HC GOVERNMENT REALTY TRUST, INC. managing broker-dealer AGREEMENT
Exhibit
1.1
managing
broker-dealer AGREEMENT
March
28, 2017
Xx.
Xxxxxx X. Xxxxxx
CEO
SANDLAPPER
Securities, LLC
Sandlapper
Financial Center
000 X.
Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Ladies
and Gentlemen:
HC
Government Realty Trust, Inc., a Delaware limited liability company
(the “Company”),
has qualified for public sale up to $30,000,000 (the
“Maximum Offering
Amount”) of its common stock (the “Shares”) for a purchase price of
$10.00 per Share (the “Offering”), pursuant to an
exemption from registration pursuant to: (i) Regulation A
(“Regulation A”)
promulgated by the Securities and Exchange Commission
(“SEC”) pursuant
to the Securities Act of 1933 (the “Securities Act”); and (ii)
applicable blue sky exemptions. The Company desires to appoint
SANDLAPPER Securities, LLC, a South Carolina limited liability
company (“SANDLAPPER”), as the managing
broker-dealer for the Offering (the “Managing Broker-Dealer”) on the
terms and conditions described herein. The Managing Broker-Dealer
shall have the right to enter into Participating Dealer Agreements
substantially in the form attached to this Managing Broker-Dealer
Agreement (this “Agreement”) as “Exhibit A” (a “Participating Dealer Agreement”)
with other members of the Financial Industry Regulatory Authority
(“FINRA”)
acceptable to the Company to sell the Shares (each broker-dealer
entering into a Participating Dealer Agreement being referred to
herein as a “Dealer” and said broker-dealers
being collectively referred to herein as the “Dealers”). The Company shall have
the right to approve any material modifications or addendums to the
form of the Participating Dealer Agreement. The indemnities,
representations and warranties to the Company in Section 3 herein
shall be required of each Dealer entering into a Participating
Dealer Agreement and becoming a Dealer. The Company shall have the
right to approve any material modification. Terms not defined
herein shall have the same meaning as in the Offering Circular
prepared by the Company for use in connection with the Offering, as
it may be amended from time to time in the future by the Company.
In connection with the Offering, the Company hereby agrees with the
Managing Broker-Dealer, as follows:
1.
Representations and Warranties of the Company
The
Company represents and warrants to the Managing Broker-Dealer and
each Dealer with whom the Managing Broker-Dealer enters into a
Participating Dealer Agreement that:
1.1 An Offering
Statement on Form 1-A (the “Offering Statement”), including a
preliminary offering circular (the “Preliminary Offering Circular”),
with respect to the Shares has been prepared by the Company in
accordance with the requirements the Securities Act, Regulation A
promulgated thereunder and any other rules and regulations (as
applicable) of the SEC (the “Rules and Regulations”) applicable
to the Offering and sale of the Shares. The Company has filed a
final offering circular with the SEC pursuant to Rule 253 of
Regulation A (the “Offering
Circular”).
1.2 The Company has
been duly organized and is validly existing as a corporation under
the laws of the State of Maryland, and has, and at all times during
the Offering will have, the power and authority to conduct its
business as described in the Offering Circular. The Company is
qualified to do business in each jurisdiction in which the
ownership or leasing of its properties or the nature or conduct of
its business, as described in the Offering Circular, requires such
qualification, except where the failure to do so would not have a
material adverse effect on the condition, financial or otherwise,
results of operations or cash flows of the Company (a
“Material Adverse
Effect”).
1.3 The Offering
Circular complies with the Securities Act and the Rules and
Regulations, and the Offering Circular and any and all authorized
printed sales literature or other sales materials prepared and
authorized by the Company for use with potential investors in
connection with the Offering (“Authorized Sales Materials”),
including without limitation, all testing the waters material under
Rule 255 (“TTW
Materials”), when used in conjunction with the
Offering Circular, do not contain any untrue statements of material
facts or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; provided, however, that the foregoing
provisions of this Section 1.3 will not extend to such
statements contained in or omitted from the Offering Circular or
Authorized Sales Materials as are primarily within the knowledge of
the Managing Broker-Dealer, or any of the Dealers and are based
upon information either (a) furnished by a Dealer in writing
to the Managing Broker-Dealer or the Company, or (b) furnished
by the Managing Broker-Dealer in writing to the Company
specifically for inclusion therein.
1.4 The Company intends
to use the funds received from the sale of the Shares as set forth
in the Offering Circular and the Operating Agreement.
1.5 No consent,
approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery
by the Company of this Agreement or the issuance and sale by the
Company of the Shares, except such as have been or are to be
obtained under the Securities Act, or where the failure to obtain
such consent, approval, authorization or other order of any
governmental authority would not have a Material Adverse
Effect.
1.6 Unless otherwise
described in the Offering Circular, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened
against the Company at law or in equity or before or by any federal
or state commission, regulatory body or administrative agency or
other governmental body, domestic or foreign, which would be
reasonably expected to have a Material Adverse Effect.
1.7 There are no
contracts or other documents required by the Securities Act or the
Rules and Regulations to be described in or incorporated by
reference into the Offering Circular which have not been accurately
described in all material respects in the Offering Circular or
incorporated or filed as required.
1.8 The execution and
delivery of this Agreement, the consummation of the transactions
herein contemplated and compliance with the terms of this Agreement
by the Company will not conflict with or constitute a default under
the Operating Agreement or any indenture, mortgage, deed of trust,
lease, or, to the Company’s knowledge, under any rule,
regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, except (i) to the extent that
the enforceability of the indemnity and/or contribution provisions
contained in Section 6 of this Agreement may be limited under
applicable securities laws, and (ii) for such conflicts or
defaults that would not reasonably be expected to have a Material
Adverse Effect.
1.9 The Company has
full legal right, power and authority to enter into this Agreement
and to perform the transactions contemplated hereby, except to the
extent that the enforceability of the indemnity and/or contribution
provisions contained in Section 6 of this Agreement may be
limited under applicable securities laws.
1.10 Since
the respective dates as of which information is given in the
Offering Circular and solely through the closing of the Offering,
there has not been any Material Adverse Effect, except as set forth
in or contemplated in the Offering Circular, (a) there has not been
any change in the capitalization of the Company, or in the
business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, arising for any
reason whatsoever other than in the ordinary course of business and
(b) the Company has not incurred and will not incur any material
liabilities or obligations, direct or contingent.
