Document:

EX-10.5

 Exhibit 10.5 

EXECUTION COPY 
 ASSET
REPRESENTATIONS REVIEW AGREEMENT 
 among 

USAA AUTO OWNER TRUST 2017-1 

as Issuer, 
 USAA FEDERAL SAVINGS
BANK, 
 as Sponsor and Servicer 

and 
 CLAYTON FIXED INCOME
SERVICES LLC, 
 as Asset Representations Reviewer 

Dated as of September 20, 2017 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I
	 	 USAGE AND DEFINITIONS
	  	 	1	 
			
	 Section 1.1.
	 	 Usage and Definitions
	  	 	1	 
			
	 Section 1.2.
	 	 Additional Definitions
	  	 	1	 
			
	 ARTICLE II
	 	 ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER
	  	 	2	 
			
	 Section 2.1.
	 	 Engagement; Acceptance
	  	 	2	 
			
	 Section 2.2.
	 	 Confirmation of Scope
	  	 	2	 
			
	 ARTICLE III
	 	 ASSET REPRESENTATIONS REVIEW PROCESS
	  	 	2	 
			
	 Section 3.1.
	 	 Review Notices
	  	 	2	 
			
	 Section 3.2.
	 	 Identification of Subject Receivables
	  	 	3	 
			
	 Section 3.3.
	 	 Review Materials
	  	 	3	 
			
	 Section 3.4.
	 	 Performance of Reviews
	  	 	3	 
			
	 Section 3.5.
	 	 Review Reports
	  	 	4	 
			
	 Section 3.6.
	 	 Limitations on Review Obligations
	  	 	5	 
			
	 Section 3.7.
	 	 Dispute Resolution
	  	 	5	 
			
	 ARTICLE IV
	 	 ASSET REPRESENTATIONS REVIEWER
	  	 	5	 
			
	 Section 4.1.
	 	 Representations and Warranties
	  	 	5	 
			
	 Section 4.2.
	 	 Covenants
	  	 	6	 
			
	 Section 4.3.
	 	 Fees, Expenses and Indemnities
	  	 	7	 
			
	 Section 4.4.
	 	 Limitation on Liability
	  	 	8	 
			
	 Section 4.5.
	 	 Indemnification by Asset Representations Reviewer
	  	 	8	 
			
	 Section 4.6.
	 	 Indemnification of Asset Representations Reviewer
	  	 	8	 
			
	 Section 4.7.
	 	 Inspections of Asset Representations Reviewer
	  	 	9	 
			
	 Section 4.8.
	 	 Delegation of Obligations
	  	 	9	 
			
	 Section 4.9.
	 	 Confidential Information
	  	 	9	 
			
	 Section 4.10.
	 	 Personally Identifiable Information
	  	 	11	 
			
	 ARTICLE V
	 	 RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS REVIEWER
	  	 	13	 
			
	 Section 5.1.
	 	 Eligibility Requirements for Asset Representations Reviewer
	  	 	13	 
			
	 Section 5.2.
	 	 Resignation and Removal of Asset Representations Reviewer
	  	 	13	 
			
	 Section 5.3.
	 	 Successor Asset Representations Reviewer
	  	 	13	 
			
	 Section 5.4.
	 	 Merger, Consolidation or Succession
	  	 	14	 

  
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 TABLE OF CONTENTS 

(continued) 
  

							
	 	 	 	  	Page	 
	 ARTICLE VI
	 	 OTHER AGREEMENTS
	  	 	14	 
			
	 Section 6.1.
	 	 Independence of Asset Representations Reviewer
	  	 	14	 
			
	 Section 6.2.
	 	 No Petition
	  	 	14	 
			
	 Section 6.3.
	 	 Limitation of Liability of Owner Trustee
	  	 	15	 
			
	 Section 6.4.
	 	 Termination of Agreement
	  	 	15	 
			
	 ARTICLE VII
	 	 MISCELLANEOUS PROVISIONS
	  	 	15	 
			
	 Section 7.1.
	 	 Amendments
	  	 	15	 
			
	 Section 7.2.
	 	 Assignment; Benefit of Agreement; Third Party Beneficiaries
	  	 	16	 
			
	 Section 7.3.
	 	 Notices
	  	 	16	 
			
	 Section 7.4.
	 	 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial
	  	 	17	 
			
	 Section 7.5.
	 	 No Waiver; Remedies
	  	 	17	 
			
	 Section 7.6.
	 	 Severability
	  	 	17	 
			
	 Section 7.7.
	 	 Headings
	  	 	17	 
			
	 Section 7.8.
	 	 Counterparts
	  	 	17	 
			
	 Schedule A
	 	 Representations and Warranties, Review Materials and Tests
	  			

  
 ii 

 ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of September 20, 2017 (this
“Agreement”), among USAA AUTO OWNER TRUST 2017-1, a Delaware statutory trust, as Issuer (the “Issuer”), USAA FEDERAL SAVINGS BANK, a federally chartered savings association
(the “Bank”), as Sponsor (the “Sponsor”) and Servicer (the “Servicer”), and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company, as Asset Representations Reviewer (the
“Asset Representations Reviewer”). 
 WHEREAS, the Issuer desires to engage the Asset Representations Reviewer to perform
reviews of certain Receivables for compliance with the representations and warranties made by the Bank, as seller, about the Receivables in the pool. 

NOW, THEREFORE, in consideration of the foregoing, other good and valuable consideration, and the mutual terms and conditions contained
herein, the parties hereto agree as follows. 
 ARTICLE I 

USAGE AND DEFINITIONS 

Section 1.1.    Usage and Definitions. (a) Except as otherwise specified herein or if the context may
otherwise require, capitalized terms not defined in this Agreement shall have the respective meanings assigned such terms set forth in Appendix A to the Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing
Agreement”), by and among USAA Acceptance, LLC, as seller, the Servicer, and the Issuer. 
 (b)    With respect
to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to “writing” include printing, typing, lithography and other means of
reproducing words in a visible form; references to agreements and other contractual instruments include all subsequent amendments, amendments and restatements, and supplements thereto or changes therein entered into in accordance with their
respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; references to laws include their amendments and supplements, the rules and regulations thereunder and any successors
thereto; the term “including” means “including without limitation;” and the term “or” is not exclusive. 

Section 1.2.    Additional Definitions. The following terms have the meanings given below: 

“Asset Representations Review” means the performance by the Asset Representations Reviewer of the testing procedures for each
Test and each Subject Receivable according to Section 3.4. 
 “Confidential Information” has the
meaning stated in Section 4.9(b). 
 “Information Recipients” has the meaning stated in
Section 4.9(a). 
 “Issuer PII” has the meaning stated in
Section 4.10(a). 
 “Personally Identifiable Information” or “PII” has the
meaning stated in Section 4.10(a). 

 “Review Fee” has the meaning stated in Section 4.3(b).

 “Review Materials” means, for an Asset Representations Review and a Subject Receivable, the documents and other
materials for each Test listed under “Review Materials” in Schedule A. 
 “Review Report” means, for an
Asset Representations Review, the report of the Asset Representations Reviewer prepared according to Section 3.5. 

“Subject Receivables” means, for any Asset Representations Review, all Receivables which are
60-Day Delinquent Receivables as of the related Review Satisfaction Date; provided, that any Receivable repurchased by the Sponsor or the Servicer from the Issuer in accordance with the Transaction Documents
after the Review Satisfaction Date will no longer be a Subject Receivable. 
 “Test” has the meaning stated in
Section 3.4(a). 
 “Test Complete” has the meaning stated in
Section 3.4(c). 
 “Test Fail” has the meaning stated in
Section 3.4(a). 
 “Test Incomplete” has the meaning stated in
Section 3.4(a). 
 “Test Pass” has the meaning stated in
Section 3.4(a). 
 ARTICLE II 

ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER 

Section 2.1.    Engagement; Acceptance. The Issuer engages Clayton Fixed Income Services LLC to act as the
Asset Representations Reviewer for the Issuer. Clayton Fixed Income Services LLC accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms in this Agreement. 

Section 2.2.    Confirmation of Scope. The parties confirm that the Asset Representations Reviewer is not
responsible for (a) reviewing the Receivables for compliance with the representations and warranties under the Transaction Documents, except as described in this Agreement or (b) determining whether noncompliance with the representations
or warranties constitutes a breach of the Transaction Documents. 
 ARTICLE III 

ASSET REPRESENTATIONS REVIEW PROCESS 

Section 3.1.    Review Notices. On receipt of a Review Notice in accordance with Section 7.5 of the
Indenture, the Asset Representations Reviewer will commence an Asset Representations Review. The Asset Representations Reviewer will have no obligation to start an Asset Representations Review until a Review Notice is received. 

  
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 Section 3.2.    Identification of Subject Receivables. Within ten
(10) Business Days after receipt of a Review Notice, the Servicer will deliver to the Asset Representations Reviewer a list of the Subject Receivables. 

Section 3.3.    Review Materials. 

(a)    Access to Review Materials. The Servicer will give the Asset Representations Reviewer access to the Review
Materials for all of the Subject Receivables within sixty (60) calendar days after receipt of the Review Notice in one or more of the following ways in the Servicer’s reasonable discretion: (i) by electronic posting of Review
Materials to a password-protected website to which the Asset Representations Reviewer has access, (ii) by providing originals or photocopies of documents relating to the Subject Receivables at one of the properties of the Servicer or
(iii) in another manner agreed by the Servicer and the Asset Representations Reviewer. The Servicer may redact or remove PII from the Review Materials so long as all information in the Review Materials necessary for the Asset Representations
Reviewer to complete the Asset Representations Review remains intact and unchanged. 
 (b)    Missing or Insufficient
Review Materials. The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test. If the Asset Representations
Reviewer reasonably determines that any of the Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less
than twenty (20) calendar days before completing the Review, and the Servicer will use reasonable efforts to provide the Asset Representations Reviewer access to such missing Review Materials or other documents or information to correct the
insufficiency within fifteen (15) calendar days. If the missing or insufficient Review Materials have not been provided by the Servicer within sixty (60) calendar days, the parties agree that the Subject Receivable will have a Test
Incomplete for the related Test(s) and the Review Report will indicate the reason for the Test Incomplete. 

Section 3.4.    Performance of Reviews. 

(a)    Test Procedures. For an Asset Representations Review, the Asset Representations Reviewer will perform for
each Subject Receivable the procedures listed under “Tests” in Schedule A for each representation and warranty (each, a “Test”), using the Review Materials listed for each such Test in Schedule A. For each
Test and Subject Receivable, the Asset Representations Reviewer will determine in its reasonable judgment if the Test has been satisfied (a “Test Pass”), if the Test has not been satisfied (a “Test Fail”) or if the
Test could not be concluded as a result of missing or incomplete Review Materials (a “Test Incomplete”). The Asset Representations Reviewer will use such determination for all Subject Receivables that are subject to the same Test.

 (b)    Review Period. The Asset Representations Reviewer will complete the Asset Representations Review of all
of the Subject Receivables within sixty (60) calendar days after receiving access to the Review Materials under Section 3.3(a). However, if missing or additional Review Materials are provided to the Asset
Representations Reviewer under Section 3.3(b), the review period will be extended for an additional thirty (30) calendar days. 

  
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 (c)    Completion of Review for Certain Subject Receivables. Following
the delivery of the list of the Subject Receivables and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Subject Receivable is paid in full by the Obligor
or purchased from the Issuer by the Bank according to the applicable Transaction Document. On receipt of notice, the Asset Representations Reviewer will immediately terminate all Tests of such Receivables and the Review of such Receivables will be
considered complete (a “Test Complete”). In this case, the Review Report will indicate a Test Complete for the Receivables and the related reason. 

(d)    Previously Reviewed Receivable. If a Subject Receivable was included in a prior Asset Representations
Review, the Asset Representations Reviewer will not conduct additional Tests on any such duplicate Subject Receivable unless such Subject Receivable was deemed a Test Incomplete as a result of the failure of the Servicer to provide missing Review
Material for such Subject Receivable and the Servicer elects to have such Subject Receivable included in the current Asset Representations Review. The Asset Representations Reviewer will include the previously reported Test results for any such
duplicate Subject Receivable within the Review Report for the current Asset Representations Review. 

(e)    Duplicative Tests. If the same Test is required for more than one representation or warranty listed on
Schedule A, the Asset Representations Reviewer will only perform the Test once for each Subject Receivable but will report the results of the Test for each applicable representation or warranty on the Review Report. 

(f)    Termination of Review. If an Asset Representations Review is in process and all of the Notes will be paid in
full on the next Payment Date, the Servicer will notify the Asset Representations Reviewer and the Indenture Trustee no less than ten (10) calendar days before that Payment Date. On receipt of notice, the Asset Representations Reviewer will
terminate the Asset Representations Review immediately and will have no obligation to deliver a Review Report. 

Section 3.5.    Review Reports. (a) Within ten (10) calendar days after the end of the Asset
Representations Review period under Section 3.4(b), the Asset Representations Reviewer will deliver to the Issuer, the Sponsor, the Servicer and the Indenture Trustee a Review Report indicating for each Subject Receivable
whether there was a Test Pass, a Test Incomplete or a Test Fail for each Test, or whether the Subject Receivable was a Test Complete and the related reason. The Review Report will contain a summary of the findings and conclusions of the Asset
Representations Reviewer with respect to the Asset Representations Review to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received, including a
description of each Test Fail and Test Incomplete, if any, from the Asset Representations Review. The Asset Representations Reviewer will ensure that the Review Report does not contain any Issuer PII. On the reasonable request of the Servicer, the
Asset Representations Reviewer will provide additional details on the Test results. 
 (b)    Questions About
Review. The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Servicer. The Asset Representations Reviewer will have no
obligation to respond to questions or requests for clarification from Noteholders or any Person other than the Servicer and will direct such Persons to submit written questions or requests to the Servicer. 

  
 4 

 Section 3.6.    Limitations on Review Obligations. The Asset
Representations Reviewer will have no obligation: 
 (a)    to determine whether a Delinquency Trigger has occurred or
whether the required percentage of Noteholders has voted to direct an Asset Representations Review under the Indenture, and may rely on the information in any Review Notice delivered by the Indenture Trustee; 

(b)     to determine which Receivables are Subject Receivables, and may rely on the lists of Subject Receivables provided
by the Servicer; 
 (c)    to confirm the validity of the Review Materials and may rely on the accuracy and completeness
of the Review Materials; or 
 (d)    to take any action or cause any other party to take any action under any of the
Transaction Documents or otherwise to enforce any remedies against any Person for breaches of representations or warranties about the Subject Receivables. 

Section 3.7.    Dispute Resolution. The Asset Representations Reviewer acknowledges and agrees that any Review
Report may be used by the Issuer, the Seller or the Servicer in any dispute resolution proceeding related to the Subject Receivables. No additional fees or reimbursement of expenses shall be paid to the Asset Representations Reviewer regarding the
Issuer’s, the Seller’s or the Servicer’s use of any Review Report; provided, that the Asset Representations Reviewer will be reimbursed for its
out-of-pocket expenses incurred in its participation in any dispute resolution proceeding. 

ARTICLE IV 
 ASSET REPRESENTATIONS
REVIEWER 
 Section 4.1.    Representations and Warranties. The Asset Representations Reviewer represents
and warrants as of the Closing Date: 
 (a)    Organization and Qualification. The Asset Representations Reviewer
is duly organized and validly existing as a limited liability company in good standing under the laws of the State of Delaware. The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses
or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement. 

(b)    Power, Authority and Enforceability. The Asset Representations Reviewer has the power and authority to
execute, deliver and perform its obligations under this Agreement. The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement. This Agreement is the legal, valid and binding obligation of the Asset

  
 5 

 
Representations Reviewer enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of
creditors’ rights or by general equitable principles. 
 (c)    No Conflicts and No Violation. The
execution, delivery and performance by the Asset Representations Reviewer of the transactions contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (A) conflict
with, or be a breach or default under, any indenture, mortgage, deed of trust, loan agreement, guarantee or other agreement or instrument under which the Asset Representations Reviewer is a party, (B) result in the creation or imposition of any
Lien on any of the properties or assets of the Asset Representations Reviewer under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or other agreement or instrument, (C) violate the organizational documents of the
Asset Representations Reviewer or (D) violate any law or any order, rule or regulation of a federal or state court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations
Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under
this Agreement. 
 (d)    No Consent Required. No approval or authorization by, or filing with, any Governmental
Authority is required in connection with the execution, delivery and performance by the Asset Representations Reviewer of this Agreement other than (i) approvals and authorizations that have previously been obtained and filings that have
previously been made and (ii) approvals, authorizations or filings which, if not obtained or made, would not have a material adverse effect on the ability of the Asset Representations Reviewer to perform its obligations under this Agreement.

 (e)    No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Asset
Representations Reviewer, threatened in writing before a federal or state court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties
(A) asserting the invalidity of this Agreement, (B) seeking to prevent the completion of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that would reasonably be expected to have a material
adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement. 

(f)    Eligibility. The Asset Representations Reviewer meets the eligibility requirements in
Section 5.1 and will notify the Issuer and the Servicer promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility requirements in Section 5.1. 

Section 4.2.    Covenants. The Asset Representations Reviewer covenants and agrees that: 

(a)    Eligibility. It will notify the Issuer and the Servicer promptly if it no longer meets the eligibility
requirements in Section 5.1. 

  
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 (b)    Review Systems; Personnel. It will maintain business process
management and/or other systems necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Subject
Receivable and the related Review Materials to be individually tracked and stored as contemplated by this Agreement. The Asset Representations Reviewer will maintain adequate staff that is properly trained to conduct Asset Representations Reviews as
required by this Agreement. 
 (c)    Maintenance of Review Materials. It will maintain copies of any Review
Materials, Review Reports and other documents relating to an Asset Representations Review, including internal correspondence and work papers, for a period of two years after the termination of this Agreement or repayment of the Notes in full,
whichever comes first. 
 Section 4.3.    Fees, Expenses and Indemnities. 

(a)    Annual Fee. The Servicer will pay the Asset Representations Reviewer, as compensation for agreeing to act as
the Asset Representations Reviewer under this Agreement, an annual fee of $5,000. The annual fee will be payable by the Servicer on the Closing Date and on each anniversary thereof until this Agreement is terminated, provided, that in the
year in which all public Notes are paid in full, the annual fee shall be reduced pro rata by an amount equal to the days of the year in which the public Notes are no longer outstanding. 

(b)    Review Fee. Following the completion of an Asset Representations Review and the delivery to the Indenture
Trustee, the Issuer, the Sponsor and the Servicer of the Review Report, or the termination of an Asset Representations Review in accordance with Section 3.4(f), and the delivery to the Servicer of a detailed invoice, the
Asset Representations Reviewer will be entitled to a fee of $200 for each Subject Receivable for which the Asset Representations Review was started (the “Review Fee”), to be paid as agreed in
Section 4.3(c). However, no Review Fee will be charged for any Tests that were performed in a prior Asset Representations Review or for any Asset Representations Review in which no Tests were completed prior to the Asset
Representations Reviewer being notified of a termination of the Asset Representations Review in accordance with Section 3.4(f). The Servicer will pay the Review Fee to the Asset Representations Reviewer in accordance with
the terms of the detailed invoice from the Asset Representations Reviewer. If an Asset Representations Review is terminated in accordance with Section 3.4(f), the Asset Representations Reviewer must submit its invoice for
the Review Fee for the terminated Asset Representations Review no later than five Business Days before the final Payment Date in order to be reimbursed no later than the final Payment Date. 

(c)    Payment of Fees and Indemnities. The Asset Representations Reviewer shall submit reasonably detailed
invoices to the Servicer for any amounts owed to it under this Agreement. To the extent not paid by the Servicer within sixty (60) calendar days following the receipt of a detailed invoice on the due date therefor hereunder, the fees provided
for in this Section 4.3 and the indemnities provided for in Section 4.6(a) shall be paid by the Issuer pursuant to the priority of payments set forth in Section 4.4(a) of the Sale and
Servicing Agreement; provided, that prior to any such payment pursuant to the Sale and Servicing Agreement, the Asset Representations Reviewer shall notify the Servicer in writing that such payments have been outstanding for at least sixty
(60) calendar days. 

  
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 Section 4.4.    Limitation on Liability. The Asset
Representations Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement. However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith, breach of this
Agreement or negligence in performing its obligations under this Agreement. In no event will the Asset Representations Reviewer be liable for special, indirect or consequential losses or damages (including lost profit), even if the Asset
Representations Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action. 

