number of Manager LTE Devices that will be added to the Service Area.  The estimated LTE Data Core Fee for the Sprint/nTelos Subscribers and the Converted nTelos Subscribers will be trued-up in accordance with Section 3.5 of the Service Agreement at the end of the calendar year in which the Merger Closing Date occurs based on the actual Manager LTE Devices added to the Service Area.

In addition to the Sprint/nTelos Subscribers, nTelos has its own postpaid and prepaid subscribers in the nTelos Service Area (“nTelos Subscribers”).  As of the Merger Closing Date, Manager will commence paying the Fee Based on Billed Revenue for the nTelos Subscribers that are postpaid subscribers and the Prepaid Management Fee for the nTelos Subscribers that are prepaid subscribers using the same methodology described in the Management Agreement for Customers and Prepaid Subscribers.   All amounts payable by Manager to Sprint PCS pursuant to the preceding sentence will be paid in accordance with the Management Agreement. When an nTelos Subscriber satisfies the criteria for becoming a Converted nTelos Subscriber (as described in category “X” of the definition of Converted nTelos Subscriber in the Master Agreement), the former nTelos Subscriber will be deemed to be a Customer or a Prepaid Subscriber (as applicable) in the Service Area and fees and credits relating to the nTelos Subscriber will be settled in accordance with the Management Agreement (including specifically Section 10 of the Management Agreement) and Manager will commence paying Sprint Spectrum for services in accordance with the Services Agreement (including specifically Section 3 of the Services Agreement.)

Unless Sprint PCS elects to discontinue offering LTE Data Core Services pursuant to Section 2.2.1(e)(3) of the Services Agreement, Sprint PCS will provide sufficient LTE Data Core Services capacity to accommodate the Converted nTelos Subscribers and additional LTE usage in the Service Area (including the nTelos Expansion Area) as of the Merger Closing Date.

 

The parties acknowledge that, under current procedures, Manager receives payments from Customers and Prepaid Subscribers that are held in Manager’s deposit accounts until transferred by Sprint PCS to its own deposit accounts.  During the Adjusted Settlement 

Period (as defined in Section 2.1 of the Master Agreement), Sprint PCS will discontinue its practice of transferring funds from Manager’s deposit accounts, and Manager shall have the right to retain all such funds.  Amounts retained by Manager shall reduce the net postpaid and prepaid cash settlements (as increased by the Adjusted Settlement Amount pursuant to the Master Agreement) payable from Sprint PCS to Manager.  Manager will continue to promptly provide Sprint PCS with all information reasonably necessary to enable Sprint PCS to correctly settle such amounts under the Management Agreement and to credit accounts of the Customers and Prepaid Subscribers.

	16.	Put and Take Rights.  Effective on the Merger Closing Date:

		(a)	Sections 11.2.1.2, 11.2.2.2, 11.2.3, 11.5.2 and 11.6.2 of the Management Agreement and any other references to a Disaggregated License (if any) in the Management Agreement are hereby deleted in their entirety.

		(b)	The second sentence of Section 11.2.1.1 of the Management Agreement is hereby amended to read in its entirety as follows:  “Sprint PCS will pay to Manager for the Operating Assets an amount equal to 90% of the Entire Business Value.”

		(c)	The second sentence of Section 11.2.2.1 of the Management Agreement is hereby amended to read in its entirety as follows:  “Sprint PCS will pay to Manager an amount equal to 90% of the Entire Business Value.”

		(d)	The second sentence of Section 11.5.1 of the Management Agreement is hereby amended to read in its entirety as follows:  “Sprint PCS will pay to Manager an amount equal to 90% of the Entire Business Value.”

		(e)	The second sentence of Section 11.6.1 of the Management Agreement is hereby amended to read in its entirety as follows:  “Sprint PCS will pay to Manager an amount equal to 81% (90% minus a 10% penalty) of the Entire Business Value.”

	17.	Net Service Fee Exclusions.  Effective January 1, 2016, Section 2.1.1(d) of the Services Agreement is amended to add subsections (vi) and (vii) to the list of Settled Separately Manager Expenses:

		(vi)	Manager Commissions; and

		(vii)	Manager Device Subsidies;

	18.	Net Service Fee Modification.  Effective January 1, 2016, Inter-Service Area Fees and Reseller Customer Fees are hereby deleted as components of the Net Service Fee and will be settled in accordance with the Management Agreement.  Commencing January 1, 2016, Sprint PCS and Manager agree that (a) the percentage used to determine the Net Service Fee in Section 3.2.1(b) of the Service Agreement is decreased from 14% to 8.6%.

 

	19.	Effective January 1, 2016, Section 3.2.2(b) of the Service Agreement is hereby deleted in its entirety and replaced with the following:

		(b)	If either party believes in good faith that the Net Service Fee necessary to permit Sprint PCS to recover its reasonable costs for providing the Services to Manager has increased or decreased, then such party may initiate a review of the Net Service Fee by delivering a Review Notice to the other party, including its proposed Net Service Fee.

	20.	Net Service Fee Cap.  Effective January 1, 2016, Section 3.2.2(l) of the Service Agreement is hereby deleted in its entirety and replaced with the following:

		(l)	Notwithstanding anything to the contrary contained herein, at no time during the term of this agreement or any renewal hereof will the Net Service Fee exceed 8.6% (through December 31, 2017) or 10% (commencing January 1, 2018) of (i) Net Billed Revenue less (ii) the Allocated Write-Offs for Net Billed Revenue, unless the cap on the percentage used to determine the Net Service Fee would need to be raised or lowered by at least one full percentage point to enable Sprint PCS to recover the average expenses that Sprint PCS incurred over an 18 month period in providing the Services, in which case the parties will negotiate in good faith to determine any increase in the cap on the Net Service Fee.  The cap on the percentage used to determine the Net Service Fee may not be increased or decreased more than once in any 12 month period.  If the parties are unable to agree on an increase in the cap on the Net Service Fee within 30 days after discussions begin, then the parties may escalate the discussion and submit the determination to arbitration using the same process and timelines used when the parties are unable to agree on a change in the Net Service Fee, as described in Sections 3.2.2(g)-(i).

	21.	Additional Service Agreement Deletions.  Effective January 2, 2016, Section 3.2.2(j) and Section 3.2.2(m) of the Service Agreement are hereby deleted in their entirety.

	22.	Settlement for Mixed Accounts.  Under Sprint PCS’ current billing system, late charges and service credits for an individual Customer may be billed or credited to a billing account number that contains billing detail for multiple individual accounts billed to a single Customer, with some individual accounts having a NPA-XXX within the Service Area and other individual accounts having a NPA-NXX outside the Service Area (“Mixed Billing Accounts”).  Sprint PCS does not have sufficient detail to settle late charges and service credits for Mixed Billing Accounts until after Sprint PCS has settled the Net Billed Revenue pursuant to the Management Agreement.  The late charges and service credits for Mixed Billed Accounts that Sprint PCS in unable to timely settle pursuant to the Management Agreement will be treated and settled as if they were Services under the Service Agreement and are included in the percentage used to determine to the Net Service Fee payable under the Service Agreement.

 

	23.	 Additional Information/Settlement Improvements.  Subject to any limitations on the sharing of information currently contained in the Management Agreement and the Services 

Agreement, on a monthly basis Sprint PCS will provide Manager with sufficient detail to enable Manager (a) to confirm the accuracy of the amounts charged to Manager for Manager Commissions and Manager Device Subsidies; (b) revenues payable to Manager relating to Reseller Customer Fees; and (c) usage of the Service Area Network by Customers assigned to the other portions of the Sprint PCS Network and usage of the Sprint PCS Network excluding the Service Area Network by Customers assigned to the Service Area Network. Manager and Sprint PCS will also meet and discuss in good faith potential improvements in the process of settling costs and revenues under the Management Agreement and the Services Agreement.

