Exhibit 4.1
THIRD
SUPPLEMENTAL INDENTURE
between
SACHEM CAPITAL CORP.
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
Dated
as of September 4, 2020
THIRD
SUPPLEMENTAL INDENTURE
THIS
THIRD SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”), dated as of September 4, 2020, is between
Sachem Capital Corp., a New York corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).
Except as otherwise set forth in this Third Supplemental Indenture, all capitalized terms used herein shall have the meaning set
forth in the Base Indenture (as defined below).
RECITALS OF THE COMPANY
The
Company and the Trustee executed and delivered an Indenture, dated as of June 21, 2019 (the “Base Indenture” and, as
supplemented by this Third Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company
from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness (the “Securities”),
to be issued in one or more series as provided in the Indenture.
The
Company desires to issue and sell up to $13,000,000 aggregate principal amount (or up to $14,950,000 aggregate principal
amount if the underwriters’ option to purchase additional Securities is exercised in full) of the Company’s 7.75% Notes
due September 30, 2025 (the “Notes”).
The
Company previously entered into the First Supplemental Indenture, dated as of June 21, 2019 (the “First Supplemental
Indenture”) and the Second Supplemental Indenture, dated as of November 7, 2019 (the “Second Supplemental Indenture”),
each of which amended and supplemented the Base Indenture. Neither the First Supplemental Indenture nor the Second Supplemental
Indenture is applicable to the Notes.
Sections 901(4) and
901(6) of the Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture,
the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental to the Base Indenture to (i) change or eliminate any of the provisions of the Base
Indenture when there is no Security Outstanding of any series created prior to the execution of the supplemental indenture that
is entitled to the benefit of such provision and (ii) establish the form or terms of Securities of any series as permitted
by Section 201 and Section 301 of the Base Indenture.
The Company desires
to establish the form and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture
for the benefit of the Holders of the Notes (except as may be provided in a future supplemental indenture to the Base Indenture
(“Future Supplemental Indenture”).
The
Company has duly authorized the execution and delivery of this Third Supplemental Indenture to provide for the issuance
of the Notes and all acts and things necessary to make this Third Supplemental Indenture a valid, binding, and legal obligation
of the Company and to constitute a valid agreement of the Company, in accordance with its terms, have been done and performed.
NOW, THEREFORE, for
and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I.
TERMS OF THE NOTES
Section
1.01. Terms of the Notes. The following terms relating to the Notes are hereby established:
(a)
The Notes shall constitute a series of Senior Securities having the title “7.75% Notes due September 30, 2025.”
The Notes shall bear a CUSIP number of 78590A 406 and an ISIN of US78590A4067.
(b)
The aggregate principal amount of the Notes that may be initially authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections
304, 305, 306, 906, 1107 or 1305 of the Base Indenture, and except for any Securities that, pursuant to Section 303 of the
Base Indenture, are deemed never to have been authenticated and delivered under the Indenture) shall be up to $13,000,000
(or up to $14,950,000 aggregate principal amount if the underwriters’ option to purchase additional Securities is exercised
in full). Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, the Company
may from time to time, without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional
Notes”) having the same ranking and the same interest rate, maturity and other terms as the Notes. Any Additional Notes and
the existing Notes will constitute a single series under the Indenture and all references to the relevant Notes herein shall include
the Additional Notes unless the context otherwise requires.
(c)
The entire outstanding principal of the Notes shall be payable on September 30, 2025, unless earlier redeemed or repurchased
in accordance with the provisions of the Indenture.
