SEVN 8-K
Seven Hills Realty Trust (SEVN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
In this Current Report on Form 8-K, the terms “we”, “us”, “the Company” and “our” refer to Seven Hills Realty Trust.
Item 8.01. Other Events
On October 30, 2025 the Company announced its intent to conduct a fully backstopped rights offering pursuant to which the Company will issue, at no charge, transferable subscription rights, or the Rights, to the Company’s shareholders of record as of 5:00 p.m., New York City time, on November 10, 2025, or the Record Date, and such shareholders, the Record Date Shareholders, entitling the holders of the rights to subscribe for up to an aggregate of 7,532,861 of the common shares of beneficial interest, $0.001 par value per share, of the Company, or the Common Shares. Record Date Shareholders will receive one transferable Right for each outstanding Common Share they own on the Record Date. The Rights will entitle the Record Date Shareholders to purchase one new Common Share for every two Rights held, or the Primary Subscription Right. The Rights will be exercisable at a price per share equal to $8.65, or the Subscription Price. Record Date Shareholders who fully exercise their Rights will be entitled to subscribe, subject to the limitations described in the Prospectus Supplement (as defined below) and subject to allotment, for additional Common Shares that remain unsubscribed as a result of any unexercised rights. Record Date Shareholders who sell Rights will not be eligible to participate in such over-subscription privilege. The Company plans to use the net proceeds from the offering to fund the growth of the Company’s business by enabling the Company to continue to pursue investment opportunities to expand the Company’s loan portfolio.
The offering will commence on November 10, 2025 and the Rights will expire if they are not exercised by 5:00 p.m., New York City time, on December 4, 2025, unless the offering is extended. There is no minimum number of Rights that must be exercised, no minimum number that any Rights holder must exercise, and no minimum number of Common Shares that the Company will issue in the offering.
The Rights being issued in the offering are expected to be listed for trading on The Nasdaq Stock Market LLC under the symbol “SEVNR” and therefore will be transferable and will allow the holders thereof to purchase additional Common Shares.
The offering will be fully backstopped by Tremont Realty Capital LLC, or Tremont. The Company and Tremont have entered into a backstop agreement, or the Backstop Agreement, pursuant to which Tremont has agreed to exercise its pro rata Primary Subscription Right in full and, upon the completion of the offering, to purchase 100% of all remaining Common Shares not otherwise subscribed for in the offering, or the Backstop Commitment. The Company has agreed to reimburse Tremont’s reasonable expenses, but Tremont will not receive any fees or other consideration in connection with the Backstop Commitment. The foregoing description of the Backstop Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Backstop Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The offering will be made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-290401) that was previously filed with the Securities and Exchange Commission, or the SEC, and became effective on September 29, 2025. The offering will only be made by means of the prospectus supplement dated October 30, 2025, or the Prospectus Supplement, and the accompanying base prospectus dated September 29, 2025.
On October 30, 2025, the Company and Tremont entered into a dealer manager agreement with UBS Securities LLC, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.
This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company or any of its subsidiaries, nor shall there be any offer, solicitation or sale of any securities of the Company or any of its subsidiaries in any state or jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction.
Information Regarding Certain Relationships and Related Person Transactions
We have relationships and historical and continuing transactions with Tremont, The RMR Group LLC, or RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees or officers who are also our Trustees or officers. Tremont is a 100% wholly owned subsidiary of RMR, which is a majority owned subsidiary of RMR Inc., and RMR Inc. is the managing member of RMR. RMR provides certain shared services to Tremont that are applicable to us, and we reimburse Tremont or pay RMR for the amounts Tremont or RMR pays for those services. One of our Managing Trustees and Chair of our Board of Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and he is also a director of Tremont, the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc., and an officer and employee of RMR. Matthew P. Jordan, our other Managing Trustee, is a director and the president and chief executive officer of Tremont. Mr. Jordan is also an officer of RMR Inc. and an officer and employee of RMR, and our other officers are officers and employees of Tremont and/or RMR; Tremont owned approximately 11.3% of our outstanding common shares at September 30, 2025. Due to the nature of the relationship between the Company and RMR, the Backstop Agreement was separately considered by a Special Committee of our Board of Trustees, comprised solely of disinterested Trustees (the “Special Committee”), and our Board, and approved by our Board pursuant to a recommendation by our Special Committee.
For further information about these and other such relationships and related person transactions, please see our Annual Report on Form 10-K for the year ended December 31, 2024, or our Annual Report, our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, or our Proxy Statement, our Quarterly Report for the quarterly period ended September 30, 2025, or our Quarterly Report, and our other filings with the SEC, including Notes 8 and 9 to our consolidated financial statements included in our Annual Report and the sections captioned “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward-Looking Statements” of our Annual Report, the section captioned “Related Person Transactions” and the information regarding our Trustees and executive officers included in our Proxy Statement and Notes 8 and 9 to our condensed consolidated financial statements included in our Quarterly Report and the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward-Looking Statements” of our Quarterly Report. In addition, please see the section captioned “Risk Factors” of our Annual Report for a description of risks that may arise as a result of these and other such relationships and related person transactions. Our filings with the SEC and copies of certain of our agreements with these related parties are publicly available as exhibits to our public filings with the SEC and accessible at the SEC’s website, www.sec.gov.
Warning Concerning Forward-Looking Statements
This Current Report on Form 8-K contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever the Company uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, the Company is making forward-looking statements. These forward-looking statements are based upon the Company’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by the Company’s forward-looking statements as a result of various factors. These forward-looking statements include, without limitation, the Company’s expectations regarding the proposed rights offering, the planned use of proceeds from the proposed rights offering, including any timing considerations relating to the Company’s use of proceeds, and the Backstop Commitment. For example, there can be no assurance that the proposed rights offering will be commenced or, if commenced, will be consummated on the terms described above, and there can be no assurance that the Company will be able to successfully complete the rights offering.
The information contained in the Company’s filings with the SEC, including under the caption “Risk Factors” in the Prospectus Supplement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or incorporated therein, identifies other important factors that could cause differences from the Company’s forward-looking statements. The Company’s filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon the Company’s forward-looking statements.
Except as required by law, the Company does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Exhibit Description | |
| 8.1 | Opinion of Sullivan & Worcester regarding tax matters (including consent of such firm). | |
| 10.1 | Backstop agreement, dated October 30, 2025, by and between Seven Hills Realty Trust and Tremont Realty Capital LLC. | |
| 10.2 | Dealer Manager Agreement, dated October 30, 2025, by and among Seven Hills Realty Trust, Tremont Realty Capital LLC and UBS Securities LLC. | |
| 99.1 | Press release, dated October 30, 2025. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SEVEN HILLS REALTY TRUST | ||
| By: | /s/ Matthew C. Brown | |
| Name: | Matthew C. Brown | |
| Title: | Chief Financial Officer and Treasurer | |
Date: October 30, 2025
Exhibit 8.1
October 30, 2025
Seven Hills Realty Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Ladies and Gentlemen:
The following opinion is furnished to Seven Hills Realty Trust, a Maryland real estate investment trust (the “Company”), to be filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 8.1 to the Current Report on Form 8-K to be filed by the Company on or about October 30, 2025, in connection with the registration by the Company of up to 7,532,861 common shares of beneficial interest, par value $0.001 per share (the “Common Shares”), of the Company upon the exercise of subscription rights issued by the Company pursuant to the Company’s Registration Statement on Form S-3 (Reg. No. 333-290401), including without limitation the documents incorporated by reference therein (the “Registration Statement”), the Company’s prospectus dated September 29, 2025, the form of which is a part of the Registration Statement, including without limitation the documents incorporated by reference therein (the “Base Prospectus”), and the Company’s prospectus supplement dated October 30, 2025 to the Base Prospectus, including without limitation the documents incorporated by reference therein (the “Prospectus Supplement”; the Base Prospectus, as supplemented by the Prospectus Supplement, the “Prospectus”), under the Securities Act of 1933, as amended (the “Act”).
We have acted as special tax counsel for the Company in connection with the issuance by the Company to the holders of record of Common Shares at the close of business on November 10, 2025 (such holders, the “Record Date Shareholders”) of transferable rights (the “Rights”) entitling such Record Date Shareholders to subscribe for up to 7,532,861 Common Shares (together with the Rights, the “Offered Securities”). We have reviewed originals or copies of such corporate records, such certificates and statements of officers of the Company and of public officials, and such other documents as we have considered relevant and necessary in order to furnish the opinion hereinafter set forth. In doing so, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such documents. Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the Company’s declaration of trust and its second amended and restated bylaws; (ii) the Registration Statement; (iii) the Prospectus; (iv) the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2024 (the “Form 10-K”, which is incorporated by reference into the Registration Statement); and (v) the Company’s Quarterly Reports on Form 10-Q for its quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025 (the “Forms 10-Q”, which are incorporated by reference into the Registration Statement, and together with the Form 10-K, the “Periodic Filings”). For purposes of the opinion set forth below, we have assumed that any documents (other than documents which have been executed, delivered, adopted, or filed, as applicable, by the Company prior to the date hereof) that have been provided to us in draft form will be executed, delivered, adopted, and filed, as applicable, without material modification.
Seven Hills Realty Trust
October 30, 2025
Page 2
The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “Tax Laws”). No assurance can be given that Tax Laws will not change. In the discussions with respect to Tax Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations”, as supplemented by the discussion in the section of the Prospectus Supplement captioned “Material U.S. Federal Income Tax Considerations”, certain assumptions have been made therein and certain conditions and qualifications have been expressed therein, all of which assumptions, conditions, and qualifications are incorporated herein by reference. With respect to all questions of fact on which our opinion is based, we have assumed the initial and continuing truth, accuracy, and completeness of: (i) the information set forth in the Registration Statement, in the Prospectus, in the Periodic Filings or in any exhibits thereto or any documents incorporated therein by reference; and (ii) representations made to us by officers of the Company or contained in the Registration Statement, in the Prospectus, in the Periodic Filings or in any exhibits thereto or any documents incorporated therein by reference, in each such instance without regard to qualifications such as “to the best knowledge of” or “in the belief of”. We have not independently verified such information.
We have relied upon, but not independently verified, the foregoing assumptions. If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Registration Statement, in the Prospectus, in the Periodic Filings or in any exhibits thereto or any documents incorporated therein by reference, have been or are consummated in a manner that is inconsistent with the manner contemplated therein, our opinion as expressed below may be adversely affected and may not be relied upon.
Based upon and subject to the foregoing: (i) we are of the opinion that the discussions with respect to Tax Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations”, as supplemented by the discussion in the section of the Prospectus Supplement captioned “Material U.S. Federal Income Tax Considerations”, in all material respects are, subject to the limitations set forth therein, fair and accurate summaries of the Tax Laws considerations relevant to holders of the Offered Securities of the Company discussed therein; and (ii) we hereby confirm that the opinions of counsel referred to in said sections represent our opinions on the subject matters thereof.
Seven Hills Realty Trust
October 30, 2025
Page 3
Our opinion above is limited to the matters specifically covered hereby, and we have not been asked to address, nor have we addressed, any other matters or any other transactions. Further, we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented, or assumed herein or any subsequent changes in Tax Laws.
This opinion is rendered to you in connection with the issuance of the Offered Securities. Purchasers and holders of the Offered Securities are urged to consult their own tax advisors or counsel, particularly with respect to their particular tax consequences of acquiring, exercising, holding, and disposing of the Offered Securities, which may vary for investors in different tax situations. We hereby consent to the filing of a copy of this opinion as an exhibit to the Current Report on Form 8-K to be filed by the Company on or about October 30, 2025, and thereby incorporated by reference as an exhibit to the Registration Statement, and to the references to our firm in the Prospectus Supplement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or under the rules and regulations of the SEC promulgated thereunder.
| Very truly yours, | |
| /s/ Sullivan & Worcester | |
| SULLIVAN & WORCESTER LLP |
Exhibit 10.1
RIGHTS OFFERING BACKSTOP AGREEMENT
THIS RIGHTS OFFERING BACKSTOP AGREEMENT (this “Agreement”), dated as of October 30, 2025, is by and between Seven Hills Realty Trust, a Maryland real estate investment trust (the “Company”), and Tremont Realty Capital LLC, a Maryland limited liability company (the “Backstop Investor”).
RECITALS
WHEREAS, in order to raise up to $65 million of additional equity capital, the Company intends to commence a transferable rights offering (the “Rights Offering”) pursuant to which it expects to distribute to holders of record of its common shares of beneficial interest, par value $0.001 per share (the “Common Shares”), as of the close of business on November 10, 2025 (such date, the “Record Date” and such holders, each, an “Eligible Shareholder” and collectively, the “Eligible Shareholders”), at no charge and on a pro rata basis, transferable subscription rights to subscribe for and purchase additional Common Shares at a subscription price of $8.65 per share (as may be modified by the Company pursuant to the terms of the Offering Documents (as defined herein), the “Subscription Price”);
WHEREAS, pursuant to the Rights Offering, Eligible Shareholders will receive one basic subscription right for every one Common Share held by them as of the Record Date, and Eligible Shareholders will be entitled to purchase, at the Subscription Price, one new Common Share for every two subscription rights held (each such basic subscription right, a “Right”, and all of such basic subscription rights, collectively, the “Rights”);
WHEREAS, the Backstop Investor currently owns 1,708,058 Common Shares, representing approximately 11.3% of the outstanding Common Shares; and
WHEREAS, the Backstop Investor has agreed and committed, to exercise its pro rata Rights in full and, as necessary, purchase from the Company upon expiration of the Rights Offering and following the completion of the exercise of the Over-Subscription Privileges, as applicable, any additional Common Shares not otherwise sold in the Rights Offering pursuant to the exercise of Rights, at the Subscription Price, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Backstop Investor and the Company agree as follows:
| 1. | The Rights Offering. |
(a) The Company shall use its reasonable best efforts to commence and complete the Rights Offering as soon as reasonably practicable. The Company filed a Universal Shelf Registration Statement on Form S-3 (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”), which Registration Statement registers the issuance by the Company of, among other securities, Common Shares and subscription rights up to an aggregate total offering price of $500,000,000, which was declared effective by the Commission on September 29, 2025, and in connection with the Rights Offering, the Company shall file one or more prospectus supplements under Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”), and/or free writing prospectuses under Rule 433 (such filings, together with the Registration Statement and any press releases issued or other filings made by the Company with the Commission in respect of the terms of the Rights Offering, collectively, the “Offering Documents”). While the Rights Offering is pending (and at all times prior to the earlier to occur of the termination of this Agreement and the Closing Date (as defined below)), the Company shall (i) maintain the Registration Statement’s effectiveness and (ii) preserve its eligibility to use the Registration Statement in accordance with applicable law. Promptly following the date hereof (and in any event, prior to the Expiration Date (as defined below) of the Rights Offering and the Closing Date), the Company shall cause (i) all of the Common Shares issuable as a result of the exercise of Rights and, as applicable, the exercise of the Over-Subscription Privilege (as defined below), pursuant to the Rights Offering, and (ii) all of the Common Shares to be acquired by the Backstop Investor pursuant to the Backstop Commitment (as defined below), to be qualified for listing on the Nasdaq Stock Market LLC (“Nasdaq”).