 

	24.	Spectrum Owner Devices and Services.  Manager will provide at its sole cost and expense (in addition to any other costs and expenses under the Management Agreement or Services Agreement) all devices, network usage and wireless services required to be provided to spectrum owners/lessors for the Educational Broadband Services or Instructional Television Fixed Service spectrum leases within Manager’s Service Area that are set forth on Exhibit E.  The associated lease expenses, annual device and service credit obligations are also set forth on Exhibit E. Sprint PCS will manage fulfillment of device orders and settle charges in accordance with this paragraph.

	25.	Tandem Bypass.  Inbound voice and data traffic to Sprint PCS Customers in the Service Area originating from Sprint PCS Customers outside the Service Area are sometimes routed through Manager’s local tandem switch facility (the “Tandem”) directly to Manager’s Mobile Switching Center (“Manager’s MSC”).  Beginning as of the Effective Date, fees charged to and payable by Sprint PCS for traffic routed through the Tandem to Manager’s MSC will not be charged to Sprint PCS.  Beginning January 1, 2016, all traffic exchanged between the Sprint PCS network and Manager’s MSC will be routed so as to bypass the Tandem unless otherwise mutually agreed to by the parties.  Upon Sprint PCS’s request, the parties will establish a direct connection between the Sprint PCS network and Manager’s MSC as the mechanism to bypass the Tandem, and maintain sufficient capacity to enable the mutual exchange of traffic between the parties’ networks over such direct connection.

	26.	Non-Renewal and Termination of Certain Tower Leases.   Manager agrees and acknowledges (including on behalf of its Related Parties) that Sprint PCS may elect to terminate or not to renew Clearwire’s WiMax leases that Clearwire entered into with a Related Party of Manager at up to 7 towers within Manager’s York and Harrisburg, PA markets listed on Exhibit F.  Manager agrees that notwithstanding any provision to the contrary in the applicable leases to be terminated or not to be renewed:

		A.	Notice of non-renewal with respect to any lease may be provided not less than thirty days in advance of the scheduled expiration of the initial term.

 

		B.	No termination fee will apply for expiration pursuant to a timely notice of non-renewal (as such notice deadline may be adjusted pursuant to section “A” immediately above). For any termination occurring after expiration of the Initial Term for which a lump sum termination fee would apply under a lease, the parties agree that the lump sum due and owing will be discounted by 50%.

 

The rights described in this Section 26 may be exercised on different dates for different sites.

	27.	Addition of SprintCom.  SprintCom acknowledges and agrees that by entering into this Addendum, it has become a party to and is entitled to rights and subject to obligations under the Management Agreement, the Services Agreement, and the Trademark License Agreements.   As of the Effective Date, all references to Sprint PCS will be deemed to include SprintCom and SprintCom is jointly and severally liable for the obligations of Sprint PCS thereunder.

Schedule of Definitions

	28.	The Schedule of Definitions is revised to include the following:

“2.5 GHz Spectrum Range” means owned or leased spectrum blocks in frequency range of 2496-2690 MHz.

“License” means the spectrum licenses issued by the FCC to Sprint PCS or one of its Related Parties that Manager is allowed to use in the Service Area in accordance with the Management Agreement.

“Manager Commissions” means device rebates and costs and amounts paid to any third party distributor relating to commissions on sales of devices or the sale of a service plan to a Customer with a NPA-NXX assigned to the Service Area, and may include, at Sprint PCS’ option, device rebates and costs and commissions payable to a third party distributor relating to the sale of a device on an installment billing plan or a lease of a device.

“Manager Device Subsidies” means the difference between the purchase price paid to the vendor supplying the device to Sprint PCS or one of its Related Parties and the actual price paid by a Customer purchasing the device for any device sold to a Customer with a NPA-NXX assigned to the Service Area, and may include, at Sprint PCS’ option, subsidies relating to the sale of a device on an installment billing plan or a lease of a device.

General Provisions

	29.	Manager and Sprint PCS’ Representations.  Manager and Sprint PCS (including SprintCom) each represents and warrants that its respective execution, delivery and performance of its obligations described in this Addendum have been duly authorized by proper action of its governing body and do not and will not violate any material agreements to which it is a party.  Each of Manager and Sprint PCS also represents and warrants that there are no legal or other claims, actions, counterclaims, proceedings or suits, at law or in arbitration or equity, pending or, to its knowledge, threatened against it, its Related Parties, officers or directors that question or may affect the validity of this Addendum, the execution and performance of the transactions contemplated by this Addendum or that party’s right or obligation to consummate the transactions contemplated by this Addendum.

 

	30.	Reaffirmation of Sprint Agreements.  Each of the undersigned reaffirms in their entirety, together with their respective rights and obligations thereunder, the Management Agreement, the Services Agreement, the Trademark and Service Mark License Agreements, and the Schedule of Definitions (as defined in the Management Agreement).

	31.	Counterparts.  This Addendum may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one agreement.

[Signature Page to Follow]

 

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

	 	
SHENANDOAH PERSONAL COMMUNICATIONS, LLC

	 	 
	 	
By:

	/s/ Christopher E. French
	 	
Name:   Christopher E. French

	 	
Title:     President and Chief Executive Officer

	 	 
	 	
SPRINT SPECTRUM L.P.

	 	 
	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

	 	 
	 	
SPRINT COMMUNICATIONS COMPANY, L.P.

	 	 
	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

	 	 
	 	
WIRELESSCO, L.P.

	 	 
	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

	 	 
	 	
APC PCS, LLC

	 	 
	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

 

[Signature Page to Affiliate Addendum]

 

	 	
PHILLIECO, L.P.

	 	 
	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

	 	 
	 	
SPRINTCOM, INC.

	 	
By:

	/s/ Michael C. Schwartz
	 	
Name:   Michael C. Schwartz

	 	
Title:     Vice President

 

[Signature Page to Affiliate Addendum]EX-10.1

 Exhibit 10.1 

ADVISORY AGREEMENT 

This ADVISORY AGREEMENT (this “Agreement”) is entered into on this the
10th day of August, 2015, by and among NEXPOINT MULTIFAMILY REALTY TRUST, INC., a Maryland corporation (the “Company”), NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the “Partnership”), and NEXPOINT REAL ESTATE ADVISORS II, L.P., a Delaware limited partnership (the “Advisor”). 

W I T N E S S E T H 

WHEREAS, the Company intends to issue shares of its common stock, par value $0.01 per share, to the public, upon registration of such
shares with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended; 
 WHEREAS, the Company
intends to qualify as a real estate investment trust and to invest its funds in investments permitted by the terms of the Company’s Articles of Incorporation, as may be amended from time to time, and Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended; 
 WHEREAS, the Company is the general partner of the Partnership and intends to conduct all of its
business and make all of its investments in Properties and other Assets through the Partnership; 
 WHEREAS, the Company and the
Partnership desire to avail themselves of the experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf
of, and subject to the supervision of, the Board, all as provided herein; and 
 WHEREAS, the Advisor is willing to undertake to
render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth. 
 NOW, THEREFORE,
in consideration of the foregoing and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

ARTICLE I 

DEFINITIONS 
 Section 1.01 The
following defined terms used in this Agreement shall have the meanings specified below: 
 (a) Acquisition Expenses. Any and
all expenses incurred by the Company, the Partnership, the Advisor, or any Affiliate of either in connection with the selection, evaluation, acquisition or development of any Asset, whether or not acquired, including, without limitation, legal fees
and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, and title insurance premiums. 

(b) Acquisition and Advisory Fees. The fees payable to the Advisor pursuant to Section 3.01(b) of this Agreement. 

 

 (c) Advisor. NexPoint Real Estate Advisors II, L.P., a Delaware limited
partnership, any successor advisor to the Company and the Partnership, or any Person to which NexPoint Real Estate Advisors II, L.P., or any successor advisor subcontracts all or substantially all of its functions. 

