Subscription Agreement
Exhibit 4.1
This
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”)
is dated as of March 19, 2019 by and between HC Government Realty
Trust, Inc., a Maryland corporation (the “Company”), and the
undersigned (the “Investor”), and provides
as follows:
RECITALS
A. The
Company is offering up to 1,050,000 shares of its 10.00% Series B
Cumulative Convertible Preferred Stock (the “Preferred Stock”) for an
offering price of $10.00 per share with a maximum aggregate
offering amount of $10,500,000 (the “Maximum Offering
Amount”). The offering of the Preferred Stock is
referred to herein as the (“Offering”).
B. The
Investor wishes to purchase, and the Company wishes to issue and
sell to the Investor, on the date hereof _____ shares of the
Preferred Stock (the “Acquired Shares”) for
aggregate purchase price of $_____ (the “Purchase
Price”).
C. The
rights, privileges and obligations pertaining to ownership of
shares of the Preferred Stock are governed by the Company’s
Articles of Incorporation, as amended or supplemented
(“Charter”), Bylaws and
Articles Supplementary to the Charter relating to the Preferred
Stock. Copies of the Charter and Bylaws are attached hereto as
Exhibits A-1 and
A-2, and a copy of the form Articles Supplementary, to be
filed on or before the initial closing of this Offering is attached
hereto as Exhibit
A-3 (the “Articles Supplementary”
and together with the Charter and the Bylaws, the
“Organic
Documents”).
NOW,
THEREFORE, in consideration of the foregoing and the promises and
covenants contained in this Subscription Agreement, the Company and
Investor hereby agree as follows:
1. Issuance
of Preferred Stock. The Company hereby agrees to issue to
Investor, and Investor hereby agrees to acquire the Acquired Shares
in exchange and consideration for Investor’s payment of the
Purchase Price to the Company. As of the date hereof, upon payment
of the Investor’s subscription price, the Company shall
promptly issue the Acquired Shares to the Investor in book-entry
only format and the Investor’s subscription funds shall be
immediately available to the Company for its business
purposes.
2. Payment
of Purchase Price. Concurrently with execution and delivery
of this Subscription Agreement, Investor shall deliver its Purchase
Price to the Company in immediately available funds.
3. Representations
and Warranties of Investor. Investor represents and warrants
to the Company that:
(a) This
Subscription Agreement has been duly authorized, executed, and
delivered by the Investor and constitutes the Investor’s
legal, valid, and binding obligation enforceable in accordance with
its respective terms, except as enforceability thereof may be
limited by any applicable bankruptcy, reorganization, insolvency or
other laws affecting creditors' rights generally or by general
principles of equity. The Investor is a corporation, limited
liability company, limited partnership or other legal entity that
has all requisite power and authority (corporate or otherwise) to
execute and deliver this Subscription Agreement and to perform its
obligations hereunder and to consummate the transactions
contemplated hereby.
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(b) The
Investor is acquiring the Acquired Shares for the Investor’s
own account for investment and not with a view to resale or
distribution. The Investor understands that the Acquired Shares
have not been, and will not be, registered under the Securities Act
of 1933, as amended (the “1933 Act”), by reason of
a specific exemption from the registration provisions of the 1933
Act that depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Investor’s
representations and warranties as expressed herein. The Investor
has not been formed solely for the purpose of acquiring the
Acquired Shares.
(c) The
Investor: (i) has been furnished all agreements, documents, records
and books that the Investor has requested relating to an investment
in the Acquired Shares; and (ii) has been given the opportunity to
ask questions of, and receive answers from, the Company concerning
the terms and conditions of the Offering, the Preferred Stock, the
Company and its business and to obtain such additional information
that was otherwise provided, and it has not been furnished any
other literature relating to the Offering, the Preferred Stock, the
Company or its business.
(d) The
Investor recognizes (i) that purchase of the Acquired Shares
involves a high degree of risk and has taken full cognizance of and
understands such risks, (ii) that all information provided by the
Company relating to its use of proceeds, and other information
which is not of an historical nature represents only the
Company’s good faith assessment of its future expenses,
revenues, and operations, as applicable, and is based upon
assumptions which the Company believes are reasonable, although no
assurance exists that such forecasts and assumptions will be
fulfilled, and (iii) that the Company has relied on the
representations of the Investor as set forth in this Section in
determining materiality for purposes of satisfying the disclosure
obligations of the Company and in determining the availability of
exemptions from registration requirements under federal and state
securities laws.
(e) The
Investor fully understands and agrees that the Investor must bear
the economic risk of the purchase of the Acquired Shares for an
indefinite period of time because, among other reasons, the
Acquired Shares have not been registered under the 1933 Act, or the
securities laws of any state, and therefore cannot be sold,
pledged, assigned or otherwise disposed of unless they are
subsequently registered under the 1933 Act and applicable state
securities laws or an exemption from such registration is
available.