(b) Pursuant to the procedures set forth in the Offering Documents, the Company shall distribute, at no charge, to each Eligible Shareholder one Right for every one Common Share held by such Eligible Shareholder as of the Record Date, including the Backstop Investor. The Rights will entitle the holder thereof to purchase one new Common Share for every two Rights held. In addition, pursuant to the procedures set forth in the Offering Documents, each Eligible Shareholder, including the Backstop Investor, that fully exercises its Rights shall also be entitled (but not obligated) to subscribe for additional Common Shares that remain unsubscribed as a result of any unexercised Rights (the “Over-Subscription Privilege”). The commencement date of the Rights Offering and the date on which the subscription period for the Rights Offering expires (the “Expiration Date”) shall be as set forth in the Offering Documents. The Company shall use the proceeds of the Rights Offering only for the purposes set forth in the Offering Documents. Subject to the terms and conditions set forth in the Offering Documents, the consummation of the Rights Offering shall occur on the terms and at the time as set forth in the Offering Documents.
(c) In connection with the preparation and filing by the Company of any prospectus supplement in connection with the Rights Offering, the Backstop Investor agrees to promptly furnish to the Company, following the Company’s written request therefor, any and all information concerning the Backstop Investor or its affiliates required to be set forth in such prospectus supplement under federal securities law.
| 2. | Rights Exercise Commitment. |
Subject to the terms and conditions set forth herein, the Backstop Investor hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Backstop Investor, at the Subscription Price, all Common Shares that are issuable to the Backstop Investor pursuant to the full exercise of its Rights in accordance with the procedures set forth in the Offering Documents (such commitment, the “Rights Exercise Commitment” and shares issued pursuant to such Rights Exercise Commitment, the “Exercised Rights Shares”). As soon as reasonably practicable following the Record Date, the Company shall deliver to the Backstop Investor a Rights Exercise Commitment Allocation Schedule, substantially in the form set forth on Exhibit A attached hereto, which shall set forth the amounts used to determine the number of Exercised Rights Shares. It is agreed and understood that the Backstop Investor shall be permitted, but not required, to exercise its Over-Subscription Privilege.
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| 3. | Backstop Commitment. |
(a) Subject to the consummation of the Rights Offering and the terms and conditions set forth herein, the Backstop Investor hereby commits to purchase from the Company, and the Company hereby agrees to sell to the Backstop Investor, at the Subscription Price, any and all Unsubscribed Rights Shares (as defined below) (such commitment, the “Backstop Commitment”). “Unsubscribed Rights Shares” if any, means a number of Common Shares equal to the excess, if any, of (i) the maximum aggregate number of Common Shares that may be purchased pursuant to the exercise of all Rights in connection with the Rights Offering, over (ii) the aggregate number of Common Shares that are validly purchased by all Eligible Shareholders, including the Backstop Investor, in the Rights Offering pursuant to the exercise of Rights and the Over-Subscription Privileges, as applicable.
(b) Within two (2) Business Days after the Expiration Date, the Company shall issue to the Backstop Investor a notice (the “Subscription Notice”) setting forth the number of Common Shares subscribed for in the Rights Offering pursuant to the exercise of Rights and the Over-Subscription Privileges, as applicable, by the Eligible Shareholders and the aggregate gross proceeds of the Rights Offering and, accordingly, the number of Unsubscribed Rights Shares to be acquired by the Backstop Investor pursuant to the Backstop Commitment at the Subscription Price (such shares to be acquired, the “Backstop Acquired Shares” and together with the Exercised Rights Shares, the “Shares”). The Subscription Notice shall also contain information with respect to the anticipated Closing Date of the Backstop Commitment. For purposes of this Agreement, “Business Day” means any day other than a Saturday, Sunday or one on which banks are authorized to close in New York, New York.
(c) On the terms and subject to the conditions set forth in this Agreement, the closing of the Backstop Commitment (the “Closing”) shall occur on the later of (i) the fourth (4th) Business Day following the issuance by the Company of the Subscription Notice and (ii) the date that all of the conditions to the Closing set forth in Section 4 of this Agreement have been satisfied or waived or such other time and date as shall be mutually agreed between the Company and the Backstop Investor (the “Closing Date”).
(d) As soon as reasonably practicable following the Closing, the Company shall cause its transfer agent to credit the number of Backstop Acquired Shares to which the Backstop Investor is entitled to the Backstop Investor’s or its designee’s account in book entry form.
| 4. | Closing Conditions. |
(a) The Closing shall be subject to the satisfaction, or valid waiver in writing by each of the parties hereto, of the following conditions:
(i) during the period beginning from the date hereof until and including the Closing Date, no suspension of the qualification of the Backstop Acquired Shares for offering or sale or trading in any jurisdiction, or any proceedings for any of such purposes, shall have occurred;
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(ii) on the Closing Date, all of the Shares (including the Backstop Acquired Shares) shall be listed for trading on Nasdaq;
(iii) prior to the Closing Date, the Rights Offering shall have been consummated in accordance with the terms set forth in the Offering Documents;
(iv) during the period beginning from the date hereof until and including the Closing Date, no federal, state, local or other governmental authority, agency, commission, body, court or other legislative, executive or judicial governmental entity (“Governmental Authority”) shall have enacted, issued, promulgated, enforced or entered any law, ordinance, regulation, rule, statute, or ruling, order, judgment, injunction, award, decree, or other requirement (whether temporary, preliminary or permanent), which is then in effect and has the effect of making the consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby, and no such Governmental Authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition; and
(v) to the extent the acquisition of the Backstop Acquired Shares by the Backstop Investor would cause the Backstop Investor to Beneficially Own or Constructively Own (as defined in the Declaration of Trust of the Company) Common Shares in violation of the ownership restriction contained in Section 7.2(a)(i)(C) of the Declaration of Trust of the Company, the number of Backstop Acquired Shares acquired by the Backstop Investor shall be reduced so that the Backstop Investor shall not Beneficially Own or Constructively Own Common Shares in violation of such ownership restriction and any payments made by the Backstop Investor in respect of the Backstop Acquired Shares so reduced shall be promptly refunded to the Backstop Investor.
(b) The obligation of the Company to consummate the Closing shall be subject to the satisfaction or valid waiver in writing by the Company of the following conditions:
(i) On and as of the date of this Agreement and the Closing Date, all representations and warranties of the Backstop Investor contained in this Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Backstop Investor Material Adverse Effect (as defined below), which representations and warranties shall be true and correct in all respects), except to the extent any such representations and warranties speak to a specified date, in which case such representations and warranties shall be true and correct in all material respects as of such specified date (other than such representations and warranties that are qualified as to materiality or Backstop Investor Material Adverse Effect, which representations and warranties shall be true and correct in all respects as of such specified date); and
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(ii) The Backstop Investor shall not be in material breach of any covenant, agreement or condition required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing.
(c) The obligation of the Backstop Investor to consummate the Closing shall be subject to the satisfaction or valid waiver in writing by the Backstop Investor of the following conditions:
(i) On and as of the date of this Agreement and the Closing Date, all representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Company Material Adverse Effect (as defined below), which representations and warranties shall be true and correct in all respects), except to the extent any such representations and warranties speak to a specified date, in which case such representations and warranties shall be true and correct in all material respects as of such specified date (other than such representations and warranties that are qualified as to materiality or Company Material Adverse Effect, which representations and warranties shall be true and correct in all respects as of such specified date);
(ii) There shall not have occurred any event, development or circumstance upon or prior to the Closing Date, which has had, or could reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; and
(iii) The Company shall not be in material breach of any covenant, agreement or condition required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing.
| 5. | Representations and Warranties by the Backstop Investor. |
The Backstop Investor represents and warrants to the Company that:
(a) The Backstop Investor (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Agreement.
(b) This Agreement has been duly executed and delivered by the Backstop Investor, and assuming the due authorization, execution and delivery of the same by the Company, this Agreement constitutes the valid and legally binding obligation of the Backstop Investor, enforceable against the Backstop Investor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
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(c) The execution and delivery of this Agreement, the purchase of the Backstop Acquired Shares and the compliance by the Backstop Investor with all of the provisions of this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Backstop Investor pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Backstop Investor is a party or by which the Backstop Investor is bound or to which any of the property or assets of the Backstop Investor is subject; (ii) the organizational documents of the Backstop Investor; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Backstop Investor or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Backstop Investor Material Adverse Effect. For purposes of this Agreement, a “Backstop Investor Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to the Backstop Investor that would reasonably be expected to have a material adverse effect on the Backstop Investor’s ability to consummate the transactions contemplated hereby, including the purchase of the Shares.
(d) The Backstop Investor (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7) (8), (9), (12) or (13) under the Securities Act), (ii) is acquiring the Backstop Acquired Shares only for its own account and not for the account of others, or if the Backstop Investor is acquiring the Backstop Acquired Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7) (8), (9), (12) or (13) under the Securities Act), and the Backstop Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Backstop Acquired Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. The Backstop Investor is not an entity formed for the specific purpose of acquiring the Shares and is an “institutional account” as defined by FINRA Rule 4512(c).
(e) The Backstop Investor understands that the Backstop Acquired Shares are being offered in a private placement exempt from registration under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and that the Backstop Acquired Shares have not been registered under the Securities Act. The Backstop Investor understands that the Backstop Acquired Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Backstop Investor absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, or (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each of cases (i) and (ii), in accordance with any applicable securities laws of the applicable states and other jurisdictions of the United States, and as a result of these transfer restrictions, the Backstop Investor may not be able to readily resell the Backstop Acquired Shares and may be required to bear the financial risk of an investment in the Backstop Acquired Shares for an indefinite period of time. The Backstop Investor understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Backstop Acquired Shares.
(f) The Backstop Investor understands and agrees that the Backstop Investor is purchasing the Backstop Acquired Shares directly from the Company. The Backstop Investor further acknowledges that there have not been, and the Backstop Investor hereby agrees that in relation to its rights and obligations with respect to the Backstop Acquired Shares, it is not relying on, any of the respective representations, warranties, covenants or agreements made to the Backstop Investor by the Company, any other Eligible Shareholder or any other person or entity, expressly or by implication, other than the respective representations, warranties, covenants and agreements of the Company expressly set forth in this Agreement.
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(g) In making its decision to purchase the Backstop Acquired Shares, the Backstop Investor has relied solely upon independent investigation made by the Backstop Investor. The Backstop Investor acknowledges and agrees that the Backstop Investor has received such information as the Backstop Investor deems necessary in order to make an investment decision with respect to the Backstop Acquired Shares, including with respect to the Company and its subsidiaries. The Backstop Investor represents and agrees that the Backstop Investor and the Backstop Investor’s professional advisor(s), if any, have had the opportunity to ask such questions, receive such answers and obtain such information as the Backstop Investor and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Backstop Acquired Shares.
(h) The Backstop Investor became aware of this offering of the Backstop Acquired Shares solely by means of direct contact between the Backstop Investor and the Company or its respective representatives or affiliates, and the Backstop Acquired Shares were offered to the Backstop Investor solely by direct contact between the Backstop Investor and the Company or its respective affiliates. The Backstop Investor did not become aware of this offering of the Backstop Acquired Shares, nor were the Backstop Acquired Shares offered to the Backstop Investor, by any other means. The Backstop Investor acknowledges that the Company represents and warrants that the Backstop Acquired Shares were not offered by any form of general solicitation or general advertising.
(i) The Backstop Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Backstop Acquired Shares. The Backstop Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Backstop Acquired Shares, and the Backstop Investor has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as the Backstop Investor has considered necessary to make an informed investment decision.
(j) The Backstop Investor has adequately analyzed and fully considered the risks of an investment in the Backstop Acquired Shares and has determined that the Backstop Acquired Shares are a suitable investment for the Backstop Investor and that the Backstop Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Backstop Investor’s investment in the Company. The Backstop Investor acknowledges specifically that a possibility of total loss exists.
(k) The Backstop Investor understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Backstop Acquired Shares or made any findings or determination as to the fairness of this investment.
(l) The Backstop Investor will have sufficient funds to fulfill its obligations hereunder at the Closing and any damages required to be paid after termination of this Agreement.
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(m) No broker or finder is entitled to any brokerage or finder’s fee or commission solely in connection with the sale of the Backstop Acquired Shares to the Backstop Investor based on any arrangement entered into by or on behalf of the Backstop Investor.
(n) The Backstop Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor provision), including any group acting for the purpose of acquiring, holding, voting or disposing of equity securities of the Company (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), with any other backstop investor, excluding members of any pre-existing “group” that the Backstop Investor may have been part of prior to the date of this Agreement.
(o) In connection with the Rights Offering, the Backstop Investor has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company in order to facilitate the sale or resale of any securities of the Company, and it is not aware of any such action taken or to be taken by any person.
(p) In connection with determining the terms of the Backstop Commitment, the Backstop Investor did not directly or indirectly collaborate with any other backstop investor, excluding members of any pre-existing “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) that the Backstop Investor may have been part of prior to the commencement of the Rights Offering.
| 6. | Representations and Warranties by the Company. |
The Company represents and warrants to the Backstop Investor that:
(a) The Company (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, (ii) has the requisite power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into, deliver and perform its obligations under this Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. For purposes of this Agreement, a “Company Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to the Company and its subsidiaries, taken together as a whole (on a consolidated basis), that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, or on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Shares.
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(b) As of the Closing Date, the Shares will be duly authorized and, when issued and delivered to the Backstop Investor against full payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will not have been issued in violation of any preemptive rights created under the Company’s organizational documents (as adopted on or prior to the Closing Date), by contract, or the laws of its jurisdiction of incorporation.
(c) This Agreement has been duly authorized, executed and delivered by the Company, and assuming the due authorization, execution and delivery of the same by the Backstop Investor, this Agreement constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(d) The execution and delivery of this Agreement, the issuance and sale of the Shares and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; (ii) the organizational documents of the Company; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
(e) As of the date hereof, the Company’s issued and outstanding Common Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “SEVN.” As of the date hereof, there is no suit, action, proceeding, or investigation pending or, to the knowledge of the Company, threatened against the Company by Nasdaq or the Commission, respectively, to prohibit or terminate the listing of the Company’s Common Shares on Nasdaq or to deregister the shares under the Exchange Act. The Company has taken no action that is designed to terminate the registration of the shares under the Exchange Act. Upon consummation of the Rights Offering and the transactions contemplated by this Agreement, the issued and outstanding Common Shares will continue to be registered pursuant to Section 12(b) of the Exchange Act and will be listed for trading on Nasdaq.
(f) The Company is in compliance with all applicable laws and has not received any written communication from any Governmental Authority that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(g) The Company has filed each form, report, statement, schedule, prospectus, proxy and registration statement (the “SEC Documents”) that the Company was required to file with the Commission since its initial registration of the Common Shares with the Commission and through the date hereof. As of their respective filing dates (the “Filing Dates”), the SEC Documents complied in all material respects with the requirements of the Securities Act, the Exchange Act, and the rules and regulations of the Commission promulgated thereunder and currently in effect at such Filing Date, and none of the SEC Documents, when filed, or if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures that were amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof, there are, and upon Closing there shall be, no outstanding or unresolved comments in comment letters from the staff of the Division of Corporation Finance of the Commission with respect to any of the SEC Documents.
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(h) The Company and the Rights Offering each meet the requirements for use of Form S-3 under the Securities Act. The Registration Statement has become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose are pending before or, to the best knowledge of the Company, threatened by, the Commission.
(i) The Company is not, and immediately after receipt of payment for the Shares and consummation of the Rights Offering, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(j) As of September 30, 2025, the Company has authority to issue 25,000,000 Common Shares, of which 15,069,116 were issued and outstanding.