(d)
The rate at which the Notes shall bear interest shall be 7.75% per annum. The Interest Payment Dates for the Notes shall
be March 30, June 30, September 30 and December 30 of each year, commencing December 30, 2020 (if an Interest Payment Date falls
on a day that is not a Business Day, then the applicable interest payment will be made on the next succeeding Business Day and
no additional interest will accrue as a result of such delayed payment). The initial interest period will be the period from and
including September 4, 2020, to, but excluding, December 30, 2020, and the subsequent interest periods will be the periods from
and including an Interest Payment Date to, but excluding, the next Interest Payment Date or the Stated Maturity, as the case may
be; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the Person
in whose name the Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be March 15, June 15, September 15, or December 15 (whether or not a Business Day), as the case
may be, immediately preceding such Interest Payment Date. Payment of principal of (and premium, if any, on) and any such interest
on the Notes will be made at the office of the Trustee located at 111 Fillmore Avenue, St. Paul, MN 55107, Attention: Sachem Capital
Corp. (7.75% Notes Due September 30, 2025) (Karen R. Beard, Vice President) or at such other address as designated by the Trustee,
in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security Register; provided, further, however, that so
long as the Notes are registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures
established by The Depository Trust Company and the Trustee. Interest on the Notes will be computed on the basis of a 360-day year
of twelve 30-day months.
(e)
The Notes shall be initially issuable in global form (each such Note, a “Global Note”). The Global Notes and the Trustee’s
certificate of authentication thereon shall be substantially in the form of Exhibit A to this Third Supplemental
Indenture. Each Global Note shall represent the outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented
thereby shall be made by the Trustee or the Security Registrar, in accordance with Sections 203 and 305 of the Base Indenture.
(f)
The depositary for such Global Notes (the “Depositary”) shall be The Depository Trust Company, New York, New York.
The Security Registrar with respect to the Global Notes shall be the Trustee.
(g) The Notes
shall be defeasible pursuant to Section 1402 or Section 1403 of the Base Indenture. Covenant defeasance contained in
Section 1403 of the Base Indenture shall apply to the covenants contained in Sections 1006, 1008 and 1009 of the Indenture.
(h) The
Notes shall be redeemable pursuant to Section 1101 of the Base Indenture and as follows:
(i) The Notes will be redeemable in whole or in part at any time or from time to time, at the option of the Company, on or after September
4, 2022, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest payments
otherwise payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.
(ii) Notice of redemption shall be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day
delivery, to each Holder of the Notes to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to
the Redemption Date, at the Holder’s address appearing in the Security Register. All notices of redemption shall contain
the information set forth in Section 1104 of the Base Indenture.
(iii) If the Company elects to redeem only a portion of the Notes, the Trustee will determine the method for selecting the particular
Notes to be redeemed, in accordance with Section 1103 of the Base Indenture and the Investment Company Act and the rules of
any national securities exchange or quotation system on which the Notes are listed, in each case to the extent applicable.
(iv) Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue
on the Notes called for redemption hereunder.
(i) The Notes shall
not be subject to any sinking fund pursuant to Section 1201 of the Base Indenture.
(j) The Notes shall
be issuable in denominations of $25 and integral multiples of $25 in excess thereof.
(k) Holders of the Notes will
not have the option to have the Notes repaid prior to the Stated Maturity.
(l) The Notes are
hereby designated as “Senior Securities” under the Indenture.
ARTICLE II.
COVENANTS
Section
2.01. Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes
but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article Ten of the Base
Indenture shall be amended by adding the following new Sections 1009, and 1010 thereto, each as set forth below:
“Section 1009. Asset Coverage Ratio.
The Company hereby
agrees that for the period of time during which Notes are Outstanding, the Company will not pay any dividends or make any distributions
in excess of 90% of its taxable income, incur any Indebtedness or purchase any shares of its outstanding capital stock, unless,
in every such case, at the time of the incurrence of such Indebtedness or at the time of any such dividend, distribution or purchase,
the Company has an Asset Coverage of at least 150% after giving effect to the incurrence of such Indebtedness and the application
of the net proceeds therefrom or after deducting the amount of such purchase, price as the case may be. “Asset Coverage”
means the ratio (expressed as a percentage) which the total assets of the Company bears to the aggregate amount of indebtedness
(including the aggregate principal amount of the involuntary liquidation preference of redeemable preferred stock, if any), of
the Company. For purposes of the Supplemental Indenture, “Indebtedness” means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations evidenced by notes, bonds, debentures or similar instruments; and (c) any lease of, or
other arrangement conveying the right to use, any property by a Person as lessee that has been or should be accounted for as a
capital lease on a balance sheet of such Person prepared in accordance with GAAP.