Section 4.5.    Indemnification by Asset Representations Reviewer. The Asset Representations Reviewer will
indemnify each of the Issuer, the Servicer, the Depositor, the Seller, the Sponsor, the Owner Trustee and the Indenture Trustee and their respective directors, officers, employees and agents for all costs, expenses, losses, damages and liabilities
(including any reasonable legal fees and expenses incurred by an Indemnified Party in connection with the enforcement of any indemnification or other obligation of the Asset Representations Reviewer) resulting from (a) the willful misconduct,
bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement, (b) the Asset Representations Reviewer’s failure to comply with the requirements of applicable federal, state or local laws
and regulations in the performance of its duties hereunder or (c) the Asset Representations Reviewer’s breach of any of its representations, warranties, covenants or other obligations in this Agreement. The Asset Representations
Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the termination of the Issuer and the permitted resignation or removal of the Asset Representations Reviewer. 

Section 4.6.    Indemnification of Asset Representations Reviewer. 

(a)    Indemnification. The Servicer will indemnify the Asset Representations Reviewer and its officers, directors,
employees and agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting from the performance of its obligations under this Agreement (including the costs and expenses of defending
itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence, (ii) the Asset
Representations Reviewer’s failure to comply with the requirements of applicable federal, state and local laws and regulations in the performance of its duties hereunder or (iii) the Asset Representations Reviewer’s breach of any of
its representations, warranties, covenants or other obligations in this Agreement. 
 (b)    Proceedings.
Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.6(a), notify the Servicer of the Proceeding. The Servicer may
participate in and assume the defense and settlement of a Proceeding at its expense. If the Servicer notifies the Indemnified Person of its intention to assume the defense of the Proceeding, the Servicer will not be liable for legal expenses of
counsel to the Indemnified Person unless there is a conflict between the interests of the Servicer, and an Indemnified Person. If there is a conflict, the Servicer will pay for the reasonable fees and expenses of separate counsel to the Indemnified
Person. No settlement of a Proceeding may be made without the approval of the Servicer and the Indemnified Person, which approval will not be unreasonably withheld. 

  
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 (c)    Survival of Obligations. The Servicer’s obligations under
this Section 4.6 will survive the permitted resignation or removal of the Asset Representations Reviewer and the termination of this Agreement. 

(d)    Repayment. If the Servicer makes any payment under this Section 4.6 and the
Indemnified Person later collects any of the amounts for which the payments were made to it from others, the Indemnified Person will promptly repay the amounts to the Servicer. 

Section 4.7.    Inspections of Asset Representations Reviewer. The Asset Representations Reviewer agrees that,
with reasonable prior notice not more than once during any year, it will permit authorized representatives of the Issuer, the Servicer or the Sponsor, during the Asset Representations Reviewer’s normal business hours, to examine and review the
books of account, records, reports and other documents and materials of the Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees
and expenses of the Asset Representations Reviewer for its performance and (c) any claim made by the Asset Representations Reviewer under this Agreement. In addition, the Asset Representations Reviewer will permit the Issuer’s, the
Servicer’s or the Sponsor’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset Representations Reviewer’s officers and employees. Each of the Issuer, the Servicer and the Sponsor
will, and will cause its authorized representatives to, hold in confidence any proprietary confidential information of the Asset Representations Reviewer except if disclosure may be required by law or if the Issuer, the Servicer or the Sponsor
reasonably determines that it is required to make the disclosure under this Agreement or the other Transaction Documents. The Asset Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a
period of at least two years after the termination of its obligations under this Agreement. 

Section 4.8.    Delegation of Obligations. The Asset Representations Reviewer may not delegate or subcontract
its obligations under this Agreement to any Person without the consent of the parties to this Agreement. 

Section 4.9.    Confidential Information. 

(a)    Treatment. The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it
under this Agreement in confidence and under the terms and conditions of this Section 4.9, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information. The Confidential
Information will not, without the prior consent of the Issuer, the Sponsor and the Servicer, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or affiliates, including legal
counsel (collectively, the “Information Recipients”) other than for the purposes of performing Asset Representations Reviews of Subject Receivables or performing its obligations under this Agreement. The Asset Representations
Reviewer agrees that it will not, and will cause its Affiliates to not (i) purchase or sell securities issued by the Bank or its Affiliates or special purpose entities on the basis of Confidential Information or (ii) use the Confidential
Information for the preparation of research reports, newsletters or other publications or similar communications. 

  
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 (b)    Definition. “Confidential Information” means
oral, written and electronic materials (irrespective of its source or form of communication) furnished before, on or after the date of this Agreement to the Asset Representations Reviewer, including: 

(i)    lists of Subject Receivables and any related Review Materials; 

(ii)    origination and servicing guidelines, policies and procedures and form contracts; and 

(iii)    notes, analyses, compilations, studies or other documents or records prepared by the Sponsor or
the Servicer, which contain information supplied by or on behalf of the Sponsor or the Servicer or their representatives. 
 However, Confidential
Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients
on a non-confidential basis from a Person or entity other than the Issuer, the Sponsor or the Servicer before its disclosure to the Information Recipients who, to the knowledge of the Information Recipient is
not bound by a confidentiality agreement with the Issuer, the Sponsor or the Servicer and is not prohibited from transmitting the information to the Information Recipients, (C) is independently developed by the Information Recipients without
the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer, the Sponsor or the Servicer provides permission to the
applicable Information Recipients to release. 
 (c)    Protection. The Asset Representations Reviewer will use
best efforts to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care. The
Asset Representations Reviewer acknowledges that Personally Identifiable Information is also subject to the additional requirements in Section 4.10. 

(d)    Disclosure. If the Asset Representations Reviewer is required by applicable law, regulation, rule or order
issued by an administrative, governmental, regulatory or judicial authority to disclose part of the Confidential Information, it may disclose the Confidential Information. However, before a required disclosure, the Asset Representations Reviewer, if
permitted by law, regulation, rule or order, will use its reasonable efforts to provide the Issuer, the Sponsor and the Servicer with notice of the requirement and will cooperate, at the Sponsor’s expense, in the Issuer’s and the
Sponsor’s pursuit of a proper protective order or other relief for the disclosure of the Confidential Information. If the Issuer or the Sponsor is unable to obtain a protective order or other proper remedy by the date that the information is
required to be disclosed, the Asset Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose. 

(e)    Responsibility for Information Recipients. The Asset Representations Reviewer will be responsible for a
breach of this Section 4.9 by its Information Recipients. 
 (f)    Violation. The
Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer, the Sponsor and the Servicer and the 

  
 10 

 
Issuer, the Sponsor and the Servicer may seek injunctive relief in addition to legal remedies. If an action is initiated by the Issuer or the Servicer to enforce this
Section 4.9, the prevailing party will be entitled to reimbursement of costs and expenses, including reasonable attorney’s fees, incurred by it for the enforcement. 

Section 4.10.    Personally Identifiable Information. 

(a)    Definitions. “Personally Identifiable Information” or “PII” means
information in any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification number(s), vehicle identification number(s) or
“VIN(s)”, any other actual or assigned attribute associated with or identifiable to an individual and any information that when used separately or in combination with other information could identify an individual. “Issuer
PII” means PII furnished by the Issuer, the Servicer or their Affiliates to the Asset Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under
this Agreement. 
 (b)    Use of Issuer PII. The Issuer does not grant the Asset Representations Reviewer any
rights to Issuer PII. The Asset Representations Reviewer will use Issuer PII only to perform its obligations under this Agreement or as specifically directed in writing by the Issuer and will only reproduce Issuer PII to the extent necessary for
these purposes. The Asset Representations Reviewer must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy,
security and data protection. The Asset Representations Reviewer will protect and secure Issuer PII. The Asset Representations Reviewer will implement privacy or data protection policies and procedures that comply with applicable laws and
regulations and this Agreement. The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards to (i) protect the
security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise
comply with its obligations under this Agreement. These safeguards include a written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection
and data transmission protection) and physical security measures. 
 (c)    Additional Limitations. In addition
to the use and protection requirements described in Section 4.10(b), the Asset Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements: 

(i)    The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its
personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform an Asset Representations Review, (B) with the prior consent of the Issuer or (C) as required by applicable
law. When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task. The Asset Representations Reviewer will inform personnel with access to Issuer PII
of the confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII. 

  
 11 

 (ii)    The Asset Representations Reviewer will not sell,
disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer. 

(d)    Notice of Breach. The Asset Representations Reviewer will notify the Issuer promptly in the event of an
actual or reasonably suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach. 

(e)    Return or Disposal of Issuer PII. Except where return or disposal is prohibited by applicable law, promptly
on the earlier of the completion of the Asset Representations Review or the request of the Issuer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that
prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer. Where the
Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable law. 

(f)    Compliance; Modification. The Asset Representations Reviewer will cooperate with and provide information to
the Issuer regarding the Asset Representations Reviewer’s compliance with this Section 4.10. The Asset Representations Reviewer and the Issuer agree to modify this Section 4.10 as necessary
from time to time for either party to comply with applicable law. 
 (g)    Audit of Asset Representations
Reviewer. The Asset Representations Reviewer will permit the Issuer and its authorized representatives to audit the Asset Representations Reviewer’s compliance with this Section 4.10 during the Asset
Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year unless circumstances necessitate additional audits. The Issuer agrees to make reasonable
efforts to schedule any audit described in this Section 4.10(g) with the inspections described in Section 4.7. The Asset Representations Reviewer will also permit the Issuer and its authorized
representatives during normal business hours on reasonable advance written notice to audit any service providers used by the Asset Representations Reviewer to fulfill the Asset Representations Reviewer’s obligations under this Agreement. 

(h)    Affiliates and Third Parties. If the Asset Representations Reviewer processes the PII of the Issuer’s
Affiliates or a third party when performing an Asset Representations Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this
Section 4.10, and this Agreement is intended to benefit the Affiliate or third party. The Affiliate or third party will be entitled to enforce the PII related terms of this Section 4.10 against the
Asset Representations Reviewer as if each were a signatory to this Agreement. 

  
 12 

 ARTICLE V 

RESIGNATION AND REMOVAL; 
 SUCCESSOR
ASSET REPRESENTATIONS REVIEWER 
 Section 5.1.    Eligibility Requirements for Asset Representations
Reviewer. The Asset Representations Reviewer must be a Person who (a) is not Affiliated with the Sponsor, the Depositor, the Servicer, the Indenture Trustee, the Owner Trustee or any of their Affiliates and (b) was not, and is not
Affiliated with a Person that was, engaged by the Sponsor or any underwriter to perform any due diligence on the Receivables prior to the Closing Date. 

Section 5.2.    Resignation and Removal of Asset Representations Reviewer. 

(a)    No Resignation of Asset Representations Reviewer. The Asset Representations Reviewer will not resign as Asset
Representations Reviewer unless the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1. The Asset Representations Reviewer will notify the Issuer and the Servicer of its resignation
as soon as practicable after it determines it is required to resign and stating the resignation date and including an Opinion of Counsel supporting its determination. 

(b)    Removal of Asset Representations Reviewer. If any of the following events occur, the Issuer, by notice to
the Asset Representations Reviewer, may, and in the case of clause (i) below, shall, remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement: 

(i)    the Asset Representations Reviewer no longer meets the eligibility requirements in
Section 5.1; 
 (ii)    the Asset Representations Reviewer breaches of any of
its representations, warranties, covenants or obligations in this Agreement; or 
 (iii)    an Insolvency
Event of the Asset Representations Reviewer occurs. 
 (c)    Notice of Resignation or Removal. The Issuer will
notify the Servicer and the Indenture Trustee of any resignation or removal of the Asset Representations Reviewer. 

(d)    Continue to Perform After Resignation or Removal. No resignation or removal of the Asset Representations
Reviewer will be effective, and the Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to
Section 5.3(b). 
 Section 5.3.    Successor Asset Representations Reviewer. 

(a)    Engagement of Successor Asset Representations Reviewer. Following the resignation or removal of the Asset
Representations Reviewer, the Issuer will appoint a successor Asset Representations Reviewer who meets the eligibility requirements of Section 5.1. 

(b)    Effectiveness of Resignation or Removal. No resignation or removal of the Asset Representations Reviewer
will be effective until the successor Asset Representations Reviewer 

  
 13 

 
has executed and delivered to the Issuer and the Servicer an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement
or entered into a new agreement with the Issuer on substantially the same terms as this Agreement. 

(c)    Transition and Expenses. If the Asset Representations Reviewer resigns or is removed, the Asset
Representations Reviewer will cooperate with the Issuer and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the
successor Asset Representations Reviewer. The Asset Representations Reviewer will pay the reasonable expenses (including the fees and expenses of counsel) of transitioning the Asset Representations Reviewer’s obligations under this Agreement
and preparing the successor Asset Representations Reviewer to take on such obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer or the successor Asset Representations Reviewer. 

Section 5.4.    Merger, Consolidation or Succession. Any Person (a) into which the Asset Representations
Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the
eligibility requirements in Section 5.1, will be the successor to the Asset Representations Reviewer under this Agreement. Such Person will execute and deliver to the Issuer and the Servicer an agreement to assume the Asset
Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law). 
 ARTICLE VI 

OTHER AGREEMENTS 

Section 6.1.     Independence of Asset Representations Reviewer. The Asset Representations Reviewer will be an
independent contractor and will not be subject to the supervision of the Issuer, the Indenture Trustee or the Owner Trustee for the manner in which it accomplishes the performance of its obligations under this Agreement. Nothing in this Agreement
will make the Asset Representations Reviewer nor the Issuer members of any partnership, joint venture or other separate entity or impose any liability as such on any of them. 

For the avoidance of doubt, neither the Indenture Trustee or the Owner Trustee shall be responsible for monitoring the performance by the
Asset Representations Reviewer of its obligations under this Agreement. 
 Section 6.2.     No Petition.
Each of the parties, by entering into this Agreement, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of (a) all securities issued by the Depositor or by a trust
for which the Depositor was a depositor (including, without limitation, the Issuer) or (b) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against (i) the Depositor or (ii) the Issuer,
respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law. This Section 6.2 will survive the termination of this Agreement.

  
 14 

 Section 6.3.    Limitation of Liability of Owner Trustee. This
Agreement has been signed on behalf of the Issuer by Wells Fargo Delaware Trust Company, National Association not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer. In no event will Wells Fargo Delaware Trust
Company, National Association in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer’s obligations under this Agreement. For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled
to the benefits of, the Trust Agreement. 
 Section 6.4.    Termination of Agreement. This Agreement will
terminate, except for the obligations under Section 4.5 or as otherwise stated in this Agreement, on the earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture
and (b) the date the Issuer is terminated under the Trust Agreement. 
 ARTICLE VII 

MISCELLANEOUS PROVISIONS 

Section 7.1.    Amendments. 

(a)    Any term or provision of this Agreement may be amended by the Sponsor, the Servicer and the Asset Representations
Reviewer without the consent of the Indenture Trustee, any Noteholder, the Issuer, the Owner Trustee or any other Person subject to the satisfaction of one of the following conditions: 

(i)    the Sponsor or the Servicer delivers to the Indenture Trustee (a) an Opinion of Counsel to the
effect that such amendment will not materially and adversely affect the interests of the Noteholders and (b) an Officer’s Certificate to the effect that such amendment will not materially and adversely affect the interests of the
Noteholders; or 
 (ii)    the Rating Agency Condition is satisfied with respect to such amendment and
the Sponsor or the Servicer notifies the Indenture Trustee in writing that the Rating Agency Condition is satisfied with respect to such amendment. 

(b)    This Agreement may also be amended from time to time by the Sponsor, the Servicer and the Asset Representations
Reviewer, with the consent of the Noteholders evidencing not less than a majority of the Outstanding Note Balance of the Controlling Class, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders. It will not be necessary for the consent of Noteholders to approve the particular form of any proposed amendment or consent, but it will be sufficient if such consent
approves the substance thereof. The manner of obtaining such consents (and any other consents of Noteholders provided for in this Agreement) and of evidencing the authorization of the execution thereof by Noteholders will be subject to such
reasonable requirements as the Indenture Trustee may prescribe, including the establishment of record dates pursuant to the Depository Agreement. 

(c)    Prior to the execution of any amendment pursuant to this Section 7.1, the Servicer shall
provide written notification of the substance of such amendment to each Rating Agency; and promptly after the execution of any such amendment or consent, the Servicer shall furnish a 

  
 15 

 
copy of such amendment or consent to each Rating Agency and the Indenture Trustee. Notwithstanding anything to the contrary in this Section 7.1, any amendment that
adversely affects the Indenture Trustee’s or the Owner Trustee’s own rights or obligations under this Agreement shall require the consent of the Indenture Trustee or the Owner Trustee, as the case may be. 

Section 7.2.    Assignment; Benefit of Agreement; Third Party Beneficiaries. 

(a)    Assignment. Except as stated in Section 5.4, this Agreement may not be assigned by
the Asset Representations Reviewer without the consent of the Servicer. 
 (b)    Benefit of Agreement; Third-Party
Beneficiaries. This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns. The Indenture Trustee, for the benefit of itself and the Noteholders, and the Owner Trustee will be third-party
beneficiaries of this Agreement and entitled to enforce this Agreement against the Asset Representations Reviewer. No other Person will have any right or obligation under this Agreement. 

Section 7.3.    Notices. 

(a)    Delivery of Notices. All notices, requests, demands, consents, waivers or other communications to or from the
parties must be in writing and will be considered given: 
 (i)    For overnight mail, on delivery or,
for a letter mailed by registered first class mail, postage prepaid, three days after deposit in the mail; 

(ii)    for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

 (iii)    for an email, when receipt is confirmed by telephone or reply email from the recipient; and

 (iv)    for an electronic posting to a password-protected website to which the recipient has access,
on delivery (without the requirement of confirmation of receipt) of an email to that recipient stating that the electronic posting has occurred. 

(b)    Notice Addresses. Any notice, request, demand, consent, waiver or other communication will be delivered or
addressed to: (i) (a) in the case of the Sponsor and the Servicer, to USAA Federal Savings Bank, 10750 McDermott Freeway, San Antonio, TX 78288, (b) in the case of the Issuer or the Owner Trustee, to USAA Auto Owner Trust 2017-1, c/o Wells Fargo Delaware Trust Company, National Association, 919 North Market Street, Suite 1600, Wilmington, Delaware 19801, Attention: Corporate Trust Services, (c) in the case of the Indenture
Trustee, to U.S. Bank National Association, 190 S. LaSalle Street, Chicago, IL 60603, Attention: Global Structured Finance – USAA 2017-1, and (d) in the case of the Asset Representations Reviewer, to
Clayton Fixed Income Services LLC, 1700 Lincoln Street, Denver, CO 80203, Attention: SVP, Surveillance; with a copy to Clayton Fixed Income Services LLC, 100 Beard Sawmill Road, Ste. 200, Shelton, CT 06484, Attention: General Counsel or (ii) as
to each party, at such other address or email as shall be designated by such party in a written notice to each other party. 

  
 16 

 Section 7.4.    Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS. 
 EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES
HERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN ANY OF THE AFORESAID COURTS, THAT ANY
SUCH COURT LACKS JURISDICTION OVER SUCH PARTY. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 
 EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. 

Section 7.5.    No Waiver; Remedies. No party’s failure or delay in exercising a power, right or remedy
under this Agreement will operate as a waiver. No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy. The powers,
rights and remedies under this Agreement are in addition to any powers, rights and remedies under law. 

Section 7.6.    Severability. If a part of this Agreement is held invalid, illegal or unenforceable, then it
will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement. 

Section 7.7.    Headings. The headings in this Agreement are included for convenience and will not affect the
meaning or interpretation of this Agreement. 
 Section 7.8.    Counterparts. This Agreement may be executed
in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document. 

  
 17 

 [Remainder of Page Left Blank] 

  
 18 

 EXECUTED BY: 
  

			
	 USAA AUTO OWNER TRUST 2017-1,

      as Issuer

	
	By: WELLS FARGO DELAWARE TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee
		
	By:	 	/s/ Rosemary Kennard
		 	Name: Rosemary Kennard
		 	Title: Vice President
	
	 USAA FEDERAL SAVINGS BANK,

      as Sponsor and Servicer

		
	By:	 	/s/ Renee Horne
		 	Name: Renee Horne
		 	Title: Vice President
	
	 CLAYTON FIXED INCOME SERVICES LLC,

      as Asset Representations Reviewer

		
	By:	 	/s/ Robert A. Harris
		 	Name: Robert A. Harris
		 	Title: Secretary

  
 [Signature Page to USAA
2017-1 Asset Representations Review Agreement] 

 Schedule A 

Representations and Warranties, Review Materials and Tests 

Representation 

Characteristics of Receivables (a): As of the Cut-Off Date (or such other date as may be
specifically set forth below), each Receivable: 
  

	 	(i)	as of the Closing Date, is secured by a first priority perfected security interest in the Financed Vehicle in favor of the Originator, as secured party, or all necessary actions have been commenced that would result in
a first priority perfected security interest in the Financed Vehicle in favor of the Originator, as secured party, which security interest, in either case, is assignable and has been so assigned (x) by the Bank to the Purchaser and (y) by
the Purchaser to the Issuer; 

  

	 	(ii)	contains provisions that permit the repossession and sale of the Financed Vehicle upon a default under the Receivable by the Obligor; 

 

	 	(iii)	provided, at origination, for level periodic payments which fully amortize the initial Outstanding Principal Balance over the original term; provided, that the amount of the first and last payments may be
different but in no event more than three times the level monthly payment; and 

  

	 	(iv)	was originated in the United States. 