7. Registration Rights.
(a) Demand Registration
(i) At any time after the date that is one hundred and twenty (120) days after the Closing Date, the Backstop Investor may make a written demand for registration of all or part of the Registrable Securities (as defined below) owned by it. Any such written demand for a registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The registration so demanded by the Backstop Investor is referred to herein as a “Demand Registration.” If the Company is eligible to utilize a Registration Statement on Form S-3 to sell securities in a secondary offering on a delayed or continuous basis in accordance with Rule 415 under the Securities Act (a “Shelf Registration”), any Demand Registration made pursuant to this Section 7 shall, at the option of the Backstop Investor, be a demand for a Shelf Registration. For the avoidance of doubt, if a Shelf Registration is so requested pursuant to this Section 7, any reference to a Demand Registration in this Agreement also refers to a Shelf Registration. For purposes of this Section 7, “Registrable Securities” shall mean the Common Shares and any other equity security of the Company or any of its subsidiaries issued or issuable with respect to the Common Shares by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a registration statement as contemplated under this Section 7 with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement by the Backstop Investor; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act (but with no volume or other restrictions or limitations including as to manner or timing of sale); and (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
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(ii) If the Backstop Investor so advises the Company as part of its written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such case, the Backstop Investor and the Company shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting (which underwriter(s) shall be reasonably acceptable to the Company), complete and execute any questionnaires, powers of attorney, indemnities, lock-up agreements, securities escrow agreements and other documents reasonably required or which are otherwise customary under the terms of such underwriting agreement and furnish to the Company and the underwriters such information as the Company and the underwriters may reasonably request in writing for inclusion in the Registration Statement.
(iii) If the managing underwriter(s) for a Demand Registration that is to be an underwritten offering advise(s) the Company and the Backstop Investor that the dollar amount or number of Registrable Securities which the Backstop Investor has agreed may be included in the offering exceeds the maximum dollar amount or maximum number of Common Shares or other securities that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method or the probability of success of such offering (such maximum dollar amount or maximum number of Common Shares or other securities, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (A) first, the Registrable Securities which the Backstop Investor has demanded be included in the Demand Registration; provided, however, if the aggregate number of Registrable Securities as to which Demand Registration has been requested exceeds the Maximum Number of Shares, then the number of Registrable Securities that may be included shall be reduced to the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Common Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the Common Shares or other securities for the account of other security holders of the Company that can be sold without exceeding the Maximum Number of Shares.
(iv) In the case of a Demand Registration, if the Backstop Investor disapproves of the terms of any underwriting or is not entitled to include all of its Registrable Securities in any offering, the Backstop Investor may elect to withdraw from such offering no later than the time at which the public offering price and underwriters’ discount are determined with the underwriter(s) by giving written notice to the Company and the underwriter(s) of its request to withdraw.
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(b) Piggy-Back Registration
(i) Piggy-Back Rights. At any time after the date that is one hundred and twenty (120) days after the Closing Date, the Company proposes to file a registration statement under the Securities Act with respect to, or to make an offering (including under any then-existing registration statement that may be used for resales of Registrable Securities) of, Common Shares, or securities or other obligations exercisable or exchangeable for, or convertible into, Common Shares, by the Company for its own account or for any other shareholder of the Company for such shareholder’s account, other than a registration statement (or related offering) (each, a “Registration”) (A) filed in connection with any employee benefit plan, (B) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (C) for an offering of debt securities convertible into equity securities of the Company, (D) for a dividend reinvestment plan or (E) filed on Form S-4 (or successor form) (a “Subsequent Registration Statement”), then the Company shall (x) give written notice of such proposed filing or offering, as applicable, to the Backstop Investor as soon as practicable but in no event less than ten (10) Business Days before the anticipated filing or offering date, as applicable, which notice shall describe the amount and type of securities to be included in such filing or offering, the intended method(s) of distribution, and the name of the proposed managing underwriter(s), if any, of the offering and (y) offer to the Backstop Investor in such notice the opportunity to register the sale of or to include in such offering, as applicable, such number of its Registrable Securities as the Backstop Investor may request in writing within five (5) Business Days following receipt of such notice (a “Piggy-Back Registration”). If the Backstop Investor so requests to register the sale of or so include some of its Registrable Securities, the Company shall consider such requests in good faith, such request not to be unreasonably denied, and if the Company agrees to such requests, shall cause the Registrable Securities to be included in the Subsequent Registration Statement and offering, as applicable, and shall use commercially reasonable efforts to cause the managing underwriter(s) of the proposed underwritten offering to permit the Registrable Securities requested to be included in the Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Company and other shareholders of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If the Piggy-Back Registration involves one or more underwriters, the Backstop Investor shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such Piggy-Back Registration by the Company, complete and execute any questionnaires, powers of attorney, indemnities, lock-up agreements, securities escrow agreements and other documents reasonably required or which are otherwise customary under the terms of such underwriting agreement and furnish to the Company such information as the Company may reasonably request in writing for inclusion in the Subsequent Registration Statement or such information that is otherwise customary.
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(ii) Reduction of Offering. If the managing underwriter(s) for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities that the dollar amount or number of Common Shares or other securities which the Company desires to sell, taken together with Common Shares or other securities, if any, as to which registration has been requested pursuant to written contractual arrangements with the Backstop Investor and other persons, the Registrable Securities as to which registration has been requested under this Section 7(b)(ii), and the Common Shares or other securities, if any, as to which registration has been requested pursuant to the written contractual demand or piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:
(1) If the registration is undertaken for the Company’s account: (x) first, the shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (y) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (x), the shares or other securities, if any, including the Registrable Securities, as to which registration has been requested pursuant to written contractual piggy-back registration rights of security holders (pro rata in accordance with the number of Common Shares or other securities which each such person has actually requested to be included in such registration, regardless of the number of shares or other securities with respect to which such persons have the right to request such inclusion) that can be sold without exceeding the Maximum Number of Shares; and
(2) If the registration is a “demand” registration undertaken at the demand of persons, other than the Backstop Investor, pursuant to written contractual arrangements with such persons, (x) first, the Common Shares or other securities for the account of the demanding persons that can be sold without exceeding the Maximum Number of Shares; (y) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (x), the Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (z) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (x) and (y), the shares or other securities, if any, including the Registrable Securities, as to which registration has been requested pursuant to written contractual piggy-back registration rights, which other shareholders desire to sell (pro rata in accordance with the number of Common Shares or other securities which each such person has actually requested to be included in such registration, regardless of the number of Common Shares or other securities with respect to which such persons have the right to request such inclusion) that can be sold without exceeding the Maximum Number of Shares.
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(iii) Withdrawal. The Backstop Investor may elect to withdraw its request for inclusion of its Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw no later than the time at which the public offering price and underwriters’ discount are determined with the underwriter(s). The Company may also elect to withdraw from a registration at any time no later than the time at which the public offering price and underwriters’ discount are determined with the underwriter(s). If the Backstop Investor’s withdrawal is based on (i) the Company’s failure to comply with its obligations under this Agreement or (ii) a reduction pursuant to Section 7(b)(ii) of ten percent (10%) or more of the number of Registrable Securities which the Backstop Investor has requested be included in the Piggy-Back Registration, the Company shall pay or reimburse all expenses otherwise payable or reimbursable by the Backstop Investor in connection with such Piggy-Back Registration pursuant to Section 8(c).
| 8. | Registration Procedures. |
(a) Filings; Information. Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 7, the Company shall use its commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:
(i) Filing Registration Statement. The Company shall, as expeditiously as possible and in any event within thirty (30) days after receipt of a request for a Demand Registration pursuant to Section 7(a), prepare and file with the Commission a Subsequent Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder and the intended method(s) of distribution thereof, and shall use commercially reasonable efforts to cause such Subsequent Registration Statement to become and remain effective for the period required by Section 8(a)(iii); provided, however, that:
(1) In the case of demand under Section 7(a) for a Shelf Registration, the Registration Statement shall be on Form S-3;
(2) the Company shall have the right to defer any Demand Registration and any Piggy-Back Registration for a reasonable period of time if, in the good faith judgment of the board of trustees or the officers of the Company (and the Company shall furnish to the holders a confirmatory certificate signed by a principal executive officer or principal financial officer of the Company), it would (A) materially interfere with a significant acquisition, disposition, financing or other transaction involving the Company, (B) result in the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential that is not then otherwise required to be disclosed or (C) render the Company unable to comply with requirements under the Securities Act or the Exchange Act; in such event, (x) if the applicable Subsequent Registration Statement has become effective, each requesting the Backstop Investor will forthwith discontinue (or cause the discontinuance of) disposition of Registrable Securities until it is advised by the Company that the use of such Subsequent Registration Statement may be resumed or (y) the Backstop Investor shall be entitled to withdraw its request for the filing of the applicable Subsequent Registration Statement and, if such request is withdrawn, such request shall not count as one of the permitted requests for registration hereunder and the Company shall pay all customary costs and expenses in connection with such withdrawn registration; provided, further, however, that the Company may not exercise the right set forth in this subsection (2) in respect of a request by the Backstop Investor, for more than one hundred twenty (120) days in any 365 day period in respect of a Demand Registration (including in such one hundred twenty (120) days, any deferral under subsection (4) of this Section 8(a)(i) if the Registration Statement was not timely filed thereunder);
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(3) the Company shall not be obligated to effect any registration of Registrable Securities upon receipt of a written demand for a Demand Registration if the Company has already completed two (2) Demand Registrations requested by the Backstop Investor within the past twelve (12) month period;
(4) the Company shall not then be obligated to effect any registration of Registrable Securities upon receipt of a written demand for a Demand Registration if the Company shall furnish to the Backstop Investor a certificate signed by a principal executive officer or principal financial officer of the Company stating that the Company expects to file, within ninety (90) days of receipt of the written demand for a Demand Registration, a Subsequent Registration Statement and offer to the Backstop Investor the opportunity to register its Registrable Securities thereunder in accordance with Section 7(b);
(5) the Company shall not be obligated to effect any registration of Registrable Securities upon receipt of a written demand for a Demand Registration from the Backstop Investor if the Company has, within the ninety (90) day period preceding the date of the written demand for a Demand Registration, already effected a Demand Registration;
(6) the Company shall not be obligated to effect any registration of Registrable Securities upon receipt of a written demand for a Demand Registration if all Registrable Securities could be sold within ninety (90) days pursuant to Rule 144 under the Securities Act without any limitations or restrictions; and
(7) the Company shall not be obligated to effect any registration of Registrable Securities upon receipt of a written demand for a Demand Registration if all Registrable Securities are proposed to be offered at an expected aggregate offering price of less than $50.0 million (net of registration expenses set forth in Section 8(c)), provided, that this subsection (7) shall not apply to a Shelf Registration.
(ii) Copies. If the Backstop Investor has included Registrable Securities in a registration, the Company shall, prior to filing a Subsequent Registration Statement or prospectus, or any amendment or supplement thereto, furnish to the Backstop Investor and its counsel, copies of such Subsequent Registration Statement as proposed to be filed, each amendment and supplement to such Subsequent Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Subsequent Registration Statement (including each preliminary prospectus) and such other documents as the Backstop Investor or counsel for the Backstop Investor may reasonably request in order to facilitate the disposition of the Registrable Securities included in such registration.
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(iii) Amendments and Supplements. If the Backstop Investor has included Registrable Securities in a registration, the Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Subsequent Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities, and all other securities covered by such Subsequent Registration Statement, have been disposed of in accordance with the intended method(s) of distribution set forth in such Subsequent Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus any period during which any such disposition is interfered with by any stop order or injunction of the Commission or any Governmental Authority) or such securities have been withdrawn.
(iv) Notification. If the Backstop Investor has included Registrable Securities in a registration, after the filing of the Subsequent Registration Statement, the Company shall promptly, and in no event more than two (2) Business Days after such filing, notify the Backstop Investor of such filing, and shall further notify the Backstop Investor promptly and confirm such notification in writing in all events within two (2) Business Days of the occurrence of any of the following: (A) when such Subsequent Registration Statement becomes effective; (B) when any post-effective amendment to such Subsequent Registration Statement becomes effective; (C) the issuance or threatened issuance by the Commission of any stop order (and the Company shall use reasonable best efforts to prevent the entry of such stop order or to remove it if entered); and (D) any request by the Commission for any amendment or supplement to such Subsequent Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Subsequent Registration Statement, such prospectus will not contain an 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, and promptly make available to the Backstop Investor any such supplement or amendment; except that before filing with the Commission a Subsequent Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the Backstop Investor and to its counsel, copies of all such documents proposed to be filed sufficiently in advance of filing to provide the Backstop Investor and its counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Subsequent Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which the Backstop Investor or its counsel shall reasonably object.
(v) State Securities Laws Compliance. If the Backstop Investor has included Registrable Securities in a registration, the Company shall use commercially reasonable efforts to (A) register or qualify the Registrable Securities covered by the Subsequent Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Backstop Investor (in light of the intended plan of distribution) may request and (B) take such action necessary to cause such Registrable Securities covered by the Subsequent Registration Statement to be registered with or approved by such other federal or state authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Backstop Investor to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 8(a)(v) or subject itself to taxation in any such jurisdiction.
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(vi) Agreements for Disposition. If the Backstop Investor has included Registrable Securities in a registration, (A) the Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and use commercially reasonable efforts to take such other actions as are required in order to expedite or facilitate the disposition of such Registrable Securities and (B) the representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any underwriters, to the extent applicable, shall also be made to and for the benefit of the Backstop Investor. For the avoidance of doubt, the Backstop Investor may not require the Company to accept terms, conditions or provisions in any such agreement which the Company determines are not reasonably acceptable to the Company, notwithstanding any agreement to the contrary herein. The Backstop Investor shall not be required to make any representations or warranties in the underwriting agreement except as reasonably requested by the underwriters or the Company and, if applicable, with respect to the Backstop Investor’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with the Backstop Investor’s material agreements and organizational documents, and with respect to written information relating to the Backstop Investor that the Backstop Investor has furnished in writing expressly for inclusion in such Subsequent Registration Statement, in each case, as applicable to the Backstop Investor. The Backstop Investor, however, shall agree to such covenants and indemnification and contribution obligations for selling stockholders as are reasonable and customarily contained in agreements of that type.
(vii) Cooperation. The Company shall cooperate in any offering of Registrable Securities under this Agreement, which cooperation shall include, without limitation, the preparation of the Subsequent Registration Statement with respect to such offering and all other offering materials and related documents and participation in meetings with underwriters, attorneys, accountants and potential investors. The Backstop Investor shall cooperate in the preparation of the Subsequent Registration Statement and other documents relating to any offering in which it includes securities pursuant to this Agreement. If the Backstop Investor has included Registrable Securities in a registration, the Backstop Investor shall also furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method(s) of disposition of such securities as the Company and/or its counsel shall reasonably request in order to assure full compliance with applicable provisions of the Securities Act and the Exchange Act in connection with the registration of the Registrable Securities.
(viii) Records. If the Backstop Investor has included Registrable Securities in a registration, upon reasonable notice and during normal business hours, subject to the Company receiving any customary confidentiality undertakings or agreements, the Company shall make available for inspection by the Backstop Investor, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other professional retained by the Backstop Investor or any underwriter, all relevant financial and other records, pertinent corporate documents and properties of the Company as shall be necessary to enable them to exercise their due diligence responsibility, and shall cause the Company’s officers, directors and employees to supply all information reasonably requested by the Backstop Investor in connection with such Subsequent Registration Statement.
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(ix) Opinions and Comfort Letters. If the Backstop Investor has included Registrable Securities in a registration, the Company shall use commercially reasonable efforts to furnish to the Backstop Investor signed counterparts, addressed to the Backstop Investor, of (A) any opinion of counsel to the Company delivered to any underwriter and (B) any comfort letter from the Company’s independent public accountants delivered to any underwriter; provided, however, that counsel to the underwriter shall have exclusive authority to negotiate the terms thereof. In the event no legal opinion is delivered to any underwriter, the Company shall furnish to the Backstop Investor, at any time that the Backstop Investor elects to use a prospectus in connection with an offering of the Backstop Investor’s Registrable Securities, an opinion of counsel to the Company to the effect that the Subsequent Registration Statement containing such prospectus has been declared effective, that no stop order is in effect and such other matters as persons holding a majority of the Registrable Securities subject to the registration may reasonably request as would customarily have been addressed in an opinion of counsel to the Company delivered to an underwriter.
