8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 20, 2020

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.(Exact Name of Registrant as Specified in Its Charter)

Maryland (State or other jurisdiction of incorporation)	000-55782 (Commission File Number)	32-0506267 (I.R.S. EmployerIdentification No.)
2901 Butterfield Road Oak Brook, Illinois		60523
(Address of principal executive offices)		(Zip Code)

(800) 826-8228

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act

☐ Soliciting material pursuant to Rule 14a‑12 under the Exchange Act

☐ Pre‑commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act

☐ Pre‑commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

ITEM 2.02.Results of Operations and Financial Condition

The information in Item 7.01 is incorporated by reference into this Item 2.02 and is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such act, nor shall any of such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 7.01.        Regulation FD Disclosure.

Furnished as Exhibits 99.1 and 99.2 to this Current Report, respectively, are a letter from InPoint Commercial Real Estate Income, Inc. (“we” or the “Company”) to the Company’s stockholders and presentation materials, both of which include updated information regarding the Company’s investment portfolio that is being shared with broker-dealers and financial advisors to the Company’s stockholders. The information contained in Exhibits 99.1 and 99.2 is incorporated into this Item 7.01 disclosure by reference.

The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filings made by the Company pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 8.01.        Other Events.

June 30, 2020 NAV per Share

We calculate NAV per share in accordance with the valuation guidelines that have been approved by our board of directors. Our NAV per share, which is typically updated as of the last calendar day of each month, is posted on our website at www.inland-investments.com/inpoint.Please refer to “Net Asset Value Calculation and Valuation Guidelines” in the prospectus dated May 3, 2019, as supplemented, for how our NAV is determined. Our advisor, Inland InPoint Advisor, LLC, is ultimately responsible for determining our NAV. The valuation of our commercial real estate loan portfolio is reviewed byour independent valuation advisor. We have included a breakdown of the components of total NAV and NAV per share as of June 30, 2020.

Our total NAV presented in the following table includes the NAV of our Class A, Class T, Class S, Class D, and Class I common stock sold in our public offering, as well as our Class P common stock, which was issued in our prior private offering.  As of June 30, 2020, we had not issued any Class S shares. The following table provides a breakdown of the major components of our total NAV as of June 30, 2020 ($ and shares in thousands, except per share data):

Components of NAV	June 30, 2020
Commercial mortgage loans	$	505,446
Real estate securities		73,903
Cash and cash equivalents and restricted cash		39,937
Other assets		6,548
Repurchase agreements - commercial mortgage loans		(327,928	)
Repurchase agreements - real estate securities		(45,328	)
Due to related parties		(1,988	)
Interest payable		(341	)
Accrued stockholder servicing fees (1)		(18	)
Other liabilities		(817	)
Net asset value	$	249,414
Number of outstanding shares		11,631
Aggregate NAV per share	$	21.4439

(1) Stockholder servicing fees only apply to Class T, Class S, and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. Under accounting principles generally accepted in the United States of America (“GAAP”), we accrue the full cost of the stockholder servicing fee as an offering cost at the time we sell Class T, Class S, and Class D shares. As of June 30, 2020, we have accrued under GAAP $723 of stockholder servicing fees payable to the dealer manager for our public offering (the “Dealer Manager”) related to the Class T and Class D shares sold. The Dealer Manager does not retain any of these fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers.

The following table provides a breakdown of our total NAV and NAV per share by share class as of June 30, 2020 ($ and shares in thousands, except per share data):

NAV Per Share	Class P		Class A		Class T		Class D		Class I		Total
Net asset value	$	217,633	$	14,043	$	8,535	$	1,076	$	8,129	$	249,414
Number of outstanding shares		10,152		654		397		50		378		11,631
NAV per share as of June 30, 2020	$	21.4379	$	21.4868	$	21.4857	$	21.4818	$	21.4874	$	21.4439

Although we have provided NAV per share for the above classes of our common stock, our public offering, including our distribution reinvestment plan, and our share repurchase plan remain suspended, as previously disclosed.  

