CAREY WATERMARK INVESTORS INCORPORATED UP TO 100,000,000 SHARES OF COMMON STOCK SELECTED DEALER AGREEMENT October 7, 2010
Exhibit 10.12
XXXXX WATERMARK INVESTORS INCORPORATED
UP TO 100,000,000 SHARES OF COMMON STOCK
October 7, 2010
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Ameriprise Financial Services, Inc.
000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Each of Xxxxx Watermark Investors Incorporated, a Maryland corporation (the “Company”), Xxxxx
Financial, LLC, a Delaware limited liability company (the “Dealer Manager”) Xxxxx Lodging
Advisors, LLC, a Delaware limited liability company (the “Advisor”), and W. P. Xxxxx & Co. LLC, a
Delaware limited liability company (the “Sponsor”) (collectively, the “Issuer Entities”) and CWA,
LLC, an Illinois limited liability company (the “Sub-Advisor”), 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 between the Issuer Entities, the Sub-Advisor and Ameriprise whereby
Ameriprise will offer and sell on a best efforts basis for the account of the Company a maximum of
$1,237,500,000 in shares of common stock (the “Common Stock”), par value $.001 per share (each a
“Share,” and collectively, the “Shares”), (including $1,000,000,000 in Shares to be offered in the
primary offering (the “Primary Offering”) and $237,500,000 in Shares to be offered pursuant to the
Company’s Distribution Reinvestment Plan (“DRIP”)) 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”). 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 Issuer Entities.
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:
(b) 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.
333-149899), for the registration of up to $1,237,500,000 in Shares 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 of such Rules 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
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Registration Statement”), the term “Registration Statement” shall refer to
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 refer to 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.
(c) 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 is effective in the
states indicated in the Blue Sky Memorandum (defined in Section 5(d) herein), as updated from time
to time pursuant to the terms of Section 5(d). Neither the Commission nor any such 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 XXXXX, except to
the extent permitted by Regulation S-T.
(d) 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 Companyis duly qualified to do business as a foreign corporation, , 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.
(e) The Shares. The Shares, when issued, will be duly and validly issued, 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.
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(f) 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.
(g) 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 (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 (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 Company and the
Advisor with its 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
Repayments 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.
(h) 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 in the Prospectus present fairly in all material respects the financial position of
the Company, its consolidated subsidiaries and each such Acquired Entity, 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
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Regulation S-X promulgated by the
Commission. PricewaterhouseCoopers LLP, 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
accountant 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 the information shown therein and have been
compiled on a basis consistent with that of the audited 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 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 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.
(i) 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 “Appendix A — Prior Performance
Tables” (the “Prior Performance Tables”) present fairly in all material respects the financial
information required to be included therein by Item 8 of 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 with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the
Securities Act, to the extent applicable.
(j) 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 cash distributions on the Common
Stock, there has been no distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(k) 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.
(l) 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
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Agreements, the Advisory Agreement and Section 8 of this Agreement, as applicable, may be limited
under applicable securities laws.
| (m) | The Advisor. | ||
| (i) | The Advisor has been duly organized 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 partnership 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. | ||
| (ii) | The Advisor is 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 it is engaged and which the Advisor deems adequate; all policies of insurance insuring the Advisor or its business, assets, employees, officers and trustees, including the Advisor’s employees and officers errors and omissions insurance policy, are in full force and effect; the Advisor is in compliance with the terms of such policy in all material respects; and there are no claims by the Advisor under any such policy as to which any insurance company is denying liability or defending under a reservation of rights clause; the Advisor has not been refused any insurance coverage sought or applied for; and the Advisor has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be 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 Advisor and its subsidiaries, 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 (exclusive of any supplement thereto). Advisor carries, or is covered by, insurance, including, at a minimum, errors and omissions insurance, in such amounts and covering such risks as is adequate for the conduct of its businesses and the value of its properties and as is customary for companies engaged in similar industries. All policies of insurance insuring the Advisor or its respective businesses, assets, employees, partners, officers and directors are in full force and effect, and the Advisor is in compliance with the terms of such policies in all material respects. There are no claims by the Advisor under any such policy or instrument as to which an insurance company is denying liability or defending under a reservation of rights clause. | ||
| (iii) | The Advisor has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Registration Statement, the Prospectus and under this Agreement and the Advisory Agreement. | ||
| (iv) | The Advisor maintains a system of internal controls sufficient to provide reasonable assurance that (a) transactions effectuated by it under the Advisory Agreement are executed in accordance with its management’s general or specific authorization; and (b) access to the Company’s assets is permitted only in accordance with its management’s general or specific authorization. |
(n) The Dealer Manager. The Dealer Manager has been duly incorporated 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
Dealer Manager is duly qualified to do business as a foreign entity 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
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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 its taxable year ending
December 31, 2010, the Company has been organized and has operated in conformity with the
requirements for qualification as a real estate investment trust under the Code and its actual
method of operation has enabled it and its proposed method of operation as described in the
Prospectus will enable it to continue to meet the requirements for qualification and taxation as a
real estate investment trust under the Code.
