which the Company has the right to vote any shares owned by these persons or entities in excess of issued Class B Units will be determined and expensed when we deem the achievement34.9% of the performance condition to be probable. AsCompany’s outstanding shares of December 31, 2017, we could not determine the probability of achieving the performance condition. The Advisor receives distributions on the vested and unvested Class B Units it receivesCommon Stock in connection with its asset management subordinated participation at the same rateproportion as distributions received on our Common Stock. Such distributions on issued Class B Units are expensed inall other shares voted by the consolidated statements of operationsCompany’s stockholders.
Side Letter With the Advisor
On February 4, 2022, the Company and comprehensive loss until the performance condition is considered probable to occur. No Class B Units have been issued since the Class B Units issued with respectAdvisor entered into a side letter (the “Side Letter”) to the year ended December 31, 2017, with a cumulative issuanceAdvisory Agreement pursuant to which the Advisor agreed, from the date of 159,159 Class B Units outstanding asthe Side Letter until August 4, 2022, to immediately invest all fees received by the Advisor under Section 10(c)(i)-(ii) of December 31, 2017 under this arrangement,the Advisory Agreement in shares of which 31,832 units have been transferred to Mr. Happel.
Acquisition Fees
The Advisor is paid an acquisition fee equal to 1.5% of (A) the contract purchase price of each acquired property and (B) the amount advanced for a loan or other investment. The Advisor is also reimbursed for expenses actually incurred related to selecting, evaluating and acquiring assets on the Company’s behalf, regardless of whether the Company actually acquires the related assets. Specifically, the Company reimburses the Advisor or its affiliates for any services provided for which they incur investment-related expenses, or insourced expenses. Insourced expenses are fixed initially at and may not exceed 0.50% of the contract purchase price of each property and 0.50% of the amount advanced for each loan or other investment, which is paid at the closing of each such investment. The Advisor is also reimbursed for legal expenses incurred in the process of acquiring properties,Common Stock (the “Shares”), in an amount not to exceed 0.10%aggregating no more than $3.0 million. The price of the contract purchase price.Shares was determined, at each issuance, in accordance with Section 10(c)(iii) of the Advisory Agreement and was not less than the “Minimum Price” as defined in Section 312.04(h) of the New York Stock Exchange Listed Company Manual (the “Listed Company Manual”), which minimum price was $84.40 per share (adjusted for the reverse stock split completed on January 11, 2023). The Advisor’s obligation to invest its fee in Shares under the Side Letter was in consideration of, and subject to, the provisions of the Waiver Agreements (defined below). In addition, the Company also pays third parties,was not required to issue any Shares under the Side Letter if doing so would have required the Company to seek stockholder approval under Section 312 of the Listed Company Manual or reimbursesany subsequent rules and regulations of the NYSE.
On February 4, 2022, concurrently with the execution of the Side Letter, the Board granted (i) a waiver from the Aggregate Share Ownership Limit, as defined and contained in Section 5.7 of the Company’s charter, to permit each of Bellevue, the Advisor, entities controlled by Bellevue, Edward M. Weil. Jr, who is an officer and director of the Company, an officer of the Advisor and a holder of a non-controlling interest in Bellevue, and their respective affiliates and certain other entities and individuals who would be treated as Beneficially Owning or Constructively Owning (each as defined our charter) Shares held by either or both of Bellevue and the Advisor, including Mr. Weil, to Beneficially Own or Constructively Own Shares in an amount up to 20% of the outstanding Shares (subject to certain constraints for any investment-related expenses due to third parties. In no event willeach such entity and individual on the total actual ownership of all acquisition fees, acquisition expensesShares by such entities and any financing coordination fees (as described below) payable with respectindividuals), to the Company’s portfolioextent and on the terms set forth in each ownership limit waiver agreement (collectively, the “Charter Ownership Limit Waiver Agreements”); and (ii) a waiver from the provisions contained in Section 1.1 of investments exceed 4.5%the Amended and Restated Rights Agreement, dated August 17, 2020 (as amended by Amendment No. 1 dated August 12, 2021, the “Rights Plan”), to permit each party to the Charter Ownership Limit Waiver Agreements to Beneficially Own (as defined in the Rights Plan) Shares to the maximum extent allowed by the Charter Ownership Limit Waiver Agreements without being deemed an “Acquiring Person” under Section 1.1 of (A) the contract purchase price or (B)Rights Plan, subject to the amount advancedterms set forth in the rights plan waiver agreement (the “Rights Plan Waiver Agreement,” and together with the Charter Ownership Limit Waiver Agreements, the “Waiver Agreements”).
On August 10, 2022, the Company (1) amended the Charter Ownership Limit Waiver Agreements to (i) immediately increase the Excepted Holder Limit (as defined therein) to 21%, and (ii) increase the Excepted Holder Limit to up to 25% upon conditions precedent being satisfied to increase the Excepted Holder Limit to up to 25% (the “Charter Waiver Agreement Amendments”), and (2) amended the Rights Plan Waiver Agreement to implement corresponding changes. Concurrent with these amendments, the Board reduced the Aggregate Share Ownership Limit to 6% for all loans or other investments. Once the proceeds from the primary offering have been fully invested, the aggregate amountstockholders of acquisition fees and any financing coordination fees may not exceed 1.5% of (A) the contract purchase price and (B) the amount advanced for a loan or other investment, as applicable, for all the assets acquired.
During the year ended December 31, 2016, the Company incurred acquisition fees and acquisition expense reimbursements of $3.6 million, which is net of $0.6 million in acquisition expense reimbursements which were waived by the Advisor. During the year ended December 31, 2017, the Company didthat are not incur any acquisition fees and acquisition expense reimbursements.
Financing Coordination Fees
Under the Advisory Agreement, ifotherwise Bellevue, the Advisor, provides servicestheir respective affiliates or persons who would be treated as Beneficially Owning or Constructively Owning shares of the Company’s Common Stock held by either or both of Bellevue and the Advisor (the “Excluded Persons”). The terms and conditions of the Charter Ownership Limit Waiver Agreements entered into with each of these entities or individuals are the same except for the actual number of Shares the entities or individuals may own or acquire. All other terms and conditions contained in connection with the origination or refinancing of any debtCompany’s charter will otherwise continue to apply to the Shares that the Company obtains and uses to acquire propertiesentities or to make other permitted investments,individuals may own or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company pays the Advisoracquire.
As a financing coordination fee equal to 0.75%consequence of the amount made available or outstanding under such financing, subjectCompany’s decision to certain limitations. For the years ended December 31, 2017 and 2016, we paid the Advisor $1.1 million and $0.7 million in financing coordination fees, respectively.
Other Fees and Reimbursements
Subject to certain limitations, we reimburse the Advisor’s costs of providing administrative services. We do not make operating expense reimbursements for personnel costs toterminate our Advisor in connection with services for which the Advisor already receives acquisition fees, acquisition expenses or real estate commissions. We do not reimburse the Advisor for salaries, bonuses or benefitselection to be paid to our executive officers.
Fortaxed as a REIT, the years ended December 31, 2017 and 2016, we reimbursed our Advisor $3.8 million and $1.7 million for administrative services, respectively.ownership limitations set forth in Section 5.7 of the Company’s charter, including, without limitation, the Aggregate Share Ownership Limit, no longer apply.
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