Exhibit 10.2

 

SECOND AMENDED AND RESTATED EXPENSE SUPPORT AGREEMENT

 

This SECOND AMENDED AND RESTATED EXPENSE SUPPORT AGREEMENT (the “Agreement”) is
dated as of January 1, 2019 (the “Effective Date”), by and among Black Creek
Industrial REIT IV Inc., a Maryland corporation (the “Corporation”), BCI IV
Operating Partnership LP, a Delaware limited partnership (the “Operating
Partnership”) and BCI IV Advisors LLC, a Delaware limited liability company (the
“Advisor”).

 

WITNESSETH

 

WHEREAS, the Corporation, the Operating Partnership and the Advisor are parties
to the Fourth Amended and Restated Advisory Agreement (2018), dated as of
June 13, 2018 (the “Advisory Agreement”) and capitalized terms not otherwise
defined herein shall have the meanings given them in the Advisory Agreement;

 

WHEREAS, pursuant to the Advisory Agreement, the Advisor manages the day-to-day
activities and implements the investment strategy of the Corporation and is paid
certain fees for these services;

 

WHEREAS, the Corporation and the Operating Partnership have requested that the
Advisor help reduce certain of the Corporation’s expenses in certain
circumstances as noted in this Agreement;

 

WHEREAS, the Advisor, in its pursuit to carry on a viable trade or business, has
agreed to help reduce certain of the Corporation’s expenses, in its ordinary
course in certain circumstances as noted in this Agreement, which assistance is
similar to assistance provided by other entities engaged in the Advisor’s
business to affect the marketability of the corporate entity which they advise;

 

WHEREAS, the parties hereto originally entered into the Expense Support
Agreement, dated as of October 27, 2016 and effective as of October 1, 2016 (the
“Initial Agreement”); and

 

WHEREAS, the parties amended and restated the Initial Agreement, effective as of
July 1, 2017 (the “Second Agreement”).

 

NOW THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree that, effective as of the Effective Date, the Second Agreement
shall be and hereby is amended and restated as follows:

 

1.              DEFINITIONS

 

As used in this Agreement, the following terms have the definitions hereinafter
indicated:

 

Annual Total Return Amount.  The Cumulative Total Return Amount divided by the
number of years, including fractional years, between the Inception Date and the
date of the Liquidity Event.

 

Baseline Distributions.  The aggregate gross cash distributions that are
declared on all shares of the Corporation’s common stock for a quarter, which
shall be calculated based on the aggregate distribution rate for Class I shares
of the Corporation’s common stock authorized by the Board of Directors of the
Corporation for such quarter.

 

Beginning NAV. The NAV per share at the Inception Date.  For purposes of
calculating the Cumulative Total Return Amount, the Corporation’s NAV per share
at the Inception Date is deemed to equal $10.00 per share.

 

Cumulative Total Return Amount.  A cumulative, non-compounded pre-tax rate of
return equal to (i) the sum of (a) the cumulative gross distributions per share
declared by the Corporation since the Inception Date and (b) the Ending NAV,
less the Beginning NAV, (ii) divided by the Beginning NAV.

 

Ending NAV. The NAV per share determined in connection with a Liquidity Event.
In connection with a Listing, for purposes of determining the Cumulative Total
Return Amount, the Ending NAV shall be an amount equal to the per share market
value of the listed shares based upon the average closing price or, if the
average closing price is not available, the average of the bid and asked prices,
for the 30-day period beginning 90 days after such Listing. Upon a Liquidity
Event other than a Listing, for purposes of determining the Cumulative Total
Return Amount, the Ending NAV shall be an amount equal to the per share
consideration received by stockholders in connection with such Liquidity Event.

 

Excess.  An “Excess” occurs when the sum of (i) the Corporation’s FFO, before
taking into consideration the impact of the fees deferred or Deficiency Support
Payments received or reimbursed as discussed in Sections 2, 3, 4 and 5 of this

 

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Agreement, (ii) the Corporation’s accrued acquisition expenses (net of any
acquisition expenses paid by or on behalf of the Corporation), (iii) the
Performance Component of the Advisory Fee, (iv) any adjustment that has been
made to FFO based on straight-line rent and amortization of above/below-market
leases, (v) organization and offering expenses reimbursed by the Corporation to
the Advisor, and (vi) the Fair Market Value Gain Amount for a quarter is greater
than the Baseline Distributions for the record dates of that quarter.