Amendment and Restatement of Distribution Reinvestment Plan

On July 14, 2020, in anticipation of the potential future reinstatement of the distribution reinvestment plan, our board of directors approved an amended and restated distribution reinvestment plan (the “Amended DRIP”), which will become effective on August 7, 2020. The Company previously issued shares of common stock in a private offering, which are referred to as Class P shares. Pursuant to the Amended DRIP, stockholders who hold Class P shares may now elect to participate in the Amended DRIP, and cash distributions with respect to Class P shares will be applied to the purchase of Class I shares.

The foregoing description of the Amended DRIP does not purport to be complete and is subject to, and qualified in its entirety by, the Amended DRIP that is filed as Exhibit 99.3 to this Current Report on Form 8-K, which AmendedDRIP is incorporated herein by reference.

ITEM 9.01.        Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No. Description

99.1InPoint Commercial Real Estate Income, Inc. Letter to Stockholders

99.2Presentation Materials

99.3Amended and Restated Distribution Reinvestment Plan, effective August 7, 2020

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		INPOINT COMMERCIAL REAL ESTATE INCOME, INC.
Date:	July 20, 2020	By:	/s/ Mitchell A. Sabshon
			Mitchell A. Sabshon
			Chief Executive Officer

EX-99.1

Exhibit 99.1

 

July 20, 2020

Dear Fellow Stockholder:

On July 20, 2020, InPoint Commercial Real Estate Income, Inc. (“we,” “InPoint” or the “Company”) announced the following per share net asset values (“NAV”) for each class of our common stock as of    June 30, 2020. The NAV is net of any fees, commissions and expenses incurred in connection with the initial investment in each share class and is determined by Inland InPoint Advisor, LLC, our Advisor, with the assistance of SPCRE InPoint Advisors, LLC, our Sub-Advisor, in accordance with the valuation guidelines adopted by our board of directors (our “Board”). The NAV is posted on the Company’s website at inland-investments.com/inpoint and is expected to be updated monthly, as we resume our standard operations that were in place prior to the onset of the COVID-19 pandemic.

Class of Common Stock	NAV as of June 30, 2020
Class P	$21.4379
Class A	$21.4868
Class T	$21.4857
Class D	$21.4818
Class I	$21.4874

Market conditions in the U.S. remain difficult with high relative unemployment and deteriorating GDP due to the global COVID-19 pandemic. In the face of the severe economic effect of the pandemic and its impact on our NAV, we are pleased that all first mortgage loans in our portfolio, apart from one non-performing loan, continue to perform in accordance with current terms.

Despite recovery in some financial markets, the CMBS market is still facing dislocation. Forced selling, among other factors, has negatively impacted valuations and commercial property values have decreased from business closings, stay-at-home guidelines and social distancing around the country. If this moderates and valuations begin to recover, we hope to recapture a portion of the unrealized portfolio losses, potentially increasing NAV in the future. In addition, we have one non-performing loan that we have declared to be in default. We expect the remedy will result in our taking ownership of the property and that we will keep the property until the economy normalizes, during which time we hope to recover value in the asset.

With our portfolio showing some signs of recovering from the initial effects of the pandemic, our management anticipates recommending to the Board that a cash distribution be authorized for stockholders of record as of July 31, 2020, payable in August 2020. Please keep in mind that we cannot guarantee that our Board will authorize a cash distribution amidst the constant rapidly changing circumstances surrounding the pandemic. Ultimately, it is our goal to reinstate InPoint’s continuous public offering of shares of common stock, its share repurchase plan and its distribution reinvestment plan at the earliest prudent time.