(d) Affiliate or Affiliated. As to any Person, (i) any Person directly or indirectly owning, controlling, or holding, with
the power to vote, 10% or more of the outstanding voting securities of such Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other
Person; (iii) any Person, directly or indirectly, controlling, controlled by, or under common control with such Person; (iv) any executive officer, director, trustee or general partner of such Person; and (v) any legal entity for
which such Person acts as an executive officer, director, trustee or general partner. 
 (e) Appraised Value. Value according
to an appraisal made by an Independent Appraiser, which may take into consideration any factor deemed appropriate by such Independent Appraiser, including, but not limited to, current market and property conditions, any unique attributes of the
investment operations, current and anticipated income and expense trends, the terms and conditions of any lease of a relevant property, the quality of any lessee’s, borrower’s or other counter-party’s credit and the conditions of the
credit markets. The Appraised Value of a Property may be greater than the construction cost or the replacement cost of the Property. 

(f) Articles of Incorporation. The Articles of Incorporation of the Company filed with the Maryland State Department of
Assessments and Taxation in accordance with the Maryland General Corporation Law, as amended from time to time. 
 (g) Assets.
Properties, Mortgages and other direct or indirect investments in equity interests in, or loans secured by, Real Property (other than investments in bank accounts, money market funds or other current assets, whether with the proceeds from an
Offering or the sale of an Asset or otherwise) owned by the Company or the Partnership, directly or indirectly through one or more of its Affiliates. 

(h) Asset Management Fee. The fee payable to the Advisor for day-to-day professional management services in connection with the Company
and its investments in Assets pursuant to this Agreement. 
 (i) Average Invested Assets. For a specified period, the average of the
aggregate book value of the Assets, before deducting depreciation, bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period; provided, however, that during such periods
in which the Board is determining on a regular basis the current value of the Company’s net assets for purposes of enabling fiduciaries of employee benefit plan stockholders to comply with applicable Department of Labor reporting requirements,
and solely for such purpose, “Average Invested Assets” will equal the greater of (i) the amount determined pursuant to the foregoing or (ii) the most recent Assets’ aggregate valuation established by the Board without
reduction for depreciation, bad debts or other non-cash reserves. 
 (j) Board. The Board of Directors of the Company. 

(k) Bylaws. The bylaws of the Company, as the same are in effect as amended from time to time. 

(l) Change of Control. Any event (including, without limitation, issue, transfer or other disposition of Shares of capital stock of the
Company or equity interests in the Partnership, merger, share exchange or consolidation) after which any “person” (as that term is used in Sections 13(d) and 14(d) of 

  
 2 

 
the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-j of the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company or the Partnership representing greater than 50% or more of the combined voting power of the Company’s or the Partnership’s then outstanding securities, respectively; provided, that, a Change of
Control shall not be deemed to occur as a result of any widely distributed public offering of the Shares. 
 (m) Code. Internal
Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto,
as interpreted by any applicable regulations as in effect from time to time. 
 (n) Company. NexPoint Multifamily Realty Trust, Inc.,
a corporation organized under the laws of the State of Maryland. 
 (o) Competitive Disposition Fee. A real estate or brokerage
commission paid or, if no such commission is paid, the amount that customarily would be paid, for the purchase or sale of a Property, which is reasonable, customary, and competitive in light of the size, type and location of the Property. 

(p) Contract Purchase Price. The amount actually paid or allocated in respect of the purchase, development, construction or improvement
of an Asset, or the amount of funds advanced with respect to a Mortgage, exclusive of Acquisition Fees and Acquisition Expenses. 
 (q)
Contract Sales Price. The total consideration provided for in the sales contract for the sale of a Property. 
 (r) Dealer
Manager. Highland Capital Funds Distributors, Inc., an Affiliate of the Advisor, or such Person selected by the Board to act as the dealer manager for an Offering. 

(s) Director. A member of the Board. 

(t) Disposition Fee. The fee payable to the Advisor for services provided in connection with the Sale of one or more Properties pursuant
to Section 3.01(c). 
 (u) Distributions. Any dividends or other distributions of money or other property by the Company to
Stockholders, including distributions that may constitute a return of capital for federal income tax purposes. 
 (v) FINRA. Means the
Financial Industry Regulatory Authority. 
 (w) Gross Proceeds. The aggregate purchase price of all Shares sold for the account of the
Company through an Offering, without deduction for Selling Commissions, volume discounts, dealer manager fees, or Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced
Selling Commissions or dealer manager fees are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the Offering price per Share pursuant to the Prospectus for
such Offering without reduction. 
 (x) Independent Appraiser. A Person with no material current or prior business or personal
relationship with the Advisor or the Directors and who is a qualified appraiser of Real Property of the type held by the Company or the Partnership or of other Assets as determined by the Board. Membership in a nationally recognized appraisal
society such as the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of such qualification as to Real Property. 

  
 3 

 (y) Independent Director. A Director who is not, and within the last two years has not
been, directly or indirectly associated with the Sponsor or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, other than the Company, (ii) employment by the Sponsor, the Advisor
or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any of their Affiliates, other than as a Director of the Company or as a director of any other real estate investment trust organized by the
Sponsor or advised by the Advisor, (iv) performance of services, other than as a Director, for the Company, (v) service as a director or trustee of more than three real estate investment trusts organized by the Sponsor or advised by the
Advisor or (vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their Affiliates. A business or professional relationship is considered “material” per se if the aggregate gross
revenue derived by the Director from the Sponsor, the Advisor and their Affiliates exceeds 5.0% of either the Director’s annual gross revenue during either of the last two years or the Director’s net worth on a fair market value basis. An
indirect association with the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law, or brother- or sister-in-law is or has been associated
with the Sponsor, the Advisor, any of their Affiliates or the Company. 
 (z) Invested Capital. The amount calculated by multiplying
the total number of Shares purchased by Stockholders by the issue price at the time of such purchase, reduced by the portion of any Distribution that is attributable to Net Sales Proceeds and by any amounts paid by the Company to repurchase Shares
pursuant to the Company’s plan for the repurchase of Shares. 
 (aa) Joint Ventures. The joint venture or partnership
arrangements in which the Company or the Partnership is a co-venturer or general partner which are established to acquire or hold Assets. 

(bb) Listing or Listed. The approval of the Company’s application to list the Shares by a national securities exchange and the
commencement of trading in the Shares on the respective national securities exchange. Upon such Listing, the Shares shall be deemed Listed. 

(cc) Market Value. Upon Listing, the market value of the outstanding Shares, measured by taking the average closing price for a single
Share over a period of 30 consecutive trading days, with such period beginning 180 days after Listing, and multiplying that number by the number of Shares outstanding on the date of measurement. 

(dd) Mortgages. In connection with mortgage financing provided, invested in or purchased by the Company, all of the notes, deeds
of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness or
obligations.  
 (ee) NASAA Guidelines. The Statement of Policy Regarding Real Estate Investment Trusts published by the North
American Securities Administrators Association, Inc. on May 7, 2007, and in effect on the date hereof. 
 (ff) NAV. Net asset
value, as calculated in accordance with the procedures described in the Prospectus. 

  
 4 

 (gg) Net Income. For any period, the Company’s total revenues applicable to such
period, less the total expenses applicable to such period other than additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Assets. If the Advisor is paid a Subordinated
Incentive Listing Distribution, “Net Income” for purposes of calculating total Operating Expenses, shall exclude the gain from the Sale of any Assets. 