(x) Earning Statement. The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make generally available to its shareholders, as soon as practicable, an earning statement satisfying the provisions of Section 11(a) of the Securities Act, provided that the Company will be deemed to have complied with this Section 8(a)(x) if the earning statement satisfies the provisions of Rule 158 under the Securities Act.
(xi) Listing. The Company shall use commercially reasonable efforts to cause all Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar shares of the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the Backstop Investor whose Registrable Securities are included in the registration.
(b) Shelf Offering. In the event that a Subsequent Registration Statement with respect to a Shelf Registration is effective, the Backstop Investor may make a written request to sell pursuant to an offering (including an underwritten offering) Registrable Securities available for sale pursuant to such Subsequent Registration Statement (a “Shelf Offering”) so long as such Subsequent Registration Statement remains in effect and to the extent permitted under the Securities Act. Any written request for a Shelf Offering shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Upon receipt of a written request for a Shelf Offering, the Company shall, as expeditiously as possible, use its commercially reasonable efforts to facilitate such Shelf Offering.
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(c) Registration Expenses. Except to the extent expressly provided by Section 7(a)(iv) or Section 7(b)(iii) or in connection with a Piggy-Back Registration relating to a registration by the Company on its own initiative (and not as a result of any other person’s or entity’s right to cause the Company to file, cause and effect a registration of the Company securities) and for the Company’s own account (in which case the Company will pay all customary costs and expenses of registration), the Backstop Investor whose Registrable Securities are included in the registration shall pay, or promptly reimburse the Company for, its pro rata share of all customary costs and expenses incurred in connection with any Demand Registration effected pursuant to Section 7(a) or Piggy-Back Registration pursuant to Section 7(b), such pro rata share to be in proportion to the number of shares the Backstop Investor is selling, after giving effect to any reduction pursuant to Section 7(a)(iii) or Section 7(b)(ii), in such Demand or Piggy-Back Registration relative to the total number of shares being sold in the registration, of all customary costs and expenses incurred in connection with such registration, in each case whether or not the Subsequent Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) fees imposed by the Financial Industry Regulatory Authority, Inc.; and (v) fees and disbursements of counsel for the Company and fees and expenses for independent registered public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 8(a)(ix)). The Company shall have no obligation to pay for the fees and expenses of counsel representing the Backstop Investor in any Demand Registration or Piggy-Back Registration. The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the Backstop Investor, which underwriting discounts or selling commissions shall be borne solely by the Backstop Investor. For the avoidance of doubt, the Backstop Investor shall have no obligation to pay any underwriting discounts or selling commissions attributable to the shares being sold by any other person. Additionally, in an underwritten offering, the Backstop Investor, the Company and any other person whose Shares or other securities are included in the offering shall bear the expenses of the underwriter(s) pro rata in proportion to the respective amount of shares each is selling in such offering. For the avoidance of doubt, the Backstop Investor shall have no obligation to pay, and the Company shall bear, all internal expenses of the Company (including, without limitation, all fees, salaries and expenses of its officers, employees and management) incurred in connection with performing or complying with the Company’s obligations under this Agreement.
(d) Information. The Backstop Investor shall provide such information as may reasonably be requested by the Company, or the managing underwriter, if any, in connection with the preparation of any Subsequent Registration Statement, including amendments and supplements thereto, in order to effect the registration of any of its Registrable Securities under the Securities Act pursuant to this Agreement and in connection with the Company’s obligation to comply with federal and applicable state securities Laws.
(e) The Backstop Investor’s Obligations. The Backstop Investor may not participate in any underwritten offering pursuant to this Agreement unless the Backstop Investor (i) agrees to only sell Registrable Securities on the basis reasonably provided in any underwriting agreement and (ii) completes, executes and delivers any and all questionnaires, lock-up agreements, powers of attorney, custody agreements, indemnities, underwriting agreements and other documents reasonably or customarily required by or under the terms of any underwriting agreement or as reasonably requested by the Company.
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(f) Lock-Up in an Underwritten Public Offering. If requested by the underwriter(s) of a registered underwritten public offering of securities of the Company, the Backstop Investor will enter into a lock-up agreement in customary form pursuant to which it shall agree not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer, dispose of or hedge, directly or indirectly, or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of any Common Shares or other securities of the Company or any securities convertible into or exercisable or exchangeable for Common Shares or other securities of the Company (except as part of such registered underwritten public offering or as otherwise permitted by the terms of such lock-up agreement) for a lock-up period that is customary for such an offering.
| 9. | Lock-Up. |
(a) The Backstop Investor agrees that it shall not (i) sell, exchange, transfer or assign, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly or (ii) enter into any swap or other arrangement that transfers to another person, in whole or in part, any of the economic consequences of ownership (each, a “Transfer”) of the Backstop Acquired Shares for the period beginning on the Closing Date and ending on the six (6) month anniversary of the Closing Date (the “Lock-Up Period”). For the avoidance of doubt, the Backstop Investor shall retain all of its rights as a stockholder of the Company with respect to the Backstop Acquired Shares during the Lock-Up Period, including the right to vote any Backstop Acquired Shares that the Backstop Investor is entitled to vote.
(b) In order to enforce this Section 9, the Company shall not seek specific performance, including the imposition of stop-transfer instructions, with respect to Backstop Acquired Shares. Accordingly, if the Backstop Investor violates this Section 9, the Company shall only seek monetary damages from the Backstop Investor with respect to the Backstop Acquired Shares.
| 10. | Termination. |
(a) This Agreement shall terminate upon the earliest to occur of (i) such date and time as the Rights Offering is validly terminated in accordance with its terms without being consummated, or (ii) upon the mutual written agreement of both parties, or (iii) by written notice from the Backstop Investor given any time on or after December 31, 2025, if the Closing has not occurred by such date and the Backstop Investor’s breach was not the primary reason the Closing failed to occur by such date. The Company shall notify Backstop Investor of the termination of the Rights Offering without it being consummated promptly after the termination thereof.
(b) If this Agreement is terminated pursuant to Section 10(a), this Agreement, shall forthwith become wholly void and of no further effect (other than Section 12, which shall remain in full force and effect); provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination or common law intentional fraud in the making of any representation or warranty hereunder, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach or fraud.
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| 11. | Indemnity. |
(a) The Company agrees to indemnify and hold harmless the Backstop Investor, its affiliates (within the meaning of Rule 405 under the Securities Act), and each of their respective shareholders, members, partners, directors, trustees, employees and agents, and each person who controls (within the meaning of the Securities Act or the Exchange Act) the Backstop Investor or its affiliates (within the meaning of Rule 405 under the Securities Act) (all such persons being hereinafter referred to, collectively, as the “Backstop Investor Parties”), from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation, any reasonable attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim, regardless of whether any Backstop Investor Party is a party thereto) that any such Backstop Investor Party may suffer or incur, directly or indirectly, by reason of, arising out of or in connection with this Agreement, the Offering Documents, or any Demand Registration, Piggy-Back Registration, or Subsequent Registration Statement under which the sale of Registrable Securities was registered under the Securities Act (or any amendment thereto), or any prospectus, preliminary prospectus, or free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) relating to such Subsequent Registration Statement, or any amendment thereof or supplement thereto (collectively, “Subsequent Offering Documents”), or the use of the proceeds of the Rights Offering, including as a result of any untrue statement or alleged untrue statement of any material fact contained or incorporate by reference in the Offering Documents or any Subsequent Offering Documents, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except to the extent such untrue statement, alleged untrue statement, omission or alleged omission, as applicable, was made in reliance upon or in conformity with information relating to the Backstop Investor or its affiliates furnished in writing to the Company by or on behalf of the Backstop Investor expressly for use in the Offering Documents or any Subsequent Offering Documents), and reimburse each Backstop Investor Party upon demand for reasonable documented legal or other third-party expenses incurred in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to, any lawsuit, investigation, claim or other proceeding relating to any of the foregoing, irrespective of whether or not the Rights Offering or the transactions contemplated by this Agreement are consummated or whether or not this Agreement is terminated; provided, however, that the foregoing indemnification will not apply to losses to the extent that they resulted from any breach by such Backstop Investor of this Agreement.
(b) The Backstop Investor agrees to indemnify and hold harmless the Company and its trustees, officers, employees and agents (all such persons being hereinafter referred to, collectively, as the “Company Parties”), from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation, any reasonable attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) that any such Company Party may suffer or incur resulting from any untrue statement of material fact contained in the Offering Documents or any Subsequent Offering Documents, but only to the extent that such untrue statement was made in reliance or in conformity with information relating to the Backstop Investor or its affiliates furnished in writing to the Company by or on behalf of the Backstop Investor expressly for use in the Offering Documents or any Subsequent Offering Documents. Notwithstanding anything to the contrary set forth herein, in no event shall the total indemnification obligation of the Backstop Investor pursuant to this Agreement be greater in amount than the aggregate dollar amount of net proceeds received by the Company from the issuance by the Company of Common Shares to persons other than the Backstop Investor pursuant to such persons’ exercise of their respective Rights in the Rights Offering.
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(c) Any person entitled to indemnification herein shall (1) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (2) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(d) The terms of this Section 11 shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall the termination of this Agreement for any reason, the Closing and the transfer of the Shares purchased pursuant to this Agreement.
(e) If the indemnification provided under this Section 11 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 11 from any person who was not guilty of such fraudulent misrepresentation. Any contribution by the Backstop Investor pursuant to this Section 11(e) shall be limited in amount to aggregate dollar amount of net proceeds received by the Company from the issuance by the Company of Common Shares to persons other than the Backstop Investor pursuant to such persons’ exercise of their respective Rights in the Rights Offering. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Agreement.
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| 12. | Payment of Expenses. |
(a) The Company shall pay all fees and expenses in connection with satisfying its obligations under Section 1(a).
(b) The Company agrees to reimburse the Backstop Investor upon request made from time to time for its reasonable expenses incurred in connection with its activities under this Agreement, including expenses incurred in connection with the negotiation, preparation, execution, and delivery of this Agreement and any beneficial ownership filings required to be made by the Backstop Investor under Section 13 and Section 16 of the Exchange Act, in both cases arising from the Backstop Investor’s obligations hereunder.
| 13. | Miscellaneous. |
(a) Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing or delivered by email to the below email addresses and shall be deemed to have been duly given (a) when delivered by email (b) when delivered in person (c) on the next business day if transmitted by a nationally recognized overnight courier or (d) on the third (3rd) business day following mailing by first class mail, postage prepaid, in each case as follows (or at such other United States address for a party as shall be specified by like notice):
If to the Company:
Seven Hills Realty Trust
Two Newton Place
255 Washington Street
Newton, Massachusetts 02458
Attn: Lindsey Getz at [REDACTED]
If to the Backstop Investor:
Tremont Realty Capital LLC
Two Newton Place
255 Washington Street
Newton, Massachusetts 02458
Attn: Thomas J. Lorenzini at [REDACTED]
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(b) Assignment. Neither this Agreement nor any of the rights or obligations under this Agreement of any party hereto are assignable or transferable by any party without the prior written consent of the other party, except that the Backstop Investor may transfer this Agreement and its rights and obligations hereunder solely to an affiliate of the Backstop Investor provided that (i) the Backstop Investor obtains advance written consent of the Company (not to be unreasonably withheld, conditioned or delayed) and (ii) the Backstop Investor remains liable for any breach of this Agreement committed by the Backstop Investor’s assignee.
(c) Survival. All the agreements, representations and warranties made by each party hereto in this Agreement shall survive the Closing.
(d) Amendments; Waivers. This Agreement may not be amended, modified or waived except by an instrument in writing, signed by each of the parties hereto.
(e) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof and thereof.
(f) Third Party Beneficiaries. Except as otherwise provided in this Agreement (including the next sentence of this Section 13(f)), this Agreement is intended for the benefit of the parties hereto and their respective affiliates and their respective, administrators, successors, legal representatives, and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. Except as set forth in Section 11, Section 13(b) and this Section 13(f), this Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and permitted assigns, and the parties hereto acknowledge that such persons so referenced are third-party beneficiaries of this Agreement for the purposes of, and to the extent of, the rights granted to them, if any, pursuant to the applicable provisions of this Agreement.
(g) Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(h) Counterparts. This Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(i) Governing Law. The provisions of this Agreement and any Dispute (as defined below), whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.
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| (j) | Dispute Resolution. |
(i) Any disputes, claims or controversies arising out of or relating to this Agreement, including any disputes, claims or controversies brought by or on behalf of a party hereto, a direct or indirect parent of a party, or any holder of equity interests (which, for purposes of this Section 13(j), shall mean any holder of record or beneficial owner of any equity interests, or any former holder of record or beneficial owner of equity interests) of a party, either on its own behalf, on behalf of a party or on behalf of any series or class of equity interests of a party or holders of any equity interests of a party against a party, or any of their respective trustees, directors, members, officers, managers (including Tremont Realty Capital LLC or its parent and their respective successor), agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance, application or enforcement of this Agreement, including the agreements set forth in this Section 13(j) or the governing documents of a party (all of which are referred to as “Disputes”), or relating in any way to such a Dispute or Disputes shall, on the demand of any party to such Dispute or Disputes be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (the “AAA”) then in effect, except as those Rules may be modified in this Section 13(j). For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of a party and class actions by a holder of equity interests against those persons and a party. For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.
(ii) There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of a demand for arbitration. Such arbitrators may be affiliated or interested persons of such parties. If there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one (1) arbitrator within fifteen (15) days after receipt of a demand for arbitration. Such arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator, then the party (or parties) who has selected an arbitrator may request the AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date the AAA provides such list to select one (1) of the three (3) arbitrators proposed by the AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by the AAA to be the second (2nd) arbitrator; and, if they should fail to select the second (2nd) arbitrator by such time, the AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then the AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.
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(iii) Any arbitration hearings shall be held in Boston, Massachusetts, unless otherwise agreed by the parties, but the seat of arbitration shall be Maryland.
(iv) There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators. For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.
(v) In rendering an award or decision (an “Award”), the arbitrators shall be required to follow the laws of the State of Maryland, without regard to principles of conflicts of law. Any arbitration proceedings or Award rendered hereunder and the validity, effect and interpretation of the agreements set forth in this Section 13(j) shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. An Award shall be in writing and may, but shall not be required to, briefly state the findings of fact and conclusions of law on which it is based. Any monetary Award shall be made and payable in U.S. dollars free of any tax, deduction or offset. Subject to Section 13(j)(vi), each party against which an Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of such Award or such other date as such Award may provide.
(vi) Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, to the maximum extent permitted by Maryland law, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an Award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of a party’s Award to the claimant or the claimant’s attorneys. Each party (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third (3rd) appointed arbitrator.
(vii) Notwithstanding any language to the contrary in this Agreement, any Award, including but not limited to any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”). An Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of an Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof. For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 13(j)(vi) shall apply to any appeal pursuant to this Section 13(j)(vii) and the appeal tribunal shall not render an Award that would include shifting of any costs or expenses (including attorneys’ fees) of any party.
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(viii) Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 13(j)(vii), an Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators. Judgment upon an Award may be entered in any court having jurisdiction. To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any Award made, except for actions relating to enforcement of the agreements set forth in this Section 13(j) or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.