 Documents 

Retail Contract 
 Title Documents 

Procedures to be Performed 
  

	 	i.	First Priority Interest 

  

	 	A.	Confirm that the Receivable contains security interest language in favor of USAA FSB in the Financed Vehicle. 

  

	 	B.	Confirm that the Title Documents report USAA FSB, or an acceptable variation of the name, as the first Lien holder, or that an appropriate application has been filed in the applicable state if the certificate of title
is still pending. 

  

	 	C.	Confirm that the Obligor’s name, or an acceptable variation thereof, on the Contract matches the name on the Title Documents. 

	 	D.	Confirm that the Vehicle Identification Number (VIN) on the Contract matches the VIN on the Title Documents. 

  

	 	E.	Confirm that the Receivable has been assigned: 

 (x) by the Bank to the
Purchaser, and 
 (y) by the Purchaser to the Issuer. 

 

	 	ii.	Repossession 

  

	 	A.	Observe the Contract and confirm it contains provisions that permit the repossession and sale of the Financed Vehicle upon a default under the Receivable by the Obligor. 

 

	 	iii.	Payment Schedule Structure 

  

	 	A.	Confirm all payments are equivalent with the possible exception of the first and last month’s payments which may differ by no more than three times the amount of the level monthly payment. 

 

	 	B.	Confirm that the Number of Payments and the Amount of Payments, together with any first and last month’s payment (if applicable), equals the Total of the Payments as stated within the Truth and Lending section of
the Contract. 

  

	 	iv.	United States Origination 

  

	 	A.	Confirm the Contract reports an originator and Obligor located in the United States. 

  

	 	v.	If steps (i) through (iv) are confirmed, then Test Pass. 

 Representation 

Individual Characteristics (b): Each Receivable has the following individual characteristics, in each case as of the Cut-Off Date: 
  

	 	(i)	the Receivable is secured by a new or used automobile or light-duty truck; 

  

	 	(ii)	the Receivable has a Contract Rate of no less than 2.00%; 

  

	 	(iii)	the Receivable had an original term to maturity of not more than 84 months, and the Receivable has a remaining term to maturity of not less than 1 month; 

 

	 	(iv)	the Receivable has an Outstanding Principal Balance of greater than or equal to $600.00; 

  

	 	(v)	the Obligor on the Receivable has a FICO® score of no less than 600; 

  

	 	(vi)	the Financed Vehicle related to the Receivable is a model year 2009 or newer; 

  

	 	(vii)	the Receivable has a scheduled maturity date on or before March 15, 2024; 

  

	 	(viii)	the Receivable is not more than 30 days past due; 

  

	 	(ix)	the Receivable was not noted in the records of the Servicer as being the subject of any pending bankruptcy or insolvency Proceeding; 

 

	 	(x)	the Receivable is a Simple Interest Receivable. 

 Documents 

Retail Contract 
 System Screenprint 

Procedures to be Performed 
  

	 	i.	Financed Vehicle 

  

	 	A.	Review the Contract and confirm that the Financed Vehicle is a new or used automobile or light-duty truck. 

  

	 	ii.	Contract Rate 

  

	 	A.	Review the System Screenprint and confirm the Contract Rate is not less than the minimum allowable Contract Rate. 

	 	iii.	Original Term 

  

	 	A.	Review the Contract and confirm the Number of Payments (including first and last payments) does not exceed the maximum allowable Contract Term of no more than 84 months. 

 

	 	B.	Review the System Screenprint and confirm that the remaining term of the Contract is within the allowable limits of no less than 1 month. 

 

	 	iv.	Remaining Balance 

  

	 	A.	Review the System Screenprint and confirm that the unpaid balance as of the Cut-Off Date is not less than the minimum allowable Outstanding Principal Balance. 

 

	 	v.	FICO Score 

  

	 	A.	Review the System Screenprint and confirm that the Obligor has a FICO® score of at least 600. 

 

	 	vi.	Model Year 

  

	 	A.	Review the System Screenprint and confirm that the Financed Vehicle related to the Receivable is a model year 2009 or newer. 

  

	 	vii.	Maturity Date 

  

	 	A.	Review the System Screenprint and confirm that the Receivable has a Maturity Date on or before March 15, 2024. 

  

	 	viii.	Delinquency Status 

  

	 	A.	Review the System Screenprint and confirm that the Receivable is not more than 30 days past due as of the Cut-Off Date. 

 

	 	ix.	Bankruptcy and Insolvency 

  

	 	A.	Verify through the System Screenprint that there is no evidence the Receivable is the subject of a Bankruptcy or insolvency proceeding. 

 

	 	x.	Interest Method 

  

	 	A.	Review the Contract and confirm that the Receivable is amortized using the Simple Interest Method. 

  

	 	xi.	If steps (i) through (x) are confirmed, then Test Pass. 

 Representation 

Compliance with Law (c): The Receivable complied at the time it was originated or made in all material respects with all
requirements of law in effect at that time and applicable to such Receivable. 
 Documents 

Retail Contract 
 List of Approved Contract Forms 

System Screenprint 
 Procedures to be Performed

  

	 	i.	Observe the Contract and confirm the form number and revision date are on the List of Approved Contract Forms. 

  

	 	ii.	Confirm the following disclosures are included in the Contract: 

  

	 	a.	Prepayment disclosure 

  

	 	b.	Late payment policy including the late charge amount (or calculation) 

  

	 	c.	Security Interest Disclosure 

  

	 	d.	Contract Reference 

  

	 	e.	Insurance Requirements 

  

	 	iii.	Review the System Screenprint and confirm that there is no evidence of any judgment against USAA FSB indicating that the Contract was originated in violation of applicable law. 

 

	 	iv.	Review the System Screenprint and confirm that there is no evidence of any Obligor(s) alleging non-compliance. 

 

	 	v.	If steps (i) through (iv) are confirmed, then Test Pass. 

 Representation 

Binding Obligation (d): The Receivable constitutes the legal and binding payment obligation in writing of the Obligor,
enforceable in all material respects by the holder thereof in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, liquidation or other similar laws and equitable principles, consumer protection laws and the
Servicemembers Civil Relief Act. 
 Documents 

Retail Contract 
 List of Approved Forms 

Procedures to be Performed 
  

	 	i.	Confirm that the Contract form number and revision date are on the List of Approved Contract Forms. 

  

	 	ii.	Confirm that the Obligor(s) signed the Contract. 

  

	 	iii.	 If steps (i) and (ii) are confirmed, then Test Pass.

 
Representation 
 Receivable in Force (e): As of the Cut-Off Date, neither the Bank’s records nor the Receivable Files indicate that the Receivable was satisfied, subordinated or rescinded nor has the related Financed Vehicle been released from the Lien granted
by the Receivable in whole or in part. 
 Documents 

Title Documents 
 System Screenprint 

Procedures to be Performed 
  

	 	i.	Confirm there is no indication within the Title Documents or the System Screenprint that the Receivable was satisfied prior to the Cut-Off Date. 

 

	 	ii.	Confirm there is no indication within the Title Documents or the System Screenprint that the Receivable was subordinated or rescinded prior to the Cut-Off Date. 

 

	 	iii.	Confirm there is no indication within the Title Documents or the System Screenprint that the Financed Vehicle has been released from the Lien in whole or in part prior to the
Cut-Off Date. 

  

	 	iv.	Confirm that the Receivable is noted as “active” within the System Screenprint. 

  

	 	v.	 If steps (i) through (iii) are confirmed, then Test Pass.

 
Representation 
 No Waiver (f): As of the Cut-Off Date, no provision of a Receivable has been expressly waived in writing in any material respect, except by instruments or documents identified in the related Receivable File. 

Documents 
 Retail Contract 

System Screenprint 
 Procedures to be Performed

  

	 	i.	Compare the System Screenprint to the Contract and confirm that there is no indication of modifications or amendments to the Contract terms. 

 

	 	ii.	If modifications or amendments are observed, review the System Screenprint and confirm modifications and amendments were noted. 

  

	 	iii.	If steps (i) or (ii) are confirmed, then Test Pass. 

 Representation 

No Default (g): Except for payment delinquencies continuing for a period of not more than 30 days as of the Cut-Off Date, the records of the Servicer did not disclose any payment defaults under the terms of the Receivable existed as of the Cut-Off Date. 

Documents 
 System Screenprint 

Procedures to be Performed 
  

	 	i.	Observe the System Screenprint and confirm the Receivable was not more than 30 days delinquent as of the Cut-Off Date. 

 

	 	ii.	If step (i) is confirmed, then Test Pass. 

 Representation 

Insurance (h): Under the terms of each Receivable, the Obligor is required to maintain physical damage insurance covering the
related Financed Vehicle. 
 Documents 
 Retail
Contract 
 Procedures to be Performed 
  

	 	i.	Confirm the Contract contains language that requires the Obligor(s) to obtain and maintain physical damage insurance covering the Financed Vehicle. 

 

	 	ii.	If step (i) is confirmed, then Test Pass. 

 Representation 

No Government Obligor (i): The Obligor on each Receivable is not the United States of America or any state thereof or any local
government, or any agency, department, political subdivision or instrumentality of the United States of America or any state thereof or any local government. 

Documents 
 Retail Contract 

Procedures to be Performed 
  

	 	i.	Confirm the Buyer section of the Contract includes the name of a natural person. 

  

	 	ii.	If the Buyer section of the Contract does not report a natural person’s name, confirm internet search results show no indication the Buyer is the United States of America or any State, or any agency, department or
instrumentality of the United States of America or any State. 

  

	 	iii.	If step (i) or (ii) is confirmed, then Test Pass. 

 Representation 

Assignment (j): The terms of the Receivable do not limit the right of the owner of the Receivable to sell and assign the
Receivable. 
 Documents 
 Retail Contract 

List of Approved Forms 
 Procedures to be Performed

  

	 	i.	Confirm that the Contract form number and revision date are included on the List of Approved Forms. 

  

	 	ii.	Confirm that the Contract does not contain language that limits the sale or transfer of the Receivable. 

  

	 	iii.	If (i) and (ii) are confirmed, then Test Pass. 

 Representation 

Good Title (k): As of the Closing Date and immediately prior to the sale and transfer contemplated in the Purchase Agreement, the
Bank had good and marketable title to and was the sole owner of each Receivable free and clear of all Liens (other than Permitted Liens or any which will be released prior to assignment of such Receivable thereunder), and, immediately upon the sale
and transfer thereof, the Issuer will have good and marketable title to each Receivable, free and clear of all Liens (other than Permitted Liens). 

Documents 
 Retail Contract 

Title Documents 
 Procedures to be Performed 

 

	 	i.	Review the Contract and confirm that the Receivable has not been assigned to any party other than USAA FSB (or an acceptable variation of the name). 

 

	 	ii.	Observe the Title Documents and confirm they report USAA FSB, or an acceptable variation of its name, as the first Lien holder. 

  

	 	iii.	If steps (i) and (ii) are confirmed, then Test Pass. 

 Representation 

One Original (l): There is only one executed original, electronically authenticated original or authoritative copy of the
Contract (in each case within the meaning of the UCC) related to each Receivable. 
 Documents 

Retail Contract 
 Procedures to be Performed 

 

	 	i.	Confirm there is a signature of the appropriate Obligor(s) on the Contract. 

  

	 	ii.	Confirm that the Contract either constitutes an electronically authenticated original, or is marked “Authoritative Copy.” 

  

	 	iii.	If steps (i) and (ii) are confirmed, then Test Pass. 

 Representation 

No Defenses (m): The Bank’s electronic records related to the Receivable do not reflect any right of rescission, set-off, counterclaim or defense has been asserted or threatened in writing by an Obligor with respect to any Receivable. 

Documents 
 System Screenprint 

Procedures to be Performed 
  

	 	i.	Review the System Screenprint and confirm there is no evidence of litigation or other attorney involvement as of the Cut-Off Date. 

If step (i) is confirmed, then Test Pass.Exhibit 10.1

 

BLACK CREEK INDUSTRIAL REIT IV INC.

 

UP TO $2,000,000,000 OF COMMON STOCK:

 

CLASS T SHARES

 

SELECTED DEALER AGREEMENT

 

September 15, 2017

 

 

SELECTED DEALER AGREEMENT

 

Ameriprise Financial Services, Inc.

369 Ameriprise Financial Center

Minneapolis, MN  55474

 

Ladies and Gentlemen:

 

Each of Black Creek Industrial REIT IV Inc., a Maryland corporation (the “Company”), Black Creek Capital Markets, LLC, a Colorado limited liability company (the “Dealer Manager”), BCI IV Advisors LLC, a Delaware limited liability company (the “Advisor”), and BCI IV Advisors Group LLC, a Delaware limited liability company (the “Sponsor”), hereby confirms its agreement with Ameriprise Financial Services, Inc., a Delaware corporation (“Ameriprise”), as follows:

 

1.              Introduction.  This Selected Dealer Agreement (the “Agreement”) sets forth the understandings and agreements  whereby Ameriprise will offer and sell on a best efforts basis for the account of the Company Class T Shares (“Shares”) of common stock (the “Common Stock”),  par value $.01 per share of the Company registered pursuant to the Registration Statement (as defined below) at the per share price set forth in the Registration Statement from time to time (subject to certain volume and other discounts described therein) (the “Offering”), which Offering includes Shares being offered pursuant to the Company’s distribution reinvestment plan (the “DRIP”).  The Shares are more fully described in the Registration Statement defined below.

 

Ameriprise is hereby invited to act as a selected dealer for the Offering, subject to the other terms and conditions set forth below.

 

2.              Representations and Warranties of the Company, the Dealer Manager, the Advisor, and the Sponsor.

 

The Company, the Dealer Manager, the Advisor, and the Sponsor (each an “Issuer Entity” and, collectively, the “Issuer Entities”), jointly and severally, represent, warrant and covenant with Ameriprise for Ameriprise’s benefit that, as of the date hereof and at all times during the term of this Agreement:

 

(a)         Registration Statement and Prospectus.  The Company has filed with the Securities and Exchange Commission (the “Commission”) an effective registration statement on Form S-11 (File No. 333-200594), for the registration of up to $2,000,000,000 in Class T, Class W, and Class I shares of Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) and the regulations thereunder (the “Regulations”).  The registration statement, as amended, and the prospectus, as amended or supplemented, on file with the Commission at the Effective Date (as defined below) of the registration statement (including financial statements, exhibits and all other documents related thereto filed as a part thereof or incorporated therein), and any registration statement filed under Rule 462(b) of the Securities Act, are respectively hereinafter referred to as the “Registration Statement” and the “Prospectus,” except that if the Registration Statement is amended by a post-effective amendment, the term “Registration Statement” shall, from and after the declaration of effectiveness of such post-effective amendment, refer to the Registration Statement as so amended and the term “Prospectus” shall refer to the Prospectus as so amended or supplemented to date, and if any Prospectus filed by the Company pursuant to Rule 424(b) or 424(c) of the Regulations shall differ from the Prospectus on file at the time the Registration Statement or any post-effective amendment shall become effective, the term “Prospectus” shall refer to the Prospectus

 

 

filed pursuant to either Rule 424(b) or 424(c) from and after the date on which it shall have been filed with the Commission.  Further, if a separate registration statement is filed and becomes effective with respect solely to the DRIP (a “DRIP Registration Statement”), the term “Registration Statement” shall include such DRIP Registration Statement from and after the declaration of effectiveness of such DRIP Registration Statement, as such registration statement may be amended or supplemented from time to time.  If a separate prospectus is filed and becomes effective with respect solely to the DRIP (a “DRIP Prospectus”), the term “Prospectus” shall include such DRIP Prospectus from and after the declaration of effectiveness of such DRIP Prospectus, as such prospectus may be amended or supplemented from time to time.

 

(b)         Compliance with the Securities Act.  The Registration Statement has been prepared and filed by the Company and has been declared effective by the Commission and the Shares have been registered or qualified for sale under the respective securities laws of such jurisdictions as indicated in the Blue Sky Memorandum (defined in Section 4(d) herein), as updated from time to time-pursuant to the terms of Section 4(d).  Neither the Commission nor any state securities authority has issued any order preventing or suspending the use of any Prospectus filed with the Registration Statement or any amendments or supplements thereto and no proceedings for that purpose have been instituted, or to the Company’s knowledge, are threatened or contemplated by the Commission or by any of the state securities authorities.  At the time the Registration Statement first became effective (the “Effective Date”) and at the time that any post-effective amendments thereto or any additional registration statement filed under Rule 462(b) of the Securities Act becomes effective, the Registration Statement or any amendment thereto (1) complied, or will comply, as to form in all material respects with the requirements of the Securities Act and the Regulations and (2) did not or will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading.  When the Prospectus or any amendment or supplement thereto is filed with the Commission pursuant to Rule 424(b) or 424(c) of the Regulations and at all times subsequent thereto through the date on which the Offering is terminated (“Termination Date”), the Prospectus will comply in all material respects with the requirements of the Securities Act and the Regulations, and will not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.  Any Prospectus delivered to Ameriprise will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(c)          The Company.  The Company has been duly incorporated and validly exists as a corporation in good standing under the laws of the State of Maryland with full power and authority to conduct the business in which it is engaged as described in the Prospectus, including without limitation to acquire properties as more fully described in the Prospectus, including land and buildings, as well as properties upon which properties are to be constructed for the Company or to be owned by the Company (the “Properties”) or make loans, or other permitted investments as referred to in the Prospectus.  The Company and each of its subsidiaries is duly qualified to do business as a foreign corporation, limited liability company or limited partnership, as applicable, and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type that would make such qualification necessary except where the failure to be so qualified or in good standing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The term “Material Adverse Effect” means a material adverse effect on, or material adverse change in, the general affairs, business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business.

 

(d)         The Shares.  The Shares, when issued, will be duly and validly issued, and upon payment therefor, will be fully paid and non-assessable and will conform in all material respects to the description

 

 

thereof contained in the Prospectus; no holder thereof will be subject to personal liability for the obligations of the Company solely by reason of being such a holder; such Shares are not subject to the preemptive rights of any stockholder of the Company; and all corporate action required to be taken for the authorization, issuance and sale of such Shares has been validly and sufficiently taken.  All shares of the Company’s issued and outstanding capital stock have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any stockholder of the Company.

 

(e)          Capitalization.  The authorized capital stock of the Company conforms in all material respects to the description thereof contained in the Prospectus under the caption “Description of Shares.” Except as disclosed in the Prospectus: no shares of Common Stock have been or are to be reserved for any purpose; there are no outstanding securities convertible into or exchangeable for any shares of Common Stock; and there are no outstanding options, rights (preemptive or otherwise) or warrants to purchase or subscribe for shares of Common Stock or any other securities of the Company.

 

(f)            Violations.  No Issuer Entity or any respective subsidiary thereof is (i) in violation of its charter or bylaws, its partnership agreement, declaration of trust or trust agreement, or limited liability company agreement (or other similar agreement), as the case may be; (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which such Issuer Entity is a party or by which any of them may be bound or to which any of the respective properties or assets of such Issuer Entity is subject (collectively, “Agreements and Instruments”); or (iii) in violation of any law, order, rule or regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its property, except in the case of clauses (ii) and (iii), where such conflict, breach, violation or default would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The execution, delivery and performance by each Issuer Entity, as applicable, of this Agreement, that certain Dealer Manager Agreement between the Dealer Manager and the Company (as amended, the “Dealer Manager Agreement”), the Selected Dealer Agreements between the Dealer Manager and, with the exception of Ameriprise, each of the selected dealers soliciting subscriptions for shares of the Company’s common stock pursuant to the Offering (collectively, the “Selected Dealer Agreements”) and the Advisory Agreement between the Company and the Advisor (as amended, the “Advisory Agreement”) and the consummation of the transactions contemplated herein and therein (including the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as described in the Prospectus under the caption “Estimated Use of Proceeds”) and compliance by the Issuer Entities with their obligations hereunder and thereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, default or Repayment Event (as defined below) under any of the Agreements and Instruments, or result in the creation or imposition of any Lien (as defined below) upon any property or assets of any Issuer Entity or any respective subsidiary thereof (except for such conflicts, breaches, defaults or Repayment Events or Liens that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect) nor will such action result in any violation of the provisions of the charter or bylaws (or similar document) of any Issuer Entity or any respective subsidiary thereof; or any applicable law, rule, regulation, or governmental or court judgment, order, writ or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Issuer Entities or any of their properties, except for such violations that would not reasonably be expected to have a Material Adverse Effect.  As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by an Issuer Entity or any respective subsidiary thereof.  “Lien” means any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on any asset.