(hh) Net Sales Proceeds. In the case of a transaction described in clause (A) of the definition of Sale, the proceeds of any such
transaction less the amount of selling expenses incurred by or on behalf of the Company or the Partnership, including all Disposition Fees, closing costs and legal fees and expenses. In the case of a transaction described in clause (B) of such
definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company or the Partnership, including any legal fees and expenses and other selling expenses incurred in
connection with such transaction. In the case of a transaction described in clause (C) of such definition, Net Sales Proceeds means the proceeds of any such transaction actually distributed to the Company from the Joint Venture less the amount
of any selling expenses, including legal fees and expenses incurred by or on behalf of the Company or the Partnership (other than those paid by the Joint Venture). In the case of a transaction or series of transactions described in clause
(D) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction (including the aggregate of all payments under a Mortgage or in satisfaction thereof other than regularly scheduled interest payments) less the amount
of selling expenses incurred by or on behalf of the Company or the Partnership, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (E) of such definition, Net Sales Proceeds
means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company or the Partnership, including any legal fees and expenses and other selling expenses incurred in connection with such transaction.
In the case of a transaction described in the last sentence of the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one or more Assets
within 180 days thereafter and less the amount of any Disposition Fees, closing costs, and legal fees and expenses and other selling expenses incurred by or allocated to the Company in connection with such transaction or series of transactions. Net
Sales Proceeds shall also include any consideration (including non-cash consideration such as stock, notes, or other property or securities) that the Company determines, in its discretion, to be economically equivalent to proceeds of a Sale, valued
in the reasonable determination of the Company. Net Sales Proceeds shall not include any reserves established by the Company in its sole discretion. 

(ii) Offering. Any public offering and sale of Shares pursuant to an effective registration statement filed under the Securities Act,
other than a public offering of Shares under a distribution reinvestment plan and Shares offered under any employee benefit plan. 
 (jj)
Operating Expenses. All costs and expenses paid or incurred by the Company, as determined under generally accepted accounting principles, which are in any way related to the operation of the Company or to Company business, including the Asset
Management Fee, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax
incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves,
(v) the Subordinated Participation in Net Sales Proceeds, (vi) the Subordinated Distribution Upon Termination of the Advisory Agreement, (vii) the Subordinated Incentive Listing Distribution, (viii) Acquisition Fees and
Acquisition Expenses, (ix) Disposition Fees on the Sale of Property, and (x) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property
(including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). 

  
 5 

 (kk) Organization and Offering Expenses. Any and all expenses (other than Selling
Commissions, any distribution fees and any fees or other expenses paid to the Dealer Manager) to be paid by the Company in connection with an Offering, including the Company’s legal, accounting, printing, mailing and filing fees, the charges of
any escrow holder, due diligence expense reimbursements to soliciting dealers, reimbursements to the Advisor and its Affiliates, other costs in connection with administrative oversight of an Offering, and marketing costs (including supplemental
sales materials, educational conferences and retail seminars by soliciting dealers). 
 (ll) Partnership. NexPoint Multifamily
Operating Partnership, L.P., a Delaware limited partnership, through which the Company may own Assets. 
 (mm) Person. An individual,
corporation, business trust, estate, trust, partnership, limited liability company or other legal entity. 
 (nn) Property or
Properties. As the context requires, any, or all, respectively, of the Real Property acquired by the Company or the Partnership, either directly or indirectly (whether through joint venture arrangements or other partnership or investment
interests). 
 (oo) Prospectus. Prospectus has the meaning set forth in Section 2(10) of the Securities Act, including a
preliminary prospectus, an offering circular as described in Rule 253 of the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering
and selling securities of the Company to the public. 
 (pp) Real Property. Land, rights in land (including leasehold interests), and
any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land. 

(qq) REIT. A corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in
investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both in accordance with Sections 856 through 860 of the Code. 

(rr) Sale or Sales. Any transaction or series of transactions whereby: (A) the Company or the Partnership directly or
indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and
including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Company or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this definition) in which the Company or the Partnership as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion
thereof, including any event with respect to any Property which gives rise to insurance claims or condemnation awards; (D) the Company or the Partnership directly or indirectly (except as described in other subsections of this definition)
sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof (including with respect to any Mortgage, all repayments thereunder or in satisfaction thereof other than regularly scheduled interest payments) and any event with
respect to a Mortgage which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Company or the Partnership directly or indirectly (except as described in other subsections of

  
 6 

 
this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof. Notwithstanding the
foregoing, “Sale” or “Sales” shall not include any transaction or series of transactions specified in clause (A) through (D) above in which the proceeds of such transaction or series of transactions are reinvested in
one or more Assets within 180 days thereafter. 
 (ss) Securities Act. The Securities Act of 1933, as amended from time to time, or
any successor statute thereto. Reference to any provision of the Securities Act shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations
as in effect from time to time. 
 (tt) Selling Commissions. Any and all commissions payable to underwriters, dealer managers or other
broker-dealers in connection with the sale of the Shares, including, without limitation, commissions payable to Highland Capital Funds Distributors, Inc. 

(uu) Shares. Any shares of the Company’s common stock, par value $.01 per share. 

(vv) Soliciting Dealer. A broker-dealer that is a member of the Financial Industry Regulatory Authority, Inc., or that is exempt from
broker-dealer registration, and who, in either case, has executed participating broker-dealer or other agreements with the Dealer Manager to sell Shares. 

(ww) Sponsor. Highland Capital Management, L.P., a Delaware limited partnership. 

(xx) Stockholders. The record holders of the Shares as maintained in the books and records of the Company or its transfer agent. 

(yy) Stockholders’ 6.0% Return. As of any date, an aggregate amount equal to a 6.0% cumulative, pre-tax, non-compounded, annual
return on Invested Capital. 
 (zz) Subordinated Distribution Upon Termination of the Advisory Agreement. The fee payable to the
Advisor upon termination of this Agreement under certain circumstances if certain performance standards have been met pursuant to Section 4.03(b) of this Agreement. 

(aaa) Subordinated Incentive Listing Distribution. The fee payable to the Advisor under certain circumstances if the Shares are Listed
pursuant to Section 3.01(d). 
 (bbb) Subordinated Participation in Net Sales Proceeds. The fee payable to the Advisor under
certain circumstances following receipt of Net Sales Proceeds pursuant to Section 3.01(c). 
 (ccc) Termination Date. The date of
termination of this Agreement. 
 (ddd) 2%/25% Guidelines. The requirement pursuant to the NASAA Guidelines that,
in any four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2% of Average Invested Assets during such period or 25% of Net Income over the same period. 

  
 7 

 ARTICLE II 

THE ADVISOR 

Section 2.01 Appointment. The Company and the Partnership hereby appoint the Advisor to serve as its advisor on the terms and
conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.  
 Section 2.02 Duties of the Advisor.
Subject to Section 2.07, the Advisor undertakes to use its commercially reasonable best efforts to present to the Company and the Partnership investment opportunities consistent with the investment objectives and policies of the Company as
determined and adopted from time to time by the Board. In performance of this undertaking, subject to the supervision of the Board and consistent with the provisions of the Company’s most recent Prospectus, Articles of Incorporation and Bylaws,
the Advisor shall, either directly or by engaging a duly qualified and licensed Affiliate of the Advisor or other duly qualified and licensed Person: 

(a) find, evaluate, present and recommend to the Company investment opportunities consistent with the Company’s investment policies and
objectives; 
 (b) serve as the Company’s and Partnership’s investment and financial advisor and provide research and economic and
statistical data in connection with the Assets and the Company’s investment policies; 
 (c) provide the daily management of the Company
and Partnership and perform and supervise the various administrative functions reasonably necessary for the management and operations of the Company and the Partnership; 

(d) maintain and preserve the books and records of the Company and the Partnership, including stock books and records reflecting a record of
the Stockholders and their ownership of the Shares; 
 (e) investigate, select, and, on behalf of the Company and the Partnership, engage and
conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, correspondents, lenders, technical advisors, attorneys, brokers,
underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, mortgagors, property management companies, transfer agents and any and all
agents for any of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services, including but not limited to entering
into contracts in the name and on behalf of the Company and the Partnership with any of the foregoing; 
 (f) consult with the officers of
the Company and the Board and assist the Board in the formulation and implementation of the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent
with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company and the Partnership; 

(g) review and analyze the operating and capital budgets prepared and submitted by a third party for each property; 

