Cottonwood Capital Advisors

If the Company terminates or does not renew the Advisory Agreement before 2028 for reasons other than Advisor fraud, willful misconduct, or gross negligence, the Advisor is entitled to a 3% Contingent Acquisition Fee on all assets (reduced by prior fee payments). This creates a substantial economic disincentive for the Company to terminate the Advisor, potentially entrenching the affiliated manager.

“Upon the termination or non-renewal of this Agreement by the Company prior to ________, 2028 for any reason other than the Advisor's fraud, willful misconduct or gross negligence, as determined by a final, non-appealable judgement of a court of competent jurisdiction, the Company shall pay the Advisor a Contingent Acquisition Fee...equal to 3.0% of the sum of the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment”

The Advisor and its affiliates are expressly permitted to engage in other investment activities, manage other programs, and render services to other persons (including other REITs) without restriction. The Advisor is not obligated to present any particular investment opportunity to the Company, creating potential allocation conflicts.

“Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other real estate investment trusts) 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 manager, director, officer, employee or equity holder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person.”

The Advisor has no obligation to present any particular investment opportunity to the Company, even if the opportunity is of the type the Company could take. This creates a conflict of interest in investment allocation.

“neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the Company even if the opportunity is of character that, if presented to the Company, could be taken by the Company.”