 

Fair Market Value Gain Amount. An amount equal to up to the total net realized
and unrealized fair market value gain on the Corporation’s real property
investments, derivative instruments, and debt for a quarter.  The Advisor, in
its reasonable discretion, shall determine the amount of such gain to be
included in the calculation of an “Excess” or a “Shortfall” each quarter;
provided, that, in no event shall the Advisor determine to include an amount of
such gain that causes the Corporation’s NAV per share, as calculated in
accordance with the Corporation’s Valuation Procedures for such quarter, to
decrease below the lesser of (i) $10.00 per share and (ii) the most recent NAV
Calculation per share.

 

FFO.  Funds from Operations, as reported in the Corporation’s periodic reports
filed with the Securities and Exchange Commission.

 

Inception Date. November 1, 2017, which is the date on which the Corporation
first issued shares of its common stock to third-party retail investors pursuant
to its initial public offering.

 

Shortfall.  A “Shortfall” occurs when the sum of (i) the Corporation’s FFO,
before taking into consideration the impact of the fees deferred or Deficiency
Support Payments received or reimbursed as discussed in Sections 2, 3, 4 and 5
of this Agreement, (ii) the Corporation’s accrued acquisition expenses (net of
any acquisition expenses paid by or on behalf of the Corporation), (iii) the
Performance Component of the Advisory Fee, (iv) any adjustment that has been
made to FFO based on straight-line rent and amortization of above/below-market
leases, (v) organization and offering expenses reimbursed by the Corporation to
the Advisor, and (vi) the Fair Market Value Gain Amount for a quarter is less
than the Baseline Distributions for the record dates of that quarter.

 

Total Return Hurdle.  A non-compounded, pre-tax annual rate of return equal to
5%.

 

In calculating the amounts as defined in each of the terms “Excess” and
“Shortfall”, each of subsections (ii), (iii), (iv), and (v) in the respective
definition of such terms, shall be a positive number if it was a deduction in
calculating the Corporation’s FFO, and conversely shall be a negative number if
it was an addition in calculating the Corporation’s FFO.  For example, if
straight-line rent and amortization of above/below-market leases was an addition
in calculating the Corporation’s FFO, then it would be a negative number in
calculating “Excess” and “Shortfall” above.

 

2.              DEFERRAL OF FIXED COMPONENT OF ADVISORY FEES.  For the third
quarter of 2017 and for each subsequent quarter until the termination or
expiration of this Agreement:

 

a.              If, in a given calendar quarter, there is a Shortfall, then some
or all of the Fixed Component otherwise payable by the Corporation to the
Advisor with respect to that quarter shall be deferred as set forth in this
Section 2(a).  The amount of the Fixed Component to be deferred for the given
quarter, if any, shall equal the lesser of (i) the amount of the Shortfall for
that quarter, or (ii) the entire Fixed Component otherwise payable by the
Corporation to the Advisor with respect to that quarter.

 

b.              The definitions in Section 1 of this Agreement assume the
amounts will be calculated on a quarterly basis; provided, however, the Fixed
Component is payable by the Corporation to the Advisor on a monthly basis and,
accordingly, the amounts will be calculated on a monthly basis using reasonable
estimates, which monthly amounts then will be reconciled with the actual amounts
calculated at the end of each quarter.  The Advisor shall refund to the
Corporation any portion of the Fixed Component previously paid to the Advisor
with respect to a given calendar quarter in excess of the amount that should
have been paid to the Advisor with respect to such calendar quarter after taking
into account the Fixed Component required to be deferred with respect to such
calendar quarter in accordance with Section 2(a).  Any such refund of the Fixed
Component payable pursuant to this Section 2(b) shall be paid by the Advisor to
the Corporation within ten (10) calendar days following the filing by the
Corporation of its first periodic report with the Securities and Exchange
Commission on Form 10-K or Form 10-Q, as applicable, after the calendar quarter
with respect to which such Fixed Component was paid.

 

c.               If, in a given calendar quarter, there is an Excess, then the
amount of the Fixed Component deferred for the given quarter shall equal zero.