  
 8 

 (h) subject to the provisions of Section 2.02(i) and Section 2.03 hereof,
(i) locate, analyze and select potential investments in Assets, (ii) structure and negotiate the terms and conditions of transactions pursuant to which investments in Assets will be made; (iii) make investments in Assets on behalf of
the Company or the Partnership in compliance with the investment objectives and policies of the Company; (iv) arrange for financing and refinancing and make other changes in the asset or capital structure of, and dispose of, reinvest the
proceeds from the sale of, or otherwise deal with the investments in, Assets; and (v) enter into leases of Property and service contracts for Assets and, to the extent necessary, perform all other operational functions for the maintenance and
administration of such Assets including the servicing of Mortgages; 
 (i) provide the Board with periodic reports regarding prospective
investments in Assets; 
 (j) if a transaction requires approval by the Board, deliver to the Board all documents required by them to
properly evaluate the proposed transaction; 
 (k) obtain the prior approval of the Board (including a majority of all Independent Directors)
for any and all investments in Assets with a Contract Purchase Price greater than an amount reasonably agreed to between the Advisor and the Independent Directors; 

(l) obtain the prior approval of a majority of the Independent Directors and a majority of the Board not otherwise interested in any
transaction with the Advisor or its Affiliates; 
 (m) negotiate on behalf of the Company and the Partnership with banks or lenders for loans
to be made to the Company, negotiate on behalf of the Company and the Partnership with investment banking firms and broker-dealers, and negotiate private sales of Shares and other securities of the Company or obtain loans for the Company and the
Partnership, as and when appropriate, but in no event in such a way so that the Advisor shall be acting as a broker-dealer or an underwriter; and provided further, that any fees and costs payable to third parties incurred by the Advisor in
connection with the foregoing shall be the responsibility of the Company; 
 (n) obtain reports (which may be prepared by or for the Advisor
or its Affiliates), where appropriate, concerning the value of investments or contemplated investments of the Company and the Partnership in Assets; 

(o) from time to time, or at any time reasonably requested by the Board, make reports to the Board of its performance of services to the
Company and the Partnership under this Agreement; 
 (p) provide the Company and the Partnership with, or assist the Company and the
Partnership in arranging for, all necessary cash management services; 
 (q) deliver to or maintain on behalf of the Company and the
Partnership copies of all appraisals obtained in connection with the investments in Assets; 
 (r) upon request of the Company, act, or
obtain the services of others to act, as attorney-in-fact or agent of the Company and the Partnership in making, requiring and disposing of Assets, disbursing, and collecting the funds, paying the debts and fulfilling the obligations of the Company
and the Partnership and handling, prosecuting and settling any claims of the Company and the Partnership, including foreclosing and otherwise enforcing mortgage and other liens and security interests comprising any of the Assets; 

  
 9 

 (s) supervise the preparation and filing and distribution of returns and reports to governmental
agencies and to Stockholders and other investors and act on behalf of the Company in connection with investor relations; 
 (t) provide
office space, equipment and personnel as required for the performance of the foregoing services as Advisor; 
 (u) assist the Company in
preparing all reports and returns required by the Securities and Exchange Commission, Internal Revenue Service and other state or federal governmental agencies; and 

(v) do all things necessary to assure its ability to render the services described in this Agreement. 

Section 2.03 Authority of Advisor. Pursuant to the terms of this Agreement, including the duties set forth in Section 2.02 and the
restrictions included in this Section 2.03 and in Section 2.06, and subject to the continuing and exclusive authority of the Board over the management of the Company, the Board hereby delegates to the Advisor the authority to
(a) locate, analyze and select investment opportunities for the Company and the Partnership, (b) structure the terms and conditions of transactions pursuant to which investments will be made or acquired for the Company or the Partnership,
(c) acquire Properties, make and acquire Mortgages and other loans and invest in other Assets in compliance with the investment objectives and policies of the Company, (d) arrange for financing and refinancing of Assets, (e) enter
into leases for the Properties and service contracts for the Assets with duly qualified and licensed non-affiliated and Affiliated Persons, including oversight of non-affiliated and Affiliated Persons that perform property management, acquisition,
advisory, disposition or other services for the Company and the Partnership, and (f) arrange for, or provide, accounting and other record-keeping functions at the Asset level. 

The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority set forth in this Section 2.03,
provided however, that such modification or revocation shall be effective upon receipt by the Advisor or such later date as is specified by the Board and included in the notice provided to the Company and such modification or
revocation shall not be applicable to investment transactions to which the Advisor has committed the Company and the Partnership prior to the date of receipt by the Advisor of such notification, or, if later, the effective date of such modification
or revocation specified by the Board. 
 Section 2.04 Bank Accounts. The Advisor may establish and maintain one or more bank accounts in
its own name for the account of the Company and the Partnership or in the name of the Company or in the name of the Partnership and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money
on behalf of the Company, under such terms and conditions as the Board may approve, provided that no funds of the Company or the Partnership shall be commingled with the funds of the Advisor; and the Advisor shall from time to time, upon request by
the Board, its Audit Committee or the auditors of the Company, render appropriate accountings of such collections and payments to the Board, its Audit Committee and the auditors of the Company. 

Section 2.05 Records; Access. The Advisor shall maintain appropriate records of all its activities hereunder and make such records
available for inspection by the Board and by counsel, auditors and authorized agents of the Company, at any time or from time to time, upon reasonable request, during normal business hours. At all reasonable times the Advisor shall have access to
the books and records of the Company and the Partnership. 

  
 10 

 Section 2.06 Limitations on Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made in good faith, would (a) adversely affect the status of the Company as a REIT or of the Partnership as a partnership for federal income tax
purposes, (b) subject the Company or the Partnership to regulation under the Investment Company Act of 1940, as amended, (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction
over the Company or the Partnership, the Shares or its other securities, or (d) not be permitted by the Articles of Incorporation or Bylaws or agreement of limited partnership of the Partnership, except if such action shall be ordered by the
Board, in which case the Advisor shall notify promptly the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board.
In such event the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given. Notwithstanding the foregoing, the Advisor, its directors, officers, employees and stockholders, and the directors,
officers, employees and stockholders of the Advisor’s Affiliates shall not be liable to the Company or to the Board or Stockholders for any act or omission by the Advisor, its directors, officers, employees or stockholders, or for any act or
omission of any Affiliate of the Advisor, its directors, officers, employees or stockholders, except as provided in Section 5.02 of this Agreement. 

Section 2.07 Other Activities of the Advisor.  

(a) Nothing herein contained shall prevent the Advisor or its Affiliates from engaging in other activities, including, without limitation, the
rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict the right of any director, officer,
employee, or stockholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. With respect to any investment in which the Company or the Partnership is a participant, the Advisor
also may render advice and service to each and every other participant therein. The Advisor shall report to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, which creates or could create a
conflict of interest between the Advisor’s obligations to the Company or the Partnership and its obligations to or its interest in any other Person. The Advisor or its Affiliates shall promptly disclose to the Board knowledge of such condition
or circumstance. The Advisor shall inform the Board at least quarterly of the investment opportunities that were offered to other programs sponsored by the Sponsor, Advisor or any Director or their Affiliates with similar investment objectives as
the Company’s. If the Sponsor, Advisor, any Director or Affiliates thereof have sponsored other investment programs with similar investment objectives which have investment funds available at the same time as the Company, it shall be the duty
of the Board (including the Independent Directors) to approve the Advisor’s allocation policy set forth in the Company’s most recent Prospectus for its Shares or another reasonable method by which investments are to be allocated to the
competing investment entities. 
 (b) Once each quarter, senior representatives of the Advisor will meet with at least a majority of
the Independent Directors for the purpose of reviewing the Advisor’s compliance with the NASAA Guidelines with respect to all investments allocated among the Sponsor, the Company and each other REIT and investment program managed by an
Affiliate of the Sponsor (each, together with its Affiliates, an “Investment Entity,” and collectively, the “Investment Entities”) during the most recently completed fiscal quarter. The quarterly review will
take place at the regularly scheduled quarterly meeting of the Board, or at another time and place that are mutually determined by the Advisor and the Independent Directors, and may include representatives of other Investment Entities. The
Advisor will use its best efforts to distribute a report reasonably in advance of each quarterly review meeting containing a list of all investments allocated to the Investment Entities, the particular Investment Entity to which each investment was
allocated, a brief description of the investment, the purchase price of each investment and acquisition fees (if any) paid to the Advisor and its Affiliates in connection with each investment. Representatives of the Advisor shall be prepared to
discuss each investment and the reasons for its allocation to particular Investment Entities at the quarterly review meeting 