 

 

(g)         Financial Statements.  The consolidated financial statements of the Company and the financial statements of each entity acquired by the Company (each, an “Acquired Entity”), including the schedules and notes thereto, which have been filed as part of the Registration Statement and those included or incorporated by reference in the Prospectus present fairly in all material respects the financial position of the Company, its consolidated subsidiaries and each Acquired Entity, as applicable, as of the date indicated and the results of its operations, stockholders’ equity and cash flows of the Company, and its consolidated subsidiaries and each such Acquired Entity, as applicable, for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis or, if such entity is a foreign entity, such other accounting principles applicable to such foreign entity, (except as may be expressly stated in the related notes thereto) and comply with the requirements of Regulation S-X promulgated by the Commission.  KPMG LLP, or such other independent accounting firm that the Company may engage from time to time, whose report is filed with the Commission as a part of the Registration Statement, is, with respect to the Company and its subsidiaries, an independent accounting firm as required by the Securities Act and the Regulations and have been registered with the Public Company Accounting Oversight Board. The selected financial data and the summary financial information included in the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited and unaudited financial statements included in the Registration Statement.  The pro forma financial statements and the related notes thereto included in the Registration Statement and the Prospectus present fairly in all material respects the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement or the Prospectus, or incorporated by reference therein, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Securities Exchange Act of 1934 (the “Exchange Act”) and Item 10 of Regulation S-K of the Securities Act, to the extent applicable.

 

(h)         Prior Performance Tables.  The prior performance tables of the Company’s affiliates and other entities, including the schedules and notes thereto, filed as part of the Registration Statement and those included in the Prospectus under the heading(s) “Prior Performance Tables” (the “Prior Performance Tables”) present fairly in all material respects the financial information required by the Commission’s Industry Guide 5.  Except as disclosed in the Prospectus, the Prior Performance Tables have been prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis to the extent required by the Commission’s Industry Guide 5 and comply with the requirements of Regulation S-X promulgated by the Commission, to the extent applicable.  All disclosures in the Prior Performance Tables regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable.

 

(i)            No Subsequent Material Events.  Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as may otherwise be stated in or contemplated by the Registration Statement and the Prospectus, (a) there has not been any Material Adverse Effect, (b) there have not been any material transactions entered into by the Company except in the ordinary course of business, (c) there has not been any material increase in the long-term indebtedness of the Company and (d) except for regular distributions on the Common Stock paid in cash or reinvested in DRIP Shares, there has been no distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(j)            Investment Company Act.  The Company is not, will not become by virtue of the transactions

 

 

contemplated by this Agreement and the application of the net proceeds therefrom as contemplated in the Prospectus, and does not intend to conduct its business so as to be, an “investment company” as that term is defined in the Investment Company Act of 1940, as amended and the rules and regulations thereunder, and it will exercise reasonable diligence to ensure that it does not become an “investment company” within the meaning of the Investment Company Act of 1940.

 

(k)          Authorization of Agreements.  This Agreement, the Dealer Manager Agreement, the Selected Dealer Agreements and the Advisory Agreement between the Company, the Dealer Manager, and the Advisor, as applicable, have been duly and validly authorized, executed and delivered by the Company, the Dealer Manager, and the Advisor, as applicable, and constitute valid, binding and enforceable agreements of the Company, the Dealer Manager, and the Advisor, as applicable, except to the extent that (i) enforceability may be limited by (x) the effect of bankruptcy, insolvency or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally; or (y) the effect of general principles or equity; or (ii) the enforceability of the indemnity and/or contribution provisions contained in the Dealer Manager Agreement, the Selected Dealer Agreements, the Advisory Agreement, and Section 8 of this Agreement, as applicable, may be limited under applicable securities laws and/or the Statement of Policy Regarding Real Estate Investment Trusts, as reviewed and adopted by membership of the North American Securities Administrators Association (the “NASAA Guidelines”).

 

(l)            The Advisor.  The Advisor has been duly formed and validly exists as a limited liability company in good standing under the laws of the State of Delaware with full power and authority to conduct the business in which it is engaged as described in the Prospectus.  The Advisor is duly qualified to do business as a foreign limited liability company and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except where the failure to be so qualified or in good standing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(m)       The Dealer Manager.  The Dealer Manager has been duly formed and validly exists as a limited liability company in good standing under the laws of the State of Colorado with full power and authority to conduct the business in which it is engaged as described in the Prospectus.  The Dealer Manager is duly qualified to do business as a foreign limited liability company and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary except where the failure to be so qualified or in good standing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(n)         The Sponsor.  The Sponsor has been duly formed and validly exists as a limited liability company in good standing under the laws of the State of Delaware with full power and authority to conduct the business in which it is engaged as described in the Prospectus.  The Sponsor is duly qualified to do business as a foreign limited liability company and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary except where the failure to be so qualified or in good standing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(o)         Description of Agreements.  The Company is not a party to or bound by any contract or other instrument of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described and filed as required.

 

(p)         Qualification as a Real Estate Investment Trust.  The Company intends to satisfy the requirements of the Internal Revenue Code of 1986 as amended (the “Code”) for qualification and taxation of the Company as a real estate investment trust.  Commencing with the later of its taxable year ending December 31, 2017 or the first year that it has material operations, the Company has been

 

 

organized in conformity with the requirements for qualification as a real estate investment trust under the Code and its actual and proposed method of operation as described in the Prospectus will enable it to meet the requirements for qualification and taxation as a real estate investment trust under the Code commencing with the later of its taxable year ending December 31, 2017 or the first year that it has material operations.

 

(q)         Gramm-Leach-Bliley Act and USA Patriot Act.  The Company complies in all material respects with applicable privacy provisions of the Gramm-Leach-Bliley Act and applicable provisions of the USA Patriot Act.

 

(r)           Sales Material.  All advertising and supplemental sales literature prepared or approved by the Company or any of its affiliates (whether designated solely for broker-dealer use or otherwise) to be used or delivered by the Company or any of its affiliates or Ameriprise in connection with the Offering of the Shares will not contain an untrue statement of material fact or omit to state a material fact required to be stated therein, in light of the circumstances under which they were made and when read in conjunction with the Prospectus, not misleading.  Furthermore, all such advertising and supplemental sales literature has, or will have, received all required regulatory approval, which may include but is not limited to, the approval of the Commission, the Financial Industry Regulatory Authority, Inc. (“FINRA”) and state securities agencies, as applicable.  Any required consent and authorization has been obtained for the use of any trademark or service mark in any sales literature or advertising delivered by the Company to Ameriprise or approved by the Company for use by Ameriprise and, to the Company’s knowledge, its use does not constitute the unlicensed use of intellectual property.

 

(s)           Good Standing of Subsidiaries.  Each “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X) and each other entity in which the Company holds a direct or indirect ownership interest that is material to the Company (each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized or formed and is validly existing as a corporation, partnership, limited liability company or similar entity in good standing under the laws of the jurisdiction of its incorporation, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.  Except as otherwise disclosed in the Registration Statement, all of the issued and outstanding equity securities of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any Lien, claim or equity other than such Liens, claims or equities that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any stockholder of such Subsidiary.  The only direct subsidiaries of the Company as of the date of the Registration Statement or the most recent post-effective amendment to the Registration Statement, as applicable, are the subsidiaries listed on Exhibit 21 to the Registration Statement or such post-effective amendment to the Registration Statement.

 

(t)            No Pending Action.    Except as disclosed in the Registration Statement, there is no action, suit or proceeding pending, or, to the knowledge of the Company, threatened or contemplated before or by any arbitrator, court or other government body, domestic or foreign, against or affecting any Issuer Entity or any respective subsidiary thereof which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated by this Agreement. The aggregate of all pending legal or governmental proceedings to which any Issuer Entity or any respective subsidiary

 

 

thereof is a party or of which any of their respective properties or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect or materially adversely affect other properties or assets of any Issuer Entity or any respective subsidiary thereof.

 

(u)         Possession of Intellectual Property.  The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

(v)          Absence of Further Requirements.  No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations under this Agreement, the Dealer Manager Agreement, the Selected Dealer Agreements, and the Advisory Agreement in connection with the offering, issuance or sale of the Shares or the consummation of the other transactions contemplated by this Agreement, the Dealer Manager Agreement, the Selected Dealer Agreements and the Advisory Agreement, except for such as are specifically set forth in this Agreement and for such as have been already made or obtained under the Securities Act, the Exchange Act, the rules of FINRA, including NASD rules, or as may be required under the securities laws of the states and jurisdictions indicated in the Blue Sky Memorandum (defined in Section 4(d) of this Agreement), as updated from time to time.

 

(w)       Possession of Licenses and Permits.  The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them,  other than filings as are required by the securities laws of certain jurisdictions in which the Company intends to qualify the Shares for sale and such permits, licenses, approvals, consents and other authorizations, the failure of which to possess, would not reasonably be expected to have a Material Adverse Effect (collectively, “Governmental Licenses”), and the Company and its subsidiaries are in compliance in all material respects with the terms and conditions of all such Governmental Licenses.  All of the Governmental Licenses are valid and in full force and effect and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses.

 

(x)          Partnership Agreements.  Each of the partnership agreements, declarations of trust or trust agreements, limited liability company agreements (or other similar agreements) and, if applicable, joint venture agreements to which the Company or any of its subsidiaries is a party has been duly authorized, executed and delivered by the Company or the relevant subsidiary, as the case may be, and constitutes the valid and binding agreement of the Company or such subsidiary, as the case may be, enforceable in accordance with its terms, except as (i) the enforcement thereof may be limited by (A) the effect of bankruptcy, insolvency or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally or (B) the effect of general principles of equity, or (ii) the enforcement of the indemnity and/or contribution provisions contained in such agreements may be limited under applicable securities laws and/or the NASAA Guidelines, and the execution, delivery and performance of such agreements did

 

 

not, at the time of execution and delivery, and does not constitute a breach of or default under the charter or bylaws, partnership agreement, declaration of trust or trust agreement, or limited liability company agreement (or other similar agreement), as the case may be, of the Company or any of its subsidiaries or any of the Agreements and Instruments or any law, administrative regulation or administrative or court order or decree.

 

(y)          Properties.  Except as otherwise disclosed in the Prospectus: (i) the Company and its subsidiaries have good and insurable or good, valid and, with respect to U.S. properties, insurable title (either in fee simple or pursuant to a valid leasehold interest) to all properties and assets described in the Prospectus as being owned or leased, as the case may be, by them and to all properties reflected in the Company’s most recent consolidated financial statements included or incorporated by reference in the Prospectus, and neither the Company nor any of its subsidiaries has received notice of any claim that has been or may be asserted by anyone adverse to the rights of the Company or any subsidiary with respect to any such properties or assets (or any such lease) or affecting or questioning the rights of the Company or any such subsidiary to the continued ownership, lease, possession or occupancy of such property or assets, except for such claims that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (ii) there are no Liens, claims or restrictions on or affecting the properties and assets of the Company or any of its subsidiaries which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; (iii) no person or entity, including, without limitation, any tenant under any of the leases pursuant to which the Company or any of its subsidiaries leases (as lessor) any of its properties (whether directly or indirectly through other partnerships, limited liability companies, business trusts, joint ventures or otherwise) has an option or right of first refusal or any other right to purchase any of such properties, except for such options, rights of first refusal or other rights to purchase which, individually or in the aggregate, are not expected to have a Material Adverse Effect; (iv) to the Company’s knowledge, each of the properties of the Company or any of its subsidiaries has access to public rights of way, either directly or through easements (insured easements with respect to U.S. properties), except where the failure to have such access would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (v) to the Company’s knowledge, each of the properties of the Company or any of its subsidiaries is served by all public utilities necessary for the current operations on such property in sufficient quantities for such operations, except where the failure to have such public utilities could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (vi) to the knowledge of the Company, each of the properties of the Company or any of its subsidiaries complies with all applicable codes and zoning and subdivision laws and regulations, except for such failures to comply which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (vii) all of the leases under which the Company or any of its subsidiaries holds or uses any real property or improvements or any equipment relating to such real property or improvements are in full force and effect, except where the failure to be in full force and effect could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and neither the Company nor any of its subsidiaries is in default in the payment of any amounts due under any such leases or in any other default thereunder and the Company knows of no event which, with the passage of time or the giving of notice or both, could constitute a default under any such lease, except such defaults that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (viii) to the knowledge of the Company, there is no pending or threatened condemnation, zoning change, or other proceeding or action that could in any manner affect the size of, use of, improvements on, construction on or access to the properties of the Company or any of its subsidiaries, except such proceedings or actions that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and (ix) neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any lessee of any of the real property or improvements of the Company or any of its subsidiaries is in default in the payment of any amounts due or in any other default under any of the leases pursuant to which the Company or any of its subsidiaries leases (as lessor) any of its real property or improvements (whether directly or indirectly through

 

 

partnerships, limited liability companies, joint ventures or otherwise), and the Company knows of no event which, with the passage of time or the giving of notice or both, would constitute such a default under any of such leases, except in each case such defaults as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(z)           Insurance.  The Company and/or its subsidiaries have title insurance on all U.S. real property and improvements described in the Prospectus as being owned or leased under a ground lease, as the case may be, by them and to all U.S. real property and improvements reflected in the Company’s most recent consolidated financial statements included in the Prospectus in an amount at least equal to the original purchase price paid to the sellers of such property, except as otherwise disclosed in the Prospectus, and the Company or one of its subsidiaries is entitled to all benefits of the insured thereunder.  With respect to all non-U.S. real property described in the Prospectus as being owned or leased by the Company’s subsidiaries, each such subsidiary has received a title opinion or title certificate or other customary evidence of title assurance, as appropriate for the respective jurisdiction, showing good and indefeasible title to such properties in fee simple or valid leasehold estate or its respective equivalent, as the case may be, vested in the applicable subsidiary.  Each property described in the Prospectus is insured by special form coverage hazard and casualty insurance carried by either the tenant or the Company and its subsidiaries in amounts and on such terms as are customarily carried by owners or lessors of properties similar to those owned by the Company and its subsidiaries (in the markets in which the Company’s and subsidiaries’ respective properties are located), and the Company and its subsidiaries carry comprehensive general liability insurance and such other insurance as is customarily carried by owners of properties similar to those owned by the Company and its subsidiaries in amounts and on such terms as are customarily carried by owners  of properties similar to those owned by the Company and its subsidiaries (in the markets in which the Company’s and its subsidiaries’ respective properties are located) and the Company or one of its subsidiaries is named as an additional insured and/or loss payee, as applicable, on all policies (except workers’ compensation) required under the leases for such properties.

 

(aa)                          Environmental Matters.  Except as otherwise disclosed in the Prospectus: (i) all real property and improvements owned or leased by the Company or any of its subsidiaries, including, without limitation, the Environment (as defined below) associated with such real property and improvements, is free of any Contaminant (as defined below) in violation of applicable Environmental Laws (as defined below)except for such violations that would not, individually or in the aggregate,  reasonably be expected to have a Material Adverse Effect; (ii) neither the Company, nor any of its subsidiaries has caused or suffered to exist or occur any Release (as defined below) of any Contaminant into the Environment in violation of any applicable Environmental Law, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (iii) neither the Company nor any of its subsidiaries is aware of any notice from any governmental body claiming any violation of any Environmental Laws or requiring or calling for any work, repairs, construction, alterations, removal or remedial action or installation by the Company or any of its subsidiaries on or in connection with such real property or improvements, whether in connection with the presence of asbestos-containing materials or mold in such properties or otherwise, except for any violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or any such work, repairs, construction, alterations, removal or remedial action or installation, if required or called for, which would not result in the incurrence of liabilities by the Company, which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, nor is the Company aware of any information which may serve as the basis for any such notice that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (iv) neither the Company nor any of its subsidiaries has caused or suffered to exist or occur any environmental condition on any of the properties or improvements of the Company or any of its subsidiaries that could reasonably be expected to give rise to the imposition of any Lien under any Environmental Laws except such Liens which, individually or in the

 

 

aggregate, would not reasonably be expected to have a Material Adverse Effect; and (v) to the Company’s knowledge, no real property or improvements owned or leased by the Company or any of its subsidiaries is being used or has been used for manufacturing or for any other operations that involve or involved the use, handling, transportation, storage, treatment or disposal of any Contaminant, where such operations require or required permits or are or were otherwise regulated pursuant to the Environmental Laws and where such permits have not been or were not obtained or such regulations are not being or were not complied with, except in all instances where any failure to obtain a permit or comply with any regulation would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  “Contaminant” means any pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos or asbestos-containing materials, PCBs, lead, pesticides or regulated radioactive materials or any constituent of any such substance or waste, as identified or regulated under any Environmental Law.  “Environmental Laws” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., the Clean Air Act, 42 U.S.C. 7401, et seq., the Clean Water Act, 33 U.S.C. 1251, et seq., the Toxic Substances Control Act, 15 U.S.C. 2601, et seq., the Occupational Safety and Health Act, 29 U.S.C. 651, et seq., and all other federal, state and local laws, ordinances, regulations, rules, orders, decisions and permits, which are directed at the protection of human health or the Environment.  “Environment” means any surface water, drinking water, ground water, land surface, subsurface strata, river sediment, buildings, structures, and ambient air.  “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of any Contaminant into the Environment, including, without limitation, the abandonment or discard of barrels, containers, tanks or other receptacles containing or previously containing any Contaminant or any release, emission or discharge as those terms are defined or used in any applicable Environmental Law.

 

(bb)                          Registration Rights.  There are no persons, other than the Company, with registration or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act, or included in the Offering contemplated hereby.

 

(cc)                            Finders’ Fees.  Neither the Company nor any affiliate thereof has received or is entitled to receive, directly or indirectly, a finder’s fee or similar fee from any person other than that as described in the Prospectus in connection with the acquisition, or the commitment for the acquisition, of the Properties by the Company.

 

(dd)                          Taxes.  The Company and each of its subsidiaries has filed all material federal, state and foreign income tax returns and all other material tax returns which have been required to be filed on or before the due date thereof (taking into account all extensions of time to file) and all such tax returns are correct and complete in all material respects.  The Company has paid or provided for the payment of all taxes reflected on its tax returns and all assessments received by the Company and each of its subsidiaries to the extent that such taxes or assessments have become due, except where the Company is contesting such assessments in good faith and except for such taxes and assessments of immaterial amounts, the failure of which to pay would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There are no audits, deficiencies or assessments pending against the Company or its subsidiaries relating to income taxes, except where the Company is contesting such audit, deficiency or assessments in good faith.

 

(ee)    Internal Controls.  The Company was not required to evaluate its internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) for the year ended December 31, 2016 due to a transition period established by the rules of the Commission for newly public companies. The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f)  of the Exchange Act ) that complies with the requirements of the Exchange Act

 

 

and that has been designed by  the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Further, the Company will complete an evaluation of its internal control over financial reporting during 2017 and will include a report on this evaluation in the Form 10-K for the year ending December 31, 2017. The Company is not aware of any material weaknesses in its internal control over financial reporting. Since the date of the latest audited financial statements included or incorporated by reference in the Registration Statement, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(ff)        Disclosure Controls and Procedures.  The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e)  under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective as of June 30, 2017.

 

(gg)                          Compliance with the Sarbanes-Oxley Act.  There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(hh)                          No Fiduciary Duty.  Each Issuer Entity acknowledges and agrees that Ameriprise is acting solely in the capacity of an arm’s length contractual counterparty to it with respect to the Offering of the Shares (including in connection with determining the terms of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, such Issuer Entity or any other person.  Additionally, Ameriprise is not advising the Issuer Entities or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  Each of the Issuer Entities shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and Ameriprise shall have no responsibility or liability to the Issuer Entities with respect thereto.  Any review by Ameriprise of the Issuer Entities, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of Ameriprise and shall not be on behalf of the Issuer Entities.