 

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Any amount of the Fixed Component deferred pursuant to this Section 2 shall be
referred to hereinafter as a “Deferred Fixed Component Amount.”  All Deferred
Fixed Component Amounts shall be subject to conditional reimbursement in
accordance with the terms of Section 5 of this Agreement.

 

3.              EXPENSE SUPPORT PAYMENTS.  For the first quarter of 2019 and
ending upon the termination or expiration of this Agreement, if, in a given
calendar quarter, a Shortfall occurs, and the Deferred Fixed Component Fee is
not sufficient to satisfy the Shortfall for such quarter (the “Deficiency”) the
Advisor shall fund, directly or indirectly, certain expenses of the Corporation
or the Operating Partnership, including but not limited to general and
administrative expenses and interest expense in an amount equal to the
Deficiency.  Any payment made by the Advisor pursuant to this Section 3 to fund,
directly or indirectly, expenses of the Corporation or the Operating Partnership
shall be referred to hereinafter as a “Deficiency Support Payment.”  All
Deficiency Support Payments as defined in this Section 3 and “Deficiency Support
Payments” as defined in and paid by the Advisor under the Initial Agreement and
the Second Agreement (collectively, the “Aggregate Deficiency Support Payments”)
shall be subject to conditional reimbursement in accordance with the terms of
Section 5 of this Agreement. If the sum of all Deficiency Support Payments made
with respect to a given calendar quarter equals an amount that, if added to the
sum of items (i) through (vi) in the definition of “Excess” would cause the
Corporation to have an Excess for such quarter (an “Inadvertent Excess”), then
the Corporation shall refund to the Advisor the amount of Deficiency Support
Payments necessary to eliminate such Inadvertent Excess for that quarter. 
Except as specifically provided herein, this Agreement shall supersede the
Initial Agreement and the Second Agreement, and shall govern all deferrals and
payments with respect to the first quarter of 2019 through the third quarter of
2020.

 

4.              CAP ON DEFERRED FIXED COMPONENT AMOUNTS AND DEFICIENCY SUPPORT
PAYMENTS.  In no event will the aggregate of the Deferred Fixed Component
Amounts and Deficiency Support Payments, inclusive of all amounts paid by the
Advisor pursuant to Sections 2 and 3 of the Initial Agreement and the Second
Agreement, exceed $15 million (the “Maximum Amount”).

 

5.              CONDITIONAL REIMBURSEMENT. Deferred Fixed Component Amounts and
Aggregate Deficiency Support Payments (collectively referred to hereinafter as
“Reimbursable Amounts”) shall be reimbursed by the Corporation to the Advisor
subject to the following terms and conditions:

 

a.              Expiration of Reimbursable Amounts. Reimbursable Amounts shall,
pursuant to Section 5(c) hereof, be reduced on a dollar for dollar basis upon
their reimbursement by the Corporation to the Advisor. Except as described in
Section 5(d) of this Agreement, any Reimbursable Amount not reimbursed by the
Corporation to the Advisor within four years after the end of the calendar
quarter in which such Reimbursable Amount originated shall be deemed expired,
and the Corporation’s obligation to reimburse such Reimbursable Amount to the
Advisor shall be cancelled, but only as to that portion of the Reimbursable
Amount.

 

b.              Dollar Amount of Reimbursements. Except as described in
Section 5(d) of this Agreement, if, in a given calendar quarter, there exists an
Excess, then the Corporation shall make a reimbursement to the Advisor in an
amount equal to the lesser of (i) the amount of the Excess for that quarter, or
(ii) the sum of all Reimbursable Amounts that have not expired or been repaid.

 

c.               Priority of Reimbursements. Except as described in
Section 5(d) of this Agreement, any reimbursement made by the Corporation to the
Advisor pursuant to Section 5(b) shall be applied to Reimbursable Amounts that
have not expired or been repaid in the order of oldest to newest.