1.11 Neither
the Company, nor any predecessor of the Company; nor any other
issuer affiliated with the Company; nor any director or executive
officer of the Company or other officer of the Company
participating in the Offering, nor any beneficial owner of 20% or
more of the Company's outstanding voting equity securities, nor any
promoter connected with the Company, is subject to the
disqualification provisions of Rule 262 of the Rules and
Regulations.
2
1.12 The
issuance and sale of the Shares have been duly authorized by the
Company, and, when issued and paid for in accordance with this
Agreement and the Offering Statement, will be duly and validly
issued, fully paid and nonassessable and will not be subject to
preemptive or similar rights. The holders of the Shares will not be
subject to personal liability by reason of being such holders. The
Shares, when issued, will conform to the description thereof set
forth in the final Offering Circular in all material
respects.
1.13 The
financial statements and the related notes included in the Offering
Statement present fairly, in all material respects, the financial
condition of the Company and its subsidiaries as of the dates
thereof and the results of operations and cash flows at the dates
and for the periods covered thereby in conformity with United
States generally accepted accounting principles
(“GAAP”), except
as may be stated in the related notes thereto. No other financial
statements or schedules of the Company, any subsidiary or any other
entity are required by the Securities Act or the Rules and
Regulations to be included in the Offering Statement or the Final
Offering Circular. There are no off-balance sheet arrangements (as
defined in Regulation S-K Item 303(a)(4)(ii)) that may have a
material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures or capital resources.
1.14 Cherry
Bekaert LLP (the “Accountants”), who have reported
on the financial statements and schedules described in Section
1.13, are registered independent public accounting firm with
respect to the Company as required by the Securities Act and the
Rules and Regulations and by the rules of the Public Company
Accounting Oversight Board. The financial statements of the Company
and the related notes and schedules included in the Offering
Statement comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations
and present fairly the information shown therein.
1.15 Since
the date of the most recent financial statements of the Company
included in the Offering Statement and the most recent Offering
Circular and prior to Closing, other than as described in the final
Offering Circular (A) there has not been and will not have been any
change in the capital stock of the Company or long-term debt of the
Company or any subsidiary or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company
on any class of capital stock or equity interests, or any material
adverse change, or any development that would reasonably be
expected to result in a Material Adverse Effect and (B) neither the
Company nor any subsidiary has sustained any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any action,
order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in
the Offering Statement and the final Offering
Circular.
1.16 On
the Closing Date, all stock transfer or other taxes (other than
income taxes) which are required to be paid in connection with the
sale and transfer of the Shares to be sold hereunder will be, or
will have been, fully paid or provided for by the Company and all
laws imposing such taxes will be or will have been fully complied
with.
1.17 Neither
the Company nor its subsidiaries, nor any director, officer, agent
or employee of either the Company or any subsidiary has directly or
indirectly, (1) made any unlawful contribution to any federal,
state, local and foreign candidate for public office, or failed to
disclose fully any contribution in violation of law, (2) made any
payment to any federal, state, local and foreign governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by
the laws of the United States or any jurisdiction thereof, (3)
violated or is in violation of any provisions of the U.S. Foreign
Corrupt Practices Act of 1977, or (4) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful
payment.
1.18 The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance in all material respects with
applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no
material action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened.
3
1.19 Neither
the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent or employee of the
Company or any of its subsidiaries is currently subject to any U.S.
sanctions (the “Sanctions
Regulations”) administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC or listed on the
OFAC Specially Designated Nationals and Blocked Persons List.
Neither the Company nor, to the knowledge of the Company, any
director, officer, agent or employee of the Company, is named on
any denied party or entity list administered by the Bureau of
Industry and Security of the U.S. Department of Commerce pursuant
to the Export Administration Regulations (“EAR”); and the Company will not,
directly or indirectly, use the proceeds of the offering of the
Shares hereunder, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of
any person currently subject to any Sanctions Regulations or to
support activities in or with countries sanctioned by said
authorities, or for engaging in transactions that violate the
EAR.
1.20 The
Company is not, nor upon completion of the transactions
contemplated herein will it be, an “investment company”
or an “affiliated person” of, or “promoter”
or “principal Managing Broker-Dealer” for, an
“investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”). The
Company is not a development stage company or a “business
development company” as defined in Section 2(a)(48) of the
Investment Company Act. The Company is not a blank check company
and is not an issuer of fractional undivided interests in oil or
gas rights or similar interests in other mineral rights. The
Company is not an issuer of asset-backed securities as defined in
Item 1101(c) of Regulation AB.
2.
Covenants of the Company
The
Company covenants and agrees with the Managing Broker-Dealer
that:
2.1 It will prepare and
file all amendments to the Offering Statement (or the equivalent,
if a state securities commission requires a different format). In
addition, it will furnish the Managing Broker-Dealer, at no expense
to the Managing Broker-Dealer, with such number of printed copies
of the Offering Circular, including all amendments thereto, as the
Managing Broker-Dealer may reasonably request. It will similarly
furnish to the Managing Broker-Dealer and others designated by the
Managing Broker-Dealer as many copies as the Managing Broker-Dealer
may reasonably request in connection with the Offering of:
(a) the offering circular, in preliminary and final form, and
every form of supplemental or amended offering circular; and
(b) this Agreement.
2.2 It will prepare and
file with the appropriate regulatory authorities, as may be
required, by law or regulation, at no expense to the Managing
Broker-Dealer, the Authorized Sales Materials; provided, however
that all filings of any kind with FINRA, including filings under
FINRA Rule 5110, shall be the sole responsibility of the Managing
Broker-Dealer; provided, further, that the Company shall pay all
filing fees associated with any such FINRA filings. In addition, it
will furnish the Managing Broker-Dealer, at no expense to the
Managing Broker-Dealer, with such number of printed copies of
Authorized Sales Materials as the Managing Broker-Dealer may
reasonably request.
2.3 If at any time the
SEC shall issue any stop order suspending the qualification of the
Offering Statement, and to the extent the Company determines that
such action is in the best interest of its members, it will use its
reasonable best efforts to obtain the lifting of such order at the
earliest possible time.
2.4 It will not use any
Offering Circular or sales materials for the Offering which have
not been approved by the Managing Broker-Dealer prior to use, and
shall make such modifications, amendments or supplements to the
Offering Circular and Authorized Sales Materials as reasonably
requested by the Managing Broker-Dealer to eliminate any materially
inaccurate or misleading statement contained therein, but no
failure to make any objection or to request any modification,
amendment or supplement shall constitute any representation by the
Managing Broker-Dealer regarding the accuracy or completeness of
the Offering Circular or sales materials prepared by the Company.