(f) The
Investor (i) can bear the risk of losing the entire investment;
(ii) has overall commitments to other investments which are not
readily marketable that are not disproportionate to his, her or its
net worth and the investment in the Acquired Shares will not cause
such overall commitment to become excessive; (iii) has adequate
means of providing for current needs and personal contingencies and
has no need for liquidity in the investment in the Acquired Shares;
and (iv) has sufficient knowledge and experience in financial and
business matters such that it is capable, either alone, or together
with one or more advisors, of evaluating the risks and merits of
investing in the Acquired Shares.
(g) The
Investor has not incurred, and will not incur, directly or
indirectly, as a result of any action taken by the Investor, any
liability for brokerage or finder’s fees or agent’s
commissions or any similar charges in connection with this
Subscription Agreement.
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(h) The
Investor acknowledges that the Investor must depend entirely upon
his, her or its own personal advisors for tax advice concerning an
investment in the Company, that the Company has not provided any
information on tax matters, and that any information provided to or
it by, or on behalf of, the Company is not to be construed as tax
advice to it from counsel to the Company. The Investor will rely
solely on his, her or its own personal advisors and not on any
statements or representations of the Company or any of its agents
and understands that the Investor (and not the Company) shall be
responsible for the Investor’s own tax liability that may
arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.
(i) The
Investor accepts the terms of the Company’s Organic
Documents.
(j) The
representations and warranties made in this Section, and all other
information that the Investor has provided to the Company, either
directly or indirectly, concerning the Investor’s financial
position and knowledge of financial and business matters, is
correct and complete as of the date hereof.
(k) The
Investor qualifies as an "Accredited Investor" as such term is
defined under Rule 501 of Regulation D promulgated under the 1933
Act.
(l) Neither
the Investor nor, to the extent it has them, any of its equity
owners who own 20% or more of the outstanding equity of Investor,
(collectively with the Investor, the “Investor Covered
Persons”), are subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act, except for a Disqualification Event covered by
Rule 506(d)(2) or (d)(3); provided, however that if an Investor
Covered Person is subject to a Disqualification Event covered by
Rule 506(d)(2)(i) then Investor shall have provided the Company
with such information as necessary to make the required disclosure
regarding the applicable Disqualification Event under Rule 506(e).
The Investor has exercised reasonable care to determine whether any
Investor Covered Person is subject to a Disqualification Event. The
purchase of the Acquired Shares by the Investor will not subject
the Company to any Disqualification Event.
4. The
Company hereby represents and warrants to Investor that, as of the
date hereof:
(a) it
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland;
(b) it
has full power and authority to execute and deliver, and to perform
its obligations under, this Subscription Agreement and the
consummation by it of the transactions contemplated hereby has been
duly authorized by all necessary action on its part;
(c) this
Agreement has been duly and validly executed and delivered by the
Company and constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar
laws;
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(d) the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not, with
or without the giving of notice or the lapse of time or both, (i)
violate any provision of law, statute, rule or regulation to which
the Company is subject, (ii) violate any order, judgment or decree
applicable to it, or (iii) conflict with or result in a breach or
default under any term or condition of the Organic Documents or any
agreement or other instrument to which it is a party or by which it
is bound;
(e) no
consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any
federal, state or local governmental authority on part of the
Company is required in connection with the consummation of the
transactions contemplated by this Subscription Agreement, except
for such filings required pursuant to applicable federal and state
securities laws;
(f) as
of the closing of this Subscription Agreement and immediately after
the transactions contemplated to occur concurrently
herewith1, the authorized capital stock of the
Company shall consist of (i) 750,000,000 shares of Common Stock,
par value of $0.001 per share, of which 2,525,457 shares are issued
and outstanding, (ii) 400,000 shares of 7.00% Series A Cumulative
Convertible Preferred Stock, par value of $0.001 per share, of
which 144,500 shares are issued and outstanding, and (iii)
2,050,000 shares of Preferred Stock, par value of $0.001 per share,
of which 1,050,000 shares shall be issued and outstanding. All such
issued and outstanding shares have been duly authorized and validly
issued and have been offered, issued, sold, and (assuming the truth
and accuracy of the representations and warranties of Investor
herein) delivered by the Company in compliance with applicable
federal and state securities laws. Other than the Organic
Documents, the Company is not party to, or otherwise bound by, any
agreement affecting the voting of any of its capital
stock;
(h) the
Acquired Shares issued hereunder will, upon issuance, be validly
issued, fully paid and nonassessable, free and clear of any liens
or other encumbrances (other than restrictions under securities
laws), free of preemptive rights and rights of first refusal and
(assuming the truth and accuracy of the representations and
warranties of Investor herein) the issuance of the Acquired Shares
hereunder shall be exempt from registration under the Securities
Act and any applicable state securities laws.
5. Survival;
Indemnification.
