Global Medical REIT Inc. (NYSE:GMRE) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On September 12, 2017, Global Medical REIT Inc. (the “Company”), Inter-American Management LLC, the external manager of the Company (the “Manager”) and Global Medical REIT L.P., the Company’s operating partnership (the “Operating Partnership”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with FBR Capital Markets & Co. as representative (the “Representative”) of the several underwriters named therein (the “Underwriters”), for the sale of 2,700,000 shares of its 7.50% Series A cumulative redeemable preferred stock, par value $0.001 per share (the “Series A Preferred Stock”) at a public offering price of $25.00 per share. to the terms of the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 405,000 shares of Series A Preferred Stock at the public offering price per share to cover over-allotments, if any. On September 14, 2017 the Company received notice to the Underwriting Agreement that the Underwritersexercised their over-allotment option in full. The Company estimates that the net proceeds from the offering, including shares issuable to the Underwriters’ exercise of the over-allotment option and after deducting underwriting discounts and commissions and estimated offering expenses paid or payable by the Company, will be approximately $75 million.
The offering was made to a shelf registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on April18, 2017 (File No. 333-217360), as amended on June 15, 2017, a base prospectus, dated June 19, 2017, included as part of the registration statement, and a prospectus supplement, dated September 12, 2017, filed with the SEC to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).
The Company intends to contribute the net proceeds from the offering to its Operating Partnership in exchange for 7.50% Series A cumulative redeemable preferred units. The Operating Partnership intends to use the proceeds for general corporate purposes, including funding new acquisitions, and repaying indebtedness. A copy of the amendment to the Partnership Agreement relating to the 7.50% Series A cumulative redeemable preferred units is filed as Exhibit 10.1 and is incorporated herein by reference.
The Company, the Manager and the Operating Partnership made certain customary representations, warranties and covenants concerning the Company, the Manager, the Operating Partnership and the registration statement in the Underwriting Agreement and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Underwriters may be required to make in respect of those liabilities.
The Underwriters have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. The Underwriters have received, and may in the future receive, customary fees and commissions for these transactions.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibits 1.1 and 10.1. In connection with the filing of the Underwriting Agreement, the Company is filing as Exhibits 5.1 and 8.1 hereto opinions of its counsel, Venable LLP and Vinson & Elkins L.L.P.
| Item 3.03 | Material Modification to Rights of Security Holders. |
Upon issuance of the Series A Preferred Stock referenced in Item 5.03 below, the ability of the Company to make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment on, any other shares of capital stock of the Company ranking junior to or on a parity with the Series A Preferred Stock, will be subject to certain restrictions in the event that the Company does not declare distributions on the Series A Preferred Stock during any distribution period. The terms of the Series A Preferred Stock are set forth in the Articles Supplementary to the Company’s charter, that are filed as Exhibit 3.1 hereto and incorporated herein by reference. The form of Series A Preferred Stock Certificate is filed as Exhibit 4.1 hereto.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Under the Company’s charter, the Board of Directors is authorized without further stockholder action to provide for the issuance of up to 10,000,000 shares of preferred stock. On September 14, 2017, the Company filed with the Maryland State Department of Assessments and Taxation Articles Supplementary designating 3,105,000 shares of the Company’s preferred stock as “7.50% Series A Cumulative Redeemable Preferred Stock.”
| Item 9.01 | Financial Statements and Exhibits. |
Global Medical REIT Inc. ExhibitEX-1.1 2 v475155_ex1-1.htm EXHIBIT 1.1 Exhibit 1.1 EXECUTION VERSION 2,…To view the full exhibit click here
About Global Medical REIT Inc. (NYSE:GMRE)
Global Medical REIT Inc. focuses on operating as a real estate investment trust. The Company is engaged primarily in the acquisition and leasing of licensed purpose-built healthcare facilities in certain markets with various clinical operators. The Company seeks to invest in these purpose-built, specialized facilities, such as surgery centers, specialty hospitals and outpatient treatment centers. Its tenant-operators are physician group tenant-operators, community hospital tenant-operators and corporate medical treatment chain operators. Its properties include a six building, 52,266 square foot medical clinic portfolio in Tennessee; a combined approximately 27,190 square foot surgery center and medical office building located in West Mifflin, Pennsylvania; an approximately 8,840 square foot medical office building known as the Orthopedic Surgery Center, located in Asheville, North Carolina, and a 56-bed long term acute care hospital located at 1870 South 75th Street, Omaha, Nebraska.