If at any time when an Offering Circular is required to be
delivered under the Securities Act any event occurs as a result of
which, in the opinion of either the Company or the Managing
Broker-Dealer, the Offering Circular or Authorized Sales Materials
would include an untrue statement of a material fact or, in view of
the circumstances under which they were made, omit to state any
material fact necessary to make the statements therein not
misleading, the Company will promptly notify the Managing
Broker-Dealer thereof (unless the information shall have been
received from the Managing Broker-Dealer) and will affect the
preparation of an amended or supplemental Offering Circular and
Authorized Sales Materials which will correct such statement or
omission and file such amended or supplemental Offering Circular
and Authorized Sales Materials as required under federal
law.
4
2.5 Neither the Company
nor any of its affiliates shall make any written or oral
representations or statements to investors that contradict or are
inconsistent with the statements made in the Offering Circular or
the Authorized Sales Material, as then amended or
supplemented.
2.6 The Company will,
as long as any Shares placed by the Managing Broker-Dealer or any
Dealer remain held by investors purchasing them in the Offering,
furnish directly to the Managing Broker-Dealer one (1) copy of each
report furnished to investors in the Shares at the time such report
is furnished to the investors.
2.7 The Company will
not at any time, directly or indirectly, take any action intended,
or which might reasonably be expected, to cause or result in, or
which will constitute, stabilization of the price of the Shares to
facilitate the sale or resale of any of the Shares.
2.8 Each of the
representations and warranties contained in this Agreement are true
and correct and the Company will comply with each covenant and
agreement contained in this Agreement.
3.
Agreements and Representations of Managing
Broker-Dealer
3.1 The
Company hereby appoints the Managing Broker-Dealer as its agent and
principal distributor for the purpose of selling the Shares for
cash, on a “minimum/maximum,
best efforts” basis, either alone or through one or
more Dealers. The Managing Broker-Dealer may also sell Shares for
cash directly to its own clients and customers at the public
offering price and subject to the terms and conditions stated in
the Offering Circular. The Managing Broker-Dealer hereby accepts
such agency and distributorship and agrees to use its best efforts
to sell the Shares on said terms and conditions. Under no
circumstances will the Managing Broker-Dealer be obligated to
underwrite or purchase any of the Shares for its own account or
otherwise provide any financing. The Managing Broker-Dealer
represents to the Company that it is a member of FINRA, that it and
its employees and representatives have all required licenses and
registrations to act under this Agreement, and that each shall
remain a member or duly licensed, as the case may be, during the
Offering.
3.2 It is understood
that no sale of the Shares shall be regarded as effective unless
and until accepted by the Company and that the Company reserves the
right, in its sole discretion, to reject any subscription for
Shares (a “Subscription
Agreement”) in whole or in part. The Shares will be
offered during a period which commenced on the date the Offering
Statement became qualified with SEC and continuing until the
earliest of: (i) the sale of $30,000,000 of Shares; (ii) the date
specified in the Offering Circular as the date of the termination
of the Offering (the “Outside
Date”), or (iii) a determination by the
Company’s board of directors to terminate the Offering (the
“Offering Termination
Date”). If subscriptions for at least $3,000,000 in
Shares (the “Minimum Offering
Amount”) have not been received and accepted by the
Company by the date specified in the Offering Circular for
termination of the Offering if the Minimum Offering Amount is not
reached (the “Minimum
Termination Date”), none of the Shares will be sold
and all funds tendered for the purchase of the Shares will be
refunded in full to cash subscribers without deductions or
charges.
3.3 On or prior to the
date hereof, Company, Managing Broker-Dealer and the Branch Banking
and Trust Company (the “Escrow Agent”) will enter into an
escrow agreement substantially in the form included as an exhibit
to the Offering Statement (the “Escrow Agreement”), resulting in
the establishment of an escrow account at the Company’s
expense, for the benefit of the investors (the “Escrow Account”). Prior to the
date of a Closing (each, a “Closing Date”), (i) the Managing
Broker-Dealer will provide specific wire instructions for the
Escrow Account to the investors along with instructions on how to
transmit funds by check or through automated clearing house
(“ACH”), and
each investor will promptly transfer an amount equal to the price
per Share as shown on the cover page of the final Offering Circular
multiplied by the number of Shares purchased by the investor to the
Escrow Account in compliance with Rule 15c2-4 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) the
Escrow Agent will notify the Company and the Managing Broker-Dealer
in writing whether the Escrow Account is fully funded in the amount
equal to at least the Minimum Offering Amount (the
“Requisite
Funds”). If the Escrow Agent shall have received all
of the Requisite Funds by 10:00 a.m., New York City time, on the
Outside Date, or at such other time on such other date as may be
agreed upon by the Company and the Managing Broker-Dealer (such
date is hereinafter referred to as the “Initial Closing Date”), the Escrow
Agent will release the Requisite Funds from the Escrow Account for
collection by the Company and the Managing Broker-Dealer as
provided in the Escrow Agreement and the Company shall deliver the
Shares to the investors, which delivery may be made through the
facilities of the Depository Trust Company (“DTC”), if available. The initial
closing (the “Initial
Closing”) shall take place at the office of the
Company or at such other place as may be mutually agreed to by the
Company and the Managing Broker-Dealer. All actions taken at the
Closing shall be deemed to have occurred simultaneously. If the
Requisite Funds have not been received immediately prior to the
Initial Closing Date, the Offering will not proceed and the Escrow
Agent will promptly return all funds deposited by investors to such
investors without interest. If at the time of the Initial Closing
the Maximum Offering Amount has not been fully funded, then
additional closings (the Initial Closing and each additional
Closing being a “Closing” and, collectively, the
“Closings”) may
occur in accordance with the Escrow Agreement until the earlier of
the date that the Maximum Offering Amount has been fully funded or
the Outside Date. As specified above, the Company and the Managing
Broker-Dealer have agreed to comply with the provisions of SEC Rule
15c2-4 as to all funds provided by Investors for the purchase of
Shares. The Managing Broker-Dealer and the Company may, however,
choose to comply with SEC Rule 15c2-4 by using a platform made
available by FOLIOfn Investments, Inc. (“Folio”), a FINRA member and
SEC-registered broker-dealer, to process subscriptions and conduct
Closings. If the Managing Broker-Dealer uses the Folio platform
then in lieu of placing Investor funds in the Escrow Account, those
funds may be deposited by Investors into their own investment
accounts that are cleared by Folio (a “Folio Investor Account”) where
they will stay until a Closing or termination or cancellation of
the Offering. At a Closing, the funds in a Folio Investor Account,
minus applicable expenses, will be delivered to the Company. If no
Closing occurs or the Offering is cancelled or otherwise
terminated, no funds will be provided to the Company from the Folio
Investor Account and the funds will remain in the Folio Investor
Account. Funds held in a Folio Investor Account shall be added to
the Requisite Amount and counted toward the achievement of the
Minimum Offering Amount.