Please note that, in addition to disclosing NAV per share and in anticipation of the potential future reinstatement of the distribution reinvestment plan, the Company has also amended and restated its distribution reinvestment plan effective August 7, 2020 (the “Amended DRIP”), which will permit Class P stockholders to reinvest their distributions into Class I shares. The Amended DRIP was included as an

exhibit to the Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission on July 20, 2020, which may be accessed via its website at sec.gov or on the Company’s website at inland-investments.com/inpoint/sec-filings.

As industry leading real estate and credit managers, the management of InPoint’s Advisor and Sub-Advisor have navigated multiple market cycles and disruptions while remaining committed to safeguarding investors’ capital. Thank you for your ongoing trust in our expertise. If you have questions, feel free to contact your financial advisor or our Inland Investor Services team at 800-826-8228.

We hope that you and your family are safe and healthy as the COVID-19 pandemic continues to evolve.

Sincerely,

InPoint Commercial Real Estate Income, Inc.

Mitchell Sabshon

Chief Executive Officer

Certain statements in this letter constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “may,” “could,” “should,” “expect,” “intend,” “plan,” “goal,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “variables,” “potential,” “continue,” “expand,” “maintain,” “create,” “strategies,” “likely,” “will,” “would” and variations of these terms and similar expressions indicate forward-looking statements.  These forward-looking statements reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not factual or guarantees of future performance, and we caution stockholders not to place undue reliance on them. Actual results may differ materially from those expressed or forecasted in forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those in the Risk Factors section in our most recent Annual Report on Form 10-K and in subsequent filings on Form 10-Q as filed with the Securities and Exchange Commission and made available on our website.  Forward-looking statements reflect our management’s view only as of the date of this letter and may ultimately prove to be incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

InPoint | Page 2

EX-99.2

InPoint Management and Portfolio Update July 20, 2020 Exhibit 99.2

Disclaimer and Forward Looking Statements For Institutional Use Only. Not for distribution to the public. This presentation is neither an offer to sell nor a solicitation of an offer to buy securities. Important Note Regarding Risks and Forward-Looking Statements: Certain statements in this communication and the related webinar and 8-K constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “may,” “could,” “should,” “expect,” “intend,” “plan,” “goal,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “variables,” “potential,” “continue,” “expand,” “maintain,” “create,” “strategies,” “likely,” “will,” “would” and variations of these terms and similar expressions indicate forward-looking statements. These forward-looking statements reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not factual or guarantees of future performance, and we caution stockholders not to place undue reliance on them. Actual results may differ materially from those expressed or forecasted in forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to those in the Risk Factors section in our most recent Annual Report on Form 10-K and in subsequent filings on Form 10-Q as filed with the Securities and Exchange Commission and made available on our website. Forward-looking statements reflect our management’s view only as of the date of these communications and may ultimately prove to be incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act. The Inland name is a registered trademark being used under license. This material has been distributed by Inland Securities Corporation, member FINRA/SIPC, dealer manager for InPoint Commercial Real Estate Income, Inc. Publication Date: 07/20/2020

Mitchell Sabshon President & CEO Inland Real Estate Investment Corporation Andrew Winer Portfolio Manager Sound Point Capital Management, LP Don MacKinnon Portfolio Manager Sound Point Capital Management, LP On Today’s Call

InPoint Investment Strategy InPoint launched in 2016 with an income and preservation of capital investment strategy Performed exactly as expected through February 2020, up until the U.S. economy reacted to the global Coronavirus pandemic in March 2020 Why did we suspend public offering? The speed and severity of the economic collapse, the uncertainty of the depth and length of the collapse as well as its immediate and long term impact on CRE in the U.S. Why is now the time to publish an NAV? The economy is opening and functioning The U.S. consumer is active and asset prices have stabilized and even rebounded in many instances. Commercial property prices, while they declined collectively by 11%1 in value since the onset of Covid-19, have stabilized New issue capital markets for CRE credit, while limited, have reopened since March and April 20202 A Quick Look Back 1 Green Street Advisors. 2 Commercial Mortgage Alert, July 10, 2020.

