Document:

Exhibit 10.3

 

FACILITATION FEE AGREEMENT

 

THIS FACILITATION FEE AGREEMENT (this “Agreement”) is to be effective for all purposes as of August 13, 2018, by and between Black Creek Exchange LLC, a Delaware limited liability company (“BCX Sponsor”) and Black Creek Diversified Property Advisors LLC, a Delaware limited liability company (“DPF Advisor”).

 

RECITALS:

 

A.                                    BCX Sponsor is a wholly owned subsidiary of a taxable real estate investment trust subsidiary (a “TRS”), which in turn is wholly owned by Black Creek Diversified Property Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership is the entity through which Black Creek Diversified Property Fund Inc. (“DPF”), its general partner, conducts substantially all of its business and owns substantially all of its assets.  DPF is externally advised by DPF Advisor pursuant to that certain Amended and Restated Advisory Agreement (2018) effective as of June 30, 2018 (as it may be amended from time to time, the “Advisory Agreement”) by and among DPF, the Operating Partnership and DPF Advisor.

 

B.                                  BCX Sponsor has offered and intends to make future offers (each, an “Offering”) from time to time, either directly or through wholly owned subsidiaries, in private placements exempt from registration under the Securities Act of 1933, as amended, beneficial interests (each, an “Interest” and collectively, the “Interests”) in specific Delaware statutory trusts. The Offerings will be conducted pursuant to that certain Program Description Memorandum dated March 2, 2016, and that certain Program Description Memorandum dated September 1, 2017 (collectively, the “Program”) and will be offered to individuals or entities who are “accredited investors,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act (the “Investors”).

 

C.                                    In connection with the Offerings, DPF Advisor provides certain services (the “Services”) to BCX Sponsor, an indirect subsidiary of DPF, pursuant to the Advisory Agreement.  In addition, in connection with the Offerings, the BCX Sponsor has engaged Black Creek Capital Markets, LLC (the “Dealer Manager”) to act as dealer manager pursuant to that certain Amended and Restated Dealer Manager agreement dated August 13, 2018 (the “Dealer Manager Agreement”).

 

E.                                     In connection with the Offerings, DPF Advisor pays certain Dealer Manager personnel related costs (the “Facilitation Costs”), which are not reimbursed to DPF Advisor or Dealer Manager by BCX Sponsor, the Operating Partnership or DPF under the Advisory Agreement or the Dealer Manager Agreement.

 

F.                                      Under the terms of future Offerings, the Property Supplements for which are dated on or after August 1, 2018 (“Future Offerings”), BCX Sponsor may receive a fee, paid via a mark-up on the total equity amount paid for the Interests, in the form of a non-accountable fee of up to 1.5% of the total equity amount paid for the Interests (the “Facilitation Fee Mark-Up”).  The BCX Sponsor has discretion to reduce or waive the Facilitation Fee Mark-Up.

 

 

G.                                 In consideration of DPF Advisor’s payment of the Facilitation Costs, BCX Sponsor wishes to pay DPF Advisor a fee in an amount equal to the Facilitation Fee Mark-Up received by BCX Sponsor (the “Facilitation Fee”).

 

NOW THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt whereof and sufficiency of which are hereby acknowledged, BCX Sponsor and DPF Advisor hereby agree as follows:

 

1.                                      Facilitation Fees.  With respect to Future Offerings only, in consideration of DPF Advisor’s payment of the Facilitation Costs, BCX Sponsor agrees to pay DPF Advisor the Facilitation Fee.

 

2.                                      No Reduction of Amounts Due Under Advisory Agreement.  Notwithstanding anything contained herein to the contrary, payment of the Facilitation Fee will not reduce any fees or other expense reimbursements otherwise payable to DPF Advisor or its affiliates under the Advisory Agreement.

 

3.                                      Termination.  This Agreement may be terminated by any of the parties upon 10 days’ advance written notice.  Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination or non-renewal of the Advisory Agreement. After the date of termination of this Agreement (the “Termination Date”), DPF Advisor shall not be entitled to the Facilitation Fees as set forth herein, except that, in recognition of Facilitation Costs that may already have been expended, it shall be entitled to continue to receive Facilitation Fees (within 30 days after such Facilitation Fees actually are received by BCX Sponsor) after the Termination Date solely with respect to those Offerings with a Property Supplement first dated before the Termination Date (the “Existing Offerings”), and (ii) the BCX Sponsor will not reduce or waive the Facilitation Fee Mark-Up with respect to any Existing Offerings without the prior written consent of the DPF Advisor.  DPF Advisor shall cooperate with BCX Sponsor to provide an orderly management transition.  This Section 3 shall survive termination of this Agreement.