5
3.4 Promptly after the
date hereof, the Managing Broker-Dealer and the Dealers shall
commence the offering of the Shares for cash to the public in
jurisdictions in which the Shares are registered or qualified for
sale or in which such offering is otherwise permitted. The Managing
Broker-Dealer and the Dealers will suspend or terminate offering of
the Shares upon request of the Company at any time and will resume
offering the Shares upon subsequent request of the Company. Subject
to the Company’s compliance with its obligations hereunder,
the Managing Broker-Dealer will comply with all applicable federal
securities laws, including the Securities Act, Exchange Act, and
the applicable rules and regulations of FINRA (the
“FINRA
Rules”).
3.5 The Managing
Broker-Dealer represents and warrants to the Company that the
information under the caption “Plan of Distribution” in the
Offering Circular and all other information furnished to the
Company by the Managing Broker-Dealer in writing expressly for use
in the Offering Circular, or any amendment or supplement thereto,
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
3.6 The Managing
Broker-Dealer represents and warrants to the Company that it will
not use any sales literature not authorized and approved by the
Company, use any “broker-dealer use only” materials
with members of the public, or make any unauthorized verbal
representations or verbal representations which contradict or are
inconsistent with the statements made in the Offering Circular or
the Authorized Sales Material in connection with offers or sales or
the Shares.
3.7 The Managing
Broker-Dealer is a duly organized and validly existing limited
liability company under the laws of the State of South
Carolina.
3.8 No consent,
approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery
by the Managing Broker-Dealer of this Agreement, except such as may
be required under the Securities Act.
3.9 There are no
actions, suits or proceedings pending or to the knowledge of the
Managing Broker-Dealer, threatened against the Managing
Broker-Dealer at law or in equity or before or by any federal or
state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, which could be reasonably
expected to have a material adverse effect on the Managing
Broker-Dealer or the ability of the Managing Broker-Dealer to
perform its obligations under this Agreement or to participate in
the Offering as contemplated by the Offering Circular.
3.10 The
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of
this Agreement by the Managing Broker-Dealer will not conflict with
or constitute a default under any operating agreement or other
similar agreement, indenture, mortgage, deed of trust, lease, or,
to the Managing Broker-Dealer’s knowledge, under any rule,
regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Managing Broker-Dealer, except to the extent
that the enforceability of the indemnity and/or contribution
provisions contained in Section 6 of this Agreement may be
limited under applicable securities laws.
3.11 The
Managing Broker-Dealer has full legal right, power and authority to
enter into this Agreement and to perform the transactions
contemplated hereby, except to the extent that the enforceability
of the indemnity and/or contribution provisions contained in
Section 6 of this Agreement may be limited under applicable
securities laws.
3.12 Except
for Participating Dealer Agreements, no agreement will be made by
the Managing Broker-Dealer with any person permitting the resale,
repurchase or distribution of any Shares purchased by such
person.
3.13 The
Managing Broker-Dealer represents that it believes the commissions
and fees payable to the Managing Broker-Dealer as set forth in this
Agreement are fair, reasonable and not in excess or violation of
applicable rules, regulations and other requirements of the SEC,
FINRA, the Act, or the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”).
6
3.14 Neither
the Managing Broker-Dealer, nor any Dealer, nor any managing member
of the Managing Broker-Dealer, or any Dealer, nor any director or
executive officer of the Managing Broker-Dealer or any Dealer or
other officer of the Managing Broker-Dealer, or any Dealer
participating in the Offering is subject to the disqualification
provisions of Rule 262 of the Rules and Regulations. No registered
representative of the Managing Broker-Dealer, or any Dealer, or any
other person being compensated by or through the Managing
Broker-Dealer, or any Dealer for the solicitation of investors, is
subject to the disqualification provisions of Rule 262 of the Rules
and Regulations.
3.15 If
and to the extent that the Managing Broker-Dealer directly places
any of the Shares sold to investors in the Offering, the Managing
Broker-Dealer shall be deemed to have made the representations,
warranties and covenants of a Dealer as contained in the
Participating-Dealer Agreement as if it had entered into a
Participating Dealer Agreement, as a Dealer, with the
Company.
3.16 The
Managing Broker-Dealer is required to provide, or require the
applicable Dealer to provide, each prospective investor with a copy
of the final Offering Circular and any exhibits and appendices
thereto. If a prospective investor received the preliminary
offering circular, then the Managing Broker-Dealer will be required
to deliver to the investor the final Offering Circular at least 48
hours before such investor will be permitted to acquire
Shares.
3.17 The
Managing Broker-Dealer is and during the term of this Agreement
will be, duly registered as a broker-dealer pursuant to the
provisions of the Exchange Act, a member in good standing of FINRA,
and a broker or dealer duly registered as such in any state where
offers are made by the Managing Broker-Dealer. The Managing
Broker-Dealer will comply with all applicable laws, regulations and
requirements of the Securities Act, the Exchange Act, applicable
state law and FINRA. The Managing Broker-Dealer has all required
licenses and permits.
3.18 The
Managing Broker-Dealer has established and implemented
anti-money-laundering compliance programs, in accordance with FINRA
Rule 3310 and Section 352 of the Money Laundering Abatement Act and
Section 326 of the Patriot Act of 2001, which are reasonably
expected to detect and cause reporting of suspicious transactions
in connection with the sale of the Shares.
4. “Compensation and Expense
Allowances. As compensation for services rendered by the
Managing Broker-Dealer under this Agreement, the Managing
Broker-Dealer will be entitled to receive from the
Company:
4.1
A selling
commission of up to 6.0% of the Shares sold by the Managing
Broker-Dealer (the “Total
Sales”), which it may re-allow in whole or in part to
the Dealers.
