SANDLAPPER SECURITIES, LLC SANDLAPPER FINANCIAL CENTER
Exhibit
1.2
SANDLAPPER SECURITIES, LLC
SANDLAPPER
FINANCIAL CENTER
000 X.
Xxxxx Xx., 0xx Xxxxx
Xxxxxxxxxx,
XX 00000
000-000-0000
for
Shares in
,
20
Ladies
and Gentlemen:
The
undersigned, Sandlapper Securities, LLC, a South Carolina limited
liability company (the “Managing Broker-Dealer”), has
entered into an agreement (the “MBD Agreement”) with HC
Government Realty Trust, Inc., a Maryland corporation (the
“Company”) for the sale (the “Offering”) of
up to $30,000,000 of shares of common stock (the
“Shares”) in the Company, pursuant to which the
Managing Broker-Dealer has agreed to use its best efforts to form
and manage, as the Managing Broker-Dealer, a group of securities
dealers (the “Dealers”) for the purpose of soliciting
offers for the purchase of the Shares. The MBD Agreement is
attached as Exhibit A. The Company has prepared and filed an
Offering Statement on Form 1-A, File No.: 024-10563 (together with
all amendments thereto, the “Offering Statement”) with
the Securities and Exchange Commission (“SEC”). The
date the Offering Statement is qualified by SEC shall be referred
to herein as the “Qualification Date.” The Shares will
be offered during a period commencing on the Qualification Date,
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, or
(iii) a determination by the Company’s board of
directors to terminate the Offering (the “Offering
Termination Date”); provided, however, that the Company in
its sole discretion may terminate the Offering at any time. If
subscriptions for at least 300,000 Shares ($3,000,000, the
“Minimum Offering Amount”) have not been received and
accepted by the Company before the Minimum Termination Date none of
the Shares will be sold and all funds tendered for the purchase of
Shares will be refunded in full to each subscriber without
deductions or charges. Terms used but not otherwise defined in this
Participating Dealer Agreement (this “Agreement”) have
the same meanings as set forth in the MBD Agreement. The Shares
will be offered at a price of $10.00 per Share.
You are
invited to become a Dealer and by your confirmation hereof you
agree to act in such capacity and to use your best efforts, in
accordance with the following terms and conditions, to find
qualified investors (the “Investors”) for the Shares.
By your acceptance of this Agreement, you will become one of the
Dealers and will be entitled to and subject to the indemnification
and contribution provisions contained in the MBD Agreement,
including the provisions of the MBD Agreement wherein the Dealers
severally agree to indemnify and hold harmless the Company and the
Managing Broker-Dealer for certain actions.
1. Dealer
Representations.
1.1 You
hereby confirm that you (i) are a member in good standing of
the Financial Industry Regulatory Authority, Inc.
(“FINRA”), (ii) are qualified and duly registered
to act as a broker-dealer within all states in which you will sell
the Shares, (iii) are a broker-dealer duly registered with the
SEC pursuant to the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and (iv) will maintain all
such registrations and qualifications in good standing for the
duration of your involvement in the Offering. You agree to
immediately notify the Managing Broker-Dealer if you cease to be a
member of FINRA in good standing.
1.2 You
hereby agree to solicit, as an independent contractor, and not as
the Managing Broker-Dealer’s agent, or as an agent of the
Company or its affiliates, persons acceptable to the Company to
purchase the Shares pursuant to the Subscription Agreement (the
“Subscription Agreement”) in the form attached to the
Offering Statement and in accordance with the terms of the Offering
Statement and to diligently make inquiries as required by this
Agreement, the Offering Statement or applicable law with respect to
prospective Investors in order to ascertain whether a purchase of
the Shares is suitable for the Investor. In accordance with the
instructions set forth in the Subscription Agreement, all the
Subscription Agreements shall be transmitted to the Managing
Broker-Dealer. If you receive any funds from a subscriber with
respect to any Subscription Agreement, you shall immediately
transmit such funds to the Escrow Account. To the extent received
by the Managing Broker-Dealer, the Managing Broker-Dealer will be
responsible for the transmittal of such funds for the purchase of
Shares to the Escrow Account. 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. No
Subscription Agreement shall be effective unless and until accepted
by the Company, it being understood that the Company may accept or
reject any Investor in its sole discretion and that the Company may
terminate the Offering at any time for any reason.
