FORM OF SUBSCRIPTION AGREEMENT
Exhibit 10.3
FORM OF SUBSCRIPTION AGREEMENT
Board of Directors
Legacy Healthcare Properties Trust Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Legacy Healthcare Properties Trust Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
[ ], 2010
Ladies and Gentlemen:
In connection with a proposed purchase from Legacy Healthcare Properties Trust Inc. (the
“Company”) of shares of common stock, par value $0.01 per share, of the Company (the “Common
Stock”), the undersigned (the “Investor”) hereby confirms, certifies and agrees as follows:
I. Irrevocable Subscription for Shares
A. The Investor irrevocably subscribes for and agrees to purchase from the Company the number
of shares of Common Stock (the “Shares”) equal to the Investor’s subscription amount of $[___]
(the “Subscription Amount”) divided by the public offering price per share of Common Stock to be
paid by investors in the Company’s initial public offering (the “IPO”). The Investor agrees to and
understands the terms and conditions upon which the Shares are being offered. The price per Share
to be paid by the Investor shall be the initial public offering price per share of Common Stock to
be paid by investors in the Company’s IPO.
B. The Investor understands and agrees that the Company reserves the right to accept or reject
the Investor’s subscription for the Shares for any reason or for no reason, in whole or in part, at
any time prior to its acceptance by the Company, and the same shall be deemed to be accepted by the
Company only when this Subscription Agreement is signed by a duly authorized person by or on behalf
of the Company. In the event of rejection of the entire subscription, the Investor’s Subscription
Amount will be returned promptly to the Investor along with this Subscription Agreement, and this
Subscription Agreement shall have no force or effect.
II. Payment by the Investor and Issuance of Shares
Concurrently with the closing of the sale by the Company of common stock in the IPO, the
Investor will pay the Subscription Amount, representing payment in full for the Shares by the
Investor pursuant to this Subscription Agreement, and the Company will issue the Shares to and in
the name of the Investor in the account designated by the Investor.
III. Representations and Covenants of the Investor
The Investor understands that the Shares are being sold in reliance upon the exemption from
registration provided in Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Regulation D thereunder for transactions involving limited offers and sales,
and the Investor makes the following representations, declarations and warranties:
A. The Investor is an “accredited investor” within the meaning of Rule 501(a) of Regulation D
under the Securities Act, as noted on Attachment A entitled “Eligibility Representations of
the Investor” following the signature page to this Subscription Agreement. The Investor fully
understands that the Shares are being offered in a transaction not involving any public offering
within the United States within the meaning of the Securities Act and that the Shares have not been
registered under the Securities Act or any state securities laws and, unless so registered, may not
be sold except in accordance with the Securities Act (a) pursuant to a registration statement that
has been declared effective under the Securities Act; or (b) pursuant to an available exemption
from the registration requirements of the Securities Act. The Investor understands that the
registrar and transfer agent for the Shares will not be required to accept for registration or
transfer any Shares acquired by the Investor except upon presentation of evidence, satisfactory to
the Company and the transfer agent, that the proposed transfer complies with the foregoing. The
Investor further understands that any certificates representing Shares acquired by the Investor
will bear a legend reflecting the substance of this paragraph.
B. The Investor has consulted with, as deemed appropriate, his, her or its attorney,
accountant or investment advisor with respect to the investment contemplated hereby and its
suitability for the Investor. The Investor acknowledges that in making a decision to subscribe for
the Shares the Investor has relied solely upon the independent investigations made by the Investor.
The Investor is aware and acknowledges that the Company has been recently formed and has no
operating history. The Investor’s investment in the Shares is consistent with the investment
purposes and objectives and cash flow requirements of the Investor and will not adversely affect
the Investor’s overall need for diversification and liquidity.
C. The Investor has received such information as the Investor deems necessary in order to make
an investment decision with respect to the Shares. The Investor represents and agrees that prior to
the Investor’s agreement to purchase the Shares, the Investor and the Investor’s advisor or
advisors, if any, have asked such questions, received such answers and obtained such information as
the Investor deemed relevant to making an investment in the Shares. The Investor became aware of
the offering of the Shares solely by means of direct contact between the Investor and the Company.
The Investor did not become aware of, nor were the Shares offered to the Investor by, any other
means including, in each case, by any form of general solicitation or general advertising. In
making the decision to purchase the Shares, the Investor relied solely on information obtained by
the Investor directly from the Company as a result of any inquiries by the Investor.