 

d.              Reimbursement Upon Liquidity Event. In connection with the
completion of a Liquidity Event, the Corporation shall reimburse the Advisor for
any Reimbursable Amounts that have not been repaid pursuant to Section 5(a),
including Reimbursable Amounts that have been deemed expired pursuant to
Section 5(a); provided that the Corporation shall reimburse the Advisor under
this Section 5(d) only if the Annual Total Return Amount exceeds the Total
Return Hurdle; and provided further that the amount of the reimbursement shall
equal the lesser of (i) the sum of all Reimbursable Amounts that have not been
repaid pursuant to Section 5(a), including Reimbursable Amounts that have been
deemed expired pursuant to Section 5(a), or (ii) the maximum amount permitted to
be reimbursed without causing the Annual Total Return Amount to be less than the
Total Return Hurdle. The Corporation shall pay such reimbursement to the Advisor
prior to any payment of any other distribution to any other party in connection
with the Liquidity Event. After the Corporation has reimbursed the Advisor to
the extent permissible under this Section 5(d), the Corporation shall have no
further obligation to pay, and the Advisor shall have no further right to
receive, any additional reimbursement of any Reimbursable Amounts.

 

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e.               Termination Without Cause. In the event of a termination of the
Advisory Agreement by the Corporation without Cause and not in connection with
the completion of a Liquidity Event, any Reimbursable Amounts that have not
expired or been repaid pursuant to Section 5(a) shall become immediately due and
payable.

 

f.                Non-Interest Bearing. The Corporation’s obligation to
reimburse the Advisor the Reimbursable Amounts pursuant to this Section 5 shall
be a non-interest bearing obligation.

 

g.               No Clawback. The Advisor’s obligations in the event of a
Shortfall are limited solely to those obligations described in Sections 2, 3 and
4 of this Agreement. The occurrence of a Shortfall in any given calendar quarter
shall not entitle the Corporation to receive any refund of any amounts
previously reimbursed pursuant to this Section 5 or of any amount of the Fixed
Component (or other amounts) previously paid by the Corporation to the Advisor
except as specified in Section 2(b) of this Agreement. Notwithstanding this
Section 5(g), the terms of Section 12 of the Advisory Agreement shall continue
to apply to all reimbursements of Total Operating Expenses paid to the Advisor;
provided, however, that if Section 12 of the Advisory Agreement prohibits the
payment of all or a portion of a reimbursement payable by the Corporation to the
Advisor pursuant to this Section 5 for a calendar quarter, then such
reimbursement shall be deemed to have been earned by the Advisor in such
calendar quarter and any portion of the reimbursement that is not permitted to
be paid to the Advisor pursuant to Section 12 of the Advisory Agreement shall be
paid by the Corporation in the next calendar quarter in which Section 12 of the
Advisory Agreement permits such reimbursement.

 

h.              Termination of Advisory Agreement. Except as described in
Sections 5(d) and 5(e) hereof, in the event of a termination or expiration of
the Advisory Agreement, any Reimbursable Amounts that have not expired or been
repaid pursuant to Section 5(a) will not become immediately due and payable.
Notwithstanding the foregoing, the agreements contained in this Section 5 shall
survive any such termination or expiration of the Advisory Agreement and shall
remain operative and in full force and effect.

 

6.              TERM; SURVIVAL.  This Agreement shall continue in full force and
effect until June 30, 2020; provided, however, that (i) any obligation of the
Advisor to make payments pursuant and subject to Sections 2, 3 and 4 of this
Agreement with respect to the calendar quarter ending June 30, 2020, shall
remain operative and in full force and effect and shall survive the expiration
of this Agreement (but not any earlier termination in accordance with Section 7
below) and (ii) the agreements contained in Section 5 of this Agreement shall
remain operative and in full force and effect and shall survive any termination
or expiration of this Agreement.

 

7.              TERMINATION.  This Agreement may be terminated at any time, and
without payment of any penalty, by a majority of the independent directors of
the Corporation, upon thirty (30) days’ prior written notice to the Advisor. 
This Agreement and the Advisor’s obligations under Section 2 and Section 3
hereof shall immediately terminate upon the earlier to occur of (a) the
termination or non-renewal of the Advisory Agreement by the Corporation; (b) the
delivery by the Corporation of notice to the Advisor of the Corporation’s intent
to terminate or not renew the Advisory Agreement; (c) a Liquidity Event; or
(d) the Maximum Amount has been reached pursuant to Section 4. At the Advisor’s
election, which election shall be evidenced by written notice from the Advisor
to the Corporation, this Agreement and the Advisor’s obligations under Section 2
and Section 3 hereof shall immediately terminate upon the modification of the
calculation of FFO by the Corporation.  Notwithstanding anything in this
Section 7 to the contrary, the agreements contained in Section 5 of this
Agreement shall remain operative and in full force and effect and shall survive
any such termination or expiration.