 

4.                                      Notices. All notices, demands, consents, approvals, requests or other communications which any of the parties to this Agreement may desire or be required to give hereunder shall be in writing and shall be sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the party for whom it is intended at its address as follows:

 

	
If to DPF   Advisor:
    	
 
    	
518 Seventeenth Street, 17th Floor
    
	
 
    	
 
    	
Denver, Colorado 80202
    
	
 
    	
 
    	
Attention: Evan H. Zucker
    
	
 
    	
 
    	
 
    
	
with a courtesy copy   to:
    	
 
    	
518 Seventeenth Street, 17th Floor
   Denver, Colorado 80202
   Attention: Joshua J. Widoff, Esq.
    
	
 
    	
 
    	
 
    
	
If to BCX Sponsor:
    	
 
    	
518 Seventeenth Street, 17th Floor
    
	
 
    	
 
    	
Denver, Colorado 80202
    
	
 
    	
 
    	
Attention: Lainie P. Minnick
    

 

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with a courtesy copy   to:
    	
 
    	
Seyfarth Shaw LLP
   233 S. Wacker Drive, Suite 8000
   Chicago, Illinois 60606-6448
   Attention: Steven Meier, Esq.
    
	
 
    	
 
    	
 
    
	
with a courtesy copy   to:
    	
 
    	
DLA Piper LLP
   4141 Parklake Avenue, Suite 300
   Raleigh, NC 27612-2350
   Attention: Christopher R. Stambaugh, Esq.
    
	
 
    	
 
    	
 
    
	
with a courtesy copy   to:
    	
 
    	
518 Seventeenth Street, 17th Floor
    
	
 
    	
 
    	
Denver, Colorado 80202
    
	
 
    	
 
    	
Attention: Joshua J. Widoff, Esq.
    

 

5.                                      Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute but one and the same agreement.

 

6.                                      Further Assurances. Each party shall execute and deliver to the other all such further instruments as may be reasonably requested to make effective any provision of this Agreement.

 

7.                                      Attorney Fees. If any of the parties obtains a judgment or arbitration award against any other party by reason of the breach of this Agreement or the failure to comply with the terms hereof, reasonable attorneys’ fees and costs as fixed by the court or arbitrator shall be included in such judgment.

 

8.                                      Captions/Pronouns. All titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision in this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, and neuter, singular and plural, as the identity of the party or parties may require.

 

9.                                      Assignment. This Agreement may be assigned by DPF Advisor in accordance with the terms of the Advisory Agreement. This Agreement shall not be assigned by Sponsor without the consent of DPF Advisor, except in the case of an assignment by Sponsor to a corporation, limited partnership or other organization which is a successor to all of the assets, rights and obligations of Sponsor, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as Sponsor are bound by this Agreement.

 

10.                               Extension Not a Waiver. No delay or omission in the exercise of any power, remedy or right herein provided or otherwise available to each of the parties to this Agreement shall impair or affect the right of any such party thereafter to exercise the same. Any extension of time or other indulgence granted to a party hereunder shall not otherwise alter or affect any power, remedy or right of any other party, or the obligations of the party to whom such extension or indulgence is granted.

 

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11.                               Severability. In case any one or more of the provisions contained in this Agreement or any application thereof shall be invalid, illegal or unenforceable in any respect, such provision shall be reformed and enforced to the maximum extent permitted by law. If such provision cannot be reformed, it shall be stricken and the validity, legality and enforceability of the remaining provisions contained herein and other application thereof shall not in any way be affected or impaired thereby.

 

12.                               Amendment. Amendments, variations, modifications or changes herein may be made effective and binding upon the parties by, and only by, the setting forth of same in a document duly executed by BCX Sponsor and DPF Advisor, and any alleged amendment, variation, modification or change herein which is not so documented shall not be effective as to any party.