(q) Xxxxx-Xxxxx-Xxxxxx Act and USA Patriot Act. The Company complies in all material respects
with applicable privacy provisions of the Xxxxx-Xxxxx-Xxxxxx 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, prior
to use. Any required consent and authorization has been obtained for the use of any trademark or
service xxxx 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 capital stock 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 amendment to the
Registration Statement, as applicable, are the subsidiaries listed on Exhibit 21 to the
Registration Statement or such amendment to the Registration Statement.
(t) No Pending Action. There is no action, suit or proceeding pending, or, to the knowledge
of
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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 such as have been already made or obtained under the
Securities Act, the Exchange Act, the rules of FINRA, including NASD rules, or the securities laws
of the states indicated in the Blue Sky Memorandum (defined in Section 5(d) of this
Agreement).
(w) Possession of Licenses and Permits. The Company and its subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them (except such Governmental Licenses, the
failure of which to possess, would not reasonably be expected to have a Material Adverse Effect),
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 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, 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
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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 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 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 material with respect to the Company and its subsidiaries
taken as a whole; (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.
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(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 and its subsidiaries are 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 extended
coverage hazard and casualty insurance carried by either the tenant or the Company 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 either the tenant or 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 or loss payee 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 that would
reasonably be expected to have a Material Adverse Effect or could result in a violation of any
applicable Environmental Laws, 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
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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 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 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. The
Company’s internal control over financial reporting is effective as of the end of its most recently
completed fiscal year and 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
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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 December 31, 2009.
(gg) Compliance with the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx 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. 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.
3. Representations and Warranties of the Sub-Advisor.
(a) Good Standing and Authority. The Sub-Advisor is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of Illinois with full
power and authority to conduct its business as described in the Prospectus. The Sub-Advisor is or
will be duly qualified to do business and is in good standing as a foreign limited liability
company in each other jurisdiction in which it owns or invests, or transacts business of a type
that would make such qualification necessary except where the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to have or result in a
Sub-Advisor Material Adverse Effect. The term “Sub-Advisor Material Adverse Effect” means 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 Sub-Advisor and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of business.
(b) Violations. The Sub-Advisor is not (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 organizational 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, loan or credit agreement, note, or other agreement or instrument to which the
Sub-Advisor is a party or by which it may be bound or to which any of its assets is subject (the
“Sub-Advisor 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 Sub-Advisor, except in the case of clauses (ii)
and (iii), where such conflict, breach, violation or default would not reasonably be expected to
have or result in, individually or in the aggregate, a Sub-Advisor Material Adverse Effect. The
execution, delivery and performance by the Sub-Advisor of the Sub-Advisory Agreement and any other
material agreements, and the consummation of the transactions contemplated herein and therein and
compliance by the Sub-Advisor with respect to its 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, individually or in the aggregate, and would not reasonably be expected to have or
result in a Sub-Advisor Material Adverse Effect, nor will such action result in any violation of the
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provisions of the charter or bylaws (or similar organizational document) of the Sub-Advisor, or
of any applicable law, rule, regulation, judgment, order, writ, or decree of any government,
governmental instrumentality, or court, domestic or foreign, having jurisdiction over the
Sub-Advisor, except for such violations that would not reasonably be expected to have or result in
a Sub-Advisor Material Adverse Effect. As used in this Section, 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 the Sub-Advisor.
(c) No Pending Action. Except as disclosed in the Prospectus, there is no action, suit or
proceeding pending, or, to the knowledge of the Sub-Advisor, threatened or contemplated before or
by any arbitrator, court or other government body, domestic or foreign, against or affecting the
Sub-Advisor or any subsidiary thereof which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which would reasonably be expected to have or
result in a Sub-Advisor Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the assets thereof or the consummation of the transactions
contemplated by this Agreement. The aggregate of all pending legal or governmental proceedings to
which the Sub-Advisor or any subsidiary thereof is a party or of which any of their respective
assets is the subject that are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, would not reasonably be expected to have or result
in a Sub-Advisor Material Adverse Effect or materially adversely affect other assets of the
Sub-Advisor or any subsidiary thereof, taken as a whole.