1.3 You
understand that the offering of Shares is made on an
“minimum/maximum, best-efforts” basis, as described in
the Offering Circular. You further understand and agree that your
compensation under this Agreement for the sale of Shares is
conditioned upon the sale of at least $3,000,000 in Shares before
the Minimum Offering Termination Date, and the Company’s
acceptance of sales by you, and that the failure to sell at least
$3,000,000 in Shares or the failure to accept a purchase for Shares
shall relieve the Managing Broker-Dealer or any other party of any
obligation to pay you for any services rendered by you in
connection with the sale of Shares under this Agreement or
otherwise.
1.4 You
agree that before participating in the Offering, you will have
reasonable grounds to believe, based on information made available
to you by the Managing Broker-Dealer and/or the Company through the
Offering Circular, that all material facts are adequately and
accurately disclosed in the Offering Circular and provide a basis
for evaluating the Company and the Shares.
1.5 You
agree not to execute any transaction in which an Investor invests
in the Shares in a discretionary account without prior written
approval of the transaction by the Investor and the Managing
Broker-Dealer.
1.6 You
agree to comply in all respects with the purchase procedures and
plan of distribution set forth in the Offering Circular. Further,
you agree that although you may receive due diligence regarding the
Offering from the Company in electronic form, you will not
distribute to any prospective Investor or any other person any such
due diligence material.
1.7 All
subscriptions solicited by you will be strictly subject to
confirmation by the Managing Broker-Dealer and acceptance thereof
by the Company. The Managing Broker-Dealer and the Company reserve
the right in their absolute discretion to reject any such
subscription and to accept or reject subscriptions in the order of
their receipt by the Company, as appropriate or otherwise. Neither
you nor any other person is authorized to, and neither you nor any
of your employees, agents or representatives shall give any
information or make any representation other than those contained
in the Offering Circular or in any supplemental sales literature
furnished by the Managing Broker-Dealer or the Company for use in
making solicitations in connection with the offer and sale of the
Shares.
2
1.8
Upon authorization by the Managing Broker-Dealer, you may offer the
Shares at the Offering price set forth in the Offering Circular,
subject to the terms and conditions thereof.
1.9 The
Company or the Managing Broker-Dealer will provide you with such
number of copies of the Offering Circular as you may reasonably
request. You will be solely responsible for correctly placing
orders of such materials, and will reimburse the Managing
Broker-Dealer for any costs incurred in connection with
unreasonable or mistaken orders. The Managing Broker-Dealer also
understands that the Company may provide you with certain
supplemental sales material to be used by you in connection with
the solicitation of purchases of the Shares. If you elect to use
such supplemental sales material, you agree that such material
shall not be used in connection with the solicitation or purchase
of the Shares unless accompanied or preceded by the Offering
Circular, as then currently in effect, and as it may be amended or
supplemented in the future.
1.10
The Managing Broker-Dealer shall have full authority to take such
action as it may deem advisable with respect to all matters
pertaining to the Offering. The Managing Broker-Dealer shall be
under no liability to you except for lack of good faith and for
obligations expressly assumed by it in this Agreement. Nothing
contained in this Section is intended to operate as, and the
provisions of this Section shall not constitute a waiver by you, of
compliance with any provision of the Securities Act, the Exchange
Act, other applicable federal law, applicable state law or of the
rules and regulations thereunder.
1.11
For the sale of Shares, you will instruct all Investors to make
their checks payable to “Branch Banking and Trust Company, as
Escrow Agent for HC Government Realty Trust, Inc.” or to
deposit funds in their Folio Investor Account. If you receive a
check that does not conform with the foregoing instructions, you
shall return such check directly to such subscriber not later than
the end of the next business day following its
receipt.
1.12
You will limit the offering of the Shares to persons whom you have
reasonable grounds to believe, and in fact believe, meet the
financial suitability and other Investor requirements set forth in
the Offering Statement.