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D. The Investor has such knowledge and experience in financial and business matters so that
the Investor is capable of evaluating the merits and risks of the Investor’s investment in the
Shares and is able to bear such risks and has obtained, in the Investor’s judgment, sufficient
information from the Company or its authorized representative to evaluate the merits and risks of
such investment. The Investor has evaluated the risks of investing in the Shares and has determined
that the Shares are a suitable investment for the Investor.
E. The Investor is a “knowledgeable” employee with respect to the Company within the meaning
of Rule 3c-5 under the Investment Company Act of 1940.
F. The Investor is acquiring the Shares subscribed for herein for its own account and not for
the account of others, for investment purposes only and not with a view to distribute or resell
such Shares in whole or in part.
G. The Investor agrees and is aware that no federal or state agency has passed upon the Shares
or made any findings or determination as to the fairness of this investment.
H. The Investor understands that there is no established market for the Shares and that no
public market for the Shares may develop.
I. The execution, delivery and performance by the Investor of this Subscription Agreement will
not constitute or result in a breach of or default under or conflict with any order, ruling or
regulation of any court or other tribunal or of any governmental commission or agency or with any
agreement or other undertaking to which the Investor is a party or by which the Investor is bound.
The signature on this Subscription Agreement is genuine, and the Investor has legal competence and
capacity to execute the same, and this Subscription Agreement constitutes a legal, valid and
binding obligation of the Investor, enforceable in accordance with its terms.
J. The Investor represents that neither it nor, to its knowledge, any person or entity
controlling, controlled by or under common control with it, nor any person having a beneficial
interest in it, nor any person on whose behalf the Investor is acting: (i) is a person listed in
the Annex to Executive Order No. 13224 (2001) issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism); (ii) is named on the List of Specially Designated Nationals and
Blocked Persons maintained by the U.S. Office of Foreign Assets Control; (iii) is a non-U.S. shell
bank or is providing banking services indirectly to a non-U.S. shell bank; (iv) is a senior
non-U.S. political figure or an immediate family member or close associate of such figure; or (v)
is otherwise prohibited from investing in the Company pursuant to applicable U.S. anti-money
laundering, anti-terrorist and asset control laws, regulations, rules or orders (categories (i)
through (v), each a “Prohibited Investor”). The Investor agrees to provide the Company,
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promptly upon request, all information that the Company reasonably deems necessary or appropriate
to comply with applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules and orders. The Investor consents to the disclosure to U.S. regulators and law
enforcement authorities by the Company and its affiliates and agents of such information about the
Investor as the Company reasonably deems necessary or appropriate to comply with applicable U.S.
anti-money laundering, anti-terrorist and asset control laws, regulations, rules and orders. The
Investor acknowledges that if, following its investment in the Company, the Company reasonably
believes that the Investor is a Prohibited Investor or is otherwise engaged in suspicious activity
or refuses to provide promptly information that the Company requests, the Company has the right or
may be obligated to prohibit additional investments, segregate the assets constituting the
investment in accordance with applicable regulations or immediately require the Investor to
transfer the Shares. The Investor further acknowledges that the Investor will have no claim against
the Company or any of its affiliates or agents for any form of damages as a result of any of the
foregoing actions.
K. The Investor hereby (i) acknowledges that the Company and others will rely upon the
Investor’s confirmations, acknowledgments, agreements and binding commitment to purchase Shares,
(ii) agrees that the Company is entitled to rely upon this agreement and the terms, representations
and warranties hereof; and (iii) authorizes the Company to produce this Agreement or a copy hereof
to an interested party in any administrative or legal proceeding or official inquiry with respect
to the matter covered hereby.
IV. General
A. Indemnification. The Investor agrees to indemnify and hold harmless the Company and its
directors, executive officers and each other person, if any, who control or are controlled by the
Company, within the meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, from and against any and all loss, liability, claim, damage and expense
whatsoever (including, without limitation, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation commenced or threatened or any claim
whatsoever) arising out of or based upon (a) any false, misleading or incomplete representation,
declaration or warranty or breach or failure by the Investor to comply with any covenant or
agreement made by the Investor in this Subscription Agreement or (b) any action for securities law
violations by the Investor arising out of the foregoing.