(a) The
representations and warranties of Investor contained in Section 3
of this Subscription Agreement shall survive the closing of the
purchase and sale of the Acquired Shares.
(b) Investor
hereby agrees to indemnify, defend and hold harmless the Company
and its shareholders, officers, directors, affiliates, external
managers and advisors from any and all damages, losses,
liabilities, costs and expenses (including reasonable attorneys'
fees) that they may incur by reason of Investor’s failure to
fulfill all of the terms and conditions of this Subscription
Agreement or by reason of the untruth or inaccuracy of any of the
representations, warranties or agreements contained herein or in
any other documents Investor has furnished to any of the foregoing
in connection with the transactions described herein. This
indemnification includes, but is not limited to, any damages,
losses, liabilities, costs and expenses (including reasonable
attorneys' fees) incurred by the Company, and all of its respective
shareholders, officers, directors, affiliates, external managers or
advisors defending against any alleged violation of federal or
state securities laws that is based upon or related to any untruth
or inaccuracy of any of the representations, warranties or
agreements contained herein or in any other documents Investor has
furnished in connection with this transaction.
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6. Applicable
Law; Venue. This Subscription Agreement shall be construed
in accordance with, and governed by, the laws of the State of
MARYLAND without reference to the choice of law principles of any
jurisdiction. THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
CONSENT TO THE EXCLUSIVE JURISDICTION OF A COURT OF COMPETENT
JURISDICTION SARASOTA COUNTY, FLORIDA IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND AGREE NOT TO
COMMENCE ANY SUIT, ACTION OR PROCEEDING RELATING THERETO EXCEPT IN
SUCH COURTS. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO
ANY LITIGATION ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION
AGREEMENT.
7. Binding
Effect. Except as otherwise provided herein, this
Subscription Agreement shall be binding upon, and inure to the
benefit of, the parties and their heirs, executors, administrators,
successors, legal representatives, and assigns.
8. Notice.
All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall
be in writing and shall be deemed to have been given three days
after the date mailed when mailed by registered or certified mail,
postage prepaid, or the next business day if sent by special
courier such as Federal Express (except that notice of change of
address shall be deemed given only when received), to the address
shown on the signature pages hereto, in the case of Investor, and
HC Government Realty Trust, Inc., 0000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, XX 00000, attn.: Chief Executive Officer, in the case of
the Company, or to such other names or addresses as the Company or
the Investor, as the case may be, shall designate by notice to the
other party in the manner specified in this Section 7.
9. Severability.
If any provision of this Subscription Agreement or its application
to anyone or under any circumstances is adjudicated to be invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provisions or
applications of this Subscription Agreement that can be given
effect without the invalid or unenforceable provision or
application and shall not invalidate or render unenforceable the
invalid or unenforceable provision in any other jurisdiction or
under any other circumstance.
10. Entire
Agreement. This Subscription Agreement (including all
exhibits, appendices and schedules) and the Organic Documents,
constitute the entire agreement by and between the parties
pertaining to the subject matter hereof and supersede all prior and
contemporaneous understandings of the parties.
11. Variation
in Pronouns. All pronouns shall be deemed to refer to
masculine, feminine, neuter, singular, or plural, as the identity
of the person or persons may require.
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12. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
13. Legal
Counsel; Potential Conflicts. This Subscription Agreement
has been prepared by Xxxxxx Voekler Xxxxxxxxxx & Xxxxx, PLC, as
counsel to the Company (“Counsel”),
after full disclosure of its representation of the Company and with
the consent and direction of the Company and the Investor. The
Investor has reviewed the contents of this Subscription Agreement,
and fully understand its terms. The Investor acknowledges that it
is fully aware of its right to the advice of counsel independent
from that of the Company, and that it understands the potentially
adverse interests of the parties with respect to this Subscription
Agreement. The Investor further acknowledges that no
representations have been made with respect to the tax or other
consequences of this Subscription Agreement and any acquisition of
the Preferred Stock, to any individual Investor and that it has
been advised of the importance of seeking independent counsel with
respect to such consequences. By executing this Subscription
Agreement the Investor represents that it has, after being advised
of the potential conflicts among the Investor and the Company with
respect to the future consequences of this Subscription Agreement,
an investment in the Preferred Stock either consulted independent
legal counsel or elected, notwithstanding the advisability of
seeking such independent legal counsel, not to consult such
independent legal counsel.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, this Subscription Agreement has been duly executed
by the Company and the undersigned Investor or its duly authorized
officer, as the case may be, as of the date first written
above.
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INVESTOR:
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[Investment
Entity(ies)]
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By:
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Taxpayer
Identification Number
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Address:
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ACCEPTED BY THE
COMPANY:
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By:
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Name:
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EXHIBIT A-1
CHARTER
(see attached)
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EXHIBIT A-2
BYLAWS
(see attached)
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EXHIBIT A-3
FORM OF ARTICLES SUPPLEMENTARY
(See Attached)
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