“Section 1010. Commission Reports and Reports
to Holders.
If, at any time, the
Company is not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with
the Commission, the Company agrees to furnish to the Holders of Notes and the Trustee for the period of time during which the Notes
are Outstanding: (i) within 90 days after the end of the each fiscal year of the Company (which fiscal year ends on December
31), audited annual consolidated financial statements of the Company and (ii) within 45 days after the end of each fiscal
quarter of the Company (other than the Company’s fourth fiscal quarter), unaudited interim consolidated financial statements
of the Company. All such financial statements shall be prepared, in all material respects, in accordance with GAAP.”
ARTICLE III.
MEETINGS OF HOLDERS OF SECURITIES
Section
3.01. Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes
but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 1505 of the
Base Indenture shall be amended by replacing clause (c) thereof with the following:
“(c) At any meeting
of Holders, each Holder of a Security of such series or proxy shall be entitled to one vote for each $25.00 principal amount of
the Outstanding Securities of such series held or represented by such Holder; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series
or proxy.”
ARTICLE IV.
MISCELLANEOUS
Section
4.01. This Third Supplemental Indenture and the Notes shall be governed by and construed in accordance with the
law of the State of New York, without regard to principles of conflicts of laws. This Third Supplemental Indenture is subject to
the provisions of the Trust Indenture Act that are required to be part of the Indenture and shall, to the extent applicable, be
governed by such provisions.
Section
4.02. In case any provision in this Third Supplemental Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.
Section
4.03. This Third Supplemental Indenture may be executed in counterparts, each of which will be an original, but
such counterparts will together constitute but one and the same Third Supplemental Indenture. The exchange of copies of this Third
Supplemental Indenture and of signature pages by facsimile, .pdf transmission, email or other electronic means shall constitute
effective execution and delivery of this Third Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted
by facsimile, .pdf transmission, email or other electronic means shall be deemed to be their original signatures for all purposes.
Section
4.04. The Base Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects
ratified and confirmed, and the Base Indenture and this Third Supplemental Indenture shall be read, taken and construed as one
and the same instrument with respect to the Notes. All provisions included in this Third Supplemental Indenture supersede any conflicting
provisions included in the Base Indenture with respect to the Notes, unless not permitted by law. The Trustee accepts the trusts
created by the Base Indenture, as supplemented by this Third Supplemental Indenture, and agrees to perform the same upon the terms
and conditions of the Base Indenture, as supplemented by this Third Supplemental Indenture.
Section
4.05. The provisions of this Third Supplemental Indenture shall become effective as of the date hereof.
Section
4.06. Notwithstanding anything else to the contrary herein, the terms and provisions of this Third Supplemental
Indenture shall apply only to the Notes and shall not apply to any other series of Securities under the Base Indenture and this
Third Supplemental Indenture shall not and does not otherwise affect, modify, alter, supplement or change the terms and provisions
of any other series of Securities under the Base Indenture, whether now or hereafter issued and Outstanding.
Section
4.07. For the avoidance of doubt, all notices, approvals, consents, requests and any communications hereunder or
with respect to the Notes must be in writing (provided that any communication sent to Trustee hereunder must be in the form of
a document that is signed manually or by way of a digital signature provided by DocuSign or Adobe (or such other digital signature
provider as specified in writing to Trustee by the authorized representative), in English. The Company agrees to assume all
risks arising out of the use of using digital signatures and electronic methods to submit communications to Trustee, including
without limitation the risk of Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.
Section
4.08. The recitals contained herein and in the Notes shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency
of this Third Supplemental Indenture, the Notes or any Additional Notes, except that the Trustee represents that it is duly authorized
to execute and deliver this Third Supplemental Indenture, authenticate the Notes and any Additional Notes and perform its obligations
hereunder. The Trustee shall not be accountable for the use or application by the Company of the Notes or any Additional Notes
or the proceeds thereof. In acting hereunder and with respect to the Notes, the rights, privileges, protections, immunities and
benefits afforded to the Trustee under the Base Indenture, including, without limitation, its right to be indemnified, are deemed
to be incorporated herein, and shall be enforceable by the Trustee hereunder, in each of its capacities hereunder as if set forth
herein in full.