  
 11 

 ARTICLE III 

COMPENSATION 
 Section 3.01
Fees.  
 (a) Asset Management Fee. Subject to the approval of the Board, the Company shall pay to the Advisor an Asset
Management Fee equal to 1/12th of 0.75% of the Company’s average of the aggregate book value of its gross Assets (before reserves for depreciation or other non-cash reserves), including
amounts borrowed and additional amounts used for improvements, computed by taking the average of the book value of the Company’s gross Assets at the end of each month (or partial month), and is payable monthly in arrears. 

(b) Acquisition and Advisory Fees. The Company shall pay the Advisor or an Affiliate of the Advisor, a fee in the amount of 1.0% of the
purchase price of each Asset, excluding Acquisition Expenses, as Acquisition and Advisory Fees. The total of all Acquisition Fees and any Acquisition Expenses shall be reasonable and shall not exceed an amount equal to six percent (6%) of the
Contract Purchase Price.
 (c) Disposition Fee. If the Advisor or an Affiliate of the Advisor provides a substantial amount of the
services (as determined by a majority of the Independent Directors) in connection with the Sale of one or more Properties or any Asset, the Advisor or such Affiliate shall receive a Disposition Fee of 0.5% of the Contract Sales Price. If the Advisor
or an Affiliate of the Advisor provides a substantial amount of services (as determined by a majority of the Independent Directors) in connection with the Sale of the entire Company, the Advisor or such Affiliate shall receive a Disposition Fee of
the lesser of 0.5% of the Contract Sales Price or 50% of the amount of the investment banking fees related to such sale. The Disposition Fee may be paid in addition to Disposition Fees paid to non-Affiliates, provided that the total Disposition Fees
paid to all Persons by the Company (including the Disposition Fee) shall not exceed an amount equal to the lesser of (i) the Competitive Disposition Fee or (ii) 6.0% of the Contract Sales Price of the Property. 

(d) Subordinated Participation in Net Sales Proceeds. The Subordinated Participation in Net Sales Proceeds shall be payable to the
Advisor in an amount equal to 15.0% of Net Sales Proceeds remaining after the Stockholders have received Distributions equal to the sum of the Stockholders’ 6.0% Return and 100% of Invested Capital. The Company shall have the option to pay such
fee in the form of cash, Shares, a promissory note, or any combination of the foregoing. In no event will the Company pay a Subordinated Participation in Net Sales Proceeds, including any interest payable in connection with any promissory note
issued by the Company in payment of the Subordinated Participation in Net Sales Proceeds, in excess of the amount that would be presumptively reasonable under Section 8.7 of the Articles of Incorporation. 

(e) Subordinated Incentive Listing Distribution. Upon Listing, the Advisor shall be entitled to the Subordinated Incentive Listing
Distribution in an amount equal to 15.0% of the amount by which (i) the Market Value of the Company’s outstanding Shares plus distributions paid by the Company prior to Listing, exceeds (ii) the sum of (A) 100% of Invested
Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the Stockholders’ 6.0% Return from inception through the date that Market Value is determined. The Company shall have the option to pay such
fee in the form of cash, 

  
 12 

 
Shares, a promissory note, or any combination of the foregoing. If the Company pays such fee with a promissory note, payment in full shall be made from the Net Sales Proceeds of the first Sale
completed by the Company after Listing, and no interest will accrue. If the Net Sales Proceeds from the first Sale after Listing are insufficient to pay the promissory note in full, then the promissory note shall be paid in part with such Net Sales
Proceeds, and in part from the Net Sales Proceeds from the next successive Sales until the amount owing pursuant to such promissory note is paid in full. If the promissory note has not been paid in full within five years from the date of Listing,
then the Advisor, or its successors or assigns, may elect to convert the unpaid balance into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of such election. If
the Shares are no longer Listed at such time as the promissory note becomes convertible into Shares as provided by this paragraph, then the price per Share, for purposes of conversion, shall equal the fair market value for the Shares as determined
by the Board based upon the Appraised Value of the Assets as of the date of election. Neither the Advisor nor any of its Affiliates can earn both the Subordinated Participation in Net Sales Proceeds and the Subordinated Incentive Listing
Distribution. Any Subordinated Participation in Net Sales Proceeds becoming due and payable to the Advisor or its assignees hereunder shall be reduced by the amount of any distribution made to the Advisor pursuant to the Partnership. Any portion of
the Subordinated Participation in Net Sales Proceeds that the Advisor receives prior to Listing will offset the amount otherwise due pursuant to the Subordinated Incentive Listing Distribution. 

(f) Changes to Fee Structure. In the event of Listing, the Company and the Advisor shall negotiate in good faith to establish a fee
structure appropriate for perpetual life entity. A majority of the Independent Directors must approve the new fee structure negotiated with the Advisor. In negotiating a new fee structure, the Independent Directors may consider any of the
factors they deem relevant, including but not limited to: (a) the amount of compensation to the Advisor in relation to the size, composition and profitability of the Company’s portfolio; (b) the success of the Advisor in
generating opportunities that meet the investment objectives of the Company; (c) the rates charged to other REITs and to investors other than REITs by advisors performing similar services; (d) additional revenues realized by the Advisor
and its Affiliates through their relationship with the Company, including loan administration, servicing, inspection and other fees, whether paid by the Company or by others with whom the Company does business; (e) the quality and extent of
service and advice furnished by the Advisor; (f) the performance of the investment portfolio of the Company, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress
situations; and (g) the quality of the portfolio of the Company in relationship to the investments generated by the Advisor for the account of other clients.

(g) Payment. For purposes of the payment of compensation to the Advisor in the form of Shares, the value of each Share shall be:
(i) the NAV per share as determined by the Board or an Independent Appraiser, or (ii) if an appraisal has not yet been performed, the value per share included on a customer account statement pursuant to FINRA Rule 2340, or (iii) prior
to April 11, 2016, $10.00 per Class A share and $9.35 per Class T share. If shares are being offered to the public at the time a fee is paid in Shares, the value shall be the price of the Shares without commissions. The NAV may be adjusted
on a quarterly or other basis by the Board to account for significant capital transactions. 
 Section 3.02 Expenses.  