1.13
After the Offering Statement has been filed with the SEC but prior
to the Qualification Date, you are required to provide each
prospective Investor with a copy of the Preliminary Offering
Circular and any exhibits and appendices thereto (which are
contained in the Offering Statement). After the Qualification Date,
you are required to provide each prospective Investor with a copy
of the final Offering Circular and any exhibits and appendices
thereto. If a prospective Investor receives the Preliminary
Offering Circular, then you 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. If an Investor
purchases Shares within 90 calendar days of the Qualification Date,
you will deliver to the Investor, no later than two business days
following the completion of such sale, a copy of the final Offering
Circular and all exhibits and appendices thereto either by
(i) electronic delivery of the final Offering Circular or the
uniform resource locator (the “URL”) to where the final
Offering Circular may be accessed on the SEC’s Electronic
Data Gathering, Analysis and Retrieval System
(“XXXXX”), or (ii) mailing the final Offering
Circular and all exhibits and appendices thereto to the Investor at
the address indicated in the Subscription Agreement.
1.14
During the course of the Offering, you will advise each prospective
Investor at the time of the initial offering to him or her that the
Company and/or its agents and consultants will, during the course
of the Offering and prior to any sale, accord said Investor and his
or her purchaser representative, if any, the opportunity to ask
questions of and to receive answers from the Company and/or its
agents and consultants concerning the terms and conditions of the
Offering and to obtain any additional information, which
information is possessed by the Company or may be obtained by it
without unreasonable effort or expense and which is necessary to
verify the accuracy of the information contained in the Offering
Statement.
1.15
You will immediately bring to the attention of the Company and the
Managing Broker-Dealer any circumstance or fact which causes you to
believe the Offering Statement, or any other literature distributed
pursuant to the Offering, or any information supplied to
prospective Investors in their purchase materials, may be
inaccurate or misleading.
3
1.16
You agree that in recommending to an Investor the purchase or sale
of the Shares, you shall have reasonable grounds to believe, on the
basis of information obtained from the prospective Investor
concerning his or her investment objectives, other investments,
financial situation and needs, and any other information known by
you, that:
1.16.1
The prospective Investor is an accredited investor or is otherwise
not investing more than such Investor’s maximum investment as
set forth in the Offering Statement and the acquisition of Shares
is otherwise a suitable investment for such Investor as may be
required by all applicable laws, rules and
regulations;
1.16.2
The prospective Investor is or will be in a financial position
appropriate to enable him or her to realize to a significant extent
the benefits described in the Offering Statement;
1.16.3
The prospective Investor has a fair market net worth sufficient to
sustain the risks inherent in an investment in the Shares,
including, but not limited to, the total loss of the investment,
lack of liquidity and other risks described in the Offering
Statement; and
1.16.4
An investment in the Shares is otherwise suitable for the
prospective Investor.
1.17
You agree to keep records in compliance with the requirements
imposed by (i) federal and state securities laws and the rules
and regulations thereunder and (ii) the applicable rules of
FINRA. You agree to retain in your records and make available to
the Managing Broker-Dealer and to the Company, for a period of at
least 6 years following the Offering Termination Date, information
establishing that (i) each person who purchases the Shares
pursuant to a Subscription Agreement solicited by you is within the
permitted class of Investors under the requirements of the
jurisdiction in which such Investor is a resident, (ii) each
person met the suitability requirements set forth in the Offering
Statement and the Subscription Agreement and (iii) each person
is suitable for such investment and the basis on which such
suitability determination was made. You also agree to make your
records regarding suitability available to representatives of the
SEC and FINRA and applicable state securities administrators upon
the Managing Broker-Dealer’s request.
1.18
You agree that upon request by the Managing Broker-Dealer, you will
furnish a complete list of all persons who have been offered the
Shares (including the corresponding number of the Offering
Statement delivered to such persons) and such persons’ place
of residence.
1.19
You agree that before executing a purchase transaction in the
Shares, you will inform the prospective Investor and his or her
purchaser representative, if any, of all pertinent facts relating
to the liquidity and marketability of the Shares, as appropriate,
during the term of the investment.
1.20
You hereby undertake and agree to comply with all obligations
applicable to you as set forth in FINRA rules, including, but not
limited to, any new suitability and filing
requirements.
1.21
You agree not to rely upon the efforts of the Managing
Broker-Dealer in (i) performing due diligence related to the
Company (including its members, managers, officers, directors,
employees, and Affiliates), the Shares, or the suitability thereof
for any Investors and (ii) determining whether the Company has
adequately and accurately disclosed all material facts upon which
to provide a basis for evaluating the Company to the extent
required by federal law, state law and/or FINRA. You further agree
that you are solely responsible for performing adequate due
diligence, and you agree to perform adequate due diligence as
required by federal law, state law, and/or FINRA.