(ix) This Section 13(j) is intended to benefit and be enforceable by the parties hereto and their respective shareholders, stockholders, members, beneficial interest owners, direct and indirect parents, trustees, directors, officers, managers (including The RMR Group LLC or its parent and their respective successor), members, agents or employees and their respective successors and assigns and shall be binding on the parties and such persons and be in addition to, and not in substitution for, any other rights to indemnification or contribution that such persons may have by contract or otherwise.
(k) Statement of Limited Liability. The Declaration of Trust of the Company provides that no trustee, officer, shareholder, employee or agent of the Company shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, the Company. All persons or entities dealing with the Company, in any way, shall look only to the assets of the Company for the payment of any sum or the performance of any obligation.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| SEVEN HILLS REALTY TRUST | ||
| By: | /s/ Thomas J. Lorenzini | |
| Name: | Thomas J. Lorenzini | |
| Title: | President | |
| TREMONT REALTY CAPITAL LLC | ||
| By: | /s/ Matthew P. Jordan | |
| Name: | Matthew P. Jordan | |
| Title: | President and Chief Executive Officer | |
[Signature Page to Rights Offering Backstop Agreement]
EXHIBIT A
Form of Rights Exercise Commitment Allocation Schedule
| Number and Percentage of Issued and Outstanding Common Shares Owned at Record Date | Rights Issued | Exercised Rights Shares to be Purchased | ||||||
| [●] shares representing [●]% shares of the Company’s Common Shares issued and outstanding at the Record Date | [●] | [●] | ||||||
Exhibit 10.2
SEVEN HILLS REALTY TRUST
7,532,861 Shares of Beneficial Interest
Issuable Upon Exercise of Transferable Rights
to Subscribe for Such Shares
DEALER MANAGER AGREEMENT
| New York, New York October 30, 2025 |
UBS Securities LLC
11 Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
Seven Hills Realty Trust, a Maryland real estate investment trust (the “Company”) and Tremont Realty Capital LLC, a Maryland limited liability company (the “Manager”) hereby confirms the agreement with and appointment of UBS Securities LLC to act as exclusive dealer manager (the “Dealer Manager”) in connection with the issuance by the Company to the holders of record (the “Record Date Shareholders”) at the close of business on the record date set forth in the Prospectus (as defined herein) (the “Record Date”) transferable rights entitling such Record Date Shareholders to subscribe for up to an aggregate of 7,532,861 common shares of beneficial interest (each a “Share” and, collectively, the “Shares”), par value $0.001 per share (the “Common Shares”), of the Company (the “Offer”). Pursuant to the terms of the Offer, the Company is issuing each Record Date Shareholder two transferable rights (each a “Right” and, collectively, the “Rights”) for each Common Share held by such Record Date Shareholder on the Record Date. Such Rights entitle their holders to acquire during the subscription period set forth in the Prospectus (the “Subscription Period”), at the price set forth in such Prospectus (the “Subscription Price”), one Share for each two Rights exercised (except that any Record Date Shareholder who is issued fewer than two Rights will be able to subscribe for one full Share pursuant to the primary subscription), on the terms and conditions set forth in such Prospectus. No fractional shares will be issued. Any Record Date Shareholder who fully exercises all Rights initially issued to such Record Date Shareholder (other than those Rights that cannot be exercised because they represent the right to acquire less than one Share) will be entitled to subscribe for, subject to certain limitations and subject to allocation, additional Shares (the “Over-Subscription Privilege”), on the terms and conditions set forth in the Prospectus. The Rights are transferable and are expected to be admitted for trading on the Nasdaq Stock Market (the “Nasdaq”) under the symbol “SEVNR.”
The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (File No. 333-290401), including the prospectus contained therein (the “Base Prospectus”), under the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations of the Commission under the Securities Act (the “Rules and Regulations”), which has been declared effective by the Commission, and has filed a prospectus supplement to the Base Prospectus, related to such registration statement on Form S-3 for the issuance of the Rights (the “Prospectus Supplement”). The term “Registration Statement” means the registration statement, allowing for delayed offerings pursuant to Rule 415 under the Rules and Regulations, as amended, at the time it becomes or became effective, including financial statements and all exhibits and all documents, if any, incorporated therein by reference, and any information deemed to be included by Rule 430B under the Rules and Regulations. The term “Prospectus” means (except as otherwise specified herein) (i) the Base Prospectus and (ii) the Prospectus Supplement.
As used herein, “Issuer Free Writing Prospectus” means any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy in connection with the Offer.
The Prospectus, any Issuer Free Writing Prospectus and any letters to owners of Common Shares of the Company, subscription certificates and other forms used to exercise rights, brochures, wrappers, any letters from the Company to securities dealers, commercial banks and other nominees and any newspaper announcements, press releases and other offering materials and information that the Company may use, approve, prepare or authorize for use in connection with the Offer are collectively referred to hereinafter as the “Offering Materials.”
| 1. | Representations and Warranties. |
| (a) | The Company represents and warrants to, and agrees with, the Dealer Manager as of the date hereof, as of the date of the commencement of the Offer (such date being hereinafter referred to as the “Representation Date”) and as of the Expiration Date (as defined below) that: |
| (i) | The Company meets the requirements for use of Form S-3 under the Securities Act and the Rules and Regulations. At the time the Registration Statement became or becomes effective, the Registration Statement did or will contain all statements required to be stated therein in accordance with, and did or will comply with the requirements of the Securities Act and the Rules and Regulations and did not or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. From the time the Registration Statement became or becomes effective through the expiration date of the Offer set forth in the Prospectus, as it may be extended as provided in the Prospectus (the “Expiration Date”), the Offering Materials will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Offering Materials made in reliance upon and in conformity with information relating to the Dealer Manager furnished to the Company by the Dealer Manager expressly for use in the Registration Statement or Offering Materials. |
| (ii) | The Company (A) has been duly formed and has legal existence as a real estate investment trust and is in good standing under the laws of the State of Maryland, (B) has power and authority to conduct its business as described in the Registration Statement and the Prospectus, (C) owns, possesses or has obtained and currently maintains all necessary licenses, permits, consents, orders, approvals and other authorizations (collectively, the “Licenses and Permits”), whether foreign or domestic, necessary to carry on its business as contemplated in the Prospectus, (D) has made all necessary filings required under any federal, state, local or foreign law, regulation or rule and (E) is duly qualified to do business and is in good standing in each jurisdiction in which the conduct of its business requires such qualification, except with respect to (C), (D) and (E), where such failure would not have a material adverse effect upon the Company’s condition (financial or otherwise), earnings, business affairs, business prospects, management, properties, net assets or results of operation or this offering (a “Company Material Adverse Effect”). The Company has no subsidiaries (as defined under the Securities Act) other than those subsidiaries listed on Schedule A hereto (each, a “Subsidiary” and collectively, the “Subsidiaries”). Each direct and indirect Subsidiary has been duly formed and is validly existing as a corporation or limited liability company, as the case may be, in good standing under the laws of the jurisdiction in which it is organized with full power and authority (corporate or other) to conduct its business as described in the Registration Statement, the Prospectus and any Issuer Free Writing Prospectus and is duly qualified to do business as a foreign corporation or limited liability company, as the case may be, and is in good standing under the laws of each jurisdiction which requires such qualification. |
| (iii) | [Reserved]. |
| (iv) | Deloitte & Touche LLP, the independent registered public accounting firm that certified the financial statements of the Company set forth or incorporated by reference in the Registration Statement and the Prospectus, is an independent registered public accounting firm as required by the Securities Act, the Rules and Regulations and by the rules of the Public Company Accounting Oversight Board. |
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| (v) | The financial statements of the Company, together with the related notes and schedules thereto, set forth or incorporated by reference in the Registration Statement and the Prospectus present fairly in all material respects the financial condition of the Company as of the dates or for the periods indicated in conformity with U.S. generally accepted accounting principles applied on a consistent basis. |
| (vi) | The Company has an authorized and outstanding capitalization as set forth in the Prospectus; the issued and outstanding Common Shares have been duly authorized and are validly issued, fully paid and nonassessable and conform in all material respects to the description thereof in the Prospectus under the heading “Description of Shares of Beneficial Interest — Common Shares”; the Rights have been duly authorized by all requisite action on the part of the Company for issuance pursuant to the Offer; the certificates, if any, for the Shares are in due and proper form; the Shares have been duly authorized by all requisite action on the part of the Company for issuance and sale pursuant to the terms of the Offer and, when issued and delivered by the Company pursuant to the terms of the Offer against payment of the consideration set forth in the Prospectus, will be validly issued, fully paid and nonassessable; and the Shares and the Rights conform in all material respects to the statements relating thereto contained in the Registration Statement, the Prospectus and the other Offering Materials. No person is entitled to any preemptive or other similar rights with respect to the issuance of each of the Rights and the Shares. |
| (vii) | Except as set forth in the Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (A) the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, other than in the ordinary course of business or incident to its organization, (B) there has not been any material change in the Common Shares or long-term debt of the Company, or any event that resulted in a Company Material Adverse Effect, (C) there has been no dividend or distribution declared or paid in respect of the Company’s capital stock (other than ordinary or customary distributions declared and paid in the ordinary course) and (D) the Company has not incurred any long-term debt. |
| (viii) | Neither the issuance of the Rights, nor the issuance and sale of the Shares upon the exercise of the Rights, nor the execution, delivery, performance and consummation by the Company of any other of the transactions contemplated in this Agreement, nor the consummation of the transactions contemplated in this Agreement or in the Registration Statement nor the fulfillment of the terms thereof will (A) violate the Declaration of Trust, By-Laws or similar organizational documents of the Company, (B) conflict with, result in a breach or violation of, or constitute a default or an event of default under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company under the terms and provisions of any agreement, indenture, mortgage, loan agreement, note, insurance or surety agreement, lease or other instrument to which the Company is a party or by which it may be bound or to which any of the property or assets of the Company is subject (other than those expressly created by any Company Agreement), except such as would not reasonably be expected to have a Company Material Adverse Effect, or (C) result in any violation of any order, law, rule or regulation of any court, governmental instrumentality, securities exchange or association or arbitrator, whether foreign or domestic, applicable to the Company or having jurisdiction over the Company or any of its material properties, other than state securities or “blue sky” laws. |
| (ix) | Except as set forth in the Registration Statement, there is no pending or, to the knowledge of the Company, threatened action, suit, claim, investigation, inquiry or proceeding affecting the Company or to which the Company is a party before or by any court or governmental agency, authority or body or any arbitrator which is of a character required by the Securities Act or the Rules and Regulations to be described in the Registration Statement. |
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| (x) | There are no franchises, contracts or other documents of the Company that are required by the Securities Act or the Rules and Regulations to be described in the Registration Statement or the Prospectus, or to be filed or incorporated by reference as exhibits to the Registration Statement which are not described or filed or incorporated by reference therein as required by the Securities Act or the Rules and Regulations. |
| (xi) | There is no relationship, direct or indirect, that exists between or among the Company or any of the Subsidiaries on the one hand, and the Trustees, officers or shareholders of the Company or any of the Subsidiaries on the other hand, which is required by the Securities Act to be described in the Registration Statement or the Prospectus, which is not so described. |
| (xii) | No consent, approval, authorization, notification or order of, or filing with, or the issuance of any license or permit by, any federal, state, local or foreign court or governmental or regulatory agency, commission, board, authority or body or with any self-regulatory organization or other non-governmental regulatory authority, securities exchange or association, whether foreign or domestic, is required by the Company for the consummation by the Company of the transactions to be performed by the Company or the performance by the Company of all the terms and provisions to be performed by or on behalf of it in each case as contemplated in the Registration Statement, except such as (i) have been obtained or (ii) may be required by the Financial Industry Regulatory Authority, Inc. (“FINRA”), Nasdaq or under state securities or “blue sky” laws, or (iii) the failure to obtain which would not reasonably be expected to have a Company Material Adverse Effect. |
| (xiii) | The Company is not currently in material breach of, or in material default under, any written agreement or instrument to which it is a party or by which it or its property is, to the knowledge of the Company, bound or affected. |
| (xiv) | There are no transfer taxes or similar fees or charges under federal law or laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the distribution of the Rights or the issuance and sale of the Shares pursuant to the terms of the Offering, except for transfer taxes or similar fees or charges that will not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. |
| (xv) | The Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), for its taxable years ended December 31, 2020 through December 31, 2024. The Company’s organization and present and proposed method of operation (as described under the caption “Material United States Federal Income Tax Considerations—Taxation as a REIT” in Part I, Item 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024) will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2025 and thereafter. All statements regarding the Company’s qualification and taxation as a REIT set forth under the caption “Material United States Federal Income Tax Considerations—Taxation as a REIT” in Part I, Item 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 are correct in all material respects. |
| (xvi) | No person has any right to the registration of any securities of the Company because of the filing of the Registration Statement with the Commission. No person has tag along rights or other similar rights included in the transaction contemplated by this Agreement. |
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| (xvii) | The Common Shares have been duly listed on Nasdaq and prior to their issuance the Shares and the Rights will have been admitted for trading and the Shares will have been duly approved for listing, subject to official notice of issuance, on Nasdaq. |
| (xviii) | The Company (A) has not taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights and the Shares, (B) has not since the filing of the Registration Statement sold, bid for or purchased, or paid anyone any compensation for soliciting purchases of, Common Shares of the Company (except for the solicitation of exercises of the Rights pursuant to this Agreement) and (C) will not, until the later of the expiration of the Rights or the completion of the distribution (within the meaning of the anti-manipulation rules under the Securities Exchange Act of 1934 (the “Exchange Act”)) of the Shares, sell, bid for or purchase, pay or agree to pay to any person any compensation for soliciting another to purchase any other securities of the Company (except for the solicitation of exercises of the Rights pursuant to this Agreement). |
| (xix) | Other than the Offering Materials, the Company has not, without the written permission of the Dealer Manager, used, approved, prepared or authorized any letters to beneficial owners of the Common Shares of the Company, forms used to exercise rights, any letters from the Company to securities dealers, commercial banks and other nominees or any newspaper announcements or other offering materials and information in connection with the Offer; provided, however, that any use of transmittal documentation and subscription documentation independently prepared by the Dealer Manager, broker-dealers, directors, nominees or other financial intermediaries shall not cause a violation of this Section 1(a)(xviii). |
| (xx) | The Offering Materials complied and will comply in all material respects with the applicable requirements of the Securities Act and the Rules and Regulations. |
| (xxi) | The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. |
| (xxii) | The Company has established and maintains disclosure controls and procedures, in compliance with the Rules and Regulations, designed to ensure that material information relating to the Company is made known to the Company’s Chief Executive Officer and its Chief Financial Officer by others within the Company, and such disclosure controls and procedures are effective to perform the functions for which they were established; the Company is not aware of any material weakness in its internal controls over financial reporting. The Company’s independent registered public accounting firm and the Audit Committee of the Board of Trustees of the Company have been advised of: (A) any significant deficiencies in the design or operation of internal controls over financial reporting which could adversely affect the Company’s ability to record, process, summarize, and report financial data; and (B) any fraud that involves management or other employees who have a role in the Company’s internal controls over financial reporting; any material weaknesses in the Company’s internal controls over financial reporting have been identified for the Company’s independent registered public accounting firm; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no changes in internal controls over financial reporting or in other factors that could affect internal controls over financial reporting, including any corrective actions with regard to any significant deficiencies and material weaknesses. |
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| (xxiii) | The Company and its officers and trustees, in their capacities as such, are in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder in all material respects. |
| (xxiv) | The Company’s Board of Trustees has validly appointed an audit committee whose composition satisfies the requirements of Section IM-5605-4 of the Nasdaq Manual and the Board of Trustees and/or the audit committee has adopted a charter that satisfies the requirements of Section IM-5605-3 of the Nasdaq Manual. The audit committee has reviewed the adequacy of its charter within the past twelve months. |