 

(ii)        Dealer Manager and Advisor Insurance.  Each of the Dealer Manager and the Advisor are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged and which each of them deems adequate.  All policies of insurance insuring the Dealer Manager and the Advisor or each of their respective businesses, assets, employees, officers and trustees, including their respective errors and omissions insurance policies, are in full force and effect and the Dealer Manager and the Advisor are in compliance with the terms of their respective policies in all material respects. There are no claims by the Dealer Manager or the Advisor under any such policy as to which any insurance company is denying liability or defending under a reservation of rights clause. Neither the Dealer Manager nor the Advisor has been refused any insurance coverage sought or applied for. Neither the Dealer Manager nor the Advisor has reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain new insurance coverage to replace the existing insurance coverage in amounts and on such terms as it deems necessary to continue its business at a cost that would not have a material adverse effect on, or material adverse change in, the general affairs, business, operations, condition (financial or otherwise) or results of operations of the Dealer Manager and the Advisor, taken as

 

 

a whole, whether or not arising in the ordinary course of business, except as set forth in or contemplated in the Registration Statement and the Prospectus and provided, that, such insurance coverage is available to the Dealer Manager and the Advisor on commercially reasonable terms.

 

(jj)        Financial Resources.  Each of the Dealer Manager and the Advisor has the financial resources available to it that it deems necessary for the performance of its respective services and obligations as contemplated in the Registration Statement, the Prospectus and under this Agreement, the Dealer Manager Agreement, and the Advisory Agreement.

 

(kk)    Transactions effectuated by the Advisor are executed in accordance with its management’s general or specific authorization under the Advisory Agreement, and access by the Advisor to the Company’s assets is permitted only in accordance with its management’s general or specific authorization under the Advisory Agreement.

 

(ll)        Valuation: General.  The Company’s Board of Directors shall value its shares consistent with FINRA requirements and this Section 2(ll), and shall disclose such value in the Registration Statement, Form 10-K, Form 10-Q and/or in a Form 8-K (collectively referred to as “SEC Disclosure Documents”) filed with the Commission and in the Annual Report sent to investors in accordance with regulatory requirements.

 

Net Investment Methodology.  For the period from the effective date of the offering through June 30, 2018 (provided, that, in all instances, such valuation shall be provided in accordance with such other more restrictive timing as the SEC may require or which may be necessary for Ameriprise to comply with FINRA requirements), the Company may report a per share estimated value reflecting the “net investment amount” disclosed in the Company’s most recent SEC Disclosure Document.  “Net investment” shall be based on the “amount available for investment” percentage in the “Estimated Use of Proceeds” section of the Prospectus or, where “amount available for investment” is not provided, another equivalent disclosure that reflects the estimated percentage deduction from the aggregate dollar amount of securities registered for sale to the public of upfront sales commissions, dealer manager fees, and estimated issuer offering and organization expenses (which if based on a range of amounts, may assume issuer offering and organization expenses based on raising the maximum offering).

 

Appraised Value Methodology.  Following the permitted period for utilizing “Net Investment Methodology,” as set forth above, at a minimum, the Company shall provide a per share value based on the fair value of the Company’s assets less liabilities under market conditions existing as of the date of valuation, referred to as Net Asset Value (“NAV”), and assuming the allocation of the resulting NAV among the Company’s common shareholders, to arrive at a Net Asset Value Per Share (“Per Share NAV”).  Notwithstanding that generally accepted accounting principles of the Financial Accounting Standards Board (“GAAP”) generally require the fair value of real estate to reflect the price received to sell an asset in an orderly transaction between market participants at the measurement date and not on an ongoing basis, the NAV shall be determined in a manner consistent with the methods and principles used to determine fair value under GAAP, primarily as set forth in ASC 820, and the international financial reporting standards of the International Accounting Standards Board (as applicable), and consistent with the methodology set forth in Exhibit B to this Agreement.  The Board of Directors of the Company will appoint the Audit Committee or another committee comprised of a majority of independent directors of the REIT that will be responsible for oversight of the valuation process (“Valuation Committee”), subject to the final approval of the Company’s Board of Directors.

 

Independent Valuation Firm.  The Company, with the approval of the Valuation Committee and the Board of Directors, shall engage one or more independent third-party firms (each an “Independent Valuation Firm” and collectively, the “Independent Valuation Firms”) for valuation purposes, provided,

 

 

however, the Company will  discuss in advance with and thereafter notify Ameriprise in writing prior to the engagement of an Independent Valuation Firm.  However, for the avoidance of doubt, the engagement of the Independent Valuation Firms shall be the sole responsibility of the Company and the Company shall have the sole discretion to select the Independent Valuation Firms to perform the valuation.

 

Independent Valuations.  The independent valuation by the Independent Valuation Firm shall be determined on a monthly basis as described in the Prospectus and the initial valuation by the Independent Valuation Firm share be determined as of June 30, 2018 and disclosed in a supplement to the Prospectus in July 2018; provided, that, the initial valuation by the Independent Valuation Firm shall be provided in accordance with such other timing as the SEC may require or which may be necessary for Ameriprise to comply with FINRA requirements.    The disclosure date of the valuation shall be no more than thirty (30) days after the valuation is determined.

 

The Company shall obtain a new appraisal of each real property at least once every calendar year, unless the property is bought or sold in the calendar year.  The acquisition price of newly acquired properties will serve as the appraised value for the year of acquisition and thereafter such properties will be appraised at least once every year. All appraisals shall be conducted utilizing recognized industry standards prescribed by the Uniform Standards of Professional Appraisal Practice (“USPAP”) or the similar industry standard for the country where the property appraisal is conducted, and the Independent Valuation Firm will assign a discrete value for each such property pursuant to the methodology set forth in Exhibit A. All appraisals shall be conducted by appraisers possessing a Member Appraisal Institute (“MAI”) or similar designation or, for international appraisals, a public certified expert for real estate valuations, qualified to perform and oversee the appraisal work of the scope and nature described on Exhibit A. All appraisals shall be conducted on the basis of one or more of the discounted cash flow approach, the income capitalization approach, the sales comparison approach, or the cost approach, using whichever approaches and timing assumptions as are deemed the most appropriate by the Independent Valuation Firm based on the highest and best use of the properties being appraised, which method(s) shall be disclosed in the Company’s SEC Disclosure Documents.

 

Reports. For all valuations, the Company will obtain from the Independent Valuation Firm a written report, which shall set forth a summary analysis of the Independent Valuation Firm’s process and methodology undertaken in the valuation, a description of the scope of the reviews performed and any limitations thereto, the data and assumptions used for the review and the applicable industry standards used for the valuation.

 

Upon the issuance of the Independent Valuation Firm’s report to the Company, as part of Ameriprise’s on-going due diligence review of the Company, the Company will immediately notify Ameriprise and thereafter, subject  to Ameriprise’s execution and delivery to the Company and the Independent Valuation Firm of an access and confidentiality agreement, substantially consistent with the form attached hereto as Exhibit B,  provide Ameriprise with access to supporting materials related to the Independent Valuation report, which includes, but may not be limited to, the data and assumptions used for the review and the appraisals of each of the real estate properties.

 

For the avoidance of doubt, the final determination of NAV and Per Share NAV shall be the sole responsibility of the Company and the Board of Directors.   To the extent the valuation provided by the Independent Valuation Firm is different from the valuation, assigned by the Board of Directors and disclosed by the Company, the Company will provide an explanation in its SEC Disclosure Documents.

 

In addition, immediately following the final determination and disclosure of the NAV and Per Share NAV by the Company, the Company will send a copy of the Independent Valuation Firm’s report to Ameriprise and schedule a reasonable number of meetings or teleconferences with the Independent

 

 

Valuation Firm so that Ameriprise may perform its on-going due diligence review of Company.

 

Disclosure.   A valuation will be reported in the SEC Disclosure Documents filed with the Commission and in the Annual Report sent to investors with sufficient narrative disclosure to meet FINRA regulatory requirements and in a clear and concise manner so as to be understood by the average investor.  In addition, if the Company has knowledge of a material impairment or appreciation, or a material other-than-temporary change in the value of any real property or real estate-related asset which would result in a material change in the NAV or Per Share NAV, then the Company shall consider such change prior to the issuance of a valuation and shall otherwise file such SEC Disclosure Documents as required.

 

In addition to and in conjunction with the terms set forth in this Section 2(ll), pursuant to FINRA Rule 2310(b)(5), the Issuer Entities agree that the Company shall make specified disclosures as to the value of the Shares in each annual report distributed to investors pursuant to Section 13(a) of the Exchange Act, specifically: (i) a per share estimated value of the Shares, developed in a manner reasonably designed to ensure it is reliable, in the Company’s periodic reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act; (ii) an explanation of the method by which the value was developed; and (iii) the date of the valuation.

 

In addition to and in conjunction with the terms set forth in this Section 2(ll),  pursuant to FINRA Rule 2310(b)(5), the Issuer Entities agree that the Company shall disclose in a periodic or current report filed pursuant to Section 13(a) or 15(d) of the Exchange Act, within the time parameters set forth in the Independent Valuations paragraph of Section 2(ll) hereof, and in each annual report thereafter, a per share estimated value: (i) based on the valuations of the assets and liabilities of the Company performed at least annually by, or with the material assistance or confirmation of, a third-party valuation expert or service; (ii) derived from a methodology that conforms to standard industry practice; and (iii) accompanied by a written opinion or report by the issuer, delivered at least annually, that explains the scope of the review, the valuation methodology used and the basis for the reported value.

 

Notwithstanding any agreements to the contrary, nothing shall preclude Ameriprise from taking any action, such as suspending sales of any offering or withholding disclosure of Per Share NAV on its account statements, on the basis of the due diligence review of the valuation materials and the Independent Valuation Firm’s report.  Following the Company’s disclosure of the valuation in the SEC Disclosure Documents, and subject to the fair disclosure requirements of Regulation FD and to the provisions of any non-disclosure agreement between Ameriprise and the Independent Valuation Firm, nothing shall preclude Ameriprise from providing the name of the Independent Valuation Firm and/or a summary of its review to its clients and/or its financial advisors.   In no event will the Company engage in a follow-on offering or any subsequent offering of non-listed securities without first performing and disclosing an independent valuation.   In addition, notwithstanding anything to the contrary in this Section 2(ll), the Company acknowledges and agrees that it shall cooperate with, provide access to, and afford sufficient time in advance for Ameriprise to conduct its on-going due diligence review of the Company from the effective date of this Agreement through the date of a merger, listing of its shares on an exchange or other similar significant event.

 

Policies and Certification.  The Company has designed and implemented policies reasonably designed to ensure compliance with this Section 2(ll), which are discussed in the Prospectus.  If the Company materially changes such policies, the Company shall promptly provide written notice to Ameriprise.  In addition, the Company will briefly describe its valuation policies, including the role and responsibilities of an Independent Valuation Firm, in its Form S-11, amendments thereto or other offering materials filed with the Commission.

 

 

(mm)                      Disclosure of Funds from Operations and Modified Funds from Operations.  The Company will include, in a report on Form 10-K or Form 10-Q filed with the Commission for the period in which the Company completes its first acquisition of a real property or real estate-related investment, and in each subsequent report on Form 10-K or Form 10-Q filed with the Commission, the following performance measures:  Funds From Operations using the definition and protocols established by the National Association of Real Estate Investment Trusts, and Modified Funds From Operations using the definition found in the Investment Program Association Practice Guideline 2010-01, each as amended from time-to-time.    The Company has designed and implemented policies reasonably designed to ensure compliance with this Section 2(mm), and will provide Ameriprise with a copy of those policies.  In no event will the Company materially change such policies without prior written notice to Ameriprise.

 

3.              Sale of Shares.

 

(a)         Purchase of Shares.  On the basis of the representations, warranties and covenants herein contained, but subject to the terms and conditions herein set forth, the Company hereby appoints Ameriprise as a Selected Dealer for the Shares during the period from the date hereof to the Termination Date (the “Effective Term”), including the Shares to be issued pursuant to the DRIP, each in the manner described in the Registration Statement.  Subject to the performance by the Company of all obligations to be performed by it hereunder and the completeness and accuracy of all of its representations and warranties, Ameriprise agrees to use its best efforts, during the Effective Term, to offer and sell such number of Shares as contemplated by this Agreement at the price stated in the Prospectus, as the same may be adjusted from time to time.

 

The purchase of Shares must be made during the offering period described in the Prospectus, or after such offering period in the case of purchases made pursuant to the DRIP (each such purchase hereinafter defined as an “Order”).

 

(i)                        Persons desiring to purchase Shares are required to (i) deliver to Ameriprise a check in the amount of $10.47 per Share purchased (subject to any discounts that may be described in the Prospectus, or such other per share price as may be applicable pursuant to the DRIP, or such other share price as disclosed from time to time in the Registration Statement or Prospectus) payable to Ameriprise, or (ii) authorize a debit of such amount to the account such purchaser maintains with Ameriprise.

 

(ii)                        An order form as mutually agreed upon by Ameriprise and the Company substantially similar to the form of subscription agreement attached to the Prospectus (each an “Order Form”) must be completed and submitted to the Company for all investors.  The Company and American Enterprise Investment Services, Inc. (“AEIS”), an affiliate of Ameriprise, are parties to that certain Alternative Investment Product Networking Services Agreement, dated as of September 15, 2017 (the “AIP Networking Agreement”), pursuant to which the broker-controlled accounts of Ameriprise’s customers that invest in the Company will be processed and serviced.  The parties acknowledge that any receipt by Ameriprise of payments for subscriptions for Shares shall be effected solely as an administrative convenience, and such receipt of payments shall not be deemed to constitute acceptance of Orders to purchase Shares or sales of Shares by the Company.

 

All Orders solicited by Ameriprise will be strictly subject to review and acceptance by the Company and the Company reserves the right in its absolute discretion to reject any Order or to accept or reject Orders in the order of their receipt by the Company or otherwise.  The Company will accept or reject Orders on a monthly basis in accordance with the procedures described in the “How to Subscribe” section of the Prospectus.  If the Company elects to reject such Order, within 10 business days after such rejection, it will notify the purchaser and Ameriprise of such fact and cause the return of such purchaser’s

 

 

funds submitted with such application.  If Ameriprise receives no notice of rejection within the foregoing time limits, the Order shall be deemed accepted.  Ameriprise agrees to make every reasonable effort to determine that the purchase of Shares is a suitable and appropriate investment for each potential purchaser of Shares based on information provided by such purchaser regarding, among other things, such purchaser’s age, investment experience, financial situation and investment objectives.  Ameriprise agrees to maintain copies of the Orders received from investors and of the other information obtained from investors, including the Order Forms, for a minimum of 6 years from the date of sale and will make such information available to the Company upon request by the Company.

 

(b)         Closing Dates and Delivery of Shares.  In no event shall a sale of Shares to an investor be completed until at least five business days after the date the investor receives a copy of the Prospectus. Orders shall be submitted as contemplated by the AIP Networking Agreement, Section 5(j) of the Dealer Manager Agreement and as otherwise set forth in this Agreement.  Shares will be issued as described in the Prospectus.  Share issuance dates for purchases made pursuant to the DRIP will be as set forth in the DRIP.

 

(c)          Dealers.  The Shares offered and sold under this Agreement shall be offered and sold only by Ameriprise, a member in good standing of FINRA.  The Issuer Entities and affiliates thereof agree to participate in Ameriprise’s marketing efforts to the extent that Ameriprise may reasonably request and, without limiting the generality of the foregoing, agree to visit Ameriprise’s offices as Ameriprise may reasonably request.

 

(d)         Compensation.

 

In consideration for Ameriprise’s execution of this Agreement, and for the performance of Ameriprise’s obligations hereunder, the Dealer Manager agrees to pay or cause to be paid to Ameriprise a selling commission (the “Sales Commission”) of two percent ($0.2094 based on $10.47 price per share) of the price of each Share (except for Shares sold pursuant to the DRIP) sold by Ameriprise. The Issuer Entities and Ameriprise Financial acknowledge that the Issuer Entities and AEIS, an affiliate of Ameriprise Financial, are parties to that certain Cost Reimbursement Agreement, dated as of the date hereof, (the “Cost Reimbursement Agreement”), pursuant to which the parties have agreed to certain cost reimbursement services and cost reimbursement compensation.

 

In addition to the Sales Commission, the Dealer Manager will receive, and the Dealer Manager shall reallow to Ameriprise Financial, an annual distribution (the “Distribution Fee”) of 1.0% of the NAV  per Share (which, until reported, will be deemed to equal $10.00 per Share) for Shares purchased; provided however, that the amount of the Distribution Fee to be reallowed to Ameriprise will not exceed a total of 3.0% of gross proceeds per Share.  The Distribution Fee will accrue monthly and be paid monthly in arrears.  The Dealer Manager will reallow the ongoing Distribution Fee to the selected dealer who initially sold the Shares to a stockholder or, if applicable, to a subsequent broker-dealer of record of the Shares so long as the subsequent broker-dealer is party to a selected dealer agreement or other agreement with the Dealer Manager that provides for such reallowance and such broker-dealer is in compliance with the applicable terms of such selected dealer agreement or other agreement.

 

The Company expects the Dealer Manager to enter into Selected Dealer Agreements with other broker-dealers that are members of FINRA, which the Company refers to as participating broker-dealers, to sell the Shares. Except as provided in the Selected Dealer Agreements, the Dealer Manager will reallow to the participating broker-dealers all of the Sales Commissions attributable to such participating broker-dealers.  The Company may also offer other discounts in connection with certain other types of sales, as set forth in the “Plan Distribution” section of the Prospectus. The net proceeds to the Company will not be affected by any such discounts.

 

 

The Company and the Dealer Manager shall cease paying the Distribution Fee with respect to Shares when they are no longer outstanding, including a result of a conversion to Class I shares. Pursuant to the Prospectus, Shares held within a shareholder’s account shall automatically and without any action on the part of the holder thereof convert into a number of Class I shares at the conversion rate described in the Prospectus on the earlier of: (i) a listing of any shares of the Company’s common stock on a national securities exchange, (ii) the Company’s merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets and (iii) the end of the month in which the Dealer Manager, in conjunction with the Company’s transfer agent, determines that the total upfront Sales Commissions, upfront dealer manager fees and ongoing distribution fees paid with respect to all shares of such class held by such stockholder within such account (including shares purchased through a distribution reinvestment plan or received as stock dividends) equals or exceeds 8.5% of the aggregate purchase price of all shares of such class held by such stockholder within such account and purchased in a primary offering (i.e., an offering other than a distribution reinvestment plan). In addition, after termination of a primary offering registered under the Securities Act, each Share (i) sold in that primary offering, (ii) sold under a distribution reinvestment plan, and (iii) received as a stock dividend with respect to such shares sold in such primary offering or distribution reinvestment plan, shall automatically and without any action on the part of the holder thereof convert into Class I shares at the conversion rate described in the Prospectus at the end of the month in which the Company, with the assistance of the Dealer Manager, determines that all underwriting compensation paid or incurred with respect to the primary offering covered by that registration statement from all sources, determined pursuant to the rules and guidance of FINRA, would be in excess of 10% of the aggregate purchase price of all shares sold for the Company’s account through that primary offering.

 

No payment of Sales Commissions or Distribution Fees will be made in respect of Orders (or portions thereof) which are rejected by the Company.  As noted in Section 3(a) above, Ameriprise shall transfer to the Transfer Agent the total amount debited from such investor accounts for the purchase of Shares, net of the Sales Commission payable to Ameriprise Financial.  Sales Commissions will be payable only with respect to transactions lawful in the jurisdictions where they occur.  Ameriprise affirms that the Dealer Manager’s liability for Sales Commissions, Distribution Fees and any other amount payable from the Dealer Manager to Ameriprise is limited solely to the amount of the Sales Commissions and the Distribution Fees received by the Dealer Manager from the Company, and Ameriprise hereby waives any and all rights to receive payment of Sales Commissions, Distribution Fees and any other amount due to Ameriprise until such time as the Dealer Manager has received  from the Company the Sales Commissions and the Distribution Fees from the sale of Shares by Ameriprise.

 

No Sales Commissions shall be paid to Ameriprise for purchases made by an investor pursuant to the DRIP.

 

Except for offers and sales of Shares to the Company’s officers and directors and their immediate family members, to officers and employees of the Advisor or other affiliates and their immediate family members, to or through registered investment advisers or a bank acting as a trustee or fiduciary, or through any other arrangements described in the “Plan of Distribution” section of the Prospectus, the Company represents that neither it nor any of its affiliates have offered or sold any Shares pursuant to this Offering, and agrees that, through the Termination Date, the Company will not offer or sell any Shares (except for Shares offered pursuant to the DRIP) otherwise than through the Dealer Manager as provided in the Dealer Manager Agreement, Ameriprise as herein provided, and the selected dealers other than Ameriprise as provided in the Selected Dealer Agreements, except pursuant to arrangements described in the “Plan of Distribution” section of the Prospectus.

 

(e)          Calculation of Fees.    Ameriprise will have sole responsibility, and Ameriprise’s records will

 

 

provide the sole basis, for calculating fees for which Ameriprise provides invoices under this Agreement.  However, the Issuer Entities may provide records to assist Ameriprise in its calculations.