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first
above written.
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SACHEM CAPITAL CORP.
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By:
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/s/ John L. Villano
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Name:
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John L. Villano
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Title:
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Chief Executive Officer
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U.S. BANK NATIONAL
ASSOCIATION, as Trustee
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By:
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/s/ Karen R. Beard
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Name:
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Karen R. Beard
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Title:
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Vice President
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[Signature
page to Third Supplemental Indenture]
Exhibit A – Form of Global
Note
This Security is
a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of The Depository Trust
Company or a nominee thereof. This Security may not be exchanged in whole or in part for a Security registered, and no transfer
of this Security in whole or in part may be registered, in the name of any Person other than The Depository Trust Company or a
nominee thereof, except in the limited circumstances described in the Indenture.
Unless this certificate
is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer,
exchange or payment and such certificate issued in exchange for this certificate is registered in the name of Cede & Co.,
or such other name as requested by an authorized representative of The Depository Trust Company, any transfer, pledge or other
use hereof for value or otherwise by or to any person is wrongful, as the registered owner hereof, Cede & Co., has an
interest herein.
Sachem Capital Corp.
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No.
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$
CUSIP No.: 78590A
406
ISIN:
US78590A4067
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7.75%
Notes due September 30, 2025
Sachem
Capital Corp., a corporation duly organized and existing under the laws of New York (herein called the “Company”, which
term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of THIRTEEN MILLION AND 00/100 Dollars (U.S. $13,000,000)
on September 30, 2025 and to pay interest thereon from September 4, 2020 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly on March 30, June 30, September 30 and December 30 in each year, commencing
December 30, 2020, at the rate of 7.75% per annum, until the principal hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest,
which shall be March 15, June 15, September 15, or December 15 (whether or not a Business Day), as the case
may be, immediately preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security
is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in
said Indenture. This Security may be issued as part of a series.
Payment
of the principal of (and premium, if any, on) and any such interest on this Security will be made at the office of the Trustee
located at 111 Fillmore Avenue, St. Paul, MN55107, Attention: Sachem Capital Corp. (7.75% Notes Due September 4, 2025) or
at such other address as designated by the Trustee, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the
Security Register; provided, further, however, that so long as this Security is registered to Cede & Co., such
payment will be made by wire transfer in accordance with the procedures established by The Depository Trust Company and the Trustee.
Reference is hereby
made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.
Dated:
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SACHEM CAPITAL CORP.
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By:
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Name:
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Title:
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[Global
Note - Third Supplemental Indenture]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.
Dated:
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U.S. BANK NATIONAL ASSOCIATION, as Trustee
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By:
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Authorized Signatory
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[Global
Note - Third Supplemental Indenture]
Sachem Capital Corp.
7.75%
Notes due September 30, 2025
This
Security is one of a duly authorized issue of Senior Securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an Indenture, dated as of June 21, 2019 (herein called the “Base Indenture”,
which term shall have the meaning assigned to it in such instrument), between the Company and U.S. Bank National Association, as
Trustee (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), and reference
is hereby made to the Base Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated
and delivered, as supplemented by the Third Supplemental Indenture, dated as of September 4, 2020, by and between the Company
and the Trustee (herein called the “Third Supplemental Indenture”; the Third Supplemental Indenture and the Base Indenture
collectively are herein called the “Indenture”). In the event of any conflict between the Base Indenture and the Third
Supplemental Indenture, the Third Supplemental Indenture shall govern and control.
This
Security is one of the series designated on the face hereof, which series is initially limited in aggregate principal amount to
$13,000,000. Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement,
the Company may from time to time, without the consent of the Holders of Securities, issue additional Securities of this series
(in any such case “Additional Securities”) having the same ranking and the same interest rate, maturity and other terms
as the Securities. Any Additional Securities and the existing Securities will constitute a single series under the Indenture and
all references to the relevant Securities herein shall include the Additional Securities unless the context otherwise requires.