1.22
You will refrain from making any representations to any prospective
Investor other than those contained in the Offering Statement, and
will not allow any other written materials to be used to describe
the potential investment to prospective Investors other than the
Offering Statement or factual summaries and sales brochures of the
Offering prepared by the Company and distributed by the Managing
Broker-Dealer.
1.23
You will refrain from distributing any material to prospective
Investors that is marked “Financial Advisor Use Only”
or “Broker-Dealer Use Only,” or any other due diligence
material related to the Offering received by you.
4
1.24
Neither you nor any of your managing members, directors, or
executive officers, or any of your officers participating in the
offering is subject to the disqualification provisions of Rule 262
of the Rules and Regulations. None of your registered
representatives or any other person being compensated by or through
you for the solicitation of investors, is subject to the
disqualification provisions of Rule 262 of the Rules and
Regulations.
1.25
You acknowledge that this Offering is being made in reliance on
Regulation A promulgated under the Securities Act and that the
Company is relying on a certification from you that a potential
Investor meets with the suitability requirements set forth in the
Offering Statement.
1.26
You will provide the Managing Broker-Dealer with such information
relating to the offer and sale of the Shares by you as the Managing
Broker-Dealer may from time to time reasonably
request.
2. Compensation.
Subject to certain conditions, and in consideration of your
services hereunder, the Managing Broker-Dealer will pay you sales
commissions and marketing allowances as follows:
2.1 You
will receive a selling commission in an amount up to 6% of the
purchase price of the Shares sold by you; provided, however, that
this amount will be reduced to the extent the Managing
Broker-Dealer negotiates a lower commission rate with you, in which
event the commission rate will be the lower agreed upon rate (the
above being referred to as the
“Commissions”).
2.2 You
may receive a non-accountable marketing and due diligence allowance
of up to 1% of the purchase price of the Shares sold by you (the
“Allowances”).
2.3
Payment of the Commissions and the Allowances shall be subject to
the following conditions:
(a) No
Commissions or Allowances will be payable with respect to any
Subscription Agreements that are rejected by the Company or the
Managing Broker-Dealer, or if the Company terminates the Offering
for any reason whatsoever.
(b) No
Commissions or Allowances will be payable unless and until release
to the Company of funds from the Escrow Account or the Folio
Investor Account, as applicable with which, in the aggregate, there
is to be deposited the Minimum Offering Amount of
$3,000,000.
(c) No
Commissions or Allowances will be payable to you with respect to
any sale of the Shares by you unless and until such time as the
Company has received the total proceeds of any such sale from the
Escrow Account and/or the Folio Investment Accounts and the
Managing Broker-Dealer has received the aggregate amount of sales
commission to which it is entitled.
2.4 All
other expenses incurred by you in the performance of your
obligations hereunder, including, but not limited to, expenses
related to the Offering and any attorneys’ fees, shall be at
your sole cost and expense, and the foregoing shall apply
notwithstanding the fact that the Offering is not consummated for
any reason.
2.5
Once Commissions or Allowances become payable, they will be paid on
the first and fifteenth of each month. You agree that, in the event
any Commissions or Allowances have been paid to the Managing
Broker-Dealer pursuant to the terms of the Managing Broker-Dealer
Agreement, you will look solely to the Managing Broker-Dealer for
payment of any Commissions or Allowances.
2.6 In
the event that a purchase is revoked or rescinded, the Dealer will
be obligated to return to the Managing Broker-Dealer any
Commissions or Allowances previously paid to the Dealer in
connection with such purchase.
3. Solicitation.
3.1 In
soliciting persons to acquire the Shares, you agree to comply with
any applicable requirements of the Securities Act, the Exchange
Act, applicable state securities laws, the published rules and
regulations thereunder and FINRA rules and, in particular, you
agree that you will not give any information or make any
representations other than those contained in the Offering
Statement and in any supplemental sales literature furnished to you
by the Managing Broker-Dealer or the Company for use in making such
solicitations.
