Exhibit 10.22
FIRST LOAN MODIFICATION AGREEMENT
THIS FIRST LOAN MODIFICATION AGREEMENT (this “Agreement”) is entered into as of March 9, 2023 (the “Modification Closing Date”), between INPOINT REIT OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Borrower”), and Western Alliance Bank, an Arizona corporation (“Lender”).
RECITALS
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
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“Borrowing Base” shall mean, with respect to Eligible Notes pledged as Collateral, the lesser of (i) an amount equal to the applicable percentage of the unpaid principal balance of those Collateral loans that are deemed to be Eligible Notes by Lender, in Lender’s reasonable judgment (“LTB”), or (ii) an amount equal to the applicable percentage of the appraised value (as reflected in the most recent appraisal of the underlying real property collateral delivered by Borrower to, and accepted and approved by, Lender) of the underlying real property collateral securing those Collateral loans that are deemed to be Eligible Notes by Lender, in Lender’s reasonable judgment (“LTV”), in any event in the aggregate up to the Maximum Amount, all as such applicable percentages and amounts are set forth in the table of Borrowing Base Limits and Sublimits attached hereto as Exhibit E.
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“Ineligible Collateral” means the following types of Collateral:
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“Maximum Amount” means $40,000,000.00 unless this amount is expressly reduced or increased under the terms of this Agreement, in which event it means such lower or higher amount.
“Promissory Note” means the promissory note, dated as of March 10, 2021 in the stated principal amount of the Maximum Amount, executed by Borrower and payable to the order of Lender, and all amendments, extensions, renewals, replacements, increases, and modifications thereof.
(f) Compensating Balances. In the event at any time the Borrower’s, Guarantor’s and their Affiliates’ average unrestricted aggregate deposit account balances with Lender, measured quarterly for the previous three (3) calendar months, are less than (i) $3,750,000.00 for the calendar quarter ending on June 30, 2023 or (ii) $5,000,000.00 commencing with the calendar quarter ending on September 30, 2023 and each calendar quarter thereafter , then the Stated Interest Rate set forth in the Promissory Note shall increase automatically by one-half of one percent (0.50%) per annum beginning the following quarter in which the compensating balances in this Section are not maintained. These deposit account balances will be tested quarterly and to the extent that the average unrestricted aggregate deposit account balances once again exceed $5,000,000.00, the interest rate shall be re-set to the Stated Interest Rate set forth in the Promissory Note.
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“Term SOFR Rate” means the 1-month Term SOFR Reference Rate (“Term SOFR”) which is published for loans in United States Dollars by CME Group Benchmark Administration Limited and is obtained by Lender from Bloomberg Financial Services Systems with the code SR1M (or, if no longer available, any similar or successor publication selected by Lender).
3. Stated Interest Rate. Except as provided in Section 4 below, the principal balance outstanding hereunder from time to time shall bear interest at the Stated Interest Rate. Except to the extent affected by Section 2.3(f) of the Loan Agreement, the “Stated Interest Rate” shall be equal to the greater of: (i) Term SOFR Rate plus three and one half of one percent (3.50%), which interest rate shall change when and as the Term SOFR Rate changes; or (ii) six percent (6.00%) per annum (the “Floor”).
The Term SOFR Rate shall initially be determined on the date of this Agreement and shall thereafter be adjusted monthly on the first day of each calendar month to be the Term SOFR determined by Lender to be in effect on such date. If Lender determines (which determination shall be conclusive absent manifest error) that either of the following has occurred: (i) Term SOFR ceases to exist or is no longer available; or (ii) a public announcement by the regulatory supervisor for the administrator of Term SOFR, or a determination made by Lender, that Term SOFR is no longer representative, then commencing on the next reset date, the interest rate hereunder shall be replaced with such alternate base rate and spread (collectively, “Benchmark Replacement”) as Lender determines in its sole
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discretion to be most comparable to the then-current interest rate. If the Benchmark Replacement as determined pursuant to this Section 3 would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Note and the other Loan Documents.
In connection with the implementation of a Benchmark Replacement, Lender will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Borrower. “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes, such as changes to the definitions of “Business Day,” “Interest Period,” or timing and frequency of determining rates and making payments of interest, that Lender decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if Lender determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Lender decides is reasonably necessary in connection with the administration of this Note and the other Loan Documents).
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All covenants, representations and warranties of Borrower herein are incorporated by reference and hereby made a part of the Loan Agreement and the Guaranty, as applicable.
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[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, Borrower and Lender have executed and delivered this Agreement as of the date set forth above.
BORROWER:
INPOINT REIT OPERATING PARTNERSHIP, LP, a Delaware limited partnership
By: InPoint Commercial Real Estate Income, Inc., a Maryland corporation, its general partner
By:
Name: Jason Fruchtman
Title: Authorized Signatory
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
[Signature Page to First Loan Modification Agreement]
LENDER:
WESTERN ALLIANCE BANK,
an Arizona corporation
By:
Name: Kenneth C. Hedberg
Title: Senior Vice President
[Signature Page to First Loan Modification Agreement]
SCHEDULE 1 TO FIRST LOAN MODIFICATION AGREEMENT
EXHIBIT E
BORROWING BASE AND SUBLIMITS
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CONSENT AND AGREEMENT OF GUARANTOR
With respect to the “First Loan Modification Agreement” dated effective March 9, 2023 (the “Agreement”), by and between (i) INPOINT REIT OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Borrower”), and (ii) WESTERN ALLIANCE BANK, an Arizona corporation, (“Lender”), the undersigned (“Guarantor”) agrees for the benefit of Lender as follows:
[SIGNATURES APPEAR ON THE FOLLOWING PAGES.]
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IN WITNESS WHEREOF, the undersigned Guarantor has executed this Consent dated effective as of the date first written above.
GUARANTOR:
INPOINT COMMERCIAL REAL ESTATE INCOME, INC., a Maryland corporation
By:
Name: Jason Fruchtman
Title: Authorized Signatory
[Signature Page to Consent and Agreement of Guarantor]