Cole Capital

The charter expressly contemplates that the Corporation may purchase or lease assets from, and sell or lease assets to, the Sponsor, Advisor, Directors or their Affiliates, subject to Independent Director approval. All such transactions are potential conflicts of interest and require majority Independent Director sign-off.

“The Corporation may purchase or lease an Asset or Assets from the Sponsor, the Advisor, a Director or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction that such transaction is fair and reasonable to the Corporation and at a price to the Corporation no greater than the cost of the Asset to such Sponsor, Advisor, Director or Affiliate”

The Dealer Manager is an Affiliate of the Corporation, creating a conflict of interest in the sale of Shares. All Selling Commissions flow to an affiliated entity rather than an independent broker-dealer.

“Dealer Manager . The term 'Dealer Manager' shall mean Cole Capital Corporation, an Affiliate of the Corporation, or such other Person selected by the Board to act as the dealer manager for an Offering.”

The Dealer Manager is Cole Capital Corporation, an Affiliate of the Corporation, creating a structural related-party conflict in offering distribution. The Advisor and its Affiliates may receive multiple streams of compensation (acquisition fees, operating expense reimbursements, incentive fees) and may also engage in joint ventures with the Corporation subject only to Independent Director approval.

“Dealer Manager . The term 'Dealer Manager' shall mean Cole Capital Corporation, an Affiliate of the Corporation, or such other Person selected by the Board to act as the dealer manager for an Offering.”

The General Partner (CCIT II) is expressly permitted to employ and pay Affiliates, including the advisor Cole Corporate Income Advisors II, LLC, for services to the Partnership at compensation determined by the General Partner to be 'fair and reasonable,' without arm's-length negotiation. Related-party transactions with the Sponsor or any affiliate require only a majority-board finding of fairness, not independent third-party approval.

“Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as an advisor, buyer, lessor, lessee, manager, property management agent, asset manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.”

The General Partner is expressly permitted to employ or retain Affiliates as advisors, managers, brokers, lenders, and in other roles, receiving compensation the GP determines to be fair and reasonable, without arm's-length negotiation requirements imposed by the LP Agreement.

“Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as an advisor, buyer, lessor, lessee, manager, property management agent, asset manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.”

In the event of a conflict between the interests of the General Partner's stockholders and Limited Partners, the General Partner may resolve such conflict in favor of its stockholders, and bears no monetary liability for losses to Limited Partners arising from such decisions.

“In the event of a conflict between the interests of its stockholders on the one hand and the Limited Partners on the other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either its stockholders or the Limited Partners; provided, however, that for so long as the General Partner directly owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or the Limited Partners shall be resolved in favor of its stockholders.”

In any conflict between CCIT II stockholders and the Limited Partners of the operating partnership, the General Partner resolves the conflict in favor of its own stockholders so long as it holds a controlling interest in the Partnership. Limited Partners expressly have no recourse for monetary damages from such conflict resolution.

“for so long as the General Partner directly owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or the Limited Partners shall be resolved in favor of its stockholders.”

The Corporation may invest in Joint Ventures with the Sponsor, Advisor, Directors or their Affiliates, and may purchase or sell assets to/from such parties, subject to approval by a majority of disinterested Independent Directors. The Charter explicitly governs related-party sales, leases, loans and 'other transactions' with Affiliates, reflecting structural conflicts inherent in the externally-advised REIT structure.

“The Corporation may invest in Joint Ventures with the Sponsor, the Advisor, one or more Directors or any Affiliate, only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approve such investment as being fair and reasonable to the Corporation and on substantially the same terms and conditions as those received by the other joint venturers.”