 

(f)            Finder’s Fee.  Neither the Company nor Ameriprise shall, directly or indirectly, pay or award any finder’s fees, commissions or other compensation to any person engaged by a potential investor for investment advice as an inducement to such advisor to advise the purchase of Shares; provided, however, that normal Sales Commissions payable to a registered broker-dealer or other properly licensed person for selling Shares shall not be prohibited hereby.

 

4.              Covenants.  Each Issuer Entity, jointly and severally, covenants and agrees with Ameriprise  that it will:

 

(a)         Commission Orders.  Use its best efforts to cause any amendments to the Registration Statement to become effective as promptly as possible and to maintain the effectiveness of the Registration Statement, and will promptly notify Ameriprise and confirm the notice in writing if requested, (i) when any post-effective amendment to the Registration Statement becomes effective, (ii) of the issuance by the Commission or any state securities authority of any jurisdiction of any stop order or of the initiation, or the threatening (for which it has knowledge), of any proceedings for that purpose or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction or of the institution or threatening (for which it has knowledge) of any proceedings for any of such purposes, (iii) of the receipt of any material comments from the Commission with respect to the Registration Statement, the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, or any other filings, (iv) of any request by the Commission for any amendment to the Registration Statement as filed or any amendment or supplement to the Prospectus or for additional information relating thereto and (v) if the Registration Statement becomes unavailable for use in connection with the Offering of the Shares for any reason.  Each of the Company and the Dealer Manager will use its best efforts to prevent the issuance by the Commission of a stop order or a suspension order and if the Commission shall enter a stop order or suspension order at any time, each of the Company and the Dealer Manager will use its best efforts to obtain the lifting of such order at the earliest possible moment.  The Company shall not accept any order for Shares during the effectiveness of any stop order or if the Registration Statement becomes unavailable for use in connection with the Offering of the Shares for any reason.

 

(b)         Registration Statement.  Deliver to Ameriprise without charge promptly after the Registration Statement and each amendment or supplement thereto becomes effective, such number of copies of the Prospectus (as amended or supplemented), the Registration Statement and supplements and amendments thereto, if any (without exhibits), as Ameriprise may reasonably request.  Unless Ameriprise is otherwise notified in writing by the Company; the Company hereby consents to the use of the Prospectus or any amendment or supplement thereto by Ameriprise both in connection with the Offering and for such period of time thereafter as the Prospectus is required to be delivered in connection therewith.

 

(c)          “Blue Sky” Qualifications.  Endeavor in good faith to seek and maintain the approval of the Offering by FINRA, and to qualify the Shares for offering and sale under the securities laws of all 50 states and the District of Columbia and to maintain such qualification, except in those jurisdictions Ameriprise may reasonably designate; provided, however, the Company shall not be obligated to subject itself to taxation as a party doing business in any such jurisdiction.  In each jurisdiction where such qualification shall be effected, the Company will, unless Ameriprise agrees that such action is not at the time necessary or advisable, file and make such statements or reports as are or may reasonably be required by the laws of such jurisdiction.

 

(d)         “Blue Sky” Memorandum.  To furnish to Ameriprise, and Ameriprise may be allowed to rely upon, a “Blue Sky” Memorandum (the “Blue Sky Memorandum”), prepared by counsel reasonably

 

 

acceptable to Ameriprise (with the understanding that Greenberg Traurig, LLP shall so qualify), in customary form naming (i) the jurisdictions in which the Shares have been qualified for sale under the respective securities laws of such jurisdiction, (ii) the amount of Shares available for sale in each such jurisdiction, and (iii) the expiration or termination date(s) of the applicable registration or permit in each such jurisdiction.  The Blue Sky Memorandum shall be promptly updated by counsel and provided to Ameriprise from time to time to reflect changes and updates to the jurisdictions in which the Shares have been qualified for sale. In each jurisdiction where the Shares have been qualified, the Company will make and file such statements and reports in each year as are or may be required by the laws of such jurisdiction.

 

(e)          Amendments and Supplements.  If during the time when a Prospectus is required to be delivered under the Securities Act, any event relating to the Company shall occur as a result of which it is necessary, in the opinion of the Company’s counsel, to amend the Registration Statement or to amend or supplement the Prospectus in order to make the Prospectus not misleading in light of the circumstances existing at the time it is delivered to an investor, or if it shall be necessary, in the opinion of the Company’s counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the Securities Act or the Regulations, the Company will forthwith notify an Ameriprise representative in the Ameriprise legal department, further, the Company shall prepare and furnish without expense to Ameriprise, a reasonable number of copies of an amendment or amendments of the Registration Statement or the Prospectus, or a supplement or supplements to the Prospectus which will amend or supplement the Registration Statement or Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or to make the Registration Statement or the Prospectus comply with such requirements.  During the time when a Prospectus is required to be delivered under the Securities Act, the Company shall comply in all material respects with all requirements imposed upon it by the Securities Act, as from time to time in force, including the undertaking contained in the Company’s Registration Statement pursuant to Item 20.D of the Commission’s Industry Guide 5, so far as necessary to permit the continuance of sales of the Shares in accordance with the provisions hereof and the Prospectus.

 

(g)         Delivery of Periodic Filings.  The Company shall include with any prospectus or “investor kit” delivered to Ameriprise for distribution to potential investors in connection with the Offering a copy of the Company’s most recent Annual Report on Form 10-K, a copy of the Company’s most recent Quarterly Report on Form 10-Q filed with the Commission since such Annual Report on Form 10-K was filed and any supplement to the Prospectus that contains the material information from such reports or incorporates such reports by reference.

 

(h)         Periodic Financial Information.  Within one business day following the date on which there shall be released to the general public interim financial statement information related to the Company with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company shall furnish such information to Ameriprise, confirmed in writing, and shall file such information pursuant to the rules and regulations promulgated under the Securities Act or the Exchange Act as required thereunder.

 

(i)            Audited Financial Information.  On or prior to the date on which there shall be released to the general public financial information included in or derived from the audited financial statements of the Company for the preceding fiscal year, the Company shall furnish such information to Ameriprise, confirmed in writing, and shall file such information pursuant to the rules and regulations promulgated under the Securities Act or the Exchange Act as required thereunder.

 

 

(j)            Copies of Reports.  During the Offering, the Company will provide (which may be by electronic delivery) Ameriprise with the following:

 

(i)                                     as soon as practicable after they have been sent or made available by the Company to its stockholders or filed with the Commission, a copy of each annual and interim financial or other report provided to stockholders, excluding individual account statements sent to security holders of the Company in the ordinary course;

 

(ii)                                  as soon as practicable, a copy of every press release issued by the Company and every material news item and article in respect of the Company or its affairs released by the Company; and

 

(iii)                                                       additional documents and information with respect to the Company and its affairs as Ameriprise may from time to time reasonably request.

 

Documents (other than final Prospectuses or supplements or amendments thereto for distribution to investors and the documents incorporated by reference therein) required to be delivered pursuant to this Agreement (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, or provides a link thereto on the Company’s website on the Internet; or (ii) on which such documents are posted on the Company’s behalf on the website of the Securities and Exchange Commission or any other Internet or intranet website, if any, to which Ameriprise has access; provided that the Company shall notify Ameriprise of the posting of any such documents.

 

(k)          Sales Material.  The Company will deliver to Ameriprise from time to time, all advertising and supplemental sales material (whether designated solely for broker-dealer use or otherwise) proposed to be used or delivered in connection with the Offering, prior to the use or delivery to third parties of such material, and will not so use or deliver, in connection with the Offering, any such material to Ameriprise’s customers or registered representatives without Ameriprise’s prior written consent, which consent, in the case of material required by law, rule or regulation of any regulatory body including FINRA to be delivered, shall not be unreasonably withheld or delayed.  The Company shall ensure that all advertising and supplemental sales literature used by Ameriprise will have received all required regulatory approval, which may include but is not limited to, the Commission, FINRA and state securities agencies, as applicable, prior to use by Ameriprise.  For the avoidance of doubt, ordinary course communications with the Company’s stockholders, including without limitation, the delivery of annual and quarterly reports and financial information, dividend notices, reports of net asset value and information regarding the tax treatment of distributions and similar matters shall not be considered advertising and supplemental sales material, unless the context otherwise requires.

 

(l)            Use of Proceeds.  The Company will apply the proceeds from the sale of Shares substantially as set forth in the section of the Prospectus entitled “Estimated Use of Proceeds” and operate the business of the Company in all material respects in accordance with the descriptions of its business set forth in the Prospectus.

 

(m)       Prospectus Delivery.  Within the time during which a prospectus relating to the Shares is required to be delivered under the Securities Act, the Company will comply with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions hereof and the Prospectus. The Dealer Manager confirms that it is familiar with Rule 15c2-8 under the Exchange Act, relating to the distribution of preliminary and final

 

 

prospectuses, and confirms that it has complied and will comply therewith in connection with the Offering of Shares contemplated by this Agreement, to the extent applicable.

 

(n)         Financial Statements.  The Company will make generally available to its stockholders as soon as practicable, but not later than the Availability Date, an earnings statement of the Company (in form complying with the provisions of Rule 158 under the Securities Act) covering a period of 12 months beginning after the Effective Date but not later than the first day of the Company’s fiscal quarter next following the Effective Date.  For purposes of the preceding sentence, “Availability Date” means the 45th day after the end of the fourth fiscal quarter following the fiscal quarter that includes such Effective Date, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter (or if either of such dates specified above is a day the Commission is not open to receive filings, then the next such day that the Commission is open to receive filings).

 

(n)         Compliance with Exchange Act.  The Company will comply with the requirements of the Exchange Act relating to the Company’s obligation to file and, as applicable, deliver to its stockholders periodic reports including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

 

(o)         Title to Property.  The Company (or any partnership or joint venture holding title to a particular Property) will acquire good and marketable title to each Property to be owned by it, as described in the Prospectus and future supplements to the Prospectus, it being understood that the Company may incur debt with respect to Properties and other assets in accordance with the Prospectus; and except as stated in the Prospectus, the Company (or any such partnership or joint venture) will possess all licenses, permits, zoning exceptions and approvals, consents and orders of governmental, municipal or regulatory authorities required for the ownership of the Properties, and prior to the commencement of construction for the development of any vacant land included therein as contemplated by the Prospectus, except where the failure to possess any such license, permit, zoning exception or approval, consent or order could not be reasonably likely to cause a Material Adverse Effect.

 

(p)         Licensing and Compliance.  The Company and the Dealer Manager covenant that any persons employed or retained by them to provide sales support or wholesaling services in support of Ameriprise or its clients shall be licensed in accordance with all applicable laws, will comply with all applicable federal and state securities laws and regulations, and will use only sales literature approved and authorized by the Company and the Dealer Manager.

 

(q)         Reimbursement Policy.  The Company, the Dealer Manager and any agents of either, including any of the Dealer Manager’s wholesalers, shall comply in all material respects with (i) all applicable federal and state laws, regulations and rules and the rules of any applicable self-regulatory organization, including but not limited to, FINRA rules and interpretations governing cash and non-cash compensation, (ii) Ameriprise’s policies governing marketing fees, cash compensation and non-cash compensation as communicated in writing to the Dealer Manager, with respect to cash and non-cash payments to Ameriprise Financial and associated persons of Ameriprise Financial, and (iii) Ameriprise’s wholesaler reimbursement policy as communicated in writing to the Dealer Manager, as amended from time to time in Ameriprise’s sole discretion; provided that such policies comply with the rules and regulations of FINRA and the Dealer Manager is notified in writing of any changes to such policies.

 

(r)           Trade Names and Trademarks.  No Issuer Entity may use any company name, trade name, trademark or service mark or logo of Ameriprise or any person or entity controlling, controlled by, or under common control with Ameriprise without Ameriprise’s prior written consent.

 

 

5.              Covenants of Ameriprise.  Ameriprise covenants and agrees with the Company as follows:

 

(a)         Prospectus Delivery.  Ameriprise confirms that it is familiar with Rule 15c2-8 under the Exchange Act and with Section III.E.1 of the NASAA Guidelines, relating to the distribution of preliminary and final prospectuses, and confirms that it has complied and will comply therewith in connection with the Offering of the Shares contemplated by this Agreement, to the extent applicable.

 

(b)         Accuracy of Information.  No information supplied by Ameriprise specifically for use in the Registration Statement will contain any untrue statements of a material fact or omit to state any material fact necessary to make such information not misleading.

 

(c)          No Additional Information.  Ameriprise will not give any information or make any representation in connection with the Offering of the Shares other than that contained in the Prospectus, the Registration Statement, and any of the Company’s other filings under the Securities Act or the Exchange Act which are incorporated by reference into the Prospectus or filed as a supplement to the Prospectus or advertising and supplemental sales material contemplated by this Agreement and approved by the Company.

 

(d)         Sale of Shares.  Ameriprise shall solicit purchasers of the Shares only in the jurisdictions in which Ameriprise has been advised by the Company (including pursuant to the Blue Sky Memorandum, and any updates thereto, delivered to Ameriprise pursuant to Section 4(d)) that such solicitations can be made and in which Ameriprise is qualified to so act.

 

6.              Payment of Expenses.

 

(a)         Expenses.  Whether or not the transactions contemplated in this Agreement are consummated or if this Agreement is terminated, the Company, the Dealer Manager and/or the Advisor, as designated in the Prospectus, will pay or cause to be paid, in addition to the compensation described in Section 3(d) (which Ameriprise may retain up to the point of termination unless this agreement is terminated without any Shares being sold, in which case no such compensation shall be paid), all fees and expenses incurred in connection with the formation, qualification and registration of the Company and in marketing, distributing and processing the Shares under applicable Federal and state law, and any other fees and expenses actually incurred and directly related to the Offering and the Company’s other obligations under this Agreement, including such fees and expenses as: (i) the preparing, printing, filing and delivering of the Registration Statement (as originally filed and all amendments thereto) and of the Prospectus and any amendments thereof or supplements thereto and the preparing and printing of this Agreement and Order Forms, including the cost of all copies thereof and any financial statements or exhibits relating to the foregoing supplied to Ameriprise in quantities reasonably requested by Ameriprise; (ii) the preparing and printing of the subscription material and related documents and the filing and/or recording of such certified certificates or other documents necessary to comply with the laws of the State of Maryland for the formation of a corporation and thereafter for the continued good standing of the Company; (iii) the issuance and delivery of the Shares, including any transfer or other taxes payable thereon; (iv) the qualification or registration of the Shares under state securities or “blue sky” laws; (v) the filing fees payable to the Commission and to FINRA; (vi) the preparation and printing of advertising material in connection with and relating to the Offering, including the cost of all sales literature and investor and broker-dealer sales and information meetings; (vii) the cost and expenses of counsel and accountants of the Company; (viii) subject to Section 6(d), and as mutually agreed upon, Ameriprise’s costs of the facilitation of the marketing of the Shares and the ownership of such Shares by Ameriprise’s customers, including fees to attend Company-sponsored conferences, (ix) any escrow arrangements in connection with the transactions described herein, including any compensation or reimbursement to an escrow agent for its services as such; and (x) any other expenses of issuance and distribution of the Shares.

 

 

(b)         Ad Hoc Requests.  From time to time, the Issuer Entities may make requests that can reasonably be regarded as being related to but separate from the services contemplated by this Agreement (the “Services”) or that otherwise fall outside the ordinary course of business relationships such as the one contemplated under this Agreement (“Ad Hoc Requests”).  Examples of Ad Hoc Requests include, but are not limited to, requests that would require Ameriprise to implement information technology modifications, participate in or respond to audits, inspections or compliance reviews, or respond to or comply with document requests.  To the extent that Ameriprise’s compliance with an Ad Hoc Request would cause Ameriprise to incur additional material expenses, the Company and Ameriprise will mutually agree as to the payment of such expenses between the parties (the “Ad Hoc Expenses”).  Ameriprise reserves the right to refuse to comply with an Ad Hoc Request if the parties are unable to reach an agreement on payment of reasonable expenses unless payment of such expenses would violate FINRA rules and provided that consent to an agreement has not been unreasonably withheld; it being understood that consent shall not be deemed to be unreasonably withheld if the payment for such Ad Hoc Requests, individually or when aggregated with other amounts to be paid to Ameriprise  pursuant to this Agreement, would violate FINRA rules.  Payment for Ad Hoc Requests will be separate from and above the payments for the Services but shall be included as applicable, when calculating total compensation paid to Ameriprise  for purposes of the limitations described in Section 6(d) hereof.

 

(c)          Calculation of Expenses.  Ameriprise will have the sole responsibility, and their records will provide the sole basis for calculating expenses (including, but not limited to, wholesaler reimbursements, conference fees and the fees addressed in Section 6(a) and (b) of this Agreement) for which Ameriprise provides invoices under this Agreement.  However, the Issuer Entities may provide records to assist Ameriprise in their calculations, as applicable.

 

(d)         Limitations.  The Issuer Entities and Ameriprise acknowledge and agree that the total compensation paid to Ameriprise and AEIS by the Issuer Entities in connection with the Offering pursuant hereto and the Cost Reimbursement Agreement shall not exceed the limitations prescribed by FINRA, including the 10% limitation prescribed by FINRA Rule 2310 on compensation of participating broker-dealers, which is calculated with respect to the gross proceeds from sales of Shares (except for Shares sold pursuant to the DRIP). The Company, the Dealer Manager and Ameriprise agree to monitor the payment of all fees and expense reimbursements to assure that FINRA limitations are not exceeded. Accordingly, if at any time during the term of the Offering, the Company determines in good faith that any payment to Ameriprise pursuant to this Agreement and/or any payment to AEIS pursuant to the Cost Reimbursement Agreement could result in a violation of the applicable FINRA regulations, the Company or the Dealer Manager shall promptly notify Ameriprise, and the Company, the Dealer Manager and Ameriprise agree to cooperate with each other to implement such measures as they determine are necessary to ensure continued compliance with applicable FINRA regulations. For the avoidance of doubt, if the Company or the Dealer Manager determines in good faith that any payment to AEIS pursuant to the Cost Reimbursement Agreement and/or any payment to Ameriprise pursuant to this Agreement could result in a violation of the applicable FINRA regulations and there is a dispute as to whether Ameriprise or AEIS will return such payment to the Company or the Dealer Manager in order to ensure continued compliance with applicable FINRA regulations, then each of AEIS and Ameriprise agrees that AEIS, or Ameriprise, as applicable, shall return such payment or payments necessary to ensure continued compliance with applicable FINRA regulations. However, nothing in this Agreement shall relieve Ameriprise of its obligations to comply with FINRA Rule 2310.

 

7.              Conditions of Ameriprise’s Obligations.  Ameriprise’s obligations hereunder shall be subject to the continued accuracy throughout the Effective Term of the representations, warranties and agreements of the Company, to the performance by the Company of its obligations hereunder and to the following terms and conditions:

 

 

(a)         Effectiveness of Registration Statement.  The Registration Statement shall have initially become effective not later than 5:30 P.M., Eastern time, on the date of this Agreement and, at any time during the term of this Agreement, no stop order shall have been issued or proceedings therefor initiated or threatened by the Commission; and all requests for additional information on the part of the Commission and state securities administrators shall have been complied with and no stop order or similar order shall have been issued or proceedings therefor initiated or threatened by any state securities authority in any jurisdiction in which the Company intends to offer Shares.

 

(b)         Closings.  The Company, the Advisor and the Dealer Manager will deliver or cause to be delivered to Ameriprise (or to AEIS as directed by Ameriprise), as a condition of Ameriprise’s obligations hereunder, those documents as described in this Section 7 as of the date hereof and, as applicable, on or before the fifth business day following the date that each post-effective amendment to the Registration Statement is filed by the Company prior to the earlier of the termination of the primary offering of up to $2,000,000,000 in Class T, Class W, and Class I shares of Common Stock pursuant to the Registration Statement (the “Primary Offering”) or the termination of this Agreement shall have been declared effective by the Commission (each such date, a “Documented Closing Date”); provided that if a Documented Closing Date has not occurred within ninety (90) days of the previous Documented Closing Date, the 90th day following the previous Documented Closing Date shall be deemed to be a Documented Closing Date through the termination of the Primary Offering, and also provided, further, that the earlier to occur of the date on which (i) the Company terminates the Primary Offering or (ii) this Agreement is otherwise terminated by any party shall also be  deemed to be a Documented Closing Date, and the Company, the Advisor and the Dealer Manager will deliver or cause to be delivered to Ameriprise (or to AEIS as directed by Ameriprise), those documents as described in Section 7 on or before the tenth business day following such date.