| (xxv) | Any statistical, demographic or market-related data included in the Registration Statement, the Prospectus or the other Offering Materials are based on or derived from sources that the Company believes to be reasonably reliable and accurate, and all such data included in the Registration Statement, the Prospectus and the other Offering Materials accurately reflects the materials upon which it is based or from which it was derived in all material respects. |
| (xxvi) | No transaction has occurred between or among the Company and any of its officers or trustees, shareholders or affiliates or any affiliate or affiliates of any such officer or trustee or shareholder or affiliate that is required to be described in and is not described in the Registration Statement and the Prospectus. |
| (xxvii) | Neither the Company nor, to the knowledge of the Company, any employee or agent of the Company has made any payment of funds of the Company or received or retained any funds on behalf of the Company, which payment, receipt or retention of funds is a character required to be disclosed in the Registration Statement or Prospectus and is not so disclosed. |
| (xxviii) | Each of the Company and its Subsidiaries has filed all federal, state, local and non-U.S. income tax returns required to be filed by or on behalf of the Company or any of its Subsidiaries on or before the due dates therefor (taking into account all extensions of time to file) and has paid or provided for the payment of all such taxes indicated by such tax returns and any other assessments, fines or penalties levied against it or any of its Subsidiaries to the extent that any of the foregoing have become due, excepting any failure to file or pay taxes that would not have a Company Material Adverse Effect. There are no taxes that have been assessed on, or any other assessment, fines or penalties levied against, the Company or any Subsidiary or are due by the Company or any Subsidiary that have not been paid, except for the nonpayment of which would not, individually or in the aggregate, have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries have executed a waiver with respect to the statute of limitations relating to the assessment or collection of any federal, state, local or non-U.S. tax. To the Company’s knowledge, (A) there are no material tax deficiencies that have been threatened or asserted in writing against the Company or its Subsidiaries, (B) there are no tax audits, investigations or other administrative proceedings or court proceedings currently pending against the Company or the Subsidiaries with regard to any tax returns, (C) no taxing authority has notified the Company or the Subsidiaries in writing that it intends to investigate its tax affairs, and (D) the charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined. |
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| (xxix) | The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged; all policies of insurance insuring the Company or its business, assets, employees, officers and trustees, including the Company’s trustees and officers errors and omissions insurance policy, if any, are in full force and effect; the Company is in compliance with the terms of such policy, if any; and there are no claims by the Company under any such policy, if any, as to which any insurance company is denying liability or defending under a reservation of rights clause; the Company has not been refused any insurance coverage sought or applied for; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage, if any, as and when such coverage, if any, expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. |
| (xxx) | The Company owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business operated by the Company, except for that which the failure to own or possess would not reasonably be expected to have a Company Material Adverse Effect, and the Company has not received any notice or is not otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company, except for that which if determined to be invalid or inadequate would not reasonably be expected to have a Company Material Adverse Effect. |
| (xxxi) | Neither the Company nor any Subsidiary is required, nor, after giving effect to the Offer and the sale of the Rights and the Shares and the application of the proceeds thereof as described in the Registration Statement, the Prospectus and any Issuer Free Writing Prospectus, will be required, to be registered as an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act (as defined herein) and the rules and regulations thereunder. |
| (xxxii) | Neither the Company nor, to the knowledge of the Company, any trustee, officer, agent, employee or representative of the Company acting on behalf of the company has, directly or indirectly, while acting on behalf of the Company (A) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (B) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (C) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); or (D) made any other unlawful payment. |
| (xxxiii) | The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Bank Secrecy 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 action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. |
| (xxxiv) | Neither the Company nor, to the knowledge of the Company or any trustee, officer, agent or employee of the Company is currently subject to any U.S. sanctions 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 Offer, 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. |
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| (xxxv) | All of the information provided to the Dealer Manager or to counsel for the Dealer Manager by the Company, its officers and trustees in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA’s conduct rules is true, complete and correct in all material respects. |
| (b) | The Manager represents and warrants to, and agrees with, the Dealer Manager as of the date hereof, as of the Representation Date and as of the Expiration Date that: |
| (i) | The Manager has been duly organized and is validly existing as a limited liability company in good standing under the laws of Maryland, has full power and authority to own its assets and conduct its business and other activities conducted by it as described in the Registration Statement and the Prospectus. |
| (ii) | Each of this Agreement and the Management Agreement dated as of January 5, 2021 between the Manager and the Company (the “Management Agreement”) has been authorized, executed and delivered by the Manager, and is, assuming due authorization, execution and delivery by the other parties thereto, a legal, valid, binding and enforceable obligation of the Manager, subject to the qualification that the enforceability of the Manager’s obligations thereunder, as applicable, may be limited by U.S. bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws of general applicability (whether statutory or decisional) relating to or affecting creditors’ rights and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law), except as enforcement of rights to indemnity and contribution hereunder or thereunder may be limited by federal or state securities laws or principles of public policy. |
| (iii) | The Manager (A) has not taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights and the Shares, (B) has not since the filing of the Registration Statement sold, bid for or purchased, or paid anyone any compensation for soliciting purchases of Common Shares of the Company (except for the solicitation of exercises of the Rights pursuant to this Agreement) and (C) will not, until the later of the expiration of the Rights or the completion of the distribution (within the meaning of the anti-manipulation rules under the Exchange Act) of the Shares, sell, bid for or purchase, pay or agree to pay any person any compensation for soliciting another to purchase any other securities of the Company (except for the solicitation of exercises of the Rights pursuant to this Agreement), provided that, for the avoidance of doubt, the entry of the Manager into the Backstop Agreement (as defined herein) does not constitute a violation of any of the foregoing clauses (A) through (C). |
| (iv) | The Management Agreement is in full force and effect and neither the Company nor the Manager is in default thereunder. |
| (v) | All information furnished by the Manager including, without limitation, any description of the Manager and description of the Backstop Agreement (as defined herein) for use in (A) the Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact necessary to make such information not misleading, and (B) Prospectus does not contain any untrue statement of a material fact or omit to state any material fact necessary to make such information in the light of the circumstances under which such statements were made, not misleading. |
| (c) | Any certificate required by this Agreement that is signed by any officer of the Company or the Manager and delivered to the Dealer Manager or counsel for the Dealer Manager shall be deemed a representation and warranty by the Company or the Manager, as the case may be, to the Dealer Manager, as to the matters covered thereby. |
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| 2. | Agreement to Act as Dealer Manager. |
| (a) | On the basis of the representations and warranties contained herein, and subject to the terms and conditions of the Offer: |
| (i) | The Company hereby appoints the Dealer Manager to solicit the exercise of Rights and authorizes the Dealer Manager to sell Shares purchased by the Dealer Manager from the Company through the exercise of Rights as described herein in accordance with the Securities Act and the Exchange Act; the Company hereby authorizes the Dealer Manager to form and manage a group of selling broker-dealers (each a “Selling Group Member” and collectively the “Selling Group”) that enter into a Selling Group Agreement with the Dealer Manager in the form attached hereto as Schedule A to solicit the exercise of Rights and to sell Shares purchased by the Selling Group Member from the Dealer Manager as described herein; and the Company hereby authorizes other soliciting broker-dealers (each a “Soliciting Dealer” and collectively the “Soliciting Dealers”) that enter into a Soliciting Dealer Agreement with the Dealer Manager in the form attached hereto as Exhibit B to solicit the exercise of Rights. The Dealer Manager hereby agrees to solicit the exercise of Rights in accordance with its customary practice subject to the terms and conditions of this Agreement, the procedures described in the Registration Statement, the Prospectus and, where applicable, the terms and conditions of such Selling Group Agreement or Soliciting Dealer Agreement; and the Dealer Manager hereby agrees to form and manage the Selling Group to solicit the exercise of Rights and to sell Shares to the Selling Group purchased by the Dealer Manager from the Company through the exercise of Rights as described herein in accordance with its customary practice subject to the terms and conditions of this Agreement, the procedures described in the Registration Statement, the Prospectus and, where applicable, the terms and conditions of the Selling Group Agreement. |
| (ii) | The Company hereby authorizes the Dealer Manager to buy, facilitate the sale of and exercise Rights, including unexercised Rights delivered to Equiniti Trust Company, LLC, as subscription agent for the Offer (the “Subscription Agent”), for resale and Rights of Record Date Shareholders whose record addresses are outside the United States held by the Subscription Agent for which no instructions are received, on the terms and conditions set forth in such Prospectus, and to sell Shares to the public or to Selling Group Members at the offering price set by the Dealer Manager from time to time. Sales of Shares by the Dealer Manager or Selling Group Members shall not be at a price higher than the offering price set by the Dealer Manager from time to time. The proceeds from the sale of Rights will be remitted to the Record Date Shareholders as set forth in the Prospectus. |
| (b) | To the extent permitted by applicable law, the Company agrees to furnish, or cause to be furnished, to the Dealer Manager, lists, or copies of those lists, showing the names and addresses of, and number of Common Shares held by, Record Date Shareholders as of the Record Date, and the Dealer Manager agrees to use such information only in connection with the Offer, and not to furnish the information to any other person except for securities brokers and dealers that have been requested by the Dealer Manager to solicit exercises of Rights. |
| (c) | The Dealer Manager agrees to provide to the Company, in addition to the services described in Section 2(a), financial structuring and solicitation services in connection with the Offer. No advisory fee, other than the fees provided for in Section 3 of this Agreement and the reimbursement of the Dealer Manager’s out-of-pocket expenses as described in Section 5 of this Agreement, will be payable by the Company, or any other party hereto, to the Dealer Manager in connection with the financial structuring and solicitation services provided by the Dealer Manager pursuant to this Section 2(c). |
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| (d) | The Company and the Dealer Manager agree that the Dealer Manager is an independent contractor with respect to the solicitation of the exercise of the Rights, and that the Dealer Manager’s performance of financial structuring and solicitation services for the Company is pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length basis, and in no event do the parties intend that the Dealer Manager act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other person, including Selling Group Members and Soliciting Dealers, in connection with any activity that the Dealer Manager may undertake or has undertaken in furtherance of its engagement pursuant to this Agreement, either before or after the date hereof. The Dealer Manager, Selling Group Members and Soliciting Dealers hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company, Dealer Manager, Selling Group Members and Soliciting Dealers agree that they are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by the Dealer Manager, Selling Group Members or Soliciting Dealers to the Company regarding such transactions, including but not limited to any opinions or views with respect to the subscription price or market for the Company’s Shares, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Dealer Manager, Selling Group Members and Soliciting Dealers with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions; provided that this release shall not protect or purport to protect the Dealer Manager, Selling Group Members and Soliciting Dealers against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence, in the performance of their duties, or by reason of their reckless disregard of their obligations and duties under this Agreement. |
| (e) | In rendering the services contemplated by this Agreement, the Dealer Manager will not be subject to any liability to the Company, the Manager or any of their affiliates, for any act or omission on the part of any soliciting broker or dealer (except with respect to the Dealer Manager acting in such capacity) or any other person, and the Dealer Manager will not be liable for acts or omissions in performing its obligations under this Agreement, except for any losses, claims, damages, liabilities and expenses that are finally judicially determined to have resulted primarily from the bad faith, willful misconduct or gross negligence of the Dealer Manager or by reason of the reckless disregard of the obligations and duties of the Dealer Manager under this Agreement. |
| 3. | Dealer Manager Fees. In full payment for the financial structuring and solicitation services rendered and to be rendered hereunder by the Dealer Manager, the Company, agrees to pay the Dealer Manager a fee (the “Dealer Manager Fee”) equal to (i) 4.00% of the aggregate Subscription Price for the Shares issued pursuant to the exercise of Rights and the Over-Subscription Privilege, other than the Shares issued to the Manager pursuant to its exercise of Rights and the Over-Subscription Privilege in fulfillment of its obligations under that certain Rights Offering Backstop Agreement between the Company and the Manager dated as of October 30, 2025 (the “Tremont Shares”) (the “Backstop Agreement”); and (ii) 2.00% of the aggregate Subscription Price for the Tremont Shares. For the avoidance of any doubt, any Shares purchased by the Manager from the Company upon the expiration of the Offer of all Shares not otherwise sold in the Offer pursuant to the terms of the Backstop Agreement shall not be included in any computation of the Dealer Manager Fee. In full payment for the soliciting efforts to be rendered, the Dealer Manager agrees to reallow selling fees (the “Selling Fees”) to Selling Group Members equal to 2.00% of the Subscription Price per Share for each Share issued pursuant to either (a) the exercise of Rights and the Over-Subscription Privilege where such Selling Group Member is so designated on the subscription form or (b) the purchase for resale from the Dealer Manager in accordance with the Selling Group Agreement. With respect to Shares purchased by a Selling Group Member from the Dealer Manager in accordance with the Selling Group Agreement, such fee may from time to time vary from 2.00% of the Subscription Price per Share. In full payment for the soliciting efforts to be rendered, the Dealer Manager agrees to reallow soliciting fees (the “Soliciting Fees”) to Soliciting Dealers equal to 0.50% of the Subscription Price per Share for each Share issued pursuant to the exercise of Rights and the Over-Subscription Privilege where such Soliciting Dealer is so designated on the subscription form, subject to a maximum fee based on the number of Common Shares held by such Soliciting Dealer through The Depository Trust Company (“DTC”) on the Record Date. The Dealer Manager agrees to pay the Selling Fees or Soliciting Fees, as the case may be, to the broker-dealer designated on the applicable portion of the form used by the holder to exercise Rights and the Over-Subscription Privilege, and if no broker-dealer is so designated or a broker-dealer is otherwise not entitled to receive compensation pursuant to the terms of the Selling Group Agreement or Soliciting Dealer Agreement, then the Dealer Manager shall retain such Selling Fee or Soliciting Fee for Shares issued pursuant to the exercise of Rights and the Over-Subscription Privilege. Payment to the Dealer Manager by the Company will be in the form of a wire transfer of same day funds to an account or accounts identified by the Dealer Manager. Such payment will be made on each date on which the Company issues Shares after the Expiration Date. Payment to a Selling Group Member or Soliciting Dealer will be made by the Dealer Manager directly to such Selling Group Member or Soliciting Dealer by check to an address identified by such broker-dealer. Such payments shall be made on or before the tenth business day following the day the Company issues Shares after the Expiration Date. |
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| 4. | Other Agreements. |
| (a) | The Company covenants with the Dealer Manager as follows: |
| (i) | The Company will use its reasonable best efforts to maintain the Registration Statement’s effectiveness under the Securities Act, and will advise the Dealer Manager promptly as to the time at which the Registration Statement and any amendments thereto (including any post-effective amendment) becomes so effective. |
| (ii) | The Company will notify, and confirm the notice in writing to, the Dealer Manager as promptly as practicable (A) of any amendment to the Registration Statement (including any post-effective amendment), (B) of the receipt of any comments from the Commission, (C) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose and (E) of the receipt of any written notice regarding the suspension of the qualification of the Shares or the Rights for offering or sale in any jurisdiction. The Company will use its reasonable best efforts to prevent the issuance of any stop order described in subsection (D) hereunder and, if any such stop order is issued, to obtain the lifting thereof as promptly as practicable. |
| (iii) | The Company will give the Dealer Manager notice of its intention to file any amendment to the Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use by the Dealer Manager in connection with the Offer, which differs from the prospectus on file at the Commission at the time the Registration Statement becomes effective), whether pursuant to the Securities Act, or otherwise, and will furnish the Dealer Manager with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will consider any comments of the Dealer Manager in good faith. |
| (iv) | The Company will promptly file any Issuer Free Writing Prospectus to the extent required by Rule 433. |
| (v) | The Company will, without charge, deliver to the Dealer Manager, as soon as practicable, the number of copies (one of which is manually executed) of the Registration Statement as originally filed and of each amendment thereto as it may reasonably request, in each case with the exhibits filed therewith. |