(d) Authorization of Agreement. This Agreement and the Sub-Advisory Agreement have been duly
and validly authorized, executed and delivered by the Sub-Advisor. The Sub-Advisor has full
limited liability company power and authority to enter into this Agreement and the Sub-Advisory
Agreement. The Sub-Advisory Agreement constitutes the valid, binding and enforceable agreement of
the Sub-Advisor, except to the extent that (i) enforceability may be limited by (a) the effect of
bankruptcy, insolvency or similar laws now or hereinafter in effect relating to or affecting
creditors’ rights generally or (b) the effect of general principles of equity; or (ii) the
enforceability of the indemnification and/or contribution provisions contained in the Sub-Advisory
Agreement may be limited under applicable securities laws.
(e) Possession of Licenses and Permits. The Sub-Advisor possesses such
Governmental Licenses issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it, except such Governmental
Licenses, the failure of which to possess, would not reasonably be expected to have or result in a
Material Adverse Effect, and the Sub-Advisor is 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 the Sub-Advisor has not received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses.
(f) Foreign Corrupt Practices Act. Neither the Sub-Advisor nor, to the knowledge of the
Sub-Advisor, any director, officer, agent, employee or affiliate of the Sub-Advisor is aware of or
has taken any action, directly or indirectly, that would result in a violation by such persons of
the FCPA, including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce in furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or authorization of the giving of
anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political office, in contravention
of the FCPA and the Sub-Advisor, and, to the knowledge of the Sub-Advisor, its affiliates have
conducted their businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.
(g) Insurance. The Sub-Advisor is insured by insurers of recognized financial responsibility
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against such losses and risks and in such amounts as are prudent and customary in the businesses in
which it is engaged and which the Sub-Advisor deems adequate; all policies of insurance insuring
the Sub-Advisor or its business, assets, employees, officers and trustees, including the
Sub-Advisor’s employees and officers errors and omissions insurance policy, are in full force and
effect; the Sub-Advisor is in compliance with the terms of such policy in all material respects;
and there are no claims by the Sub-Advisor under any such policy as to which any insurance company
is denying liability or defending under a reservation of rights clause; the Sub-Advisor has not
been refused any insurance coverage sought or applied for; and the Sub-Advisor has no reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Sub-Advisor Material Adverse Effect, except as set forth
in or contemplated in the Registration Statement and the Prospectus (exclusive of any supplement
thereto). Sub-Advisor carries, or is covered by, insurance, including, at a minimum, errors and
omissions insurance, in such amounts and covering such risks as is adequate for the conduct of its
businesses and the value of its properties and as is customary for companies engaged in similar
industries. All policies of insurance insuring the Sub-Advisor or its respective businesses,
assets, employees, partners, officers and directors are in full force and effect, and the
Sub-Advisor is in compliance with the terms of such policies in all material respects. There are
no claims by the Sub-Advisor under any such policy or instrument as to which an insurance company
is denying liability or defending under a reservation of rights clause.
(h) Financial Resources. The Sub-Advisor has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in the Registration
Statement, the Prospectus and under this Agreement and the Sub-Advisory Agreement.
(i) Registration Statement, Prospectus, and Amendments. The description of the Sub-Advisor,
its business, its fees, and the statements attributable to the Sub-Advisor, in the Registration
Statement and the Prospectus complied and comply in all material respects with the provisions of
the Securities Act and the Regulations and did not and will not contain an untrue statement of a
material fact necessary to make the statements therein (in the case of a prospectus, in light of
the circumstances under which they were made) not misleading.
(j) No Subsequent Material Events. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus through the date hereof, except as may
otherwise be stated in or contemplated by the Registration Statement and the Prospectus, there has
not been any Sub-Advisor Material Adverse Effect, whether or not arising in the ordinary course of
business.
(k) Internal Controls. The Sub-Advisor maintains a system of internal controls sufficient to
provide reasonable assurance that (i) transactions effectuated by it under the Sub-Advisory
Agreement are executed in accordance with its management’s general or specific authorization; and
(ii) access to the Company’s assets is permitted only in accordance with its management’s general
or specific authorization.
(l) Possession of Intellectual Property. The Sub-Advisor and its subsidiaries own or possess,
or can acquire on reasonable terms, adequate Intellectual Property necessary to carry on the
business now operated by them, and neither the Sub-Advisor 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 Sub-Advisor 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 have or result in a Sub-Advisor Material Adverse Effect.
(m) 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
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necessary or required for the performance by the Sub-Advisor of its obligations under
this Agreement and the Sub-Advisory Agreement in connection with the offering, issuance or sale of
the Common Shares or the consummation of the other transactions contemplated by this Agreement and
the Sub-Advisory Agreement except as specifically set forth in this Agreement or as have been
already made or obtained under the Securities Act, the Exchange Act, FINRA, or as may be required
under the securities laws of all 50 states, the District of Columbia, Guam and Puerto Rico.
