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InPoint Commercial Real Estate Income Reports Changes to Offering Agreements and Bylaws

May 3, 2019

InPoint Commercial Real Estate Income Reports Changes to Offering Agreements and Bylaws

April 30, 2019 | James Sprow | Blue Vault

On April 29, 2019, InPoint Commercial Real Estate Income entered into the Dealer Manager Agreement with Inland Securities Corporation pursuant to which the Dealer Manager will serve as the exclusive dealer manager for the Offering on a best efforts basis. Pursuant to the Dealer Manager Agreement, the Company will pay the Dealer Manager the following selling commissions: (a) up to 6.0% of the transaction price per Class A share sold in the primary offering; (b) up to 3.0% of the transaction price per Class T share sold in the primary offering; and (c) up to 3.5% of the transaction price per Class S share sold in the primary offering. The Company will not pay any selling commissions in respect of the purchase of any Class I shares, Class D shares, or shares sold pursuant to the DRP. The Company will pay the Dealer Manager the following dealer manager fees: (a) 1.25% of the transaction price per Class A share sold in the primary offering; and (b) 0.5% of the transaction price per Class T Share sold in the primary offering. The Company will not pay any dealer manager fees in respect of the purchase of any Class S shares, Class D shares, Class I shares, or shares sold pursuant to the DRP. The Company will pay the Dealer Manager the following stockholder servicing fees: (a) with respect to outstanding Class T shares, equal to 0.85% per annum of the aggregate net asset value (“NAV”) of outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of outstanding Class T shares; (b) with respect to outstanding Class S shares, equal to 0.85% per annum of the aggregate NAV of outstanding Class S shares; and (c) with respect to outstanding Class D shares, equal to 0.25% per annum of the aggregate NAV of outstanding Class D shares. The Company will not pay any stockholder servicing fees with respect to outstanding Class A or Class I shares of common stock.

Related: The Interesting Case of Highlands REIT-Part II in a Series on InvenTrust Properties Corporation

First Amended and Restated Advisory Agreement
On April 29, 2019, the Company and InPoint REIT Operating Partnership, LP entered into a First Amended and Restated Advisory Agreement with Inland InPoint Advisor, LLC, which supersedes and replaces the previous Advisory Agreement dated as of October 25, 2016, between the Company, the Operating Partnership and the Advisor. Except as set forth below, the Amended Advisory Agreement is substantially similar to the previous Advisory Agreement.

The Amended Advisory Agreement modifies the management fee payable to the Advisor. Prior to the date the Company discloses its net asset value (the “NAV Pricing Date”), the management fee shall be payable quarterly and shall equal 1.5% per annum of the gross value of the Company’s assets. Following the NAV Pricing Date, the management fee shall be payable monthly and shall equal 1.25% per annum of the gross value of the Company’s assets, provided that any such monthly payment shall not exceed 1/12th of 2.5% of the NAV. The performance fee payable to the Advisor remains unchanged from the previous Advisory Agreement. Pursuant to the Amended Advisory Agreement, following the NAV Pricing Date, the Advisor will receive all loan origination fees (whether paid upfront or upon payoff of all or any portion of a loan), application fees and future funding facility draw request fees related to any loan made by the Company or the Operating Partnership. Loan Fees will only be paid to the Advisor to the extent that they are paid by a borrower and generally will be paid directly from the borrower to the Advisor. To the extent any Loan Fees are paid to the Company, the Company will remit such fees to the Advisor. The Company will reimburse the Advisor for expenses it (or the sub-advisor acting on the Advisor’s behalf) incurs in providing services to the Company, provided that the Company (1) will not reimburse the Advisor for any of its overhead or personnel costs and (2) will only reimburse the Advisor for fees payable to its affiliates if they are incurred for legal or marketing services rendered on the Company’s behalf.

First Amended and Restated Sub-Advisory Agreement
On April 29, 2019, the Advisor entered into a First Amended and Restated Sub-Advisory Agreement with SPCRE InPoint Advisors, LLC (the “Sub-Advisor”), which supersedes and replaces the Sub-Advisory Agreement dated as of October 25, 2016, between the Advisor and the Sub-Advisor. Except as set forth below, the Amended Sub-Advisory Agreement is substantially similar to the Previous Sub-Advisory Agreement.

Amendments to Articles of Incorporation of Bylaws
On April 29, 2019, Articles of Amendment (the “Articles of Amendment”) were filed and accepted for record by the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”), and thereby became effective as part of the Company’s charter. The Articles of Amendment modify the number of shares the Company has authority to issue from 500,000,000, consisting of 450,000,000 Class P common shares and 50,000,000 shares of preferred stock, to 3,050,000,000, consisting of 3,000,000,000 Class P common shares and 50,000,000 shares of preferred stock.

On April 29, 2019, Articles Supplementary (the “Articles Supplementary”) were filed and accepted for record by the SDAT, and thereby became effective as part of the Company’s charter. The Articles Supplementary reclassify and designate: (i) 500,000,000 authorized but unissued Class P common shares as Class A common shares; (ii) 500,000,000 authorized but unissued Class P common shares as Class D common shares; (iii) 500,000,000 authorized but unissued Class P common shares as Class I common shares; (iv) 500,000,000 authorized but unissued Class P common shares as Class S common shares; and (v) 500,000,000 authorized but unissued Class P common shares as Class T common shares.

Source:  SEC

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