The aggregate amount of outstanding Securities represented hereby may from time to time be reduced or increased, as appropriate,
to reflect exchanges and redemptions.
The
Securities of this series are subject to redemption in whole or in part at any time or from time to time, at the option of the
Company, on or after September 4, 2022, at a redemption price per security equal to 100% of the outstanding principal amount
thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to,
but excluding, the date fixed for redemption.
Notice of redemption
shall be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, to each
Holder of the Securities to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption
Date, at the Holder’s address appearing in the Security Register. All notices of redemption shall contain the information
set forth in Section 1104 of the Base Indenture.
If
the Company elects to redeem only a portion of the Securities, the Trustee will determine the method for selecting the particular
Securities to be redeemed, in accordance with Section 1.01 of the Third Supplemental Indenture and Section 1103
of the Base Indenture. In the event of redemption of this Security in part only, a new Security or Securities of this series and
of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
Unless the Company
defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities
called for redemption.
Holders
of Securities do not have the option to have the Securities repaid prior to September 30, 2025.
The Indenture contains
provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default
with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As
provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities
of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the
Trustee indemnity, security, or both reasonably satisfactory to the Trustee against the costs, expenses and liabilities
to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for sixty (60) days after receipt of such notice, request and offer of indemnity and/or security.
The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates expressed herein.
No reference herein
to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this
series are issuable only in registered form without coupons in denominations of $25 and any integral multiples of $25 in excess
thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable
for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall
be made for any such registration of transfer or exchange, but the Company, the Trustee, or the Security Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee, or the Security Registrar and any agent of the Company,
the Trustee, or the Security Registrar may treat the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and none of the Company, the Trustee, the Security Registrar or any agent thereof
shall be affected by notice to the contrary.
All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the Indenture.
The Indenture and this
Security shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
To the extent any provision
of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
Exhibit 99.1
FOR IMMEDIATE RELEASE
SACHEM CAPITAL CORP. ANNOUNCES CLOSING
OF PUBLIC OFFERING OF $13 MILLION OF 7.75% NOTES
Branford, Connecticut, September 4,
2020 -- Sachem Capital Corp. (NYSE American: SACH) announces the closing of its previously announced registered public offering
of $13.0 million aggregate principal amount of 7.75% unsecured, unsubordinated notes due 2025 (“Notes”). The net proceeds
of the offering to Sachem Capital Corp. are expected to be approximately $12.3 million after payment of underwriting discounts
and commissions and estimated offering expenses payable by Sachem Capital Corp.
Sachem Capital Corp. has granted the underwriters
a 30-day option to purchase up to an additional $1.95 million aggregate principal amount of Notes to cover over-allotments, if
any. The over-allotment option expires September 27, 2020.
The Notes will rank pari passu with
all the company’s unsecured, unsubordinated indebtedness, whether currently outstanding or issued in the future. The Notes
are expected to be listed on the NYSE American under the trading symbol “SCCC” and begin to trade on or about September
10, 2020.
The Notes will mature on September 30,
2025, and may be redeemed, in whole or in part, at any time, or from time to time, at the company’s option on or after September
4, 2022. Interest on the Notes will accrue at the annual rate of 7.75% and will be payable quarterly, in arrears, on each March
30, June 30, September 30 and December 30 that the Notes are outstanding, beginning December 30, 2020.
Sachem plans to use the net proceeds from
the sale of the Notes for working capital and general corporate purposes, i.e., primarily to fund new real estate loans
secured by first mortgage liens. Sachem may also use the net proceeds to acquire other real estate finance companies or existing
mortgage loan portfolios, although no such transactions are pending at this time.
Sachem Capital Corp. has received an investment
grade private rating of BBB+ from Egan-Jones Ratings Company, an independent, unaffiliated
rating agency. Egan-Jones is a Nationally Recognized Statistical Ratings Organization
(NRSRO) and is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). Egan-Jones
is also certified by the European Securities and Markets Authority (ESMA). A securities rating is not a recommendation to
buy, sell or hold securities and may be subject to revision or withdrawal at any time.