(n) Finder’s Fees. Other than as contemplated by this Agreement, the Sub-Advisor has not
incurred any liability for any finder’s or broker’s fee, or agent’s commission in connection with
the execution and delivery of this Agreement or the consummation of the transactions contemplated
hereby.
(o) No Fiduciary Duty. The Sub-Advisor 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 Common 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, the Sub-Advisor or any other
person. Additionally, Ameriprise is not advising the Sub-Advisor or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Sub-Advisor
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 Sub-Advisor with respect thereto. Any review by
Ameriprise of the Sub-Advisor, 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 Sub-Advisor.
(p) Taxes. The Sub-Advisor 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 Sub-Advisor has paid
or provided for the payment of all taxes reflected on its tax returns and all assessments received
by the Sub-Advisor and each of its subsidiaries to the extent that such taxes or assessments have
become due, 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 or result in a
Sub-Advisor Material Adverse Effect. There are no audits, deficiencies, or assessments pending
against the Sub-Advisor or its subsidiaries relating to income taxes, except for such audits,
deficiencies, or assessments of immaterial amounts, which would not, individually or in the
aggregate, reasonably be expected to have or result in a Sub-Advisor Material Adverse Effect.
There are no transfer taxes or other similar fees or charges under federal law or the laws of any
state, or any political subdivision thereof, required to be paid in connection with the execution
and delivery of this Agreement. All material taxes that the Sub-Advisor is required to withhold or
collect have been duly withheld or collected.
4. 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 term
of this Agreement, 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”). Persons desiring to purchase Shares are required to (i) deliver to Ameriprise a
check in the amount of $10 per Share purchased (subject to certain volume discounts or other
discounts as described in the Prospectus, or such other per share price
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as may be applicable
pursuant to the DRIP) payable to Ameriprise, or (ii) authorize a debit of such amount to the
account such purchaser maintains with Ameriprise. 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. On a daily basis, Ameriprise shall transfer, via Federal Reserve bank wire, the total
amount debited from investor accounts for the purchase of Shares along with a list including the
name, address and telephone number of, the social security number or taxpayer identification number
of, the brokerage account number of (if applicable), the number of Shares purchased by, any
election to participate in the DRIP by, and the total dollar amount of investment by, each investor
on whose behalf checks are submitted or the wire transfer is made. Ameriprise also will forward
all Order Forms received by Ameriprise to the Company by the third business day following their
receipt in good order by Ameriprise. Ameriprise shall use its best efforts to wire such funds or
transmit checks to UMB Bank, N.A. until subscription proceeds reach $33,333,334.00 and thereafter
to Bank of the West (each of UMB Bank, N.A. and Bank of the West being an “Agent Bank”) not later
than noon of the next business day after receipt by Ameriprise from its customer of each Order Form
in good order. Ameriprise will advise the Agent Bank whether the funds Ameriprise is submitting are
attributable to individual retirement accounts, Xxxxx plans, or any other employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974 or from some other type
of investor. 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. Within 30 days
of receipt of an Order, the Company must accept or reject such Order. 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 and any interest earned
thereon 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 commercially
reasonable efforts 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 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 Section 12 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 “Selling Commission”) of seven percent (7.0%) of the
price of each Share ($0.70 per share) (except for Shares sold pursuant to the DRIP, for which no
Selling Commissions shall be paid) sold by Ameriprise; provided, however, that Ameriprise’s Selling
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Commission shall be reduced with respect to volume sales of Shares to qualifying purchasers (as
defined in the Prospectus) and as otherwise set forth in the “Plan of Distribution” section of the
Prospectus. In the case of such volume sales to qualifying purchasers, on orders of $500,001 or
more, Ameriprise’s Selling Commission shall be reduced by the amount of the Share purchase price
discount. In the case of such volume sales to qualifying purchasers, Ameriprise’s Selling
Commission will be reduced for each incremental share purchase by such qualifying purchasers where
Ameriprise serves as the selected dealer for such purchase, in the total volume ranges set forth in
the table below. Such reduced share price will not affect the amount received by the Company for
investment. The following table sets forth the reduced Share purchase price and Selling Commission
payable to Ameriprise:
| Selling Commission Per | ||||||||
| Share for Incremental | ||||||||
| For a “Single Purchaser” | Purchase Price Per Share to Investors | Share in Volume Discount | ||||||
$2,000 — 500,000 |
10.00 | 7.00 | ||||||
$500,001 — 1,000,000 |
9.90 | 6.00 | ||||||
$1,000,001 — 2,000,000 |
9.80 | 5.00 | ||||||
$2,000,001 — 3,000,000 |
9.70 | 4.00 | ||||||
$3,000,001 — 5,000,000 |
9.60 | 3.00 | ||||||
$5,000,001 and over |
Negotiable | Negotiable | ||||||
For example, a single purchaser would receive 55,050.5051 shares rather than 55,000 shares for
an investment of $550,000 and the selling commission would be $38,030. The discount would be
calculated as follows: On the first $500,000 of the investment there would be no discount and the
purchaser would receive 50,000 shares at $10 per share. On the remaining $50,000, the per share
price would be $9.90 and the purchaser would receive 5,050.5051 shares.