3/13/20 Par Balance Net Borrowed 1st Mortgages $530,281,401 $360,685,419 Mezzanine $26,500,000 0 CMBS $156,799,972 $113,147,959 REO* 0 0 Cash $42,044,513 0 Total $755,625,886 $473,833,378 6/30/20 Par Balance Net Borrowed 1st Mortgages $463,512,363 $327,994,863 Mezzanine $16,500,000 0 CMBS $92,993,701 $44,924,451 REO* $24,500,000 0 Cash $39,616,728 0 Total $637,122,792 $372,919,314 Assets & Liability Summary March 13, 2020 June 30, 2020* *The REO (real estate owned) loan type represents the $24.5 million 1st mortgage loan for a Chicago hospitality property. This loan is in default, and we expect we will take ownership of this property.

Summary of Portfolio Changes: March 13 – June 30 1st Mortgages No new loans have been closed since 2/28/2020 Two loans paid off prior to maturity Only one first mortgage loan defaulted; deed-in-lieu proceedings in process Credit Loans One $10 mil loan sold for 96.75% to provide liquidity to the portfolio CMBS Six positions were sold, resulting in approximately $19.3 mil of realized losses Leverage on CMBS allocation was reduced by $68 mil

West Mid Atlantic Office Southwest West Southeast Mid Atlantic Multifamily Hospitality Investments by Loan Type as of 6/30/20* Loan Type Par Balance % of Balance Avg LTV Levered Yield Mezz 16,500,000 2.8% 76.0% 12.5% CMBS 92,993,701 15.6% 53.9% 16.3% 1st Mortgage 463,512,363 77.6% 70.4% 14.4% REO* 24,500,000 4.1% N/A N/A Total 597,506,064 100% 68.1% 13.1% *The REO (real estate owned) loan type represents the $24.5 million 1st mortgage loan for a Chicago hospitality property. The loan is in default, and we expect we will take ownership of this property.

Investments by Region West Mid Atlantic Investments by Property Type Office Southwest West Southeast Mid Atlantic Rocky Mountain Multifamily Hospitality* Retail Mixed Use 1% Great Lakes Investment Overview as of 6/30/20* *Based on the par value of investments as of 6/30/2020. Investments by Region and Property Type do not include CMBS investments or the Chicago hospitality property in default. Subject to change without notice.

Class A Class T Class D Class I Class P NAV as of February 29, 2020 $25.0577 $25.0568 $25.0529 $25.0577 $25.0019 NAV as of June 30, 2020 $21.4868 $21.4857 $21.4818 $21.4874 $21.4379 Net Asset Value (NAV) Determination

Primary driver of the NAV Change was the net loss from 3/13/20 to 6/30/20: Realized loss on CMBS $19.3M 6% Unrealized loss on CMBS $18.7M 6% Loan Loss Reserve $5.8M 2% Total NAV Impact$43.8M 14% We believe some of the unrealized loss on CMBS and some of the Loan Loss Reserve may be recoverable, which could have a positive effect on the NAV in the future

The top five CRE mortgage REITs are trading at a 45-65% discount to their pre-covid-19 values Upside potential of CMBS Portfolio Future 1st Mortgage loans will focus primarily on multifamily, industrial and office sectors Opportunity in CRE mortgage market as CRE prices have adjusted downward and capital supply will be limited Looking Ahead

Management expects to recommend to the Board of Directors the authorization of a cash distribution for stockholders as of July 31, 2020, to be payable in August 2020 Please keep in mind that we cannot guarantee that our Board will authorize a cash distribution. Declaration of distributions is within the sole authority of the Board, and the constant rapidly changing circumstances surrounding the pandemic make even short-term predictions exceedingly challenging. Our ultimate goal is to get back to pre-COVID-19 operations, including: Cash distributions Share repurchase plan Distribution reinvestment plan Reinstate InPoint’s continuous public offering of shares of common stock What to Expect in the Near Future

Thank You for Joining Us

EX-99.3

Exhibit 99.3

AMENDED AND RESTATED DISTRIBUTION REINVESTMENT PLAN

This Amended and Restated Distribution Reinvestment Plan (the “Plan”) is adopted by InPoint Commercial Real Estate Income, Inc. (the “Company”) pursuant to its Articles of Amendment and Restatement (as amended, restated or otherwise modified from time to time, the “Charter”). Unless otherwise defined herein, capitalized terms shall have the same meaning as set forth in the Charter.