Ladenburg Thalmann & Co. Inc., Janney
Montgomery Scott LLC and National Securities Corporation, a wholly owned subsidiary of National Holdings Corporation (NASDAQ: NHLD)
acted as the lead joint book-running managers for the offering. Aegis Capital Corp. is acting as co-manager for the offering.
This press release does not constitute
an offer to sell or the solicitation of an offer to buy the securities in this offering or any other securities nor will there
be any sale of the Notes or any other securities referred to in this press release in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.
A
registration statement relating to, among other things, the Notes, was filed and has been declared effective by the Securities
and Exchange Commission. The offering was made only by means of a related prospectus supplement and an accompanying base
prospectus forming part of the effective registration statement, copies of which may be obtained from: Ladenburg Thalmann, Attn:
Syndicate Department, 277 Park Avenue, 26th Floor, New York, NY 10172, or by emailing prospectus@ladenburg.com (telephone
number 1-800-573-2541); or Janney Montgomery Scott LLC, Attn: Syndicate Department, 1717 Arch Street, Philadelphia, PA 19103,
or by emailing prospectus@janney.com; or National Securities Corp., 200 Vesey Street, 25th Floor, New York,
NY 10281, or by emailing prospectusrequest@nationalsecurities.com; or Aegis Capital Corp., Attn: Syndicate Department,
810 7th Avenue, 18th Floor, New York, NY 10019, or by emailing prospectus@aegiscap.com.
Sachem Capital Corp. filed a preliminary
prospectus supplement, dated August 26, 2020 with the Securities and Exchange Commission, which contains more detailed description
of the Notes and the terms of the offering and a preliminary prospectus supplement and the accompanying base prospectus dated February
5, 2020, which contains other important information about Sachem Capital Corp., its business, operations and financial condition.
About Sachem Capital Corp.
Sachem Capital Corp. specializes in originating,
underwriting, funding, servicing, and managing a portfolio of first mortgage loans. It offers short term (i.e., three years or
less) secured, non-banking loans (sometimes referred to as “hard money” loans) to real estate investors to fund their
acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The company
does not lend to owner occupants. The company’s primary underwriting criteria is a conservative loan to value ratio. The
properties securing the company’s loans are generally classified as residential or commercial real estate and, typically,
are held for resale or investment. Each loan is secured by a first mortgage lien on real estate. Each loan is also personally guaranteed
by the principal(s) of the borrower, which guaranty may be collaterally secured by a pledge of the guarantor’s interest in
the borrower. The company also makes opportunistic real estate purchases apart from its lending activities. The company believes
that it qualifies as a real estate investment trust (REIT) for federal income tax purposes and has elected to be taxed as a REIT
beginning with its 2017 tax year.
Forward Looking
Statements
This press release may contain forward-looking
statements. All statements other than statements of historical facts contained in this press release, including statements regarding
our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking
statements. The words “anticipate,” “estimate,” “expect,” “project,” “plan,”
“seek,” “intend,” “believe,” “may,” “might,” “will,” “should,”
“could,” “likely,” “continue,” “design,” and the negative of such terms and other
words and terms of similar expressions are intended to identify forward- looking statements.
We have based these forward-looking
statements largely on our current expectations and projections about future events and trends that we believe may affect our financial
condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These
forward-looking statements are subject to several risks, uncertainties and assumptions as described in our Annual Report on Form
10-K for 2019 filed with the U.S. Securities and Exchange Commission on March 30, 2020. Because of these risks, uncertainties and
assumptions, the forward-looking events and circumstances discussed in this press release may not occur, and actual results could
differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking
statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor
any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We disclaim
any duty to update any of these forward-looking statements.
All forward-looking statements attributable
to us are expressly qualified in their entirety by these cautionary statements as well as others made in this press release. You
should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.
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Investor & Media Contact:
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Crescendo Communications, LLC
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Email:
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sach@crescendo-ir.com
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Tel:
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(212) 671-1021
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