4.2
A Managing Broker-Dealer fee of 1.25% of the Total Sales, which it
may re-allow in part to the Dealers.
4.3
A non-accountable expense reimbursement of 1.0% of the Total Sales,
which it may re-allow in whole or in part to the
Dealers.
4.4
An accountable expense reimbursement of up to 0.50% of the Total
Sales that clear through the custody, clearing and facilitation
platform of Folio, which it shall re-allow to the Dealers to the
extent that such Dealers utilize the Folio platform.
Notwithstanding the
above, if a sale of Shares is made to such persons as are set forth
under Offering Circular Section “PLAN OF DISTRIBUTION” then the
Managing Broker-Dealer may be entitled to reduced selling
commissions and expense reimbursements as mutually agreed by the
Company and the Managing Broker-Dealer.
Managing
Broker-Dealer acknowledges that, prior to the date of this
Agreement, the Company delivered a retainer of $15,000 (the
“Retainer
Amount”) to its former managing broker-dealer (the
“Former MBD”)
for the payment of out of pocket expenses actually incurred by the
managing broker-dealer for legal services and regulatory filing
fees, including fees payable to FINRA for filings made under FINRA
Rule 5110, in an amount not to exceed $30,000.00
(“Legal and Filing
Fees”).
7
4.5 As
of the date hereof, the Company and the Managing Broker-Dealer
acknowledge that Orchard Securities, LLC, a Utah limited liability
company (“Orchard”), was previously engage
to provide managing broker-dealer services and was subsequently
terminated pursuant to the terms of the managing broker-dealer
agreement executed between Orchard and Company. To the extent that
any compensation, fees, reimbursements or other payments may be
claimed by Orchard relating to the sale of any Shares, the Managing
Broker-Dealer shall work in good faith to come to arrangements for
satisfaction of the same with Orchard. As part of any settlement or
arrangement related to such amounts, Managing Broker-Dealer shall
obtain from Orchard an acknowledgement from Orchard that said
settlement or arrangement is in full accord and satisfaction of any
and all amounts that may or could be owing to Orchard related to
the Offering.
5. Conditions of the Obligations of the
Managing Broker-Dealer. The obligations of the Managing
Broker-Dealer hereunder are subject to the following conditions,
which are to be satisfied at the Initial Closing and each
subsequent Closing, unless otherwise specified below:
5.1 (A)
No stop order suspending the qualification of the Offering
Statement shall have been issued, and no proceedings for that
purpose shall be pending or threatened by any securities or other
governmental authority (including, without limitation, the SEC),
(b) no order suspending the qualification or exemption of the
Shares under the securities or Blue Sky laws of any jurisdiction
shall be in effect and no proceeding for such purpose shall be
pending before, or threatened or contemplated by, any securities or
other governmental authority (including, without limitation, the
SEC), (c) any request for additional information on the part of the
staff of any securities or other governmental authority (including,
without limitation, the SEC) shall have been complied with to the
satisfaction of the staff of the SEC or such authorities and (d)
after the date hereof no amendment or supplement to the Offering
Statement or the final Offering Circular shall have been filed
unless a copy thereof was first submitted to the Managing
Broker-Dealer and the Managing Broker-Dealer did not object thereto
in good faith, and the Managing Broker-Dealer shall have received
certificates of the Company, dated each Closing Date and signed by
the Chief Executive Officer of the Company, and the Chief Financial
Officer of the Company, to the effect of clauses (a), (b) and
(c).
5.2 Since the
respective dates as of which information is given in the Offering
Statement and the final Offering Circular, (a) there shall not have
been a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Offering Statement and
the final Offering Circular and (b) the Company shall not have
sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any court or legislative or
other governmental action, order or decree, which is not set forth
in the Offering Statement and the final Offering Circular, if in
the reasonable judgment of the Managing Broker-Dealer any such
development makes it impracticable or inadvisable to consummate the
sale and delivery of the Shares to investors.
5.3 Since the
respective dates as of which information is given in the Offering
Statement and the final Offering Circular, there shall have been no
litigation or other proceeding instituted against the Company or
any of its officers or directors in their capacities as such,
before or by any federal, state or local or foreign court,
commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, which litigation or
proceeding, in the reasonable judgment of the Managing
Broker-Dealer, would reasonably be expected to have a Material
Adverse Effect.
5.4 Each of the
representations and warranties of the Company contained herein
shall be true and correct at each Closing Date in all respects for
those representations and warranties qualified by materiality and
in all material respects for those representations and warranties
that are not qualified by materiality, as if made on such date, and
all covenants and agreements herein contained to be performed on
the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to each
Closing Date shall have been duly performed, fulfilled or complied
with in all material respects.
5.5 FINRA shall not
have raised any objection with respect to the fairness or
reasonableness of the plan of distribution, or other arrangements
of the transactions, contemplated hereby.
8
6.
Indemnification
6.1 For
the purposes of this Section 6, an entity’s
“Indemnified
Parties” shall include such entity’s officers,
directors, employees, members, managers, partners, affiliates,
agents and representatives, and each person, if any, who controls
such entity within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act.