1. Distribution Reinvestment. As agent for the stockholders of the Company (the “Stockholders”) who (i) purchase shares of the Company’s common stock (“Shares”) pursuant to the Company’s continuous public offering (the “Offering”) or purchase Shares pursuant to any future public offering of the Company (a “Future Offering”), and who, in each case, do not opt out of participating in the Plan (or, in the case of Alabama, Arkansas, Idaho, Kansas, Kentucky, Maine, Maryland, Nebraska, New Jersey, Ohio, Oregon, Vermont and Washington investors and clients of participating broker-dealers that do not permit automatic enrollment in the Plan, who opt to participate in the Plan) or (ii) purchase Shares pursuant to any unregistered private offering of the Company (a “Private Offering”) and opt to participate in the Plan (collectively, the “Participants”), the Company will apply all dividends and other distributions declared and paid in respect of the Shares held by each Participant and attributable to the class of Shares purchased by such Participant (the “Distributions”), including Distributions declared and paid with respect to any full or fractional Shares acquired under the Plan, to the purchase of additional Shares of the same class for such Participant; provided that the Company will apply Distributions declared and paid with respect to Class P Common Shares to the purchase of Class I Common Shares.

2. Effective Date. The effective date of this Plan shall be August 7, 2020.

3. Procedure for Participation. Any Stockholder who purchases Shares in the Offering or a Future Offering (unless such Stockholder is a resident of Alabama, Arkansas, Idaho, Kansas, Kentucky, Maine, Maryland, Nebraska, New Jersey, Ohio, Oregon, Vermont or Washington or is a client of a participating broker-dealer that does not permit automatic enrollment in the Plan) and has received a Prospectus, as contained in the Company’s registration statement filed with the Securities and Exchange Commission (the “SEC”), will automatically become a Participant unless he or she elects not to become a Participant by noting such election on his or her subscription agreement. Any Stockholder who purchases Shares in the Offering or a Future Offering who is a resident of Alabama, Arkansas, Idaho, Kansas, Kentucky, Maine, Maryland, Nebraska, New Jersey, Ohio, Oregon, Vermont or Washington or is a client of a participating broker-dealer that does not permit automatic enrollment in the Plan and has received a Prospectus, as contained in the Company’s registration statement filed with the SEC, will become a Participant if he or she elects to become a Participant by noting such election on his or her subscription agreement. In addition, any Stockholder, including a Stockholder who purchases Shares in a Private Offering, who is not a Participant may later elect to become a Participant by completing and executing a change of distribution form, or in the case of a broker-controlled account, the appropriate form from the participating-broker dealer who solicited the purchase of such Shares. Participation in the Plan will begin with the next Distribution paid after acceptance of a Participant’s subscription, enrollment or authorization. Shares will be purchased under the Plan on the date that Distributions are paid by the Company.

4. Suitability. Each Participant is requested to promptly notify the Company in writing if the Participant experiences a material change in his or her financial condition, including the failure to meet the income, net worth and investment concentration standards imposed by such Participant’s

state of residence and set forth in the Company’s most recent prospectus. For the avoidance of doubt, this request in no way shifts to the Participant the responsibility of the Company’s sponsor, or any other person selling Shares on behalf of the Company to the Participant to make every reasonable effort to determine that the purchase of Shares is a suitable and appropriate investment based on information provided by such Participant.