(a) In addition to the compensation paid to the Advisor pursuant to Section 3.01 hereof, the Company or the Partnership shall pay directly
or reimburse the Advisor, as applicable, for all of the expenses paid or incurred by the Advisor in connection with the services it provides to the Company and the Partnership pursuant to this Agreement, including, but not limited to: 

  
 13 

 (i) Organization and Offering Expenses; provided, however, that the reimbursement of Organization
and Offering Expenses will not exceed 1.5% of Gross Proceeds raised in the completed Offering. The Advisor shall be responsible for the payment of the Organization and Offering Expenses in excess of 1.5% of the Gross Proceeds. In the event the
Company does not raise the minimum amount of the Offering as set forth in the Prospectus, the Advisor shall not be reimbursed for any Organization and Offering Expenses; 

(ii) Acquisition Expenses incurred in connection with the selection and acquisition of Assets in an amount estimated to be 0.75% of the
Contract Purchase Price, subject, however, to the aggregate six percent 6% cap on Acquisition Fees and Acquisition Expenses set forth in the NASAA Guidelines; 

(iii) the actual cost of goods, services and materials used by the Company and obtained from Persons not affiliated with the Advisor, other
than Acquisition Expenses, including brokerage fees paid in connection with the purchase and sale of Shares; 
 (iv) interest and other costs
for borrowed money, including discounts, points and other similar fees; 
 (v) taxes and assessments on income or property and taxes as an
expense of doing business; 
 (vi) costs associated with insurance required in connection with the business of the Company or by the Board;

 (vii) expenses of managing and operating Assets owned by the Company, whether payable to an Affiliate of the Company or a non-affiliated
Person; 
 (viii) all expenses in connection with payments to the Board for attendance at meetings of the Board and Stockholders; 

(ix) expenses associated with Listing or with the issuance and distribution of Shares and other securities of the Company, such as Selling
Commissions and fees, advertising expenses, taxes, legal and accounting fees, and Listing and registration fees; 
 (x) expenses connected
with payments of Distributions in cash or otherwise made or caused to be made by the Company to the Stockholders; 
 (xi) expenses of
organizing, reorganizing, liquidating or dissolving the Company or amending the Articles of Incorporation or the Bylaws; 
 (xii) expenses of
any third party transfer agent for the Shares and of maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by
governmental entities; 
 (xiii) administrative service expenses, including all costs and expenses incurred by the Advisor in fulfilling its
duties hereunder. Such costs and expenses may include reasonable wages and salaries and other employee-related expenses of all employees and key personnel of the Advisor who are engaged in the management, administration, operations, and marketing of
the Company, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses which are directly related to their services provided hereunder; and 

  
 14 

 (xiv) audit, accounting and legal fees. 

No reimbursement shall be made for costs of personnel of the Advisor or its Affiliates to the extent that such personnel perform services in
connection with service for which the Advisor receives an Acquisition and Advisory Fee or the Disposition Fee. 
 (b) Expenses incurred by
the Advisor on behalf of the Company and the Partnership and payable pursuant to this Section 3.02 shall be reimbursed no less than quarterly to the Advisor within 60 days after the end of each quarter. The Advisor shall prepare a statement
documenting the expenses of the Company and the Partnership during each quarter, and shall deliver such statement to the Company and the Partnership within 45 days after the end of each quarter. 

(c) Notwithstanding anything else in this Article 3 to the contrary, the expenses enumerated in this Article 3 shall not become reimbursable to
the Advisor unless and until the Company has raised $10,00,000 in Gross Proceeds from the sale of Shares in the Offering. 
 Section 3.03 Other
Services. Should the Board request that the Advisor or any director, officer or employee thereof render services for the Company and the Partnership other than set forth in Section 2.02, such services shall be separately compensated at
such rates and in such amounts as are agreed by the Advisor and the Board, subject to the limitations contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this Agreement. 

Section 3.04 Reimbursement to the Advisor. The Company shall not reimburse the Advisor, at the end of any fiscal quarter, for any
Operating Expenses to the extent that, in the four consecutive fiscal quarters then ended (the “Expense Year”) the Operating Expenses exceed (the “Excess Amount”) the 2%/25% Guidelines for that period of four
consecutive quarters unless the Independent Directors determine that such excess was justified, based on unusual and nonrecurring factors which the Independent Directors deem sufficient. If the Independent Directors do not approve such excess as
being so justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company.  
 ARTICLE IV

 TERM AND TERMINATION 

Section 4.01 Term; Renewal. Subject to Section 4.02 hereof, this Agreement has a one-year term and shall continue in force until the
first anniversary of the date hereof. Thereafter, this Agreement may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. It is the Board’s duty to evaluate the performance of the Advisor annually
before renewing the Agreement, and each such renewal shall be for a term of no more than one year. 
 Section 4.02 Termination. This
Agreement will automatically terminate upon Listing. This Agreement also may be terminated at the option of either party (i) immediately upon a Change of Control or (ii) upon 60 days written notice without cause or penalty (in either case,
if termination is by the Company, then such termination shall be upon the approval of a majority of the Independent Directors). Notwithstanding the foregoing, the provisions of this Agreement which provide for payment to the

  
 15 

 
Advisor of expenses, fees or other compensation following the date of termination (i.e., Sections 3.01(e) and 4.03) shall continue in full force and effect until all amounts payable
thereunder to the Advisor are paid in full. The provisions of Sections 2.05, 2.06 and 4.03 through 6.11 shall survive the termination of this Agreement. 

Section 4.03 Payments to and Duties of Advisor upon Termination. 

(a) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to
and receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements of expenses, subject to the provisions of Section 3.04 hereof, and all contingent liabilities related to fees payable to the
Advisor prior to termination of this Agreement, provided that the Subordinated Incentive Listing Distribution, if any, shall be paid in accordance with the provisions of Section 3.01(d). 

(b) Upon termination or non-renewal of this Agreement, the Advisor shall be entitled to receive a payment of the Subordinated Distribution Upon
Termination of the Advisory Agreement equal to 15.0% of the amount, if any, by which (i) the Appraised Value of the Assets on the Termination Date, less the amount of all indebtedness secured by the Assets, plus the total distributions paid to
Stockholders from the Company’s inception through the Termination Date less any amounts distributable as of the Termination Date to limited partners of the Partnership who receive Partnership units, exceeds (ii) Invested Capital, less the
portion of any distribution that is attributable to Net Sales Proceeds and by any amounts paid by us to repurchase shares, plus an amount equal to the Stockholders’ 6.0% Return from inception through the Termination Date. The Company shall pay
such Subordinated Distribution Upon Termination of the Advisory Agreement, with no interest, at such time as the Company completes the first Sale after the Termination Date provided, however, the Advisor may elect to defer its right to receive the
Subordinated Distribution Upon Termination of the Advisory Agreement until either a Listing or other liquidity event for the Company. Payment shall be made from the Net Sales Proceeds of such Sale. The Company shall have the option to pay such fee
in the form of cash, Shares, a non-interest bearing promissory note, or any combination of the foregoing. If the Net Sales Proceeds from the first Sale after the Termination Date are insufficient to pay the Subordinated Distribution Upon Termination
of the Advisory Agreement in full, then the Subordinated Distribution Upon Termination of the Advisory Agreement shall be paid in part with such Net Sales Proceeds, and in part from the Net Sales Proceeds from the next successive Sales until the
Subordinated Distribution Upon Termination of the Advisory Agreement is paid in full. If the Subordinated Distribution Upon Termination of the Advisory Agreement has not been paid in full within five years from the Termination Date, then the
Advisor, its successors or assigns, may elect to convert the balance of the fee into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of such election if the Shares
are Listed at such time. If the Shares are not Listed at such time, the Advisor, its successors or assigns, may elect to convert the balance of the fee into Shares at a price per Share equal to the fair market value for the Shares as determined by
the Board based upon the Appraised Value of the Assets on the date of election. 
 (c) In the event that the Advisor disagrees with the
valuation of Shares pursuant to Section 4.03(b) where the Shares are not Listed for purposes of determining the number of Shares to be issued to the Advisor following the Advisor’s election to convert the balance of the Subordinated
Distribution Upon Termination of the Advisory Agreement owed to the Advisor, then the fair market value of such Shares shall be determined by an Independent Appraiser of equity value selected by the Advisor. 

(d) Notwithstanding section 4.03 (b), in the event the Subordinated Incentive Listing Distribution is paid to the Advisor following Listing, no
Subordinated Distribution Upon Termination of the Advisory Agreement will be paid to the Advisor. 

  
 16 

 (e) The Advisor shall promptly upon termination: 

(i) pay over to the Company all money collected and held for the account of the Company or the Partnership pursuant to this Agreement, after
deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; 
 (ii) deliver to the Board a full
accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board; 

(iii) deliver to the Board all assets, including the Assets, and documents of the Company then in the custody of the Advisor; and 

(iv) cooperate with, and take all reasonable actions requested by, the Company or the Partnership to provide an orderly management transition.