6.2 The Company will
indemnify, defend (subject to Section 6.6) and hold harmless the
Managing Broker-Dealer and the Dealers, and their respective
Indemnified Parties, from and against any losses, claims (including
the reasonable cost of investigation), damages or liabilities,
joint or several, to which such Dealers or the Managing
Broker-Dealer, or their respective Indemnified Parties, may become
subject, under the Securities Act or the Exchange Act, or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (a)
in whole or in part, any material inaccuracy in a representation or
warranty contained herein by the Company, any material breach of a
covenant contained herein by the Company or any material failure by
the Company to perform its obligations hereunder or to comply with
state or federal securities laws applicable to the Offering, (b)
any untrue statement or alleged untrue statement of a material fact
contained (i) in any Offering Statement or any post-qualification
amendment thereto or in the Offering Circular or any amendment or
supplement to the Offering Circular or (ii) in any Authorized Sales
Materials, (c) the omission or alleged omission to state a material
fact required to be stated in the Offering Statement or any
post-qualification amendment thereof necessary to make the
statements therein not misleading, or (d) the failure of the
Company to comply with any of the applicable provisions of the
Securities Act, Regulation A or the regulations thereunder, or any
applicable state laws or regulations, and the Company will
reimburse each Dealer or the Managing Broker-Dealer, and their
respective Indemnified Parties, for any legal or other expenses
reasonably incurred by such Dealer or the Managing Broker-Dealer,
and their respective Indemnified Parties, in connection with
investigating or defending such loss, claim, damage, liability or
action; provided, however,
that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of, or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in
conformity with written information furnished either (x) to the
Company by the Managing Broker-Dealer or (y) to the Company or the
Managing Broker-Dealer by or on behalf of any Dealer, in each case
expressly for use in the Offering Statement or any
post-qualification amendment thereof, or the Offering Circular or
any such amendment thereof or supplement thereto. Notwithstanding
the foregoing the indemnification and agreement to hold harmless
provided in this Section 6.2 is further limited to the extent that
no such indemnification by the Company of a Dealer or the Managing
Broker-Dealer, or their respective Indemnified Parties, shall be
permitted under this Agreement for, or arising out of, an alleged
violation of federal or state securities laws, unless one or more
of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee;
(ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the particular
indemnitee; or (iii) a court of competent jurisdiction approves a
settlement of the claims against the particular indemnitee and
finds that indemnification of the settlement and the related costs
should be made, and the court considering the request for
indemnification has been advised of the position of the SEC and of
the published position of any state securities regulatory authority
in which the Shares were offered or sold as to indemnification for
violations of securities laws.
6.3 The Managing
Broker-Dealer will indemnify, defend and hold harmless the Company
and Holmwood Capital Advisors, LLC (the “Manager”), each of their
respective Indemnified Parties and each person who has signed the
Offering Statement, from and against any losses, claims, damages or
liabilities to which any of the aforesaid parties may become
subject, under the Securities Act or the Exchange Act, or
otherwise, insofar as such losses, claims (including the reasonable
cost of investigation), damages or liabilities (or actions in
respect thereof) arise out of or are based upon (a) in whole or in
part, any material inaccuracy in a representation or warranty
contained herein by the Managing Broker-Dealer, any material breach
of a covenant contained herein by the Managing Broker-Dealer, or
any material failure by the Managing Broker-Dealer to perform its
obligations hereunder or (b) any untrue statement or any alleged
untrue statement of a material fact contained (i) in any Offering
Statement or any post-qualification amendment thereto or (ii) in
any Authorized Sales Materials, or (c) the omission or alleged
omission to state a material fact required to be stated in the
Offering Statement or any post-qualification amendment thereof
necessary to make the statements therein not misleading,
provided, however, that in
each case described in clauses (b) and (c) to the extent, but only
to the extent, that such untrue statement or omission was made in
reliance upon and in conformity with written information furnished
to the Company by the Managing Broker-Dealer specifically for use
with reference to the Managing Broker-Dealer in the preparation of
the Offering Statement or any such post-qualification amendments
thereof or the Offering Circular or any such amendment thereof or
supplement thereto, or (d) any use of sales literature by the
Managing Broker-Dealer not authorized or approved by the Company or
any use of “broker-dealer use only” materials with
members of the public concerning the Shares by the Managing
Broker-Dealer, or (e) any untrue statement made by the Managing
Broker-Dealer or its representatives or agents or omission to state
a fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading in
connection with the offer and sale of the Shares, or (f) any
failure by the Managing Broker-Dealer to comply with the applicable
provisions of the Securities Act, the Exchange Act, Regulation A,
the requirements and rules of FINRA, or any applicable state laws
or regulations. The Managing Broker-Dealer will reimburse the
aforesaid parties in connection with investigation or defense of
such loss, claim, damage, liability or action.
9
6.4 Each Dealer will
indemnify, defend and hold harmless the Company, the Manager, the
Managing Broker-Dealer, each of their respective Indemnified
Parties and each person who has signed the Offering Statement, from
and against any losses, claims, damages or liabilities to which any
of the aforesaid parties may become subject, under the Securities
Act or the Exchange Act, or otherwise, insofar as such losses,
claims (including the reasonable cost of investigation), damages or
liabilities (or actions in respect thereof) arise out of or are
based upon (a) in whole or in part, any material inaccuracy in a
representation or warranty contained in the Dealer’s
Participating Dealer Agreement by the Dealer, any material breach
of a covenant contained therein by the Dealer, or any material
failure by the Dealer to perform its obligations thereunder or (b)
any untrue statement or any alleged untrue statement of a material
fact contained (i) in any Offering Statement or any
post-qualification amendment thereto or (ii) in any Authorized
Sales Materials, or (c) the omission or alleged omission to state a
material fact required to be stated in the Offering Statement or
any post-qualification amendment thereof necessary to make the
statements therein not misleading, provided, however, that in each case
described in clauses (b) and (c) to the extent, but only to the
extent, that such untrue statement or omission was made in reliance
upon and in conformity with written information furnished to the
Company or the Managing Broker-Dealer by the Dealer specifically
for use with reference to the Dealer in the preparation of the
Offering Statement or any such post-qualification amendments
thereof or the Offering Circular or any such amendment thereof or
supplement thereto, or (d) any use of sales literature by the
Dealer not authorized or approved by the Company and the Managing
Broker-Dealer or any use of “broker-dealer use only”
materials with members of the public concerning the Shares by the
Dealer, or (e) any untrue statement made by the Dealer or its
representatives or agents or omission to state a fact necessary in
order to make the statements made, in light of the circumstances
under which they were made, not misleading in connection with the
offer and sale of the Shares, or (f) any other failure by the
Dealer to comply with the applicable provisions of the Securities
Act, the Exchange Act, Regulation A, the requirements and rules of
FINRA, or any applicable state laws or regulations. The Dealer will
reimburse the aforesaid parties in connection with investigation or
defense of such loss, claim, damage, liability or
action.
6.5 Promptly after
receipt by any indemnified party under this Section 6 of notice of
the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying
party under this Section 6, promptly notify the indemnifying party
of the commencement thereof; provided, however, the failure to give
such notice shall not relieve the indemnifying party of its
obligations hereunder except to the extent it shall have been
prejudiced by such failure. In case any such action is brought
against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to participate in the
defense thereof, with separate counsel. Such participation shall
not relieve such indemnifying party of the obligation to reimburse
the indemnified party for reasonable legal and other expenses
(subject to Section 6.6) incurred by such indemnified party in
defending itself, except for such expenses incurred after the
indemnifying party has deposited funds sufficient to effect the
settlement, with prejudice, of the claim in respect of which
indemnity is sought. Any such indemnifying party shall not be
liable to any such indemnified party on account of any settlement
of any claim or action effected without the consent of such
indemnifying party.