 

13.                               Governing Law. This Agreement was executed and delivered in, and its validity, interpretation and construction shall be governed by, the laws of the State of Colorado; provided, however, that causes of action for violations of federal or state securities laws shall not be governed by this Section.

 

14.                               WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF MATTERS RELATED TO THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

15.                               Arbitration. Any dispute, controversy or claim arising between the parties relating to this Agreement (whether such dispute arises under any federal, state or local statute or regulation, or at common law), shall be resolved by final and binding arbitration administered by the Judicial Arbiter Group (“JAG”) in Denver, Colorado, before a mutually-agreed representative of JAG, in accordance with its commercial mediation rules then in effect, and the parties agree to abide by all awards rendered in such proceedings. The parties shall attempt to designate one arbitrator from JAG, but if they are unable to do so, then JAG shall designate an arbitrator. Any arbitrator selected by the parties or JAG shall be a qualified person who has experience with complex commercial disputes. The arbitration shall be final and binding, and enforceable in any court of competent jurisdiction. All awards may be filed with the clerk of one or more courts, state or federal, having jurisdiction over the party against whom such award is rendered or his or her property, as a basis of judgment and of the issuance of execution for its collection.

 

16.                               Extension for Non-Business Days. Notwithstanding anything herein to the contrary, if the date for performance of any obligation under this Agreement falls on a Saturday, Sunday or federal holiday, performance shall be deemed to be required only on the first day thereafter which is not a Saturday, Sunday or federal holiday.

 

17.                               Effective Date. BCX Sponsor and DPF Advisor agree that this Agreement shall be effective as of the date hereof.

 

[remainder of page intentionally left blank]

 

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

 

 

	
 
    	
BLACK CREEK EXCHANGE LLC, a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: BCD TRS Corp., a Delaware corporation, its sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: Black Creek Diversified Property Operating Partnership LP, a Delaware   limited partnership, its sole shareholder
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: Black Creek Diversified Property Fund Inc., a Maryland corporation,   its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lainie P. Minnick
    
	
 
    	
 
    	
Name: Lainie P. Minnick
    
	
 
    	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BLACK CREEK DIVERSIFIED PROPERTY ADVISORS LLC, a Delaware limited   partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: Black Creek Diversified Property Advisors Group LLC, its Sole Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Evan H. Zucker
    
	
 
    	
 
    	
Name: Evan H. Zucker
    
	
 
    	
 
    	
Title: Manager
    

 

[Signature Page to Agreement]Exhibit 10.5

 

AMENDMENT TO AGREEMENT

 

THIS AMENDMENT TO AGREEMENT (this “Amendment”) is dated to be effective for all purposes as of March 1, 2018 (the “Effective Date”) and is entered into by and between BC Exchange Manager LLC, a Delaware limited liability company (“BC Manager”) and BC Exchange Advisor LLC, a Delaware limited liability company (“BC Advisor”) with reference to the following facts:

 

A.                                                The BC Manager and BC Advisor entered into that certain Agreement dated as of September 1, 2017 (the “Agreement”).

 

B.                                                The Sponsor has elected to modify the terms of the Offering to offer carry-back debt financing (each a “Loan” and collectively, the “Loans”) to certain prospective investors who desire such debt in order to avoid “boot” in connection with their acquisition of Interests in connection with a 1031 tax-deferred exchange.  The Loans will be made by a newly formed entity, which will be affiliated with the Sponsor.

 

C.                                                In connection with the provision of each Loan, the modified Offering will provide that investors pay to BC Manager, or a wholly-owned subsidiary thereof, a loan origination fee in an amount to be determined by BC Manager (the “Loan Origination Fee”) which Loan Origination Fee is not expected to exceed 75 basis points of the original principal amount of the Loan.

 

D.                                                The BC Manager and BC Advisor desire to modify and amend the Agreement to reflect that, in light of certain additional Services that will be required in connection with each Loan (the “Debt Services”), including, without limitation, credit underwriting, documentation, closing services, and other coordination, all of which will be provided by BC Advisor or a wholly-owned affiliate thereof, which in and of itself is an affiliate of the Advisor, the Loan Origination Fee will be part of the Fees assigned and transferred to BC Advisor.