 

(c)          Opinions of Counsel.  Ameriprise and AEIS shall receive the favorable opinion of Greenberg Traurig, LLP, counsel for the Company, the Dealer Manager and the Advisor, dated as of the date hereof or as of each Documented Closing Date, as applicable, addressed to Ameriprise and AEIS substantially in a form reasonably satisfactory to Ameriprise.   Ameriprise and AEIS shall receive the favorable opinion of Venable, LLP, Maryland counsel for the Company, dated as of the date hereof or as of each Documented Closing Date, as applicable, addressed to Ameriprise and AEIS substantially in a form reasonably satisfactory to Ameriprise.

 

(d)         Accountant’s Letter.  On the date hereof, Ameriprise and AEIS shall have received from KPMG LLP or such other independent accounting firm that the Company may engage from time to time, a comfort letter, in form and substance reasonably satisfactory to Ameriprise and AEIS in all material respects.

 

(e)          Update of Accountant’s Letter.  Ameriprise and AEIS shall receive from KPMG LLP or such other independent accounting firm that the Company may engage from time to time, on each Documented Closing Date, a comfort letter, in form and substance reasonably satisfactory to Ameriprise and AEIS in all material respects, provided that (i) the specified procedures date referred to in such comfort letter shall be a date not more than five days prior to each such Documented Closing Date, (ii) such comfort letter shall cover the Registration Statement and Prospectus (including all documents incorporated by reference therein, as amended and supplemented through the date of the latest post-effective amendment that triggers such Documented Closing Date (the “Current Filing”), and (iii) if financial statements or financial information of any other entity are included in the Current Filing, the comfort letter to be received by Ameriprise and AEIS shall also cover such financial statements or financial information.

 

(f)            Stop Orders.  On the Effective Date and during the Effective Term no order suspending the sale of the Shares in any jurisdiction nor any stop order issued by the Commission shall have been issued,

 

 

and on the Effective Date and during the Effective Term no proceedings relating to any such suspension or stop orders shall have been instituted, or to the knowledge of the Company, shall be contemplated.

 

(g)         “Blue Sky” Memorandum.  On or before the date hereof, and on each Documented Closing Date, Ameriprise and AEIS shall have received the Blue Sky Memorandum described in Section 4(d) above.

 

(h)         Information Concerning the Advisor.  On the date hereof and as of each Documented Closing Date, Ameriprise and AEIS shall receive a letter dated as of such date from the Advisor, confirming that: (1) the Advisory Agreement has been duly and validly authorized, executed and delivered by the Advisor and constitutes a valid agreement of the Advisor enforceable in accordance with its terms; (2) the execution and delivery of the Advisory Agreement, the consummation of the transactions therein contemplated and compliance with the terms of the Advisory Agreement by the Advisor will not conflict with or constitute a default under its limited liability company agreement or any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Advisor is a party, or a violation of any law, order, rule or regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Advisor, or any of its property, except for such conflicts, defaults or violations that would not reasonably be expected to have a Material Adverse Effect; (3) no consent, approval, authorization or order of any court or other governmental agency or body has been or is required for the performance of the Advisory Agreement by the Advisor, or for the consummation of the transactions contemplated thereby, other than those that have been already made or obtained; and (4) the Advisor is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business as a foreign limited liability company in each other jurisdiction in which the nature of its business would make such qualification necessary and the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

(i)                                    Confirmation.  As of the date hereof and at each Documented Closing Date, as the case may be:

 

i.                  the representations and warranties of each of the Issuer Entities in the Agreement shall be true and correct with the same effect as if made on the date hereof or the Documented Closing Date, as the case may be, and each of the Issuer Entities have performed all covenants or conditions on their part to be performed or satisfied at or prior to the date hereof or respective Documented Closing Date;

 

ii.               the Registration Statement (and any amendments or supplements thereto and any documents incorporated by reference therein) does not include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus (and any amendments or supplements thereto and any documents incorporated by reference therein) does not include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

iii.            except as set forth in the Prospectus, there shall have been no material adverse change in the business, properties, prospects or condition (financial or otherwise) of the Company subsequent to the date of the latest balance sheets provided in the Registration Statement and the Prospectus; and

 

 

iv.           since the date hereof, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus in order to cause such Prospectus not to contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but which has not been so set forth.

 

Ameriprise shall receive a certificate dated the date hereof and each Documented Closing Date, as the case may be, confirming the above.

 

If any of the conditions specified in this Agreement shall not have been fulfilled when and as required by this Agreement, all Ameriprise’s obligations hereunder and thereunder may be canceled by Ameriprise by notifying the Company of such cancellation in writing or by telecopy at any time, and any such cancellation or termination shall be without liability of any party to any other party except as otherwise provided in Sections 3(d), 6, 8, 9 and 10 of this Agreement.  All certificates, letters and other documents referred to in this Agreement will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to Ameriprise and Ameriprise’s counsel.  The Company will furnish Ameriprise with conformed copies of such certificates, letters and other documents as Ameriprise shall reasonably request.

 

(j)                                    Information on Share Classes.  The Issuer Entities shall provide Ameriprise with an update at such time as the total Sales Commissions, dealer manager fees and Distribution Fees for the sale and servicing of Shares reach their cap, as described in the Prospectus. The Issuer Entities shall make a report available to Ameriprise with such information upon written request throughout the Offering.

 

8.              Indemnification.

 

(a)         Indemnification by the Issuer Entities. Each Issuer Entity, jointly and severally, agrees to indemnify, defend and hold harmless Ameriprise and each person, if any, who controls Ameriprise within the meaning of Section 15 of the Securities Act, and any of their respective officers, directors, employees and agents from and against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all expenses whatsoever reasonably incurred in investigating, preparing for, defending against or settling any litigation, commenced or threatened, or any claim whatsoever) arising out of or based upon:

 

(i)                                     any untrue or alleged untrue statement of a material fact contained: (i) in the Registration Statement (or any amendment thereto) or in the Prospectus (as from time to time amended or supplemented) or any related preliminary prospectus; (ii) in any application or other document (in this Section 8 collectively called “application”) executed by an Issuer Entity or based upon information furnished by an Issuer Entity and filed in any jurisdiction in order to qualify the Shares under the securities laws thereof, or in any amendment or supplement thereto; or (iii) in the Company’s periodic reports such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K; provided however that no Issuer Entity shall be liable in any such case to the extent any such statement or omission was made in reliance upon and in conformity with written information furnished to an Issuer Entity by Ameriprise expressly for use in the Registration Statement or related preliminary prospectus or Prospectus or any amendment or supplement thereof or in any of such applications or in any such sales as the case may be;

 

 

(ii)           the omission or alleged omission from (i) the Registration Statement (or any amendment thereto) or in the Prospectus (as from time to time amended or supplemented); (ii) any applications; or (iii) the Company’s periodic reports such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K, of a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading; provided however that no Issuer Entity shall be liable in any such case to the extent any such statement or omission was made in reliance upon and in conformity with written information furnished to the Company by Ameriprise expressly for use in the Registration Statement or related preliminary prospectus or Prospectus or any amendment or supplement thereof or in any of such applications or in any such sales as the case may be;

 

(iii)          any untrue statement of a material fact or alleged untrue statement of a material fact contained in any supplemental sales material (whether designated for broker-dealer use or otherwise) approved by the Company for use by Ameriprise or any omission or alleged omission to state therein a material fact required to be stated or necessary in order to make the statements therein, in light of the circumstances under which they were made and when read in conjunction with the Prospectus delivered therewith not misleading;

 

(iv)          any communication regarding the valuation of the Shares provided by or on behalf of the Company; and

 

(v)           the breach by any Issuer Entity or any employee or agent acting on their behalf, of any of the representations, warranties, covenants, terms and conditions of this Agreement.

 

Notwithstanding the foregoing, no indemnification by an Issuer Entity of Ameriprise  or each person, if any, who controls Ameriprise within the meaning of Section 15 of the Securities Act, and any of their respective officers, directors, employees and agents or its officers, directors or control persons, pursuant to Section 8(a) shall be permitted under this Agreement for, or arising out of, an alleged violation of federal or state securities laws, unless one or more of the following conditions are met: (1) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (2) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (3) a court of competent jurisdiction approves a settlement of the claims against the 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 Commission and of the published position of any state securities regulatory authority in which the securities were offered or sold as to indemnification for violations of securities laws.

 

(b)   Indemnification by Ameriprise.  Subject to the conditions set forth below, Ameriprise  agrees to indemnify, defend and hold harmless each Issuer Entity, each of their directors and trustees, those of its officers who have signed the Registration Statement and each other person, if any, who controls an Issuer Entity within the meaning of Section 15 of the Securities Act to the same extent as the foregoing indemnity from an Issuer Entity contained in subsections (a)(i) and (a)(ii) of this Section, as incurred, but only with respect to an untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in the Registration Statement (as from time to time amended or supplemented) or Prospectus, or any related preliminary prospectus, or any application made in reliance upon or, in conformity with, written information furnished by Ameriprise expressly for use in such 

 

 

Registration Statement or Prospectus or any amendment or supplement thereto, or in any related preliminary prospectus or in any of such applications.

 

(c)   Procedure for Making Claims.  Each indemnified party shall give prompt notice to each indemnifying party of any claim or action (including any governmental investigation) commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify any indemnifying party shall not relieve it from any liability that it may have hereunder, except to the extent it has been materially prejudiced by such failure, and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  The indemnifying party, jointly with any other indemnifying parties receiving such notice, shall assume the defense of such action with counsel chosen by it and reasonably satisfactory to the indemnified parties defendant in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them which are different from or in addition to those available to such indemnifying party.  Any indemnified party shall have the right to employ a separate counsel in any such action and to participate in the defense thereof but the fees and expenses of such counsel shall be borne by such party unless such party has objected in accordance with the preceding sentence, in which event such commercially reasonable fees and expenses shall be borne by the indemnifying parties.  Except as set forth in the preceding sentence, if an indemnifying party assumes the defense of such action, the indemnifying party shall not be liable for any fees and expenses of separate counsel for the indemnified parties incurred thereafter in connection with such action. In no event shall the indemnifying parties be liable for the commercially reasonable fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.

 

The indemnity agreements contained in this Section 8 and the warranties and representations contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party and shall survive any termination of this Agreement.  An indemnifying party shall not be liable to an indemnified party on account of any settlement, compromise or consent to the entry of judgment of any claim or action effected without the consent of such indemnifying party.  The Company agrees promptly to notify Ameriprise of the commencement of any litigation or proceedings against the Company in connection with the issue and sale of the Shares or in connection with the Registration Statement or Prospectus.

 

(d)           Contribution.  Subject to the limitations and exceptions set forth in Section 8(a) hereof and in order to provide for just and equitable contribution where the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to therein (collectively, “Losses”), except by reason of the terms thereof, the Issuer Entities on the one hand and Ameriprise on the other shall contribute to the amount paid or payable by such indemnified party as a result of such Losses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by each of the Issuer Entities, on the one hand, and Ameriprise on the other hand, from the Offering based on the public offering price of the Shares sold and the Sales Commissions, Distribution Fees and Cost Reimbursement Compensation (as such term is defined in the Cost Reimbursement Agreement) received by Ameriprise and/or AEIS with respect to such Shares sold.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits referred to above but also the relative fault of the Issuer Entities, on the one hand and Ameriprise on the other in connection with the statements or omissions which resulted in such Losses (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Issuer Entities, on the one hand and 

 

 

Ameriprise on the other shall be deemed to be in the same proportion as (a) the sum of (i) the aggregate net compensation retained by the Issuer Entities and their affiliates for the purchase of Shares sold by Ameriprise  and (ii) total proceeds from the Offering (net of Sales Commissions, Distribution Fees and Cost Reimbursement Compensation paid to Ameriprise and/or AEIS but before deducting expenses) received by the Company from the sale of Shares by Ameriprise bears to (b) the Sales Commissions, Distribution Fees and Cost Reimbursement Compensation retained by Ameriprise and/or AEIS.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by an Issuer Entity, on the one hand or Ameriprise on the other.  The Company agrees with Ameriprise that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation, or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the Losses referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), Ameriprise shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares subscribed for through Ameriprise were offered to the subscribers exceeds the amount of any damages which Ameriprise has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.  Further, in no event shall the amount of Ameriprise’s contribution to the liability exceed the aggregate Sales Commissions, Distribution Fees, Cost Reimbursement Compensation and any other compensation retained by Ameriprise and/or AEIS from the proceeds of the Offering.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act or Section 10(b) of the Exchange Act, as amended) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section, any person that controls Ameriprise within the meaning of Section 15 of the Securities Act shall have the same right to contribution as Ameriprise, and each person who controls the Company within the meaning of Section 15 of the Securities Act shall have the same right to contribution as the Company.

 

9.              Representations and Agreements to Survive.  All representations and warranties contained in this Agreement or in certificates and all agreements contained in Sections 3(d), 6, 8, 9, 10 and 17 of this Agreement shall remain operative and in full force and effect regardless of any investigation made by any party, and shall survive the termination of this Agreement.

 

10.       Effective Date, Term and Termination of this Agreement.

 

(a)         This Agreement shall become effective as of the date it is executed by all parties hereto.  After this Agreement becomes effective, any party may terminate it at any time for any reason by giving two days’ prior written notice to the other parties.  Ameriprise will suspend or terminate the offer and sale of Shares as soon as practicable after being requested to do so by the Company or the Dealer Manager at any time.

 

(b)         Additionally, Ameriprise shall have the right to terminate this Agreement at any time during the Effective Term without liability of any party to any other party except as provided in Section 10(c) hereof if: (i) any representations or warranties of  any Issuer Entity hereunder shall be found to have been incorrect; or (ii) any Issuer Entity shall fail, refuse or be unable to perform any condition of its obligations hereunder, or (iii) the Prospectus shall have been amended or supplemented despite Ameriprise’s objection to such amendment or supplement, or (iv) the United States shall have become involved in a war or major hostilities or a material escalation of hostilities or acts of terrorism involving the United States or other national or international calamity or crisis (other than hostilities including Iraq and Afghanistan); or (v) a banking moratorium shall have been declared by a state or federal authority or 

 

 

person; or (vi) the Company shall have sustained a material or substantial loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not said loss shall have been insured, will in Ameriprise’s good faith opinion make it inadvisable to proceed with the offering and sale of the Shares; or (vii) there shall have been, subsequent to the dates information is given in the Registration Statement and the Prospectus, such change in the business, properties, affairs, condition (financial or otherwise) or prospects of the Company whether or not in the ordinary course of business or in the condition of securities markets generally as in Ameriprise’s good faith judgment would make it inadvisable to proceed with the offering and sale of the Shares, or which would materially adversely affect the operations of the Company.

 

(c)   In the event this Agreement is terminated by any party pursuant to Sections 10(a) or 10(b) hereof, the Company shall pay all expenses of the Offering as required by Section 6 hereof and no party will have any additional liability to any other party except for any liability which may exist under Sections 3(d) and 8 hereof.  Following the termination of the Offering, in no event will the Company be liable to reimburse Ameriprise for expenses other than as set forth in the previous sentence and Ameriprise’s actual and reasonable out-of-pocket expenses incurred following the termination of the Offering, including, without limitation, the cost of data transmissions and other related client transmissions.

 

(d)   If Ameriprise elects to terminate this Agreement as provided in this Section 10, Ameriprise shall notify the Company promptly by telephone or facsimile with confirmation by letter.  If the Company elects to terminate this Agreement as provided in this Section 10, the Company shall notify Ameriprise promptly by telephone or facsimile with confirmation by letter.

 

11.       Notices.

 

(a)   All communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to an Issuer Entity shall be mailed, or personally delivered, to Black Creek Industrial REIT IV Inc., 518 Seventeenth Street, 17th Floor, Denver, Colorado 80202, Attention: Joshua J. Widoff, Managing Director, General Counsel and Secretary, and if sent to Ameriprise shall be mailed, or personally delivered, to 369 Ameriprise Financial Center, Minneapolis, MN 55474, Attention: General Counsel.

 

(b)   Notice shall be deemed to be given by any respective party to any other respective party when it is mailed or personally delivered as provided in subsection (a) of this Section 11.

 

12.  Parties.  This Agreement shall inure solely to the benefit of, and shall be binding upon Ameriprise, the Issuer Entities, and the controlling persons, trustees, directors and officers referred to in Section 8 hereof, and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained.  Notwithstanding the foregoing, this Agreement may not be assigned without the consent of the parties hereto.

 

 

13.  Choice of Law and Arbitration.

 

(a)   Regardless of the place of its physical execution or performance, the provisions of this Agreement will in all respects be construed according to, and the rights and liabilities of the parties hereto will in all respects be governed by, the substantive laws of New York without regard to and exclusive of New York’s conflict of laws rules.

 

(b)   All disputes arising out of or in connection with this Agreement, including without limitation, its existence, validity, interpretation, performance, breach or termination, shall be submitted to and fully and finally resolved by binding arbitration, conducted on a confidential basis in accordance with FINRA rules.  All arbitration proceedings, and all documents, pleadings and transcripts associated therewith, shall be kept strictly confidential by all parties, their counsel and other advisors, employees, experts and all others under their reasonable control. The decision of the Arbitrator shall be final and binding, and judgment upon any arbitration award may be entered in any appropriate state or federal court within the County of New York, State of New York or any other court having competent jurisdiction. In the event that a third party brings an action or other proceeding against either party to this Agreement (a “Third Party Action”), then the Party to this Agreement against which or whom such Third Party Action is brought or asserted, may in such Third Party Action, litigate any related claim which it may have against the other party to this Agreement, including, without limitation, by way of a claim, indemnity, cross-claim, counterclaim, interpleader or other third party action without being obligated to arbitrate the same as otherwise provided in this Section 13(b) (except to the extent otherwise required in the FINRA rules regarding arbitration).  In any such case, the matter which is the subject of such Third Party Action (including any related claims, indemnity, cross-claim, counterclaim, interpleader or other third party action, which either party hereto may have against the other) shall not be subject to arbitration, but shall be resolved exclusively within such Third Party Action. Notwithstanding anything set forth herein to the contrary, no Party will be prevented from immediately seeking provisional remedies in a court of competent jurisdiction, including but not limited to, temporary restraining orders and preliminary injunctions in aid of arbitration, but such remedies will not be sought as a means to avoid or stay arbitration. In the event a court grants provisional remedies, the duration thereof shall last no longer than the Arbitrator (upon constitution of the arbitration panel) deems necessary to review such provisional remedies and render its own decision. EACH PARTY HERETO OR BENEFICIARY HEREOF HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.  EACH PARTY HERETO OR BENEFICIARY HEREOF HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANOTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER WOULD NOT, IN THE EVENT OF A PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO SIGN, OR CHANGE ITS POSITION IN RELIANCE UPON THE BENEFITS OF, THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS CLAUSE. In the event of any dispute between Ameriprise and any Issuer Entity, Ameriprise and such Issuer Entity will continue to perform its respective obligations under this Agreement in good faith during the resolution of such dispute unless and until this Agreement is terminated in accordance with the provisions hereof.

 

14.  Counterparts.  This Agreement may be signed by the parties hereto in two or more counterparts, each of which shall be deemed to be an original, which together shall constitute one and the same Agreement among the parties.

 

15.  Finders’ Fees.  Ameriprise shall have no liability for any finders’ fees owed in connection with the transactions contemplated by this Agreement.

 

 

16.  Severability.  Any provision of this Agreement, which is invalid or unenforceable in any jurisdiction, shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction.

 

17.  Use and Disclosure of Confidential Information.  Notwithstanding anything to the contrary contained in this Agreement, and in addition to and not in lieu of other provisions in this Agreement:

 

(a)           “Confidential Information” includes, but is not limited to, all proprietary and confidential information of any party to this Agreement and its subsidiaries, affiliates, and licensees, including without limitation all information regarding the business and affairs of the parties, all information regarding its customers and the customers of its subsidiaries, affiliates, or licensees;  the accounts, account numbers, names, addresses, social security numbers or any other personal identifier of such customers; and any information derived therefrom.  Confidential Information will not include information which is (i) in or becomes part of the public domain, except when such information is in the public domain due to disclosure by any party  that violates the terms of this Agreement, (ii) demonstrably known to any party  to this Agreement prior to December 18, 2015, is permitted to be used without restriction and is not under any confidentiality obligation applicable to the information, (iii) independently developed by a party to this Agreement  in the ordinary course of business without reference to or reliance upon any Confidential Information furnished by any party to this Agreement, or (iv) rightfully and lawfully obtained by any party to this Agreement or from any third party other than any party to this Agreement without restriction and without breach of this Agreement.