6.6 An indemnifying
party under Section 6 of this Agreement shall be obligated to
reimburse an indemnified party for reasonable legal and other
expenses as follows:
(a) In
the case of the Company indemnifying the Managing Broker-Dealer or
a Dealer or an Indemnified Party of either of them, the advancement
of Company funds to the Managing Broker-Dealer, Dealer or
Indemnified Party thereof for legal expenses and other costs
incurred as a result of any legal action for which indemnification
is being sought shall be permissible only if all of the following
conditions are satisfied: (i) the legal action relates to acts or
omissions with respect to the performance of duties or services on
behalf of the Company; (ii) the legal action is initiated by a
third party who is not a stockholder of the Company or the legal
action is initiated by a stockholder of the Company acting in his
or her capacity as such and a court of competent jurisdiction
specifically approves such advancement; and (iii) the Managing
Broker-Dealer, Dealer or Indemnified Party, as applicable,
undertakes to repay the advanced funds to the Company, together
with the applicable legal rate of interest thereon, in cases in
which the Managing Broker-Dealer, Dealer or Indemnified Party is
found not to be entitled to indemnification.
10
(b) In
any case of indemnification other than that described in Section
6.6(a) above, the indemnifying party shall pay all legal fees and
expenses reasonably incurred by the indemnified party in the
defense of such claims or actions; provided, however, that the
indemnifying party shall not be obligated to pay legal expenses and
fees to more than one law firm in connection with the defense of
similar claims arising out of the same alleged acts or omissions
giving rise to such claims notwithstanding that such actions or
claims are alleged or brought by one or more parties against more
than one indemnified party. If such claims or actions are alleged
or brought against more than one indemnified party, then the
indemnifying party shall only be obliged to reimburse the expenses
and fees of the one law firm that has been participating by a
majority of the indemnified parties against which such action is
finally brought; and in the event a majority of such indemnified
parties is unable to agree on which law firm for which expenses or
fees will be reimbursable by the indemnifying party, then payment
shall be made to the first law firm of record representing an
indemnified party against the action or claim. Such law firm shall
be paid only to the extent of services performed by such law firm
and no reimbursement shall be payable to such law firm on account
of legal services performed by another law firm.
6.7 To provide for just
and equitable contribution in circumstances in which the
indemnification provided pursuant to this Section 6 is for any
reason held to be unavailable from the Company, the Managing
Broker-Dealer or the Dealers, as the case may be, the Company, the
Managing Broker-Dealer and the Dealers shall contribute to the
aggregate losses, claims, damages or liabilities (including any
amount paid in settlement of any action, suit, or proceeding or any
claims asserted) in such amounts as a court of competent
jurisdiction may determine (or in the case of settlement, in such
amounts as may be agreed upon by the parties) in such proportion to
reflect the relative fault of the Company, on the one hand, and the
Managing Broker-Dealer and Dealers, on the other hand, in
connection with the events which resulted in such losses, claims,
damages or liabilities. The relative fault of the parties
shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or Managing
Broker-Dealer or Dealer, on the other, and the parties’
relative intent, knowledge, access to information and opportunity
to correct or prevent such omission or statement.
6.8 The indemnity
agreements contained in this Section 6 shall remain operative
and in full force and effect regardless of (a) any
investigation made by or on behalf of the Company, the Managing
Broker-Dealer, any Dealer, (b) delivery of any Shares and payment
therefor, and (c) any termination or completion of this
Agreement or any Participating Dealer Agreement. A successor of any
Dealer or of any of the parties to this Agreement, as the case may
be, shall be entitled to the benefits of the indemnity agreements
contained in this Section 6.
7.
Applicable Law; Venue and Dispute
Resolution.
7.1 This
Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by, the laws of
the State of South Carolina. The Company, the Managing
Broker-Dealer and each Dealer hereby agree that venue for any
action brought in connection with this Managing Broker-Dealer
Agreement or any action to enforce an arbitration award shall lie
exclusively in the state and federal courts residing in Greenville,
South Carolina. All disputes other than equitable actions and
disputes relating to the enforcement of arbitration awards shall be
resolved in accordance with Section 7.2 below.
7.2 Arbitration.
(a) Agreement to Arbitrate. Except as
provided in Section 7.2(c), any controversy, dispute or claim
arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement or to the
transactions contemplated hereby, including any claim based on
contract, tort or statute, shall be adjudicated at the request of
either party by arbitration conducted in Greenville, South
Carolina, or such other location upon which the parties may agree,
before a single arbitrator, selected in accordance with Section
7.2(b) and in accordance with the Rules for Commercial Arbitration
of the American Arbitration Association (the “AAA”), and judgment upon any award
rendered by the arbitrator may be entered by any state or federal
court having jurisdiction of the parties. Any controversy
concerning whether a dispute is an arbitrable dispute shall be
determined by the arbitrator. The designation of situs or
specifically governing law for this Agreement or the arbitration
shall not be deemed an election to preclude application of the
Federal Arbitration Act, if it is applicable.
11
(b) Selection of Arbitrator. The sole
arbitrator, who shall be selected in accordance with the procedures
of the AAA, shall be a retried or former judge of any federal court
appointed under Article III of the United States Constitution, as
amended, who sat in a court in the locality wherein the arbitration
is to be conducted or a retired or former judge of a trial court of
general jurisdiction or a higher court of such State.
(c) Aid to Arbitration. Either party
hereto may request a court of competent jurisdiction residing in to
render assistance in the arbitration as is permitted by the
Commercial Arbitration Rules of the AAA or to grant
provisional injunctive relief to either party solely for the
purpose of maintaining the status quo until the arbitrator can
render an award on the matter at hand or in question and such award
can be confirmed by a court having jurisdiction
thereof.
8.
Counterparts
This
Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original
contract, but all counterparts, when taken together, shall
constitute one and the same agreement.
9.
Successors and Amendment
9.1 This
Agreement shall inure to the benefit of and be binding upon the
Managing Broker-Dealer and the Company and their respective
successors, and to the benefit of the Dealers as applicable.
Nothing in this Agreement is intended or shall be construed to give
to any other person any right, remedy or claim, except as otherwise
specifically provided herein.
9.2 This Agreement may
be amended solely by the written agreement of the Managing
Broker-Dealer and the Company.