5
3.2 You
will conduct all solicitation and sales efforts in conformity with
Regulation A promulgated under the Securities Act, and
exemptions available under applicable state law and conduct
reasonable investigation to ensure that all prospective Investors
are not (i) listed on the Specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Asset
Control, Department of the Treasury (“OFAC”) pursuant
to Executive Order No. 133224, 66 Fed. Reg. 49079 (September
25, 2001) and/or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable enabling
legislation or other Executive Orders in respect thereof (such
lists are collectively referred to as “Lists”) or
(ii) owned or controlled by, nor act for or on behalf of, any
person or entity on the Lists.
3.3 You
agree to promptly provide to the Managing Broker-Dealer copies of
any written or otherwise documented complaints from customers
received by you relating in any way to the Offering (including, but
not limited to, the manner in which the Shares are offered by
you).
4. Offer
and Sale Activities. It is understood that under no
circumstances will you engage in any activities hereunder in any
state other than those for which permission has been granted by the
Managing Broker-Dealer to you, as evidenced by written
acknowledgement by the Managing Broker-Dealer that such state has
been cleared for offer and sale activity. It is further understood
that you shall notify the Company of Subscription Agreements you
receive within 2 business days of receipt so that the Company may
make any required federal or state law filings.
5. Relationship
of Parties. Nothing contained herein shall be construed or
interpreted to constitute the Dealer as an employee, agent or
representative of, or in association with or in partnership with,
the Managing Broker-Dealer or the Company. The Managing
Broker-Dealer shall be under no liability to make any payment to
you except out of the funds received pursuant to the terms of the
Managing Broker-Dealer Agreement as hereinabove provided, and the
Managing Broker-Dealer shall not be under any liability for, or in
respect of the value or validity of the Subscription Agreement, the
Shares or the performance by anyone of any agreement on its part,
or for, or in respect of any matter connected with this Agreement,
except for lack of good faith by the Managing Broker-Dealer, and
for obligations expressly assumed by the Managing Broker-Dealer in
this Agreement.
6. Indemnification
and Contribution. You hereby agree and acknowledge that you
shall be entitled to the rights, and be subject to the obligations
and liabilities, of the indemnification and contribution provisions
contained in the MBD Agreement, including without limitation, the
provisions by which the Dealers shall severally agree to indemnify
and hold harmless the Company and the Managing Broker-Dealer and
their respective owners, managers, members, trustees, partners,
directors, officers, employees, agents, attorneys and
accountants.
7. 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 parties wish to
include the confidentiality and non-disclosure obligations set
forth herein.
7.1 Customer
Information. “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).
7.2 Usage
and Nondisclosure. The parties understand and acknowledge
that they 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 that one party receives from the other party is
received with limitations on its use and disclosure. The parties
agree that they are prohibited from using the Customer Information
received from the other party 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.
7.3 Safeguarding
Customer Information. The parties shall establish and
maintain safeguards against the unauthorized access, destruction,
loss, or alteration of Customer Information in their control which
are no less rigorous than those maintained by a party for its own
information of a similar nature. In the event of any improper
disclosure of any Customer Information, the party responsible for
the disclosure will immediately notify the other
party.
6
7.4 Survivability.
The provisions of Section 6 and this Section 7 shall
survive the termination of this Agreement.
8. Survival
of Representations and Warranties. Except as the context
otherwise requires, all representations, warranties and agreements
contained in this Agreement and in the applicable provisions of the
MBD Agreement shall be deemed to be representations, warranties and
agreements at and through the Offering Termination Date, and such
representations, warranties and agreements by the Managing
Broker-Dealer or the Dealers, including the indemnity and
contribution agreements contained in Section 5 of the MBD
Agreement shall remain operative and in full force and effect
regardless of any investigation made by the Managing Broker-Dealer,
the Dealers and/or any controlling person, and shall survive the
sale of, and payment for, the Shares and the termination of this
Agreement.
9. Termination.
The Dealer will suspend or terminate the Offering upon request of
the Company or the Managing Broker-Dealer at any time and will
resume the Offering upon the subsequent request of the Company or
the Managing Broker-Dealer. This Agreement may be terminated by the
Managing Broker-Dealer or a Dealer at any time upon 5 days’
written notice to the other party. If this Agreement is terminated
the Dealer is still obligated to fulfill its delivery requirements
pursuant to Section 1.13.