 

(b)           Each party agrees that it may not use or disclose Confidential Information for any purpose other than to carry out the purpose for which Confidential Information was provided to it as set forth in this Agreement and/or as may otherwise be required or compelled by applicable law, regulation or court order, and agrees to cause its respective parent company, subsidiaries and affiliates, and consultants or other entities, including its directors, officers, employees and designated agents, representatives or any other party retained for purposes specifically and solely related to the use or evaluation of Confidential Information as provided for in this Section 17 (“Representatives”) to limit the use and disclosure of Confidential Information to that purpose.  If any party or any of its respective Representatives is required or compelled by applicable law, regulation, court order, decree, subpoena or other validly issued judicial or administrative process to disclose Confidential Information, such party shall use commercially reasonable efforts to notify the appropriate party of such requirement prior to making the disclosure.

 

(c)           Each party agrees to implement reasonable measures designed (i) to assure the security and confidentiality of Confidential Information; (ii) to protect Confidential Information against any anticipated threats or hazards to the security or integrity of such information; (iii) to protect against unauthorized access to, or use of, Confidential Information that could result in substantial harm or inconvenience to any customer; (iv) to protect against unauthorized disclosure of non-public personal information to unaffiliated third parties; and (v) to otherwise ensure its compliance with all applicable domestic, foreign and local laws and regulations (including, but not limited to, the Gramm-Leach-Bliley Act, Regulation S-P and Massachusetts 201 C.M.R. Sections 17.00-17.04, as applicable ) and any other legal, regulatory or SRO requirements.  Each party further agrees to cause all of its respective Representatives or any other party to whom it may provide access to or disclose Confidential Information to implement appropriate measures designed to meet the objectives set forth in this paragraph.  Each party agrees that if there is a breach or threatened breach of the provisions of this Section 17, the other party may have no adequate remedy in money or damages and accordingly shall be entitled to seek injunctive relief and any other appropriate equitable remedies for any such breach without proof of actual injury.  Each party further agrees that it shall not oppose the granting of such relief and that it shall not seek, and 

 

 

agrees to waive any requirement for, the posting of any bond in connection therewith.  Such remedies shall not be deemed to be the exclusive remedies for any breaches of the provisions of this Section 17 by a party or its respective representatives, and shall be in addition to all other remedies available at law or in equity.

 

(d)          Upon a party’s request, the other parties shall promptly return to the requesting party any Confidential Information (and any copies, extracts, and summaries thereof) of which it is in possession, or, with the requesting party’s written consent, shall promptly destroy, in a manner satisfactory to the requesting party, such materials (and any copies, extracts, and summaries thereof) and shall further provide the requesting party with written confirmation of same; provided, that, each of the other parties shall be permitted to (i) retain all or any portion of the Confidential Information, in accordance with the confidentiality obligations specified in this Section 17, to the extent required by applicable law or regulatory authority; and (ii) retain or use any such Confidential Information in connection with investigating or defending itself against allegations or claims made or threatened by regulatory authorities under applicable securities laws if reasonably necessary; provided that, promptly upon receiving any such demand or request and, to the extent it may legally do so, such receiving party advises the disclosing party of such demand or request prior to making such disclosure.

 

This entire section 17 shall survive the termination of this Agreement.

 

18.  Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter contained in this Agreement, including any information related to the subject matter of this Agreement exchanged between the parties prior to the Effective Date of this Agreement, and supersedes all previous agreements, promises, proposals, representations, understandings and negotiations, whether written or oral, between the Parties respecting such subject matter, and in particular (but not limited to) that Mutual Confidentiality Agreement dated December 18, 2015 between Ameriprise and the Company.

 

19.  Amendments.  This Agreement shall only be amended upon written agreement executed by each of the parties hereto.

 

20.  Additional Offerings.  The terms of this Agreement may be extended to cover additional offerings of shares of the Company by the execution by the parties hereto of an addendum identifying the shares and registration statement relating to such additional offering.  Upon execution of such addendum, the terms “Shares”, “Offering”, “Registration Statement” and “Prospectus” set forth herein shall be deemed to be amended as set forth in such addendum.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

 

	
 
    	
BLACK   CREEK INDUSTRIAL REIT IV INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   THOMAS G. MCGONAGLE
    
	
 
    	
 
    	
Title:   
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
BLACK   CREEK CAPITAL MARKETS, LLC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   CHARLES MURRAY
    
	
 
    	
 
    	
 
    	
Title:   
    	
CEO
    
	
 
    	
 
    	
 
    
	
 
    	
BCI   IV ADVISORS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/ EVAN H. ZUCKER
    
	
 
    	
 
    	
Title:   
    	
MANAGER
    
	
 
    	
 
    	
 
    
	
 
    	
BCI   IV ADVISORS GROUP LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/ EVAN H. ZUCKER
    
	
 
    	
 
    	
Title:   
    	
MANAGER
    
	
 
    	
 
    	
 
    
	
AMERIPRISE   FINANCIAL SERVICES, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ FRANK MCCARTHY
    	
 
    	
 
    
	
Name: Frank A. McCarthy
    	
 
    	
 
    
	
Title: Senior Vice President and General Manager
    	
 
    	
 
    
										

 

Selected Dealer Agreement Signature Page

 

 

Exhibit A

 

Definition of Fair Value: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date.

 

Methodology:

 

Step 1:  Determination of Gross Asset /Investment Value:

 

Notwithstanding that generally accepted accounting principles of the Financial Accounting Standards Board (“GAAP”) generally require the fair value of real estate to reflect the price received to sell an asset in an orderly transaction between market participants at the measurement date and not on an ongoing basis, the Company will establish the fair value of individual real properties and real estate-related assets with assistance of third-party appraisers or valuation experts consistent with the methods and principles used to determine fair value under GAAP, primarily as set forth in ASC 820, and international financial reporting standards of the International Accounting Standards Board (as applicable). Allocate to the Company the fair value of assets and liabilities related to its investment interests in joint ventures and non-wholly-owned subsidiaries based on the net fair value of such entities’ assets less liabilities and the provisions of the joint venture/subsidiary agreements relating to the allocation of economic interest between the parties in accordance with GAAP.

 

Establish the fair value of any other tangible and/or intangible assets in accordance with GAAP or other widely accepted methodologies.  For this purpose, cash, receivables, and certain prepaid expenses and other current assets which have defined and quantifiable future value should be included to the extent consistent with GAAP.  Assets with future value may include but are not necessarily limited to, prepaid expenses and taxes, acquisition deposits and pre-paid rental income where not otherwise accounted for in the determination of fair values of real estate and real estate-related assets. Intangible assets to be excluded may include, but are not limited to, deferred financing costs and all assets/liabilities required by ASC 805.

 

Where the Company holds material non-real estate related assets, liabilities or investment interests, Ameriprise requires the valuation of such assets, liabilities, or investment interests for the purpose of determining Per Share NAV be developed or reviewed by the Company’s Independent Appraiser or third-party accountants.

 

Step 2:  Determination of Liabilities:

 

Current Liabilities — GAAP book value when it approximates fair value.

 

Long-term Debt — fair value (“marked to market”) of debt maturing in one year or more.

 

Minority interests — based on allocation of fair value of assets less liabilities of the joint venture based on the provisions of the joint venture agreement.

 

Liabilities required by ASC 805 and liabilities already included in the valuation of real estate or the fair value of other liabilities (e.g., accrued property taxes included in a discounted cash flow valuation and accrued interest expense included in the fair value of a loan) shall be excluded from the valuation.

 

Step 3:  Incentive Fee Adjustments:

 

Calculate and deduct: (i) any net asset value allocable to preferred securities; and (ii) any estimated incentive fees, participations, or special interests held by or allocable to the sponsor, advisor, management or general partner based on Aggregate NAV of the Company and payable at the time of a hypothetical

 

 

liquidation of the Company as of the valuation date in accordance with the provisions of the partnership or advisory agreements and the terms of the preferred securities.

 

Step 4:  Determination of Per Share Amount:

 

Divide the resulting value of the Company allocable to common shareholders by the number of common shares outstanding (fully diluted).  Note: In the above example, disposition costs and fees and debt prepayment penalties or the impact of restriction on assumption of debt are not deducted in estimating NAV.

 

 

Exhibit B

 

ACCESS AND CONFIDENTIALITY AGREEMENT

 

This Access and Confidentiality Agreement (“Agreement”) is made on this      day of              , 201   by and among                              (“Valuation Firm”), having a place of business at                                 ; [                               (“Appraisal Firm”), having a place of business at                                                ]  [Only include “Appraisal Firm” in this Agreement to the extent there is a firm that is solely providing appraisals and not otherwise assisting with the valuation]; Black Creek Industrial REIT IV Inc. (“REIT”) having a place of business at 518 Seventeenth Street, 17th Floor, Denver, Colorado, 80202 and Ameriprise Financial Services, Inc. (“Recipient”) having a place of business at 707 Second Avenue South, Minneapolis, Minnesota 55402.

 

Valuation Firm has been engaged (the “Engagement”) by REIT to provide certain valuation services in connection with the REIT’s determination of an estimated net asset value (“NAV”) and per share NAV.  To assist in the Engagement, Appraisal Firm has been engaged by REIT to provide appraisals for commercial real estate properties of REIT.  At REIT’s direction, Valuation Firm and Appraisal Firm will make available to Recipient certain information that is trade secret, proprietary, confidential and/or sensitive information of Valuation Firm and Appraisal Firm and their respective subsidiaries and affiliates comprised of or relating to work product prepared in connection with the Engagement, including, but not limited to appraisals performed by Appraisal Firm, analyses, reports, work papers, communications or other information (the “Supporting Materials”).  Specifically, Valuation Firm will make available to Recipient the written valuation reports (including, for the avoidance of doubt, all Supporting Materials) prepared pursuant to the Engagement, which valuation reports will describe the scope of the Engagement, the reviews performed and any limitations thereto, and include certain value determinations and summary analyses of Valuation Firm which support its REIT valuations (the “Valuation Reports”) (collectively, “Confidential Information”).  To ensure the protection of such Confidential Information and in consideration of the Recipient’s intent to complete a due-diligence investigation of REIT, the parties agree as follows:

 

1.                                      None of the parties is required to disclose any particular information to any other party and any disclosure is entirely voluntary and is not intended to, and shall not, create or modify any contractual or other relationship or obligation of any kind between the parties beyond the terms of this Agreement.  Furthermore, neither this Agreement, nor any transfer of Confidential Information under it, shall be construed as creating, conveying, transferring, granting or conferring upon the other, any rights, including, but not limited to intellectual property rights, license or authority in or to the information exchanged.

 

2.                                      The parties acknowledge and agree that the transfer of Confidential Information hereunder shall not commit or bind any party to enter into any other particular contract or any other business arrangement.

 

3.                                      Recipient agrees to use the Confidential Information to review Valuation Firm’s valuation of REIT securities.  However, for the avoidance of doubt, the final determination of NAV and per share NAV shall be the sole responsibility of REIT.  Recipient agrees to regard and preserve as confidential all Confidential Information which may be obtained from REIT, Valuation Firm and Appraisal Firm as a result of this Agreement.    Recipient agrees that its own use and/or distribution of Valuation Firm’s or Appraisal Firm’s Confidential Information shall be limited to its own employees on a “need to know” basis; provided, however, that Recipient may disclose Confidential Information pursuant to this Agreement to its employees, including the employees of Recipient’s 

 

 

parent, subsidiary and affiliated companies, and to consultants or other persons or entities retained by Recipient for purposes specifically and solely related to the use or evaluation of Confidential Information as provided for herein.  Such employees, including the employees of Recipient’s parent, subsidiary and affiliated companies, and consultants or other persons or entities retained, shall treat the disclosure of the Confidential Information as confidential and are subject to the applicable terms and restrictions in this Agreement, and Recipient shall be responsible for any breach of this Agreement by any such person.  Except as provided for herein, Recipient agrees it shall not, without first obtaining the written consent of REIT, Valuation Firm and Appraisal Firm (as applicable), disclose or make available to any person, firm or enterprise, reproduce or transmit, or use (directly or indirectly) for its own benefit or the benefit of others any Confidential Information.

 

The aforementioned restriction shall not apply to communications by Recipient, if (i) Recipient becomes legally compelled (by deposition, interrogatory, request for information or documents, subpoena, civil investigative demand, governmental agency action or similar legal or judicial process), or otherwise is requested or required pursuant to law or regulation or the rules of any securities exchange or self-regulatory organization, to disclose any Confidential Information to a person or persons not otherwise permitted to receive such information or (ii) Recipient discloses Confidential Information upon the advice of legal counsel in connection with the defense of litigation or in connection with a regulatory or criminal proceeding involving Recipient or any of its members or employees.  In such event, to the extent legally permissible, before disclosing Confidential Information pursuant to this paragraph, Recipient shall provide REIT, Valuation Firm and Appraisal Firm with prompt written notice of such request or requirement and shall cooperate with REIT, Valuation Firm and Appraisal Firm in seeking a protective order or other appropriate remedy to avoid or minimize required disclosure.  If such protective order or other remedy is not obtained or reasonably obtainable, or promptly obtained, or if REIT, Valuation Firm and Appraisal Firm waive compliance with the provisions hereof, then Recipient may disclose only that portion of the Confidential Information that Recipient is advised by legal counsel in writing is legally required to be disclosed and shall exercise commercially reasonable efforts to ensure that all information so disclosed will be accorded confidential treatment.  Recipient shall give REIT, Valuation Firm and Appraisal Firm prior notice of the Confidential Information it believes it is required to disclose.

 

In addition to and without limiting the foregoing, the parties agree to the following additional confidentiality requirements with respect to the Confidential Information:

 

a.        Recipient acknowledges and agrees that the Confidential Information was provided to REIT solely for the use by REIT’s board of directors in connection with the board’s determination of the estimated value of the common shares of the respective REIT, that such board may have considered other factors in making its determination of the REIT’s NAV or per share NAV, and that the Confidential Information therefore may not be used by the Recipient to establish a cause of action against Valuation Firm regarding its conclusion as to a reasonable range of NAV and per share NAV or Appraisal Firm regarding its appraisals.  Notwithstanding the foregoing or anything else in this Agreement to the contrary, nothing in this Section 3(a), or Section 3(b) below, shall prohibit Recipient from asserting any claim or cause of action against any party other than Valuation Firm, Appraisal Firm or any of their respective Affiliates using or related to the Confidential Information, including, but not limited to, a claim or cause of action asserting detrimental reliance on the Confidential Information.

 

For purposes of this Agreement, “Affiliate” means, with respect to any entity, any other entity Controlling, Controlled by or under common Control with such entity; and “Control” and its derivatives mean, with regard to any entity, the legal, beneficial or equitable ownership, directly or indirectly, of fifty percent (50%) or more of the capital 

 

 

stock (or other ownership interest, if not a corporation) of such entity ordinarily having voting rights.

 

b.              Subject to Section 3(a) above, Recipient acknowledges and agrees that, in connection with Valuation Firm’s or Appraisal Firm’s provision of any Confidential Information to Recipient, Recipient shall not acquire any rights against the party that prepared the Confidential Information by virtue of gaining access thereto pursuant to this Agreement, and shall be estopped from asserting a cause of action of detrimental reliance on the Confidential Information against Valuation Firm or Appraisal Firm.

 

c.               Recipient acknowledges and agrees that any third party that prepared Confidential Information does not assume any duties or obligations to Recipient as a result of Recipient obtaining access to or reviewing the Confidential Information.

 

4.                                      Each of REIT, Valuation Firm and Appraisal Firm agrees that for purposes of this Agreement information shall not be considered Confidential Information to the extent, but only to the extent, that such information: (i) is already known to Recipient free of any duty of confidentiality owed to any other person at the time it is obtained; (ii) is or becomes publicly known through no wrongful act of Recipient; (iii) is rightfully received by Recipient from the REIT or a third party without confidentiality or other restrictions and without breach of this Agreement; or (iv) is independently developed by Recipient without the use of Confidential Information.  For purposes of this Agreement, no Confidential Information shall be deemed “publicly known” or “known to Recipient” merely because such Confidential Information is embraced by more general information.

 

5.                                      In the event that Recipient is seeking a protective order or otherwise seeking to avoid or minimize the disclosure of Confidential Information in cooperation with REIT, Valuation Firm and/or Appraisal Firm pursuant to the second paragraph of Section 3, the Recipient (i) shall be required to delay production of any such Confidential Information and (ii) shall be required to provide such cooperation, but only if REIT, Valuation Firm and/or Appraisal Firm, as applicable based on which of such parties has not waived compliance with the provisions of the second paragraph of Section 3, agree to bear all commercially reasonable costs and expenses of such cooperation, including, but not limited to, commercially reasonable expenses for the time expended by Recipient’s staff relating to any such efforts and reimbursement of all commercially reasonable attorney’s fees and expenses.  Recipient is not required to take any action related to these matters without reasonable assurances from REIT, Valuation Firm and/or Appraisal Firm, as applicable, that such payment and reimbursement will be provided.

 

Recipient agrees that if there is a breach or threatened breach of the provisions of this Agreement, REIT, Valuation Firm and Appraisal Firm may have no adequate remedy at law and accordingly shall be entitled to seek injunctive relief and any other appropriate equitable remedies for any such breach without proof of actual injury.  Such remedies shall not be deemed to be the exclusive remedies for any breaches of this Agreement by Recipient or its representatives, and shall be in addition to all other remedies available at law or in equity.  Notwithstanding the foregoing, the Recipient has no affirmative obligation to prevent the disclosure of Confidential Information by any person or entity to whom Recipient has disclosed Confidential Information pursuant to i) the written consent of  the REIT, Valuation Firm and Appraisal Firm, or ii) the second paragraph of Section 3; further, Recipient shall not be liable for the actions of any such person or entity in the event of such disclosure of Confidential Information by such person or entity.

 

6.                                      IN NO EVENT SHALL THE PARTIES BE LIABLE, ONE TO EACH OF THE OTHERS, FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR 

 

 

CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

 

7.                                      None of the parties shall use any other party’s name or marks, refer to or identify the other party in any advertising or publicity releases or promotional or marketing correspondence to others without such other party’s prior written approval.  The Recipient shall not use Valuation Firm’s or Appraisal Firm’s name or marks, nor refer to or identify Valuation Firm or Appraisal Firm in any advertising or publicity releases or promotional or marketing correspondence to others.

 

8.                                      None of the parties may assign or otherwise transfer this Agreement, or any of its rights or obligations hereunder, to any third party without the prior written consent of the other parties and any attempt to do so shall be in violation of this Paragraph 8 and shall be deemed null and void; provided, however, that any party may assign this Agreement in whole or in part at any time without the consent of the other parties to an Affiliate.

 

9.                                      The parties acknowledge that the Confidential Information disclosed by REIT, Valuation Firm or Appraisal Firm under this Agreement may be subject to export controls under the laws of the United States.  Each party shall comply with such laws and agrees not to knowingly export, re-export or transfer Confidential Information without first obtaining all required United States authorizations or licenses.

 

10.                               Recipient is aware, and shall advise its representatives who receive any Confidential Information or are informed of the matters that are the subject of this Agreement, that applicable securities laws restrict persons with material, non-public information concerning REIT (including for this purpose any Affiliate of REIT) from purchasing or selling securities of any Affiliate of REIT, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities.

 

11.                               This Agreement may be executed in any number of counterparts, each of which shall be an original, and which together shall constitute one and the same instrument.  This Agreement may be executed and delivered by facsimile.  Any facsimile signatures shall have the same legal effect as manual signatures.

 

12.                               This Agreement, which constitutes the entire agreement between the parties as to the subject hereof, shall be construed and interpreted fairly, in accordance with the plain meaning of its terms, and there shall be no presumption or inference against the party drafting this Agreement in construing or interpreting the provisions hereof.  Recipient acknowledges and agrees that the obligations owed to REIT by Recipient under this Agreement shall be in addition to the obligations owed to REIT by Recipient under that certain Selected Dealer Agreement, dated September 15, 2017, by and among Recipient, REIT, Black Creek Capital Markets, Inc., BCI IV Advisors LLC, and BCI IV Advisors Group LLC.

 

13.                               If any of the provisions of this Agreement are held invalid, illegal or unenforceable, the remaining provisions shall be unimpaired.

 

14.                               The termination of any other agreement or business relationship between or involving both parties shall not relieve any party of its obligations with respect to Confidential Information disclosed pursuant to the terms hereof.  This Agreement shall be governed in all respects by the substantive laws of the State of New York without regard to conflict of law principles and any cause of action shall only be brought into a court of competent jurisdiction within the State of New York.

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date(s) written below:

 

	
[VALUATION   FIRM]
    	
AMERIPRISE   FINANCIAL SERVICES, INC.
    
	
 
    	
 
    
	
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Date:
    	
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[APPRAISAL FIRM]
    	
 
    
	
 
    	
 
    
	
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BLACK CREEK INDUSTRIAL REIT IV   INC.
    	
 
    
	
 
    	
 
    
	
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Title:
    	
 
    
	
 
    	
 
    
	
Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00274-of-00352.parquet"}]]