For purposes of determining investors eligible for volume discounts, investments made by
accounts with the same primary account holder, as determined by the account tax identification
number, may be combined. This includes individual accounts and joint accounts that have the same
primary holder as an individual account. Investments made through individual retirement accounts
may also be combined with accounts that have the same tax identification number as the beneficiary
of the individual retirement account. In the event Orders are combined, the commission payable
with respect to the subsequent purchase of Shares will equal the commission per share which would
have been payable in accordance with the table set forth above if all purchases had been made
simultaneously. Any reduction of the seven percent (7.0%) Selling Commission otherwise payable to
Ameriprise will be credited to the purchaser as additional Shares. Unless Ameriprise, on behalf of
purchasers, indicates that Orders are to be combined and provide all other requested information,
the Company will not be held responsible for failing to combine Orders properly.
As set forth in the Prospectus , the Company will not pay any selling commissions in
connection with: (1) the sale of shares to retirement plans of selected dealers, to selected
dealers themselves (and their employees), to IRAs and qualified plans of their registered
representatives or to any one of their registered representatives in their individual capacities
(and to each of their spouses, parents and minor children) and (2) the sale of the shares to
investors whose contracts for investment advisory and related brokerage services include a fixed or
“wrap” fee feature or other asset fee arrangement (other than a registered investment advisor
that is also registered as a broker-dealer, and provides financial planning services, and or agents
of such firm). The Company will also provide discounts in connection with certain other types of
sales, as specified in the Prospectus. The net proceeds to the Company will not be affected by any
such reduction in selling commissions or dealer manager fees.
Purchasers may submit requests in writing to Ameriprise to aggregate subscriptions, as part of
a combined order for purposes of determining the number of Shares purchased and the applicable
volume discount, provided that any such request must be submitted by Ameriprise to the Dealer
Manager
OC\1079834.2 Xxxxx Watermark Selected Dealer Agreement
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simultaneously with the subscription for shares to which the discount is to relate.
Ameriprise may make the request to the Dealer Manager on behalf of Ameriprise investors; provided,
that, approval of any such volume discounts for combined purchases shall be at the sole discretion
of the Dealer Manager and any such discount shall be prorated among the individual subscriptions
that were combined for the purchase.
The Dealer Manager will also re-allow to Ameriprise out of its three percent (3.0%) dealer
manager fee (the “Dealer Manager Fee”) a marketing fee of up to one and one-half percent (1.5%) of
the gross proceeds of each Share (except for Shares sold pursuant to the DRIP) sold by Ameriprise
(the “Marketing Fee”); provided however, the Company will not pay Ameriprise a Marketing Fee if the
aggregate underwriting compensation to be paid to all parties in connection with the Offering
exceeds the limitations prescribed by FINRA. The Dealer Manager, in its sole discretion, may pay
to Ameriprise out of the Dealer Manager Fee for technology costs; and other costs and expenses
associated with the primary offering, the facilitation of the marketing of our shares and the
ownership of such shares by the selected dealer. The Dealer Manager Fee may be waived in connection
with certain types of sales, as specified in the Prospectus.
No payment of Selling Commissions or the Marketing Fee will be made in respect of Orders (or
portions thereof) which are rejected by the Company. Selling Commissions and the Marketing Fee
will be paid following the week in which the subscriptions generating such commissions are accepted
by the Company. Selling Commissions and the Marketing Fee will be payable only with respect to
transactions lawful in the jurisdictions where they occur.— . Ameriprise hereby waives any and all
right to receive payment of commissions and any other payment due it until such time as the Dealer
Manager is in receipt of the associated commissions and other payment from the Company.
The Company will pay or cause to be paid to Ameriprise, the amount of any bona fide,
separately invoiced due diligence expense consistent with the language in the Prospectus and
applicable regulations.
Except for the 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, other than directly to the Company’s officers and directors, and agrees
that, through the Termination Date, the Company will not offer or sell any Shares 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
Agreementsexcept to the Company’s and its affiliates’ officers and directors, employees and family
members as set forth in 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 invoices under this
Agreement. However, the Issuer Entities may provide records to assist Ameriprise in its
calculations.
(f) Finders 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 potential investor to
purchase Shares; provided, however, that normal Selling Commissions payable to a registered
broker-dealer or other properly licensed person for selling Shares shall not be prohibited hereby.