10. Managing
Broker-Dealer Obligations.
10.1 Notifications.
The Managing Broker-Dealer shall provide prompt written notice to
the Dealers of any material changes to the Offering Statement that
in its judgment could materially and adversely affect a Dealer with
respect to this Offering.
10.2 Records.
The Managing Broker-Dealer shall retain in its records and make
available to the Dealers, for a period of at least 6 years
following the Offering Termination Date, any communications and
information with respect to a prospective Investor that has
otherwise not been provided to a Dealer.
10.3 FINRA
Rule 5110. The Managing Broker-Dealer has submitted to FINRA
(or will submit no later than one business day after filing with or
submitting to the SEC or any state securities commission or other
regulatory authority) a copy of the documents to be filed pursuant
to FINRA Rule 5110(b)(5) and the information specified in
FINRA Rule 5110(b)(6); provided, however, any documents that
are filed with the SEC through the SEC’s XXXXX System that
are referenced in FINRA’s electronic filing system shall be
treated as filed with FINRA (the “FINRA Filing”). No
sales of Shares shall commence unless such documents and
information have been filed with and reviewed by FINRA and FINRA
has provided an opinion that it has no objections to the proposed
underwriting and other terms and arrangements.
10.4 Confirmation.
The Managing Broker-Dealer hereby acknowledges that it has assumed
the duty to confirm on behalf of the Dealers all orders for
purchases of Shares accepted by the Company. Such confirmations
will comply with the rules of the SEC and FINRA and will comply
with the applicable laws of such other jurisdictions to the extent
that the Managing Broker-Dealer is advised of such laws in writing
by the Dealer.
11. Governing
Law. This Agreement shall be governed by, subject to and
construed in accordance with the laws of the State of South
Carolina without regard to conflict of law provisions. The Managing
Broker-Dealer and the Dealer agree that any dispute concerning this
Agreement shall be resolved exclusively through binding arbitration
before FINRA pursuant to its arbitration rules. Arbitration will be
venued in Greenville, South Carolina (the “Agreed
Forum”). Each of the Managing Broker-Dealer and the Dealer
agree that the Agreed Forum is not an “inconvenient
forum” for proceedings hereunder, and each hereby agree to
the personal jurisdiction of the Agreed Forum and that service of
process by mail to the address for such party as set forth in this
Agreement (or such other address as a party hereto shall notify the
other in writing) constitute full and valid service for such
proceedings.
12. Severability.
If any portion of this Agreement shall be held invalid or
inoperative, then so far as is reasonable and possible (i) the
remainder of this Agreement shall be considered valid and operative
and (ii) effect shall be given to the intent manifested by the
portion held invalid or inoperative.
7
13. Counterparts.
This Agreement may be executed in 2 or more counterparts, each of
which shall be deemed to be an original, and together which shall
constitute one and the same instrument.
14. Modification
or Amendment. This Agreement may not be modified or amended
except by written agreement executed by the parties
hereto.
15. Notices.
All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, (i) if sent to
the Managing Broker-Dealer, shall be mailed or delivered to
Sandlapper Securities, LLC, SANDLAPPER FINANCIAL CENTER, 000 X.
Xxxxx Xx., 0xx Xxxxx Xxxxxxxxxx,
XX 00000, (ii) if sent to the Company, shall be mailed or
delivered to HC Government Realty Trust, Inc., c/o Holmwood Capital
Advisors, LLC, 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx XX 00000, or
(iii) if sent to you, shall be mailed or delivered to you at
your address set forth below. The notice shall be deemed to be
received on the date of its actual receipt by the party entitled
thereto.
17. Parties.
This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto, the persons referred to in Section 5
of the MBD Agreement, their respective successors, legal
representatives, heirs and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or
claim under, in respect of, or by virtue of, this Agreement or any
provision herein contained.
18. Delay.
Neither the failure nor any delay on the part of any party to this
Agreement to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall a
waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any subsequent occurrence.
19. 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.
20. Entire
Agreement. This Agreement, along with the applicable
provisions of the MBD Agreement, constitute the entire
understanding between the parties hereto and supersede any prior
understandings or written or oral agreements between them
respecting the subject matter hereof.