B. Severability. If any provision of this Subscription Agreement is invalid or unenforceable
under any applicable law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith. Any provision hereof which may be held invalid or unenforceable under any
applicable law shall not affect the validity or enforceability of any other provisions hereof, and
to this extent the provisions hereof, shall be severable.
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C. Binding Effect. This Subscription Agreement shall be binding upon the Investor and the
heirs, personal representatives, successors and assigns of the Investor.
D. Transferability. Neither this Subscription Agreement nor any rights which may accrue to an
Investor hereunder may be transferred or assigned.
E. Acknowledgement. The Investor understands and acknowledges that the Investor is purchasing
the Shares from the Company and not any other entity or individual. The Investor is aware and
agrees that no entity or individual, other than the Company, made any representations, declarations
or warranties to the Investor regarding the Company or its offering of the Shares. The Investor
further acknowledges and agrees that no entity or individual, other than the Company, made any
offer to sell, or solicited any offer to buy, any of the Shares that the Investor proposes to
acquire from the Company hereunder.
F. Choice of Law. Notwithstanding the place where this Subscription Agreement may be executed
by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof
shall be construed in accordance with and governed by the laws of the State of New York, without
regard to principles of conflicts of law.
V. Additional Information and Subsequent Changes in the Foregoing Representations
The Company may request from the Investor such additional information as the Company may deem
necessary to evaluate the eligibility of the Investor to acquire the Shares, and may request from
time to time such information as the Company may deem necessary to determine the eligibility of the
Investor to hold the Shares or to enable the Company to determine the Company’s compliance with
applicable regulatory requirements or tax status, and the Investor shall provide such information
as may reasonably be requested. The Investor agrees to notify the Company promptly if there is any
change with respect to any of the information, representations or certifications herein or in
Exhibit A hereto and to provide the Company with such further information as the Company may
reasonably require.
[Remainder Of This Page Has Been Intentionally Left Blank]
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| Very truly yours, | ||||
Date: , 2010 |
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| [ ] | ||||
| Subscription Amount: $ | ||||
| Accepted as of the ____ day of __________ , 2010: | ||||
| LEGACY HEALTHCARE PROPERTIES TRUST INC. | ||||
| By: | ||||
| Name: | Xxxxxx X. Xxxxxxxxx III | |||
| Title: | Chairman of the Board and Chief Executive Officer | |||
Signature Page to Subscription Agreement
Attachment A
ELIGIBILITY REPRESENTATIONS OF THE INVESTOR
A. ACCREDITED INVESTOR STATUS FOR ENTITIES
| (Please check the applicable subparagraphs): | ||||||||
| 1. | o | The undersigned is: a bank as defined in Section 3(a)(2) of the Securities Act acting in its individual or fiduciary capacity; a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in section 2(a)(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”) and (i) the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company or registered investment adviser, or (ii) the employee benefit plan has total assets in excess of $5,000,000, or (iii) the employee benefit plan is self-directed and its investment decisions are made solely by persons that are accredited investors (within the meaning of Rule 501(a) under the Securities Act); a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, and such plan has total assets in excess of $5,000,000. | ||||||
| 2. | o | The undersigned is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | ||||||
| 3. | o | The undersigned is an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. | ||||||
| 4. | o | The undersigned is a trust with total assets in excess of $5,000,000, that was not formed for the specific purpose of acquiring the Shares and whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of investing in the Company. | ||||||
| 5. | o | The undersigned is an entity in which all of the equity owners are accredited investors (within the meaning of Rule 501(a) under the Securities Act). | ||||||
B. ACCREDITED INVESTOR STATUS FOR INDIVIDUALS
| (Please check the applicable subparagraphs): | ||||||||
| 1. | o | I am a director or executive officer of the Company. | ||||||
| 2. | o | I am a natural person and have a net worth, either alone or with my spouse, of more than $1,000,000. | ||||||
| 3. | o | I am a natural person and had individual income in excess of $200,000 during each of the previous two years and reasonably expect to have individual income in excess of $200,000 during the current year, or joint income with my spouse in excess of $300,000 during each of the previous two years and reasonably expect to have joint income in excess of $300,000 during the current year. | ||||||
C. DTC INFORMATION:
Name of DTC Participant: |
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Participant’s DTC Account Number: |
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Investor’s Account Number with Participant: |
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