5. 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
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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 Xxxxxxx & Xxxxxxxxx, Inc. shall so qualify),
in customary form naming the jurisdictions in which the Shares have been qualified for sale under
the respective securities laws of 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 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
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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.
(f) 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 or Quarterly Report on Form
10-Q or a supplement to the Prospectus containing the material information from such reports.
(g) Periodic Financial Information. On or prior to 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 Ameripriseconfirmed 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.
(h) 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 Ameripriseconfirmed 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) Copies of Reports. During the period the Shares remain outstanding, Ameriprise will be
furnished 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, two copies of each annual and interim financial or other
report provided to stockholders;
(ii) as soon as practicable, two copies 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 investorsand 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.
(j) 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
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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.
(k) Use of Proceeds. 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 accordance with the descriptions of its business set forth in the
Prospectus.
(l) 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.
(m) Financial Statements. 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. 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
OC\1079834.2 Xxxxx Watermark Selected Dealer Agreement
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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 wholesalers, shall comply 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, 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 of any changes to such policies.
(r) Trade Names and Trademarks. No Issuer Entity may use any company name, trade name,
trademark or service xxxx or logo of Ameriprise or any person or entity controlling, controlled by,
or under common control with Ameriprise without Ameriprise’s prior written consent. Such
trademarks include, without limitation, “Ameriprise,” Ameriprise Financial,” “Ameriprise Financial
Services,” and “Riversource.”
(s) Compliance Reporting. The Issuer Entities agree to furnish Ameriprise with such
information as Ameriprise may reasonably request concerning transactions and activity in investor
accounts containing Shares of the Company and will otherwise cooperate with Ameriprise connection
with the transmission of such information to Ameriprise order to assist Ameriprise in its
supervisory responsibilities as required by applicable laws and the rules and regulations of FINRA
or other regulatory agencies.
6. Covenants of Sub-Advisor. The Sub-Advisor covenants and agrees with Ameriprise
that the Sub-Advisor will not use any company name, trade name, trademark or service xxxx or logo
of Ameriprise or any person or entity controlling, controlled by, or under common control with
Ameriprise without Ameriprise’s prior written consent. Such trademarks include, without
limitation, “Ameriprise,” Ameriprise Financial,” “Ameriprise Financial Services,” and
“Riversource.”
7. 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, 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
OC\1079834.2 Xxxxx Watermark Selected Dealer Agreement
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Memorandum, and any updates thereto, delivered to Ameriprise pursuant to Section 5(d))
that such solicitations can be made and in which Ameriprise is qualified to so act.
8. Payment of Expenses.
(a) Expenses. Whether or not the transactions contemplated in this Agreement are consummated
or if this Agreement is terminated, the Company and/or the Dealer Manager, as designated in the
Prospectus, will pay or cause to be paid, in addition to the compensation described in Section 4(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; and (viii) subject to Section 8(c), and as
mutually agreed upon, Ameriprise’s costs of technology associated with the offering, other costs
and expenses related to such technology costs, and the facilitation of the marketing of the Shares
and the ownership of such Shares by Ameriprise’s customers; and (ix) 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. 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. Payment for Ad Hoc Requests will be separate from and above the payments
for the Services.
(c) Limitation. Notwithstanding the foregoing, the total compensation paid to Ameriprise from
the Issuer Entities in connection with the Offering pursuant to Section 4(d) hereof and this
Section 8 shall not exceed the limitations prescribed by FINRA. 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
could result in a violation of the applicable FINRA regulations, the Company shall promptly notify
Ameriprise, and the Company and Ameriprise agree to cooperate with each other to implement such
measures as they
OC\1079834.2 Xxxxx Watermark Selected Dealer Agreement
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determine are 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.
9. Conditions of Ameriprise’s Obligations. Ameriprise’s obligations hereunder shall
be subjectto 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, as a condition of Ameriprise’s obligations hereunder, those documents as
described in this Section 9 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
filed by the Company shall have been declared effective (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.
(c) Opinions of Counsel. Ameriprise shall receive the favorable opinion of:
(iv) Xxxxxxxx Chance US LLP, counsel for the Company, dated as of the date hereof or as of
each Documented Closing Date, as applicable, addressed to Ameriprise substantially in the form
attached hereto as Exhibit A.
(v) Xxxxxxx LLP, Maryland counsel for the Company, dated as of the date hereof or as of each
Documented Closing Date, as applicable, addressed to Ameriprise substantially in the form attached
hereto as Exhibit B.
(vi) Xxxx Xxxxx LLP, real estate counsel for the Company, dated as of the date hereof or as of
each Documented Closing Date, as applicable, addressed to Ameriprise substantially in the form
attached hereto as Exhibit C.