21. Anti-Money
Laundering Compliance Programs. Each Dealer’s
acceptance of this Agreement constitutes a representation to the
Managing Broker-Dealer that the Dealer has established and
implemented an anti-money laundering (“AML”) compliance
program (“AML Program”), in accordance with FINRA Rule
3310 and Section 352 of the Money Laundering Abatement Act,
the Bank Secrecy Act, as amended, 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 Shares. In addition, the Dealer represents that it has
established and implemented a program (“OFAC Program”)
for compliance with OFAC and will continue to maintain its OFAC
Program during the term of this Agreement. Upon request by the
Managing Broker-Dealer at any time, the Dealer hereby agrees to
(i) furnish a copy of its AML Program and OFAC Program to the
Managing Broker-Dealer for review and (ii) furnish a copy of
the findings and any remedial actions taken in connection with the
Dealer’s most recent independent testing of its AML Program
and/or its OFAC Program.
8
The
parties acknowledge that for the purposes of the FINRA rules the
Investors who purchase Shares through the Dealer are
“Customers” of the Dealer and not the Managing
Broker-Dealer. Nonetheless, to the extent that the Managing
Broker-Dealer deems it prudent, the Dealer shall cooperate with the
Managing Broker-Dealer’s auditing and monitoring of the
Dealer’s AML Program and its OFAC Program by providing, upon
request, information, records, data and exception reports, related
to the Company’s investors introduced to, and serviced by,
the Dealer (the “Customers”). Such documentation could
include, among other things: (i) copies of Dealer’s AML
Program and its OFAC Program; (ii) documents maintained
pursuant to the Dealer’s AML Program and its OFAC Program
related to the Customers; (iii) any suspicious activity
reports filed related to the Customers; (iv) audits and any
exception reports related to the Dealer’s AML activities; and
(v) any other files maintained related to the Customers. In
the event that such documents reflect, in the opinion of the
Managing Broker-Dealer, a potential violation of the Managing
Broker-Dealer’s obligations in respect of its AML or OFAC
requirements, the Dealer will permit the Managing Broker-Dealer to
further inspect relevant books and records related to the Customers
(with respect to the Offering) and/or the Dealer’s compliance
with AML or OFAC requirements. Notwithstanding the foregoing, the
Dealer shall not be required to provide to the Managing
Broker-Dealer any documentation that, in the Dealer’s
reasonable judgment, would cause the Dealer to lose the benefit of
attorney-client privilege or other privilege which it may be
entitled to assert relating to the discoverability of documents in
any civil or criminal proceedings. The Dealer hereby represents
that it is currently in compliance with all AML rules and all OFAC
requirements, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326
of the USA PATRIOT Act. The Dealer hereby agrees, upon request by
the Managing Broker-Dealer to (i) provide an annual
certification to the Managing Broker-Dealer that, as of the date of
such certification (A) its AML Program and its OFAC Program
are consistent with the AML Rules and OFAC requirements,
(B) it has continued to implement its AML Program and its OFAC
Program and (C) it is currently in compliance with all AML
Rules and OFAC requirements, specifically including, but not
limited to, the Customer Identification Program requirements under
Section 326 of the USA PATRIOT Act and (ii) perform and
carry out, on behalf of both the Managing Broker-Dealer and the
Company, the Customer Identification Program requirements in
accordance with Section 326 of the USA PATRIOT Act and
applicable SEC and Treasury Department Rules
thereunder.
22. Managing
Broker-Dealer Representations. The Managing Broker-Dealer
hereby represents and warrants as of the Effective Date to the
Dealer that neither the Managing Broker-Dealer nor any of its
managing members, directors, or executive officers, or any of its
officers participating in the offering is subject to the
disqualification provisions of Rule 262 of the Rules and
Regulations. None of the Managing Broker-Dealer’s registered
representatives or any other person being compensated by or through
the Managing Broker-Delaer for the solicitation of investors, is
subject to the disqualification provisions of Rule 262 of the Rules
and Regulations.
24. Electronic
Delivery of Information; Electronic Processing of
Subscriptions. Pursuant to the MBD Agreement, the Company
has agreed to confirm all orders for the purchase of Shares
accepted by the Company. In addition, the Company, the Managing
Broker-Dealer and/or third parties engaged by the Company or the
Managing Broker-Dealer may, from time to time, provide to the
Dealer copies of investor letters, annual reports and other
communications provided to the Company investors. The Dealer agrees
that, to the extent practicable and permitted by law, all
confirmations, statements, communications and other information
provided to or from the Company, the Managing Broker-Dealer, the
Dealer and/or their agents or customers may be provided
electronically, as a preference but not as a
requirement.
