(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 our 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 (such amounts, “Loan Fees”). 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 (orthe 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 RestatedSub-Advisory Agreement
On April 29, 2019, the Advisor entered into a First Amended and RestatedSub-Advisory Agreement (the “AmendedSub-Advisory Agreement”) with SPCRE InPoint Advisors, LLC (the“Sub-Advisor”), which supersedes and replaces theSub-Advisory Agreement dated as of October 25, 2016, between the Advisor and theSub-Advisor (the “PreviousSub-Advisory Agreement”). Except as set forth below, the AmendedSub-Advisory Agreement is substantially similar to the PreviousSub-Advisory Agreement.
The AmendedSub-Advisory Agreement provides that theSub-Advisor will assist the Advisor in valuation, including engaging one or more third-party valuation services to independently validate the inputs and assumptions used in the valuation of the Company’s investments and to evaluate the reasonableness of the monthly NAV calculation. TheSub-Advisor shall be entitled to compensation based on formulas within the AmendedSub-Advisory Agreement. TheSub-Advisor may assign any of its rights to receive such compensation or other payments under the AmendedSub-Advisory Agreement to an affiliate. From and after the termination of the Company’s private placement of common stock, the Advisor andSub-Advisor shall have no obligation to pay or advance any issuer costs on behalf of the Company and any such issuer costs incurred thereafter shall be paid directly by the Company; provided, however, the parties shall remain liable for reimbursement or payment of their proportionate share of any such issuer costs solely to the extent such issuer costs exceed any applicable cap or limitation on the amount thereof.
Item 5.03. Amendments to Articles of Incorporation of Bylaws; Change in Fiscal Year.
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. The Articles of Amendment modify the aggregate par value of all authorized shares of stock from $500,000 to $3,050,000.
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.
The foregoing descriptions of the Articles of Amendment and Articles Supplementary are summaries only and are qualified in all respects by the provisions of the Articles of Amendment and Articles Supplementary, copies of which are attached hereto as Exhibit 3.1 and Exhibit 3.2 and are incorporated herein by reference.
