Inland Residential Properties Trust Commences Offering of Class T-3 Shares
February 3, 2017 | James Sprow | Blue Vault
On February 2, 2017, Inland Residential Properties Trust, Inc. (“the Company”) commenced the offering of an additional class of common stock, Class T-3 common stock. In connection with the offering of Class T-3 Shares, on February 2, 2017, the Company entered into a Third Amended and Restated Dealer Manager Agreement with Inland Securities Corporation.
Class T-3 Shares are subject to selling commissions of 3.0% of the selling price per Class T-3 Share sold, or approximately $0.72 per Class T-3 Share, and a dealer manager fee of 2.5% of the selling price per Class T-3 Share sold, or approximately $0.60 per Class T-3 Share. The Company will also pay a distribution and stockholder servicing fee, subject to certain limits, in an annual amount equal to 1.0% of the offering price per Class T-3 Share (or, once reported, the per share estimated value of Class T-3 Shares), payable on a monthly basis in arrears. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T-3 Shares held in any particular account on the earliest to occur of the following:
- a listing of the shares of Class A common stock on a national securities exchange;
- a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets;
- the end of the month in which the Dealer Manager determines that total underwriting compensation paid in the primary offering plus the distribution and stockholder servicing fee paid on all Class T-3 Shares sold in the primary offering is equal to 10% of the gross proceeds of the primary offering; and
- the end of the month in which the underwriting compensation paid in the primary offering on the Class T-3 Shares plus the distribution and stockholder servicing fee paid with respect to the Class T-3 Shares held by a stockholder within his or her particular account equals 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Dealer Manager and the soliciting dealer in effect at the time Class T-3 Shares were first issued to such account sets forth the lower limit and the Dealer Manager advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class T-3 Shares.
The Company’s board of directors (the “Board”) approved the Fourth Amended and Restated Distribution Reinvestment Plan (the “Fourth A&R DRP”) to include references to Class T-3 Shares, in conjunction with the decision to offer Class T-3 Shares. The Fourth A&R DRP will be effective as of February 17, 2017. For holders of Class T-3 Shares who elect to participate in the Fourth A&R DRP, distributions paid on Class T-3 Shares will be used to purchase additional Class T-3 Shares. The price per share for Class T-3 Shares purchased under the Fourth A&R DRP on any distribution payment date will be equal to $22.81 per Class T-3 Share until the earlier of the change of the public offering price in a public “reasonable best efforts” offering of the Company’s Class T-3 Shares from $24.14 per Class T-3 Share, if there is a change, and termination of any “reasonable best efforts” public offering of the Company’s Class T-3 Shares, unless followed by a subsequent “reasonable best efforts” public offering of Class T-3 Shares. A copy of the Fourth A&R DRP is attached as Exhibit 4.2 hereto.
The Board also approved the First Amendment to the Amended and Restated Share Repurchase Program to include references to Class T-3 Shares, in conjunction with the decision to offer Class T-3 Shares. The First Amendment to SRP will be effective as of March 9, 2017. Under the First Amendment to SRP, the Company is authorized, in its discretion, to purchase shares from stockholders who have held their shares for at least one year, if requested. The repurchase price for ordinary repurchases will be $21.61 per Class T-3 Share until the initial valuation date, and thereafter the repurchase price will be 96.0% of the most recent estimated value per Class T-3 Share reported by the Company. In the case of exceptional repurchases, the Company may repurchase shares at a repurchase price equal to $22.51 per Class T-3 Share until the initial valuation date, and thereafter the repurchase price will be equal to the most recent estimated value per Class T-3 Share reported by the Company. Pursuant to the First Amendment to SRP, the Company will limit the number of shares repurchased during any calendar year to 5% of the aggregate number of shares of Class A, Class T and Class T-3 common stock outstanding on December 31st of the previous calendar year.
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