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt whereof and sufficiency of which are hereby acknowledged, BC Manager and BC Advisor hereby agree as follows:

 

1.                                      Scope of First Amendment; Defined Terms; Incorporation of Recitals.  Except as expressly provided in this Amendment, the Agreement shall remain in full force and effect in all respects and the term “Agreement” shall mean the Agreement as modified by this Amendment.  Capitalized terms used but not otherwise defined in this Amendment have the respective meanings given to them in the Agreement.  The preamble and recitals set forth above are hereby incorporated into this Amendment by this reference in their entirety.

 

2.                                      Modifications and Amendments to Agreement.  The Agreement is amended such that all references to “Services” shall be deemed to include the Debt Services.  The Agreement is further amended such that all references to “Fees” shall be deemed to include the Loan Origination Fee.

 

 

3.                                      Ratification.  As amended hereby the Agreement is hereby ratified and shall remain in full force and effect.

 

4.                                      Governing Law; Venue.  This Amendment shall be construed and governed by the laws of the state of Colorado, without giving effect to the conflict of law principles of such state.  Except to the extent required otherwise by applicable law, the venue for any action relating to this Amendment shall be brought solely and exclusively in Denver, Colorado.  Each party hereto hereby consents to jurisdiction and venue in such courts.

 

5.                                      Authority.  This Amendment shall be binding upon and inure to the benefit of the parties, their respective heirs, legal representatives, successors and assigns. Each party hereto warrants that the person signing below on such party’s behalf is authorized to do so and to bind such party to the terms of this Amendment.

 

6.                                      Attorney’s Fees. In the event of any dispute arising hereunder, the substantially prevailing party shall recover its reasonable attorneys’ fees, costs, and disbursements, including the cost of reasonable investigation, preparation, and professional consultation incurred in connection with such dispute. The obligations of the parties set forth in this Section 6 shall survive the expiration or earlier termination of this Amendment.

 

7.                                      Entire Agreement; No Amendment.  This Amendment constitutes the entire agreement and understanding between the parties with respect to the subject of this amendment and shall supersede all prior written and oral agreements concerning this subject matter.  This Amendment may not be amended, modified or otherwise changed in any respect whatsoever except by a writing duly executed by authorized representatives of BC Manager and BC Advisor.  Each party acknowledges that it has read this Amendment, fully understands all of this Amendment’s terms and conditions, and executes this Amendment freely, voluntarily and with full knowledge of its significance.  Each party to this Amendment has had the opportunity to receive the advice of counsel prior to the execution hereof.

 

8.                                      Severability.  If any provision of this Amendment or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Amendment and the application of such provision to other persons or circumstances, other than those to which it is held invalid, shall not be affected and shall be enforced to the furthest extent permitted by law.

 

9.                                      Counterparts; PDF.  This Amendment may be executed in counterparts, and each counterpart shall constitute one agreement binding on all parties hereto, notwithstanding that all of the parties are not signatory to an original or same counterpart.  The parties agree that signatures transmitted electronically via pdf attachment shall be binding as if they were original signatures.

 

10.                               Captions and Headings.  The titles or headings of the various paragraphs hereof are intended solely for convenience of reference and are not intended and shall not be deemed to modify, explain or place any construction upon any of the provisions of this Amendment.

 

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as of the date first above written.

 

	
BC EXCHANGE MANAGER LLC,
    	
 
    
	
A Delaware limited   liability company
    	
 
    
	
 
    	
 
    
	
By:
    	
Black Creek Diversified   Property Operating Partnership LP,
    	
 
    
	
 
    	
A Delaware limited   partnership, its sole member
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Black Creek Diversified   Property Fund Inc.,
    	
 
    
	
 
    	
 
    	
A Maryland corporation,   its general partner
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Lainie P. Minnick
    	
 
    
	
 
    	
 
    	
 
    	
Lainie P. Minnick,   Chief Financial Officer
    	
 
    
	
 
    	
 
    
	
BC EXCHANGE ADVISOR LLC,
    	
 
    
	
A Delaware limited   liability company
    	
 
    
	
 
    	
 
    
	
By: BC Exchange Advisor   Group LLC,
    	
 
    
	
a Delaware limited   liability company, its sole member
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Evan H. Zucker
    	
 
    
	
 
    	
 
    	
Evan H. Zucker, Manager
    	
 
    

 

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