| (vi) | The Company will, without charge, furnish to the Dealer Manager, from time to time during the period when the Prospectus is required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as the Dealer Manager may request for the purposes contemplated by the Securities Act or the Rules and Regulations. |
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| (vii) | If any event shall occur as a result of which it is necessary, in the reasonable opinion of counsel for the Dealer Manager, to amend or supplement the Registration Statement or the Prospectus or any Issuer Free Writing Prospectus (or the other Offering Materials) to make the Prospectus or any Issuer Free Writing Prospectus (or such other Offering Materials) not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a Record Date Shareholder, the Company will forthwith amend or supplement the Prospectus or any Issuer Free Writing Prospectus by preparing and filing with the Commission (and furnishing to the Dealer Manager a reasonable number of copies of) an amendment or amendments of the Registration Statement or an amendment or amendments of or a supplement or supplements to the Prospectus or any Issuer Free Writing Prospectus (in form and substance reasonably satisfactory to counsel for the Dealer Manager), at the Company’s expense, which will amend or supplement the Registration Statement or the Prospectus or any Issuer Free Writing Prospectus (or otherwise will amend or supplement such other Offering Materials) so that the Prospectus or any Issuer Free Writing Prospectus (or such other Offering Materials) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus or any Issuer Free Writing Prospectus (or such other Offering Materials) is delivered to a Record Date Shareholder, not misleading. |
| (viii) | The Company will endeavor, in cooperation with the Dealer Manager and its counsel, to qualify the Rights and the Shares for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Dealer Manager may reasonably designate and maintain such qualifications in effect for the duration of the Offer. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Rights and the Shares have been qualified as above provided. |
| (ix) | For a period of 180 days from the date of this Agreement, the Company will not, without the prior written consent of the Dealer Manager, offer or sell, or enter into any agreement to sell, any equity or equity related securities of the Company or securities convertible into such securities, other than the Rights and the Shares, the Common Shares issued in reinvestments of dividends or distribution, the Common Shares issued pursuant to the Company’s Amended and Restated 2021 Equity Compensation Plan and the Common Shares issued (including any options to purchase Common Shares, upon the exercise of such options) pursuant to any stock option, stock bonus or other stock plan or arrangement as described in the Registration Statement and the Prospectus. |
| (x) | The Company will cause the Rights and the Shares to be duly authorized for listing by Nasdaq prior to the time the Rights and the Shares are issued, respectively. |
| (xi) | The Company currently intends to continue to qualify as a REIT under the Code and will use its best efforts to maintain its qualification and election to be taxed as a REIT under the Code for its taxable year ending December 31, 2025 and will continue to use its best efforts to continue to qualify for taxation as a REIT under the Code, unless the Board of Trustees of the Company determines that it is no longer in the best interests of the Company to qualify as a REIT. |
| (xii) | The Company will apply the net proceeds from the Offer in such a manner as to continue to comply with the requirements of the Prospectus as set forth under “Use of Proceeds”. The Company shall not invest or otherwise use the proceeds received by it in connection with the Offer in such a manner as would reasonably be expected to require the Company or any of its Subsidiaries to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules and regulations of the Commission thereunder. |
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| (xiii) | The Company will advise or cause the Subscription Agent (A) to advise the Dealer Manager and, only where specifically noted, each Selling Group Member who specifically requests, from day to day during the period of, and promptly after the termination of, the Offer, as to the names and addresses of all Record Date Shareholders exercising Rights, the total number of Rights exercised by each Record Date Shareholder during the immediately preceding day, indicating the total number of Rights verified to be in proper form for exercise, rejected for exercise and being processed and, for the Dealer Manager and each Selling Group Member, the number of Rights exercised on subscription certificates indicating the Dealer Manager or such Selling Group Member, as the case may be, as the broker-dealer with respect to such exercise, and as to such other information as the Dealer Manager may reasonably request; and will notify the Dealer Manager and each Selling Group Member, not later than 5:00 p.m., New York City time, on the first business day following the Expiration Date, of the total number of Rights exercised and Shares related thereto, the total number of Rights verified to be in proper form for exercise, rejected for exercise and being processed and, for the Dealer Manager and each Selling Group Member, the number of Rights exercised on subscription certificates indicating the Dealer Manager or such Selling Group Member, as the case may be, as the broker-dealer with respect to such exercise, and as to such other information as the Dealer Manager may reasonably request; (B) to offer to sell any Rights received for resale from Record Date Shareholders, including clients of Selling Group Members, exclusively to or through the Dealer Manager, which may, at its election, purchase such Rights as principal or act as agent for the resale thereof; and (C) to issue Shares upon the Dealer Manager’s exercise of Rights no later than the close of business on the business day following the day that full payment for such Shares has been received by the Subscription Agent. |
| (b) | Neither the Company nor the Manager will take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights or the Shares. |
| (c) | Except as required by applicable law, the use of any reference to the Dealer Manager in any Offering Materials or any other document or communication prepared, approved or authorized by the Company or the Manager in connection with the Offer is subject to the prior approval of the Dealer Manager, provided that if such reference to the Dealer Manager is required by applicable law, the Company and the Manager agree to notify the Dealer Manager within a reasonable time prior to such use but the Company and the Manager are nonetheless permitted to use such reference. |
| 5. | Payment of Expenses. |
| (a) | The Company will pay all expenses incident to the performance of the Company’s obligations under this Agreement and in connection with the Offer, including, but not limited to (i) expenses relating to the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) expenses relating to the preparation, issuance and delivery of the certificates, if any, for the Shares and subscription certificates relating to the Rights, (iii) the fees and disbursements of the Company’s counsel (including the fees and disbursements of local counsel) and accountants, (iv) expenses relating to the qualification of the Rights and the Shares under securities laws in accordance with the provisions of Section 4(a)(vii) of this Agreement, including filing fees, (v) expenses relating to the printing or other production and delivery to the Dealer Manager of copies of the Registration Statement as originally filed and of each amendment thereto and of the Prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred with respect to filing with FINRA, including the fees and disbursements of the Dealer Manager’s counsel with respect thereto, (vii) the fees and expenses incurred in connection with the listing of the Rights and the Shares on Nasdaq, (viii) expenses relating to the printing or other production, mailing and delivery expenses incurred in connection with Offering Materials, including all reasonable out-of-pocket fees and expenses, if any and not to exceed $150,000, incurred by the Dealer Manager, Selling Group Members, Soliciting Dealers and other brokers, dealers and financial institutions in connection with their customary mailing and handling of materials related to the Offer to their customers, upon proper presentation of documentation thereof, (ix) the fees and expenses incurred with respect to the Subscription Agent and any information agent and (x) all other fees and expenses incurred in connection with or relating to the Offer. |
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| (b) | In addition to any fees that may be payable to the Dealer Manager under this Agreement, the Company agrees to reimburse the Dealer Manager upon request made from time to time for a portion of its reasonable out-of-pocket expenses incurred in connection with its activities under this Agreement, including the reasonable fees and disbursements of its legal counsel, upon proper presentation of documentation therefor, in an amount not to exceed $200,000. |
| (c) | If this Agreement is terminated by the Dealer Manager in accordance with the provisions of Section 6 or Section 9(a), the Company agrees to reimburse the Dealer Manager for all of its reasonable out-of-pocket expenses incurred in connection with its performance hereunder, including the reasonable fees and disbursements of counsel for the Dealer Manager, upon proper presentation of documentation therefor, in an amount not to exceed $200,000. In the event the transactions contemplated hereunder are not consummated, the Company agrees to pay all of the costs and expenses set forth in Sections 5(a) and (b) which the Company would have paid if such transactions had been consummated. |
| 6. | Conditions of the Dealer Manager’s Obligations. The obligations of the Dealer Manager hereunder (including any obligation to pay for Shares issuable upon exercise of Rights by the Dealer Manager) are subject to the accuracy of the respective representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to the following further conditions: |
| (a) | The Prospectus and any amendment or supplement thereto shall have been filed with the Commission in the manner and within the time period required under the Securities Act; no stop order suspending the effectiveness of the Registration Statement or any amendment thereto shall have been issued, no revocation of registration has been issued and no proceedings for that purpose shall have been instituted or threatened or, to the knowledge of the Company or the Dealer Manager, shall be contemplated by the Commission; and the Company shall have complied with any request of the Commission for additional information (to be included in the Registration Statement, the Prospectus or otherwise). |
| (b) | On the Representation Date and the Expiration Date, the Dealer Manager shall have received: |
| (i) | The opinion, dated the Representation Date and the Expiration Date, of Ropes & Gray, LLP, counsel for the Company, and the opinion, dated the Representation Date and the Expiration Date, of Duane Morris LLP, special counsel for the Company, in substance satisfactory to counsel for the Dealer Manager. In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. |
| (ii) | Such counsel shall also have stated that, while they have not themselves checked the accuracy and completeness of or otherwise verified, and are not passing upon and assume no responsibility for the accuracy or completeness of, the statements contained in the Registration Statement or the Prospectus, in the course of their review and discussion of the contents of the Offering Materials and Registration Statement with certain officers and/or employees of the Company and the Company’s independent registered public accounting firm, no facts have come to their attention which cause them to believe that the Registration Statement, on the date it became effective, contained an untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements contained therein not misleading or that the Prospectus, as of its date and on the Representation Date or the Expiration Date, as the case may be, contained an untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that such counsel need not express any statement or belief with respect to the financial statements, schedules or other financial data included or incorporated by reference in the Registration Statement or Prospectus or omitted therefrom). |
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| (iii) | The opinion, dated the Representation Date and the Expiration Date, of Sullivan & Worcester LLP, tax counsel for the Company, in form and substance reasonably satisfactory to counsel for the Dealer Manager, to the effect set forth in Exhibit C to this Dealer Manager Agreement. In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. |
| (c) | The Dealer Manager shall have received from Mayer Brown LLP, counsel for the Dealer Manager, such opinion or opinions, dated the Representation Date and the Expiration Date, with respect to the Offer, the Registration Statement, the Prospectus and other related matters as the Dealer Manager may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. |
| (d) | The Company shall have furnished to the Dealer Manager certificates of the Company, signed on behalf of the Company by the President or other senior officer of the Company, dated the Representation Date and the Expiration Date, to the effect that the signer(s) of such certificate carefully examined the Registration Statement, the Prospectus, any supplement to the Prospectus and this Agreement and that: |
| (i) | the representations and warranties of the Company in this Agreement are true and correct on and as of the Representation Date or the Expiration Date, as the case may be, with the same effect as if made on the Representation Date or the Expiration Date, as the case may be, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Representation Date or the Expiration Date, as the case may be (to the extent not waived in writing by the Dealer Manager); |
| (ii) | no stop order suspending the effectiveness of the Registration Statement has been issued, no revocation of registration has been issued and no proceedings for that purpose have been instituted or threatened by the Commission or any other regulatory body, whether foreign or domestic; |
| (iii) | since the date of the most recent balance sheet included or incorporated by reference in the Prospectus, there has been no material adverse change, or any development involving a prospective material adverse change, in the condition (financial or other), business, management, properties, net worth or results of operations of the Company (excluding fluctuations in the Company’s book value due to investment activities in the ordinary course of business), except as set forth in or contemplated in the Prospectus; |
| (iv) | the Company has performed all of its respective obligations that this Agreement requires it to perform by such Representation Date (to the extent not waived in writing by the Dealer Manager). |
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| (e) | The Manager shall have furnished to the Dealer Manager certificates of the Manager, signed on behalf of the Manager by the President or other senior officer dated the Representation Date and the Expiration Date, to the effect that the signer(s) of such certificate carefully examined the Registration Statement, the Prospectus, any supplement to the Prospectus and this Agreement and that: |
| (i) | the representations and warranties of the Manager in this Agreement are true and correct on and as of the Representation Date or the Expiration Date, as the case may be, with the same effect as if made on the Representation Date or the Expiration Date, as the case may be, and the Manager has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Representation Date or the Expiration Date, as the case may be (to the extent not waived in writing by the Dealer Manager); and |
| (ii) | the Manager has performed all of its respective agreements that this Agreement requires it to perform by such Representation Date (to the extent not waived in writing by the Dealer Manager). |
| (f) | Deloitte & Touche LLP shall have furnished to the Dealer Manager letters, dated the Representation Date and the Expiration Date, in form and substance satisfactory to the Dealer Manager, stating in effect that: |
| (i) | it is an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the applicable Rules and Regulations, and the rules and regulations adopted by the Commission and the Public Accounting Oversight Board (United States); |
| (ii) | in its opinion, the audited financial statements examined by it and included or incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the respective Rules and Regulations with respect to registration statements on Form S-3; |
| (iii) | it has performed specified procedures, not constituting an audit in accordance with generally accepted auditing standards, including a reading of the latest available unaudited financial information of the Company, a reading of the minute books of the Company, and inquiries of officials of the Company responsible for financial and accounting matters, and on the basis of such inquiries and procedures nothing came to its attention that caused it to believe that at a specified date prior to the Representation Date or the Expiration Date, as the case may be, there was any change in the Common Shares, any decrease in net assets or any increase in long-term debt of the Company as compared with amounts shown in the most recent statement of assets and liabilities included or incorporated by reference in the Registration Statement, except as the Registration Statement discloses has occurred or may occur, or they shall state any specific changes, increases or decreases; and |
| (iv) | in addition to the procedures referred to in clause (iii) above, it has compared certain dollar amounts (or percentages as derived from such dollar amounts) and other financial information regarding the operations of the Company appearing in the Registration Statement, which have previously been specified by the Dealer Manager and which shall be specified in such letter, and have found such items to be in agreement with the accounting and financial records of the Company. |
| (g) | Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus (excluding an amendment or supplement subsequent to the Representation Date), (i) there shall not have been any change, increase or decrease specified in the letter or letters referred to in Section 6(f), (ii) no material adverse change, or any development involving a prospective material adverse change, in the condition (financial or other), business, management, properties, net worth or results of operations of the Company shall have occurred or become known and (iii) no transaction which is material and adverse to the Company shall have been entered into by the Company. |
| (h) | Prior to the Representation Date, the Company shall have furnished to the Dealer Manager such further information, certificates and documents as the Dealer Manager may reasonably request. |
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| (i) | If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Dealer Manager and its counsel, this Agreement and all obligations of the Dealer Manager hereunder may be canceled at, or at any time prior to, the Expiration Date by the Dealer Manager. Notice of such cancellation shall be given to the Company in writing or by telephone confirmed in writing. |
| 7. | Indemnity and Contribution. |
| (a) | The Company and the Manager agree to indemnify, defend and hold harmless the Dealer Manager, each Selling Group Member and each Soliciting Dealer, and their respective partners, directors, officers, employees, agents and affiliates and any person who controls the Dealer Manager, a Selling Group Member and or a Soliciting Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Dealer Manager, a Selling Group Member, a Soliciting Dealer or any such person may incur under the Securities Act, the Exchange Act, common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company) or in a Prospectus (the term “Prospectus” for the purpose of this Section 7 being deemed to include any preliminary prospectus, any Issuer Free Writing Prospectus, the Offering Materials, the Prospectus and the Prospectus as amended or supplemented by the Company), or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in either such Registration Statement or Prospectus or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission of a material fact contained in and in conformity with information furnished in writing by or on behalf of the Dealer Manager to the Company expressly for use with reference to the Dealer Manager, Selling Group Members or Soliciting Dealers in such Registration Statement or such Prospectus. |