(vii) Xxxxx Xxxx & Xxxxxxxx, special counsel for the Advisor, dated as of the date hereof or
as of each Documented Closing Date, as applicable, addressed to Ameriprise substantially in the
form attached hereto as Exhibit D.
(viii) Ungaretti & Xxxxxx LLP, counsel for the Sub-Advisor, dated as of the date hereof or as
of each Documented Closing Date, as applicable, addressed to Ameriprise substantially in the form
attached hereto as Exhibit E.
(d) Accountant’s Letter. On the date hereof, Ameriprise shall have received from
PricewaterhouseCoopers LLP a comfort letter, in form and substance reasonably satisfactory to
Ameriprise in all material respects.
(e) Update of Accountant’s Letter. Ameriprise shall receive from Pricewaterhouse Coopers LLP
on each Documented Closing Date, a comfort letter, in form and substance reasonably satisfactory to
Ameriprise in all material respects, provided that (i) the date of such comfort letter shall be a
date not
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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 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, Ameriprise shall have received the
Blue Sky Memorandum described in Section 5(d) above.
(h) Information Concerning the Advisor. On the date hereofand as of each Documented Closing
Date, Ameriprise shall receive a letter dated the date hereof 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 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 partnership 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) Information Concerning the Sub-Advisor. On the date hereof and as of each Documented
Closing Date, Ameriprise shall receive a letter dated as of such date from the Sub-Advisor
confirming that: (1) the Sub-Advisory Agreement has been duly and validly authorized, executed and
delivered by the Sub-Advisor and constitutes a valid agreement of the Sub-Advisor enforceable in
accordance with its terms; (2) the execution and delivery of the Sub-Advisory Agreement, the
consummation of the transactions therein contemplated and compliance with the terms of the
Sub-Advisory Agreement by the Sub-Advisor will not conflict with or constitute a default under its
limited liability company agreement to which the Sub-Advisor is a party, or any law, order, rule or
regulation, writ, injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Sub-Advisor, except for such conflicts or
defaults that would not reasonably be expected to have or result in a Sub-Advisor 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 Sub-Advisory Agreement by the
Sub-Advisor, or for the consummation of the transactions contemplated thereby, other than those
that have already been made or obtained; and (4) the Sub-Advisor is a limited liability company
duly formed, validly existing and in good standing under the laws of the State of Illinois 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, except where the failure
to be so qualified or in good standing could not reasonably be expected to have or result in a
Sub-Advisor Material Adverse Effect.
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(j) 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 and the Sub-Advisor 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 and the Sub-Advisor 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 4(d), 8, , 10, 11 and 12 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.
10. 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,
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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 10 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 10(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
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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 the Sub-Advisor. The Sub-Advisor 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 provided by or
attributable to the Sub-Advisor contained 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; provided however that the
Sub-Advisor shall not 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 Sub-Advisor 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 the Registration Statement (or any
amendment thereto) or in the Prospectus (as from time to time amended or
supplemented) of a material fact provided by or attributable to the Sub-Advisor
required to be stated therein or necessary to make the statements therein not
misleading; provided however that the Sub-Advisor shall not 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 Sub-Advisor by Ameriprise
expressly for use in the Registration Statement or related preliminary prospectus or
Prospectus or any amendment or supplement thereof or in any such sales as the case
may be; and
(iii) the breach by the Sub-Advisor or any employee or agent acting on its
behalf, of any of the representations, warranties, covenants, terms and conditions
of this Agreement.
Notwithstanding the foregoing, no indemnification by the Sub-Advisor 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 10(b) 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.
(c) Indemnification by Ameriprise. Subject to the conditions set forth below, Ameriprise
agrees to indemnify 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
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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.
(d) 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 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
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 10 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.
(e) Contribution. Subject to the limitations and exceptions set forth in Section 10(a) hereof
and in order to provide for just and equitable contribution where the indemnification provided for
in this Section 10 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 from the Offering based
on the public offering price of the Shares sold and the Selling Commissions, Marketing Fees and due
diligence expense reimbursements received by Ameriprise 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
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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 Selling Commissions, Marketing Fees and due diligence expense reimbursements paid
to Ameriprise but before deducting expenses) received by the Company from the sale of Shares by
Ameriprise bears to (b) the Selling Commissions, Marketing Fees and due diligence expense
reimbursements retained by Ameriprise. 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 net aggregate Selling
Commissions, Marketing Fees, due diligence expense reimbursements and any other
compensation retained by Ameriprise 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.
11. Representations and Agreements to Survive. .
All representations and warranties contained in this Agreement or in certificates and all
agreements contained in Sections 4(d), 8, 10, 11 and 12 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.
