UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-U
Current Report Pursuant to Regulation A
Date of Report (Date of earliest event reported): August 12,
2020
HC GOVERNMENT REALTY TRUST, INC.
(Exact
name of issuer as specified in its charter)
Maryland
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81-1867397
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(State or other jurisdiction of incorporation or
organization
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(I.R.S. Employer Identification No.)
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390 S. Liberty Street, Suite 100
Winston-Salem, NC 27101
(Full
mailing address of principal executive offices)
(336) 477-2535
(Issuer’s
telephone number, including area code)
Title of each class of securities issued pursuant to Regulation
A: Common Stock
ITEM 3. MATERIAL MODIFICATION TO RIGHTS OF SECURITY
HOLDERS
On
August 14, 2020 (the “Closing Date”), HC Government
Realty Trust, Inc., a Maryland corporation (the
“Company”), completed the sale and issuance of
3,600,000 shares of the Company’s 7.00% Series C Cumulative
Redeemable Preferred Stock (the “Series C Preferred
Stock”) to qualified investors (each, an
“Investor” and collectively, the
“Investors”) in a private offering (the
“Offering”) pursuant to exemptions from registration
provided by Section 4(a)(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and Regulation D
promulgated thereunder.
In
connection with the Offering, on August 12, 2020, the Company filed
Articles Supplementary classifying and designating the Series C
Preferred Stock (the “Series C Articles Supplementary”)
with the Maryland State Department of Assessments and Taxation to
classify 6,000,000 shares of the Company’s authorized but
unissued shares of preferred stock, $0.001 par value per share
(“Preferred Stock”), as Series C Preferred Stock. The
Series C Articles Supplementary became effective upon filing on
August 12, 2020.
Holders of shares of the Series C Preferred Stock
are entitled to receive, when and as authorized by the
Company’s board of directors (the “Board”) and
declared by the Company, preferential cumulative cash dividends on
the Series C Preferred Stock, payable quarterly in arrears on
January 5, April 5, July 5 and October 5 of each year. From the
date of original issue of the Series C Preferred Stock (or the date
of issue of any Series C Preferred Stock issued after such original
issue date) (the “Original Issuance Date”), the Company
will pay cumulative cash dividends on the Series C Preferred Stock
at the rate of 7.00% per annum of the $25.00 liquidation preference
per share. Dividends on the Series C Preferred Stock will accrue
and be cumulative from (and including) the Original Issuance Date
or, with respect to any accrued dividends that have been paid in
cash, the end of the most recent dividend period for which
dividends have been paid. The Series C Preferred Stock, with
respect to priority of payment of dividends and other distributions
and rights upon voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Company, will rank senior to
all classes or series of the Company’s common stock, $0.001
par value per share (the “Common Stock”), and the
Company’s 7.00% Series A
Cumulative Convertible Preferred Stock (the “Series A
Preferred Stock”) and 10.00% Series B Cumulative Convertible Preferred
Stock (the “Series B Preferred
Stock”).
Upon
any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company, the holders of shares of Series C
Preferred Stock are entitled to be paid out of the assets of the
Company legally available for distribution to its stockholders,
after payment of or provision for the Company’s debt and
other liabilities, a liquidation preference of $25.00 per share of
Series C Preferred Stock, plus an amount equal to any accrued and
unpaid dividends (whether or not earned, authorized or declared)
thereon. With respect to priority of payment of distributions upon
the voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company, the Series C Preferred Stock will
rank senior to the Common Stock, the Series A Preferred Stock and
the Series B Preferred Stock.