 ARTICLE V 

INDEMNIFICATION 

Section 5.01(a) The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective officers, directors, partners
and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related
expenses are not fully reimbursed by insurance, subject to any limitations imposed by the laws of the State of Maryland, the Articles of Incorporation and the NASAA Guidelines under the Articles of Incorporation. The Company shall not indemnify or
hold harmless the Advisor or its Affiliates, including their respective officers, directors, partners and employees, for any liability or loss suffered by the Advisor or its Affiliates, including their respective officers, directors, partners and
employees, nor shall it provide that the Advisor or its Affiliates, including their respective officers, directors, partners and employees, be held harmless for any loss or liability suffered by the Company, unless all of the following conditions
are met: (i) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, have determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of the
Company; (ii) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, were acting on behalf of or performing services of the Company; (iii) such liability or loss was not the result of
negligence or misconduct by the Advisor or its Affiliates, including their respective officers, directors, partners and employees; and (iv) such indemnification or agreement to hold harmless is recoverable only out of the Company’s net
assets and not from Stockholders. Notwithstanding the foregoing, the Advisor and its Affiliates, including their respective officers, directors, partners and employees, shall not be indemnified by the Company for any losses, liability or expenses
arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged
securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; and (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of
the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws. 

  
 17 

 (b) The Articles of Incorporation provide that the advancement of Company funds to the Advisor or
its Affiliates, including their respective officers, directors, partners and employees, for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following
conditions are satisfied: (i) the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; (ii) the legal action is initiated by a third-party who is not a Stockholder or the
legal action is initiated by a Stockholder acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; (iii) the advisor or its Affiliates provides the Company with a written affirmation
of their good faith belief that they have met the standard of conduct necessary for indemnification; and (iv) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, undertake to repay the advanced
funds to the Company together with the applicable legal rate of interest thereon, in cases in which such Advisor or its Affiliates, including their respective officers, directors, partners and employees, are found not to be entitled to
indemnification. 
 (c) Notwithstanding the provisions of this Section 5.01, the Advisor shall not be entitled to indemnification or be
held harmless pursuant to this Section 5.01 for any activity which the Advisor shall be required to indemnify or hold harmless the Company pursuant to Section 5.02. 

Section 5.02 Indemnification by Advisor. The Advisor shall indemnify and hold harmless the Company from contract or other liability,
claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that (i) such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and (ii) are incurred
by reason of the Advisor’s misconduct or negligence. The Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Advisor. 

ARTICLE VI 

MISCELLANEOUS 
 Section 6.01
Assignment to an Affiliate. This Agreement may be assigned by the Advisor to an Affiliate of the Advisor with the approval of a majority of the Board (including a majority of the Independent Directors). The Advisor may assign any
rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company or the Partnership without the consent of the Advisor, except in the case of an assignment
by the Company or the Partnership to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as the Company and the Partnership are bound by this Agreement. This Agreement shall be binding on successors to the Company and the Partnership resulting from a Change of Control or sale of all or substantially all the
assets of the Company or the Partnership, and shall likewise be binding upon any successor to the Advisor. 
 Section 6.02 Relationship of
Advisor and Company. The Company, the Partnership and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as
such on either of them. The Advisor and its Affiliates have or may have a proprietary interest in the name “NexPoint Multifamily.” The Advisor hereby grants to the Company, to the extent of any proprietary interest the Advisor may have in
the name “NexPoint Multifamily,” a non-transferable, non-assignable, non-exclusive, royalty-free right and license to use the name “NexPoint Multifamily” during the term of this Agreement. The Company agrees that the Advisor and
its Affiliates will have the right to approve of any use by the Company of the name “NexPoint Multifamily,” such approval not to be unreasonably withheld or delayed. Accordingly, 

  
 18 

 
and in recognition of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after
receipt of written request from the Advisor, cease to conduct business under or use the name “NexPoint Multifamily” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that
does not contain the name “NexPoint Multifamily” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any its
Affiliates. At such time, the Company will also make any changes to any trademarks, service marks or other marks necessary to remove any references to the word “NexPoint Multifamily.” Consistent with the foregoing, it is specifically
recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service
organizations having “NexPoint Multifamily” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company. Neither the Advisor nor any of its Affiliates makes any representation or
warranty, express or implied, with respect to the name “NexPoint Multifamily” licensed hereunder or the use thereof (including without limitation as to whether the use of the name “NexPoint Multifamily” will be free from
infringement of the intellectual property rights of third parties. Notwithstanding the preceding, the Advisor represents and warrants that it is not aware of any pending claims or litigation or of any claims threatened in writing regarding the use
or ownership of the name “NexPoint Multifamily.” 
 Section 6.03 Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to whom it is given, and shall be
given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein: 
  

			
	To the Directors and to the Company:		 NexPoint Multifamily Realty Trust, Inc.
 300
Crescent Court, Suite 700
 Dallas, Texas 75201
 Attention:
Chief Financial Officer

		
	To the Advisor:		 NexPoint Real Estate Advisors II, L.P.
 300
Crescent Court, Suite 700
 Dallas, Texas 75201
 Attention:
Secretary

		
	To the Partnership:		 NexPoint Multifamily Operating Partnership, L.P.

300 Crescent Court, Suite 700
 Dallas, Texas 75201

Attention: Chief Financial Officer of NexPoint Multifamily Realty Trust, Inc., its General Partner

 Either party shall, as soon as reasonably practicable, give notice in writing to the other party of a change in its address
for the purposes of this Section 6.03. 
 Section 6.04 Modification. This Agreement shall not be changed, modified, or amended, in
whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees. 

  
 19 

 Section 6.05 Severability. The provisions of this Agreement are independent of and severable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 

Section 6.06 Choice of Law; Venue. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the
State of Texas, and venue for any action brought with respect to any claims arising out of this Agreement shall be brought exclusively in Dallas County, Texas. 

Section 6.07 Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing signed by each of the parties hereto.

 Section 6.08 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver. 
 Section 6.09 Gender; Number. Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 

Section 6.10 Headings. The titles and headings of sections and subsections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 
 Section 6.11 Execution in
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when the counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. 

Section 6.12 Initial Investment. The Advisor or one of its Affiliates has contributed $200,000 (the “Initial Investment”)
in exchange for the initial issuance of Shares of Class A common stock of the Company. The Advisor or its Affiliates may not sell any of the Shares purchased with the Initial Investment while the Advisor acts in an advisory capacity to the
Company. The restrictions included above shall not apply to any Shares acquired by the Advisor or its Affiliates other than the Shares acquired through the Initial Investment. Neither the Advisor nor its Affiliates shall vote any Shares they now
own, or hereafter acquires, in any vote for the election of Directors or any vote regarding the approval or termination of any contract with the Advisor or any of its Affiliates. 

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] 

  
 20 

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

			
	 NEXPOINT MULTIFAMILY REALTY TRUST, INC.

a Maryland corporation

		
	By:	 	 /s/ Brian Mitts

	Name:	 	 Brian Mitts

	Title:	 	 Chief Financial Officer, Executive VP-Finance and Treasurer

	
	 NEXPOINT REAL ESTATE ADVISORS II, L.P.

a Delaware limited partnership

		
	By:	 	 NexPoint Real Estate Advisors GP, LLC,
 a
Delaware limited liability company,
 its General Partner

		
	By:	 	 /s/ Brian Mitts

	Name:	 	 Brian Mitts

	Title:	 	 Secretary

	
	NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P.
		
	By:	 	NexPoint Multifamily Realty Trust, Inc., a Maryland corporation, its General Partner
		
	By:	 	 /s/ Brian Mitts

	Name:	 	 Brian Mitts

	Title:	 	 Chief Financial Officer, Executive VP-Finance and Treasurer

  
 21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]