With
respect to Shares held through custodial accounts, the Dealer
agrees and acknowledges that to the extent practicable and
permitted by law, all confirmations, statements, communications and
other information provided from the Company, the Managing
Broker-Dealer and/or their agents to Company investors may be
provided solely to the custodian that is the registered owner of
the Shares, rather than to the beneficial owners of the Shares. In
such case it shall be the responsibility of the custodian to
distribute the information to the beneficial owners of
Shares.
The
Dealer agrees and acknowledges that the Managing Broker-Dealer may,
as a preference but not as a requirement, use an electronic
platform to process subscriptions, including but not limited to the
Depository Trust Company (DTC) model. If an electronic platform is
used, the Dealer agrees to cooperate with the processing of
subscriptions through such an electronic platform if reasonably
practical.
25. Third
Party Beneficiaries. The Company and its affiliates,
successors and assigns shall be express third party beneficiaries
of Section 1 of this Agreement.
9
26. Successors
and Assigns. No party shall assign this Agreement or any
right, interest or benefit under this Agreement without the prior
written consent of the other party. This Agreement shall be binding
upon the Managing Broker-Dealer and Dealer and their respective
successors and permitted assigns.
Please
confirm this Agreement to solicit persons to acquire the Shares on
the foregoing terms and conditions by signing and returning the
form enclosed herewith.
|
By:
|
|
|
|
Its:
|
|
|
10
Sandlapper
Securities, LLC
SANDLAPPER
FINANCIAL CENTER
000 X.
Xxxxx Xx., 0xx Xxxxx
Xxxxxxxxxx, XX
00000
Re: Offering
of Shares in HC Government Realty Trust, Inc.
Ladies
and Gentlemen:
The
undersigned confirms its agreement to act as a Dealer as referred
to in the foregoing Soliciting Dealer Agreement, subject to the
terms and conditions of such Agreement. The undersigned confirms
that it is a member in good standing of the Financial Industry
Regulatory Authority, Inc., and is qualified under federal law and
the laws of the states in which sales are to be made by the
undersigned to act as a Dealer.
|
|
|
|
|
|
|
Dated: ,
20
|
|
|
||
|
|
|
(Print
Name of Firm)
|
||
|
|
|
|
||
|
|
|
By:
|
|
|
|
|
|
(Authorized
Representative)
|
||
|
|
|
|||
|
|
|
Address:
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Taxpayer Identification Number:
|
|
|
||||||||
|
|
|
Registered
as broker-dealer in the following states:
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
☐ All
States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
☐ AL
|
|
☐ AK
|
|
☐ AZ
|
|
☐ AR
|
|
☐ CA
|
|
☐ CO
|
|
☐ CT
|
|
☐ DE
|
|
☐ DC
|
|
☐ FL
|
|
☐ GA
|
|
☐ HI
|
|
☐ ID
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
☐ IL
|
|
☐ IN
|
|
☐ IA
|
|
☐ KS
|
|
☐ KY
|
|
☐ LA
|
|
☐ ME
|
|
☐ MD
|
|
☐ MA
|
|
☐ MI
|
|
☐ MN
|
|
☐ MS
|
|
☐ MO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
☐ MT
|
|
☐ NE
|
|
☐ NV
|
|
☐ NH
|
|
☐ NJ
|
|
☐ NM
|
|
☐ NY
|
|
☐ NC
|
|
☐ ND
|
|
☐ OH
|
|
☐ OK
|
|
☐ OR
|
|
☐ PA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
☐ RI
|
|
☐ SC
|
|
☐ SD
|
|
☐ TN
|
|
☐ TX
|
|
☐ UT
|
|
☐ VT
|
|
☐ VA
|
|
☐ WA
|
|
☐ WV
|
|
☐ WI
|
|
☐ WY
|
|
☐ PR
|
11
EXHIBIT A
MBD AGREEMENT
Filed
as Exhibit No. 1.1 to the Current Report on Form 1-U, dated as of
April 11, 2017, of HC Government Realty Trust,
Inc.
1