Holders
of shares of the Series C Preferred Stock will not have any voting
rights, except with respect to (i) any amendment, alteration or
repeal of the Company’s Articles of Incorporation (the
“Charter”), including the terms of the Series C
Preferred Stock, that would alter only the contract rights, as
expressly set forth in the Charter, of the Series C Preferred
Stock, which amendment, alteration or repeal will require the
affirmative vote or consent of the holders of two-thirds of the
shares of Series C Preferred Stock issued and outstanding at the
time; (ii) any amendment, alteration or repeal of the Charter,
including the terms of the Series C Preferred Stock, that equally
affects the terms of the Series C Preferred Stock and any class or
series of capital stock of the Company that ranks on parity with
the Series C Preferred Stock with respect to priority of payment of
dividends and other distributions or rights upon voluntary or
involuntary liquidation, dissolution or winding up of the affairs
of the Company (“Parity Preferred Stock”) upon which
like voting rights have been conferred, that would alter only the
contract rights, as expressly set forth in the Charter, of the
Series C Preferred Stock and such Parity Preferred Stock, which
amendment, alteration or repeal will require the affirmative vote
or consent of the holders entitled to cast two-thirds of the votes
entitled to be cast by the holders of Series C Preferred Stock and
such Parity Preferred Stock issued and outstanding at the time,
voting together as a single class; (iii) the extension of the
Mandatory Redemption Date (as defined in the Series C Articles
Supplementary) and the election of directors to the Board in the
event of a Failed Redemption (as defined in the Series C Articles
Supplementary); and (iv) the issuance of a new class or series of
Preferred Stock or the incurrence of any additional indebtedness or
the issuance of additional shares of any class or series of Parity
Preferred Stock or class or series of capital stock of the Company
ranking senior to the Series C Preferred Stock with respect to
priority of payment of dividends and other distributions or rights
upon voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company (“Senior Stock”) if
after such incurrence or issuance, the aggregate principal amount
of long-term indebtedness and dividends on each existing class or
series of Parity Preferred Stock or Senior Stock would be greater
than 80% of the gross value of the assets of the Company and its
subsidiaries.
The
foregoing description of the Series C Articles Supplementary is not
complete and is qualified in its entirety by reference to the
complete text of the Series C Articles Supplementary, a copy of
which is filed as Exhibit 2.1 to this Current Report on Form 1-U
and is incorporated by reference into this Item 3.
ITEM 8. CERTAIN UNREGISTERED SALES OF EQUITY
SECURITIES
Series C Preferred Stock Issuance
On
August 14, 2020, the Company entered into subscription agreements
with the Investors for the sale and issuance of a total of
3,600,000 shares of the
Company’s Series C Preferred Stock for an aggregate purchase
price of $90,000,000 (the
“Subscription Agreements”) in a private offering
pursuant to exemptions from registration provided by Section
4(a)(2) of the Securities Act and Regulation D promulgated thereunder.
The Subscription Agreements provide
for customary representations, warranties and agreements by the
Company and the Investors.
As
of the Closing Date, the Investors owned all of the Company’s
issued and outstanding shares of Series C Preferred
Stock.
The
foregoing is a summary and is qualified in its entirety by the
complete text of the Subscription Agreements, the form of
which is filed as Exhibit 4.1 to this Current Report on Form 1-U
and is incorporated by reference into this
Item 8.
ITEM 9. OTHER EVENTS
On
August 12, 2020, the Company amended the Agreement of Limited
Partnership of HC Government Realty Holdings, L.P., a Delaware
limited partnership for which the Company serves as the general
partner (the “Operating Partnership”), to establish and
designate the rights, preferences and privileges of the 7.00%
Series C Cumulative Redeemable Preferred Units of the Operating
Partnership issued to the Company upon the contribution to the
Operating Partnership of the net proceeds from the sale of the
Series C Preferred Stock in the Offering (the “Partnership
Agreement Amendment”).
The foregoing is a summary and is qualified in its
entirety by the complete text of the Partnership Agreement
Amendment, a copy of which is filed as Exhibit 6.1 to
this Current Report on Form 1-U and is incorporated by reference
into this Item 9.
Exhibits
Exhibit No.
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Description of Exhibit
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Articles Supplementary of HC Government Realty Trust, Inc., filed
August 12, 2020
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Form of Series C Preferred Stock Subscription
Agreement
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Third Amendment to the Agreement of Limited Partnership of HC
Government Realty Holdings, L.P., dated August 12,
2020
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SIGNATURES
Pursuant to the
requirements of Regulation A, the issuer has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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HC Government Realty Trust, Inc.,
a Maryland corporation
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By:
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/s/
Steven A. Hale II
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Name:
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Steven A. Hale II
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Its:
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Chairman, Chief Executive Officer and President
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Date:
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August 18, 2020
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