12. 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 12(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
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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 12(a) or 12(b)
hereof, the Company shall pay all expenses of the Offering as required by Section 8 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 10 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 12,
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 12, the Company
shall notify Ameriprise promptly by telephone or facsimile with confirmation by letter.
13. 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 Xxxxx
Watermark Investors Incorporated, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention: General
Counsel, and if sent to Ameriprise shall be mailed, or personally delivered, to 000 Xxxxxxxxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, 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 13.
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 10 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) Any dispute between the parties concerning this Agreement not resolved between the parties
will be arbitrated in accordance with the rules and regulations of FINRA. 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.
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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. Facsimile signatures and signatures transmitted via
electronic mail (accompanied by a PDF scanned attachment) shall be as effective as original
signatures.
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:
Ameriprise Confidential Information.
(a) “Ameriprise Confidential Information” includes, but is not limited to, all proprietary and
confidential information of Ameriprise and its subsidiaries, affiliates, and licensees, including
without limitation all information regarding its customers and the customers of its subsidiaries,
affiliates, or licensees (together “Ameriprise Customers”); or the accounts, account numbers,
names, addresses, social security numbers or any other personal identifier of such Ameriprise
Customers; or any information derived therefrom. Ameriprise 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 an Issuer Entity , in violation of this
Agreement, (ii) demonstrably known to an Issuer Entity prior to execution of this Agreement, (iii)
independently developed by an Issuer Entity in the ordinary course of business outside of this
Agreement, or (iv) rightfully and lawfully obtained by an Issuer Entity from any third party other
than Ameriprise.
(b) No Issuer Entity may use or disclose Ameriprise Confidential Information for any purpose
other than to carry out the purpose for which Ameriprise Confidential Information was provided to
the Issuer Entities as set forth in the Agreement and/or as may otherwise be required or compelled
by applicable law, regulation or court order, and agrees to cause all the Issuer Entities’
employees, agents, representatives, or any other party to whom the Issuer Entities may provide
access to or disclose Ameriprise Confidential Information to limit the use and disclosure of
Ameriprise Confidential Information to that purpose. If any Issuer Entity is required or compelled
by applicable law, regulation or court order to disclose Ameriprise Confidential Information, the
Issuer Entity shall use its reasonable best efforts to notify Ameriprise of such requirement prior
to making the disclosure.
(c) The Issuer Entities agree to implement reasonable measures designed (i) to assure the
security and confidentiality of Ameriprise Confidential Information; (ii) to protect such
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, Ameriprise Confidential
Information that could result in substantial harm or inconvenience to any Ameriprise 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 Xxxxx-Xxxxx-Xxxxxx Act and Massachusetts
201 C.M.R. sections 17.00-17.04 as applicable ) and any other legal, regulatory or SRO
requirements. The Issuer Entities further agree to cause all of their respective agents,
representatives, subcontractors, or any other party to whom the Issuer Entities may provide access
to or disclose Ameriprise Confidential to implement appropriate measures designed to meet the
objectives set forth in this paragraph.
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(d) Upon Ameriprise’s request, the Issuer Entities shall promptly return Ameriprise
Confidential Information (and any copies, extracts, and summaries thereof) to Ameriprise , or, with
Ameriprise’s written consent, shall promptly destroy, in a manner satisfactory to Ameriprise, such
materials (and any copies, extracts, and summaries thereof) and shall further provide Ameriprise
with written confirmation of same.
18. Amendments. This Agreement shall only be amended upon written agreement executed by each
of the parties hereto.
19. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first set forth above.
| Xxxxx Watermark Investors Incorpoarted | ||||
| By: | /s/ Xxxxx X. Xxxx | |||
| Name: Xxxxx X. Xxxx | ||||
| Title: Managing Director | ||||
| Xxxxx Financial, LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: Xxxxxxx X. Xxxxx | ||||
| Title: General Counsel and Chief Compliance Officer | ||||
| Xxxxx Lodging Advisors, LLC | ||||
| By | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: Xxxxxx X. Xxxxxxxxx | ||||
| Title: Chief Operating Officer and Managing Director | ||||
| W. P. Xxxxx & Co. LLC | ||||
| By | /s/ Xxxx XxXxxxxxx | |||
| Name: Xxxx XxXxxxxxx | ||||
| Title: Chief Financial Officer | ||||
| CWA, LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
| Name: Xxxxxxx X. Xxxxxxxxx | ||||
| Title: | ||||
| Accepted as of the date first above written: | ||||
| AMERIPRISE FINANCIAL SERVICES, INC. | ||||
By:
|
/s/ Xxxxxxxx Xxxxx | |||
| Name: Xxxxxxxx Xxxxx | ||||
| Title: Vice President, Alternative Investments | ||||
OC\1079834.2 Xxxxx Watermark Selected Dealer Agreement
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