5. Purchase of Shares.

A. Participants will acquire Shares from the Company under the Plan (the “Plan Shares”) at a price equal to the most recently published transaction price per Share applicable to the class of Shares acquired under the Plan on the date that the Distribution is paid. No upfront selling commissions will be payable with respect to Plan Shares, but Plan Shares will be subject to applicable ongoing stockholder servicing fees. Participants may purchase fractional Plan Shares so that 100% of the Distributions will be used to acquire Plan Shares. However, a Participant will not be able to acquire Plan Shares and such Participant’s participation in the Plan will be terminated to the extent that a reinvestment of such Participant’s distributions in Plan Shares would cause the percentage ownership or other limitations contained in the Charter to be violated.

B. Shares to be distributed by the Company in connection with the Plan may (but are not required to) be supplied from: (i) the Plan Shares which will be registered with the SEC in connection with the Offering or (ii) Shares to be registered with the SEC in a Future Offering for use in the Plan (a “Future Registration”).

6. Taxes. THE REINVESTMENT OF DISTRIBUTIONS DOES NOT RELIEVE A PARTICIPANT OF ANY INCOME TAX LIABILITY THAT MAY BE PAYABLE ON THE DISTRIBUTIONS. INFORMATION REGARDING POTENTIAL TAX INCOME LIABILITY OF PARTICIPANTS MAY BE FOUND IN THE PUBLIC FILINGS MADE BY THE COMPANY WITH THE SEC.

7. Share Certificates. The ownership of the Plan Shares will be in book-entry form unless and until the Company issues certificates for its outstanding Shares.

8. Reports. On a quarterly basis, the Company shall provide each Participant a statement of account describing, as to such Participant: (i) the Distributions reinvested during the quarter; (ii) the number and class of Plan Shares purchased during the quarter; (iii) the per share purchase price for such Plan Shares; and (iv) the total number of Plan Shares purchased on behalf of the Participant. On an annual basis, tax information with respect to income earned on Plan Shares for the calendar year will be provided to each applicable Participant. If a Participant holds his or her investment in a broker-controlled account, all reports will be delivered by the applicable participating broker-dealer, rather than the Company.

9. Termination by Participant. A Participant may terminate participation in the Plan at any time, without penalty, by delivering five business days’ prior written notice to the Company. This notice must be received by the Company prior to the fifth to last calendar day of the month in order for a Participant’s termination to be effective for such month (i.e., a timely termination notice will be effective as of the last day of the month in which it is timely received and will not affect participation in the Plan for any prior month). Any transfer of Shares by a Participant to a non-Participant will terminate participation in the Plan with respect to the transferred Shares. If a Participant requests that the Company repurchase all or any portion of the Participant’s Shares, the Participant’s participation in the Plan with respect to the Participant’s Shares for which

repurchase was requested but that were not repurchased will be terminated. Upon termination of Plan participation for any reason, future Distributions will be distributed to the Stockholder in cash.

10. Amendment, Suspension or Termination by the Company. The Board of Directors of the Company may by majority vote amend any aspect of the Plan; provided that the Plan cannot be amended to eliminate a Participant’s right to terminate participation in the Plan and that notice of any material amendment must be provided to Participants at least ten days prior to the effective date of that amendment. The Board of Directors of the Company may by majority vote suspend or terminate the Plan for any reason upon ten days’ written notice to the Participants.

11. Liability of the Company. The Company shall not be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claims or liability (i) arising out of failure to terminate a Participant’s account upon such Participant’s death prior to timely receipt of notice in writing of such death or (ii) with respect to the time and the prices at which Shares are purchased or sold for a Participant’s account. To the extent that indemnification may apply to liabilities arising under the Securities Act of 1933, as amended, or the securities laws of a particular state, the Company has been advised that, in the opinion of the SEC and certain state securities commissioners, such indemnification is contrary to public policy and, therefore, unenforceable.