10.
Term
This
Agreement may be terminated by either party (a) immediately upon
notice to the other party in the event that the other party shall
have materially failed to comply with any of the material
provisions of this Agreement on its part to be performed during the
term of this Agreement or if any of the representations,
warranties, covenants or agreements of such party contained herein
shall not have been materially complied with or satisfied within
the times specified or (b) by either party on 30 days’
prior written notice.
In any
case, this Agreement shall expire at the close of business on the
Offering Termination Date. In addition, the Managing Broker-Dealer,
upon the expiration or termination of this Agreement, shall
(1) promptly deposit any and all funds in its possession which
were received from investors for the sale of Shares into such
account as the Company may designate; and (2) promptly deliver
to the Company all records and documents in its possession which
relate to the Offering which are not designated as dealer copies.
The Managing Broker-Dealer, at its sole expense, may make and
retain copies of all such records and documents, but shall keep all
such information confidential. The Managing Broker-Dealer shall use
its best efforts to cooperate with the Company to accomplish any
orderly transfer of management of the Offering to a party
designated by the Company. Upon expiration or termination of this
Agreement, the Company shall pay to the Managing Broker-Dealer all
commissions and expense reimbursements to which the Managing
Broker-Dealer is or becomes entitled under Section 4 at such
time as such commissions and expense reimbursements become
payable.
12
11.
Notice
Any
notice in this Agreement permitted to be given, made or accepted by
either party to the other, must be in writing and may be given or
served by (1) overnight courier, (2) depositing the same
in the United States mail, postpaid, certified, return receipt
requested, or (3) facsimile transmission. Notice deposited in
the United States mail shall be deemed given three (3) business
days after mailing. Notice given in any other manner shall be
effective when received at the address of the addressee. For
purposes hereof the addresses of the parties, until changed as
hereafter provided, shall be as follows:
|
To
Company:
|
HC
Government Realty Trust, Inc.c/o Holmwood Capital Advisors, LLC
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx, Xx.Fax: 000-000-0000
|
|
|
|
|
To
Managing Broker-Dealer:
|
SANDLAPPER
Securities, LLC
Sandlapper
Financial Center
000 X.
Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Xxxxxx X. GordonFax: 864-603-2930
With a
copy, which shall not constitute notice to:
[●]
|
12.
Severability
In the
event that any court of competent jurisdiction declares any
provision of this Agreement invalid, such invalidity shall have no
effect on the other provisions hereof, which shall remain valid and
binding and in full force and effect, and to that end the
provisions of this Agreement shall be considered
severable.
13.
Survivability. Except as the
context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be
representations, warranties and agreements at and as of the
Offering Termination Date, and such representations, warranties and
agreements by the Managing Broker-Dealer or the Company, including
the indemnity and contribution agreements contained in Section 6,
shall remain operative and in full force and effect regardless of
any investigation made by the Managing Broker-Dealer, the Company
and/or any controlling person, and shall survive the sale of, and
payment for, the Shares.
14.
No Waiver
Failure
by either party to promptly insist upon strict compliance with any
of the obligations of the other party under this Agreement shall
not be deemed to constitute a waiver of the right to enforce strict
compliance with respect to any obligation hereunder.
15.
Recovery of Costs
If any
legal action or other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys’ fees and other
costs incurred in that action or proceeding (and any additional
proceeding for the enforcement of a judgment) in addition to any
other relief to which it or they may be entitled.
13
This
Agreement may not be assigned by either party, except with the
prior written consent of the other party. This Agreement shall be
binding upon the parties hereto, their heirs, legal
representatives, successors and permitted assigns.
17.
Entire Agreement.
This
Agreement constitutes the entire understanding between the parties
hereto and supersedes any prior understandings or written or oral
agreements between them respecting the subject matter
hereof.
18.
Confirmation
The Company agrees to confirm all orders for purchase of Shares
that are accepted by the Company and provide such confirmation to
the Managing Broker-Dealer and the Dealers. To the extent
practicable and permitted by law, all such confirmations may be
provided electronically.
19.
Privacy Act
To
protect Customer Information (as defined below) and to comply as
may be necessary with the requirements of the Xxxxx-Xxxxx-Xxxxxx
Act, the relevant state and federal regulations pursuant thereto
and state privacy laws, the Managing Broker-Dealer hereby agrees to
the confidentiality and non-disclosure obligations set forth
herein.
19.1 “Customer
Information” means any information contained on a
customer’s application or other form and all nonpublic
personal information about a customer that a party receives from
the other party. “Customer
Information” shall include, but not be limited to,
name, address, telephone number, social security number, health
information and personal financial information (which may include
consumer account number).
19.2 The
Managing Broker-Dealer understands and acknowledges that it may be
financial institutions subject to applicable federal and state
customer and consumer privacy laws and regulations, including Title
V of the Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C. 6801, et seq.) and
regulations promulgated thereunder (collectively, the
“Privacy Laws”),
and any Customer Information received by the Managing Broker-Dealer
is received with limitations on its use and disclosure. The
Managing Broker-Dealer agrees that it is prohibited from using the
Customer Information received other than (i) as required by law,
regulation or rule, or (ii) to carry out the purposes for which one
party discloses Customer Information to the other party pursuant to
this Agreement, as permitted under the “use in the ordinary course of
business” exception to the Privacy Laws.
19.3 The
Managing Broker-Dealer shall establish and maintain safeguards
against the unauthorized access, destruction, loss, or alteration
of Customer Information in its control which are no less rigorous
than those maintained by the Managing Broker-Dealer for its own
information of a similar nature. In the event of any improper
disclosure of any Customer Information, the Managing Broker-Dealer
will immediately notify the Company.
[Signatures
appear on next page]
14
If the
foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that
purpose, whereupon this letter and your acceptance shall constitute
a binding agreement between us as of the date first above
written.
Very
truly yours,
By:
/s/ Xxxxxx X. Xxxxxx,
Xx.
Name:
Xxxxxx X. Xxxxxx, Xx.
Its:
President and Director
Accepted
and agreed as of the
date
first above written.
MANAGING BROKER-DEALER
SANDLAPPER
Securities, LLC
By:
/s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Its:
Chief Executive Officer
15
Exhibit A
PARTICIPATING DEALER AGREEMENT
Filed
as Exhibit No. 1.2 to the Current Report on Form 1-U, dated as of
April 11, 2017, of HC Government Realty Trust, Inc.
1