 

8.              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 Charter,
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 in the Advisory Agreement.

 

9.              ASSIGNMENT.  This Agreement may be assigned by the Advisor to an
Affiliate or Affiliates with the approval of a majority of the independent
directors of the Corporation; provided, however, the Advisor shall not assign
the agreements contained in Section 2 of this Agreement to an Affiliate or
Affiliates unless the Advisor has also assigned its right to receive the Fixed
Component under the Advisory Agreement to such Affiliate or Affiliates.  The
Advisor may assign any rights to receive any amounts payable to the Advisor
pursuant to this Agreement without obtaining the approval of the Corporation’s
Board of Directors. This Agreement shall not be assigned by the Corporation or
the Operating Partnership without the consent of the Advisor, except in the case
of an assignment by the Corporation or the Operating Partnership of its
obligations hereunder to a corporation, limited partnership or other
organization which is a successor to all of the assets, rights and obligations
of the Corporation or the Operating Partnership, in which case such successor
organization shall be bound hereunder and by the terms of said assignment in the
same manner as the Corporation and the Operating Partnership are bound by this
Agreement.

 

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10.       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; provided,
however, that if the terms of Section 5 of this Agreement are held to be
unenforceable, then the Advisor may, at its option, immediately terminate
Sections 2 and 3 of this Agreement.

 

11.       GOVERNING LAW / ATTORNEY’S FEE.  This Agreement shall be interpreted
under the laws of the State of Colorado without regard to the conflict of law
principles thereof.  Any action brought to interpret or enforce this Agreement
shall be brought in a court of competent jurisdiction located in Denver,
Colorado, and the parties hereto consent to venue and personal jurisdiction in
any such court.  The substantially prevailing party in any such litigation shall
recover its reasonable attorney’s fees and costs (including those of appeal).

 

12.       ENTIRE AGREEMENT.  For so long as this Agreement shall be in force,
the terms of this Agreement shall control in the event of any conflict with the
terms of the Advisory Agreement that relate to the subject matter hereof.  This
Agreement shall not, in any other way, effect, modify, amend or supersede any
other terms of the Advisory Agreement and, specifically, shall not in any way
impact the terms of the Advisory Agreement regarding the payment of other fees
and expense reimbursements to the Advisor.  This Agreement shall not be changed,
modified, terminated or discharged, in whole or in part, except by an instrument
in writing signed by the parties hereto, or their respective permitted
successors or assignees.

 

13.       INDULGENCES, NOT WAIVERS.  Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.  No waiver or any right, remedy, power or
privilege under this Agreement shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.

 

14.       GENDER.  Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

 

15.       TITLES NOT TO AFFECT INTERPRETATION.  The titles of paragraphs and
subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

 

16.       EXECUTION IN COUNTERPARTS.  This Agreement may be executed by
facsimile or PDF 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 one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.

 

(Remainder of page intentionally left blank.)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested by their duly authorized officers, on January 1, 2019.

 

 

BLACK CREEK INDUSTRIAL REIT IV INC.

 

 

 

 

By:

/s/ Thomas G. McGonagle

 

Name:

Thomas G. McGonagle

 

Title:

Managing Director, Chief Financial Officer

 

 

 

 

BCI IV OPERATING PARTNERSHIP LP

 

 

 

By:  Black Creek Industrial REIT IV Inc., its Sole General Partner

 

 

 

 

By:

/s/ Thomas G. McGonagle

 

Name:

Thomas G. McGonagle

 

Title:

Managing Director, Chief Financial Officer

 

 

 

 

BCI IV ADVISORS LLC

 

 

 

 

By:  BCI IV Advisors Group LLC, its Sole Member

 

 

 

 

By:

/s/ Evan H. Zucker

 

Name:

Evan H. Zucker

 

Title:

Manager

 

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