| (b) | If any action, suit or proceeding (together, a “Proceeding”) is brought against the Dealer Manager, a Selling Group Member, a Soliciting Dealer or any such person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, the Dealer Manager, a Selling Group Member, a Soliciting Dealer or such person shall promptly notify the Company in writing of the institution of such Proceeding and the Company shall assume the defense of such Proceeding by written notice to such indemnified party, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all reasonable fees and expenses; provided, however, that the failure to so notify the Company shall not relieve the Company from any liability which the Company may have to the Dealer Manager, a Selling Group Member, a Soliciting Dealer or any such person or otherwise, unless such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. The Dealer Manager, a Selling Group Member, a Soliciting Dealer or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Dealer Manager, a Selling Group Member, a Soliciting Dealer or of such person unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such Proceeding or the Company shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded (based on advice from counsel) that there may be defenses available to it or them which are different from, additional to or in conflict with those available to the Company (in which case the Company shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Company may employ counsel and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Company), in any of which events the reasonable fees and expenses shall be borne by the Company and paid as incurred in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding (provided that the Company shall not be liable for the expenses of more than one separate counsel in connection with any one Proceeding or series of related Proceedings). The Company shall not be liable for any settlement of any Proceeding effected without its written consent, but if a Proceeding is settled with the written consent of the Company, then the Company agrees to indemnify and hold harmless the Dealer Manager, a Selling Group Member, a Soliciting Dealer and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 business days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party unless such indemnified party gives written consent to such admission of fault, culpability or a failure to act. |
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| (c) | The Dealer Manager agrees to indemnify, defend and hold harmless the Company and its trustees, directors, members, and officers, employees, agents and affiliates, and any person who controls the Company, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons to the same extent as the foregoing indemnity from the Company to the Dealer Manager, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur under the Securities Act, the Exchange Act, common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in and in conformity with information furnished in writing by or on behalf of the Dealer Manager to the Company expressly for use with reference to the Dealer Manager in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company) or in a Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or such Prospectus or necessary to make such information not misleading (with respect to the Prospectus, in the light of the circumstances under which they were made). |
| (d) | If any Proceeding is brought against the Company, or any such person in respect of which indemnity may be sought against the Dealer Manager pursuant to the foregoing paragraph, the Company or such person shall promptly notify the Dealer Manager in writing of the institution of such Proceeding and the Dealer Manager shall assume the defense of such Proceeding by written notice to such indemnified party, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all reasonable fees and expenses; provided, however, that the omission to so notify the Dealer Manager shall not relieve the Dealer Manager from any liability which the Dealer Manager may have to the Company or any such person or otherwise, unless such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. The Company or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person, as the case may be, unless the employment of such counsel shall have been authorized in writing by the Dealer Manager in connection with the defense of such Proceeding or such Dealer Manager shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded (based on advice from counsel) that there may be defenses available to it or them which are different from, additional to or in conflict with those available to the Dealer Manager (in which case the Dealer Manager shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Dealer Manager may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Dealer Manager), in any of which events the reasonable fees and expenses shall be borne by the Dealer Manager and paid as incurred in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding. The Dealer Manager shall not be liable for any settlement of any such Proceeding effected without the written consent of the Dealer Manager but if settled with the written consent of the Dealer Manager, the Dealer Manager agrees to indemnify and hold harmless the Company and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 business days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party unless such indemnified party gives written consent to such admission of fault, culpability or a failure to act. |
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| (e) | If the indemnification provided for in this Section 7 is unavailable to an indemnified party under subsections (a) and (b) of this Section 7 in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Dealer Manager, Selling Group Member(s) or Soliciting Dealer(s) on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Dealer Manager on the other in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations with respect to the Offer. The relative benefits received by the Company on the one hand and the Dealer Manager, Selling Group Member(s) or Soliciting Dealer(s) on the other shall be deemed to be in the same respective proportions as the total proceeds from the Offer (net of the Dealer Manager Fee but before deducting expenses) received by the Company and the total Dealer Manager Fee received by the Dealer Manager, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and of the Dealer Manager, Selling Group Member(s) or Soliciting Dealer(s) on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or the Dealer Manager and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding. |
| (f) | The Company and the Dealer Manager agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in subsection (e) above. Notwithstanding the provisions of this Section 7, neither the Dealer Manager nor any Selling Group Member or Soliciting Dealer shall be required to contribute any amount in excess of the fees received by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. |
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| (g) | Notwithstanding any other provisions in this Section 7, no party shall be entitled to indemnification or contribution under this Dealer Manager Agreement against any loss, claim, liability, expense or damage arising by reason of such person’s willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or by reason of such person’s reckless disregard of such person’s obligations and duties thereunder. The parties hereto acknowledge that the foregoing provision shall not be construed to impose upon any such parties any duties under this Agreement other than as specifically set forth herein (it being understood that the Dealer Manager, Selling Group Members and Soliciting Dealers have no duty hereunder to the Company to perform any due diligence investigation). |
| (h) | The indemnity and contribution agreements contained in this Section 7 and the covenants, warranties and representations of the Company contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Dealer Manager, a Selling Group Member, a Soliciting Dealer, and their respective partners, directors or officers or any person (including each partner, officer or director of such person) who controls the Dealer Manager, a Selling Group Member or a Soliciting Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Company, their directors or officers or any person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Rights. The Company and the Dealer Manager agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Company against any of their officers or directors in connection with the issuance of the Rights, or in connection with the Registration Statement or Prospectus. |
| (i) | The Company acknowledges that the statements under the heading “The Offering—Dealer Manager Agreement” in the Prospectus constitute the only information furnished in writing to the Company by the Dealer Manager expressly for use in such document, and the Dealer Manager confirms that such statements are correct in all material respects. |
| 8. | Representations, Warranties and Agreements to Survive Delivery. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Dealer Manager set forth in or made pursuant to this Agreement shall survive the Expiration Date and will remain in full force and effect, regardless of any investigation made by or on behalf of Dealer Manager or the Company or any of their officers, directors or controlling persons referred to in Section 7 hereof, and will survive delivery of and payment for the Shares pursuant to the Offer. The provisions of Sections 5 and 7 hereof shall survive the termination or cancellation of this Agreement. |
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| 9. | Termination of Agreement. |
| (a) | (a) The obligations of the Dealer Manager hereunder shall be subject to termination in the absolute discretion of the Dealer Manager, by notice given to the Company prior to 5:00 p.m., New York time on the Expiration Date, if (A) since the time of execution of this Agreement or the earlier respective dates as of which information is given in the Registration Statement and the Prospectus, there has been any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), business, management, properties, net worth or results of operations of the Company, which would in the Dealer Manager’s judgment, make it impracticable or inadvisable to proceed with the Offer on the terms and manner contemplated in the Registration Statement and the Prospectus, or (B) since the time of execution of this Agreement, there shall have occurred: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or Nasdaq; (ii) a suspension or material limitation in trading in the Company’s Common Shares or in the Rights on Nasdaq; (iii) a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) a material adverse change in the financial or securities markets in the United States or the international financial markets; (v) acts of terrorism or a material outbreak or escalation of hostilities involving the United States or a declaration by the United States of a national emergency or war; or (vi) any other calamity or crisis or any change in financial, political, economic, currency, banking or social conditions in the United States, if the effect of any such event specified in clause (v) or (vi) in the Dealer Manager’s judgment makes it impracticable or inadvisable to proceed with the Offer on the terms and in the manner contemplated in the Registration Statement and the Prospectus. |
| (b) | If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 5 and the Dealer Manager shall not have any obligation to purchase any Shares upon exercise of Rights. |
| 10. | Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Dealer Manager, will be mailed, delivered or telegraphed and confirmed to UBS Securities LLC, 11 Madison Avenue, New York, New York 10010, Attention: Syndicate and, if to the Company, shall be sufficient in all respects if delivered or sent to the Company at Seven Hills Realty Trust, Two Newton Place, 255 Washington Street, Newton, Massachusetts 02458, Attention: Matthew C. Brown, Chief Financial Officer and Treasurer. |
| 11. | Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and will inure to the benefit of the officers and directors and controlling persons referred to in Section 7 hereof, and no other person will have any right or obligation hereunder. |
| 12. | Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York. |
| 13. | Submission to Jurisdiction. Except as set forth below, no claim (a “Claim”) which relates to the terms of this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and each of the Company and the Manager consents to the jurisdiction of such courts and personal service with respect thereto. Each of the Company and the Manager hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against the Dealer Manager or any indemnified party. Each of the Dealer Manager, the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and the Manager waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. Each of the Company and the Manager, as the case may be, agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Company or the Manager, as the case may be, and may be enforced in any other courts in the jurisdiction of which the Company or the Manager is or may be subject, by suit upon such judgment. |
| 14. | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. |
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If the foregoing is in accordance with your understanding of our agreement, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company, the Manager and the Dealer Manager.
| Very truly yours, | ||
| SEVEN HILLS REALTY TRUST | ||
| By: | /s/ Thomas J. Lorenzini | |
| Name: Thomas J. Lorenzini | ||
| Title: President | ||
| TREMONT REALTY CAPITAL LLC | ||
| By: | /s/ Matthew P. Jordan | |
| Name: Matthew P. Jordan | ||
| Title: President and Chief Executive Officer | ||
[Signature Page to Dealer Manager Agreement]
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The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
| UBS SECURITIES LLC | ||
| By: | /s/ Billy McArthur | |
| Name: Billy McArthur | ||
| Title: Managing Director | ||
| By: | /s/ James Rainey | |
| Name: James Rainey | ||
| Title: Associate Director | ||
[Signature Page to Dealer Manager Agreement]
Exhibit A
[SELLING GROUP AGREEMENT]
Exhibit B
[SOLICITING DEALER AGREEMENT]
Exhibit C
[FORM OF OPINION OF TAX COUNSEL REGARDING THE COMPANY]
Schedule A
SUBSIDIARIES OF SEVEN HILLS REALTY TRUST
| Name | State of Formation, Organization or Incorporation |
| Floral Vale LLC | Delaware |
| RMRM RTP Lender LLC | Delaware |
| RMTG Lender LLC | Delaware |
| RMTG Lender 2 LLC | Delaware |
| Seven Hills BH Lender LLC | Delaware |
| Seven Hills WF Finance LLC | Delaware |
| Seven Hills WF Lender LLC | Delaware |
| TRMT CB Lender LLC | Delaware |
| TRMT TCB Lender LLC | Delaware |
| TRMT TRS Inc. | Maryland |
Exhibit 99.1
Seven Hills Realty Trust Announces Rights Offering
Transaction Expected to Provide Capital to Expand Lending Platform, Capitalize on Attractive Investment Opportunities, Broaden Portfolio Diversification and Increase Share Liquidity
Newton, MA (October 30, 2025): Seven Hills Realty Trust (Nasdaq: SEVN) today announced that it intends to conduct a fully backstopped rights offering to raise gross proceeds of up to $65 million. The transaction is expected to provide additional capital to expand SEVN’s lending platform and capitalize on attractive investment opportunities, while also broadening portfolio diversification and increasing the liquidity of SEVN’s common shares, or the Common Shares.
Pursuant to the offering, SEVN will issue, at no charge, transferable subscription rights, or the Rights, to SEVN’s shareholders of record as of 5:00 p.m., New York City time, on November 10, 2025, or the Record Date. The Rights will entitle holders to subscribe for up to an aggregate of 7.6 million Common Shares.
Upon commencement of the offering, SEVN will distribute to shareholders as of the Record Date one transferable Right for each outstanding Common Share they own on the Record Date. The Rights will entitle such shareholders to purchase one new Common Share for every two Rights held, or the Primary Subscription Right. The Rights will be exercisable at a price per share equal to $8.65. Shareholders who fully exercise their Rights will be entitled to subscribe, subject to certain limitations and conditions and subject to allotment, for additional Common Shares that remain unsubscribed as a result of any unexercised rights. Shareholders who sell Rights will not be eligible to participate in such over-subscription privilege.
The offering will commence on November 10, 2025, and the Rights will expire if they are not exercised by 5:00 p.m., New York City time, on December 4, 2025, unless the offering is extended. There is no minimum number of Rights that must be exercised, no minimum number that any Rights holder must exercise, and no minimum number of Common Shares that SEVN will issue in the offering. SEVN plans to use the proceeds from the offering to fund the growth of its business by enabling SEVN to continue to expand its loan portfolio and take advantage of compelling risk-adjusted opportunities in the current lending environment.
The Rights being issued in the offering are expected to be listed for trading on The Nasdaq Stock Market LLC under the symbol “SEVNR” and therefore will be transferable and will allow the holders thereof to purchase additional Common Shares.
The offering will be fully backstopped by Tremont Realty Capital LLC, or Tremont, SEVN’s manager and a wholly-owned subsidiary of The RMR Group (Nasdaq:RMR). SEVN and Tremont have entered into a backstop agreement, or the Backstop Agreement, pursuant to which Tremont has agreed to exercise its pro rata Primary Subscription Right in full and, upon the completion of the offering, to purchase 100% of all remaining Common Shares not otherwise subscribed for in the offering
SEVN has retained UBS Securities LLC to act as the dealer manager in connection with the offering.
The offering will be made pursuant to SEVN’s existing effective shelf registration statement on Form S-3 (Reg. No. 333-290401) on file with the Securities and Exchange Commission, or the SEC, and a prospectus supplement (and the accompanying base prospectus) to be filed with the SEC prior to the commencement of the offering. SEVN reserves the right to extend, amend or terminate the planned offering, subject to certain conditions, at any time.
The information herein is not complete and is subject to change. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Rights, Common Shares or any other securities, nor will there be any sale of the Rights, Common Shares or any other securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. This document is not an offering, which can only be made by the prospectus supplement (and the accompanying base prospectus), which will contain information about SEVN and the offering, and should be read carefully before investing. For any questions or further information about the offering, or to obtain a copy of the prospectus supplement (and the accompanying base prospectus), when available, please contact D.F. King & Co, who will be acting as the information agent for the offering, toll-free at (866) 342-4881 or by email at [email protected].
About Seven Hills Realty Trust
Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market transitional commercial real estate. SEVN is managed by Tremont Realty Capital, a wholly-owned subsidiary of The RMR Group, a leading U.S. alternative asset management company with approximately $39 billion in assets under management and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate.
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These statements may include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” and negatives or derivatives of these or similar expressions. Forward-looking statements reflect SEVN’s current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause SEVN’s actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Some of the risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following: SEVN’s expectations regarding the proposed offering, the planned use of proceeds from the proposed offering, including any timing considerations relating to SEVN’s use of proceeds, and the backstop commitment; the ability of SEVN to make additional investments; the success of SEVN’s investments; SEVN’s available liquidity, access to capital and cost of capital; and various other matters. These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in SEVN’s periodic filings with the Securities and Exchange Commission, or SEC. The information contained in SEVN’s filings with the SEC, including under the caption “Risk Factors” in its periodic reports, or incorporated therein, identifies important factors that could cause SEVN’s actual results to differ materially from those stated in or implied by SEVN’s forward-looking statements. SEVN’s filings with the SEC are available on the SEC’s website at www.sec.gov. You should not place undue reliance upon forward-looking statements. Except as required by law, SEVN does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
| Contact: | |
| Matt Murphy, Manager, Investor Relations | |
| (617) 796-8253 | |
| www.sevnreit.com |
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