Item 1.01 Entry into a Material Definitive Agreement.
Thirteenth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Bluerock Residential Holdings, L.P.
On September 22, 2022, in connection with the previously announced proposed
spin-off by Bluerock Residential Growth REIT, Inc. (the "Company") of its
single-family rental business to its common shareholders (the "Spin-Off"), the
Company, as the general partner of Bluerock Residential Holdings, L.P. (the
"Operating Partnership"), with the consent of limited partners of the Operating
Partnership holding more than 66.66% of all of the outstanding common units
("Common Units") and long-term incentive plan units ("LTIPs") in the Operating
Partnership held by limited partners (other than the Company and its
subsidiaries), entered into the Thirteenth Amendment (the "Thirteenth
Amendment") to the Second Amended and Restated Agreement of Limited Partnership
of the Operating Partnership. The Thirteenth Amendment provides, among other
things, for (1) the withdrawal of the Company as general partner of the
Operating Partnership and the admission of Bluerock Homes Trust, Inc. ("BHM") as
substitute general partner of the Operating Partnership in connection with the
Spin-Off and (2) the designation of a new series of LTIPs and Common Units (the
"C-LTIPs" and the "C-Common Units," respectively), as previously disclosed,
effective, in each case, as of the Separation Transfer (as defined therein) in
connection with the Spin-Off. C-LTIPs, subject to (a) vesting in accordance with
their terms and (b) achievement of capital account equivalency with Common
Units, may, at the option of the holder, be converted into C-Common Units. No
C-LTIPs or C-Common Units will be outstanding prior to completion of the
Spin-Off. C-Common Units will be redeemable at the option of the holder, and the
Operating Partnership may elect to settle any such redemption in cash or Class C
common stock of BHM.
The foregoing description of the Thirteenth Amendment is only a summary, does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Thirteenth Amendment, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers? Election of Directors?
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 19, 2022, in connection with the previously announced acquisition
of the Company by Blackstone Real Estate (the "Acquisition") and the Spin-Off,
Messrs. R. Ramin Kamfar, I. Bobby Majumder, Romano Tio and Kamal Jafarnia and
Ms. Elizabeth Harrison were elected by the Company (in its capacity as the sole
stockholder of BHM), effective as of the completion of the Spin-Off, to serve on
the Board of Directors of BHM. In addition, the Board of Directors (the "Board")
of the Company accepted the respective resignations of each such individual from
the Board, in each case effective as of immediately prior to, and subject to,
the closing of the Acquisition. As previously announced, the Acquisition and the
Spin-Off are expected to occur on October 6, 2022. The completion of the
Acquisition remains subject to the consummation of the Spin-Off, as well as the
satisfaction or waiver of the other closing conditions in the merger agreement
between the Company and Blackstone Real Estate's affiliates.
Item 8.01 Other Events.
Declaration of the Distribution
On September 19, 2022, the Board approved the completion of the Spin-Off by
means of a pro rata distribution (the "Distribution") by the Company of all of
the outstanding common stock of BHM. To consummate the Distribution, the Board
declared a pro rata distribution of BHM common stock, which is expected to be
effective at 12:01 a.m. Eastern Time on October 6, 2022, to Company shareholders
of record as of the close of business on September 29, 2022 (the "Record Date").
In the Distribution, each Company shareholder will receive one share of BHM
Class A or Class C common stock, as applicable, for every eight shares of the
Company's Class A or Class C common stock held, respectively, as of the close of
business on the Record Date. Shareholders will not receive fractional shares of
BHM common stock.
The Distribution is subject to the satisfaction or waiver of certain conditions,
as more fully described in BHM's Registration Statement on Form 10 (File No.
001-41322), as amended. The press release announcing certain details of the
Spin-Off is filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Amendment of Company Warrant Agreements
On September 19, 2022, the Company entered into (1) an amendment to that certain
Warrant Agreement, dated as of November 15, 2017 (the "2017 Warrant Agreement"),
between the Company, Computershare Inc., a Delaware corporation
("Computershare"), and Computershare's affiliate, Computershare Trust Company,
N.A., a federally chartered trust company, collectively as warrant agent
(together with Computershare and their respective successors and assigns, the
"Warrant Agent") and (2) an amendment to that certain Warrant Agreement, dated
as of November 16, 2018 (together with the 2017 Warrant Agreement, the "Warrant
Agreements"), between the Company and the Warrant Agent (such amendments, the
"Warrant Agreement Amendments").
As previously disclosed, the Warrant Agreement Amendments clarify the operation
of the provisions of the Warrant Agreements at and following the effective time
of the Acquisition. Pursuant to the Warrant Agreement Amendments, the holder of
any warrant to purchase the Company's Class A Common Stock (a "Company Warrant")
that is exercised at or after the effective time of the Acquisition, or prior to
the effective time of the Acquisition but for which shares of the Company's
Class A Common Stock have not been issued or otherwise delivered prior to the
effective time of the Acquisition, will be entitled to receive only cash in the
amount of the merger consideration that such holder would have received if the
Company Warrant had been exercised immediately prior to the effective time of
the Acquisition in respect of such exercise. In order to implement the Spin-Off,
the depositary of the Company Warrants requires that exercises of Company
Warrants be suspended from September 23, 2022 until after the closing of the
Acquisition. Any Company Warrants not exercised prior to the close of business
on September 23, 2022 will not be entitled to receive any common stock of BHM in
The foregoing description of the Warrant Agreement Amendments is only a summary,
does not purport to be complete and is qualified in its entirety by reference to
the full text of the Warrant Agreement Amendments, which are filed as Exhibit
99.2 and Exhibit 99.3 to this Current Report on Form 8-K and are incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits
10.1 Thirteenth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Bluerock Residential Holdings, L.P., dated
September 22, 2022.
99.1 Press release of Bluerock Residential Growth REIT, Inc., dated
September 19, 2022.
99.2 Amendment to 2017 Warrant Agreement, dated as of September 19, 2022,
by and among Bluerock Residential Growth REIT, Inc., Computershare Inc.
and Computershare Trust Company, N.A.
99.3 Amendment to 2018 Warrant Agreement, dated as of September 19, 2022,
by and among Bluerock Residential Growth REIT, Inc., Computershare Inc.
and Computershare Trust Company, N.A.
104 The cover page from this Current Report on Form 8-K, formatted in Inline
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and other
federal securities laws. All statements other than statements of historical fact
are "forward-looking statements" for purposes of federal and state securities
laws and may be identified by words such as "will," "expect," "believe," "plan,"
"anticipate," "intend," "goal," "future," "outlook," "guidance," "target,"
"estimate" and similar words or expressions, including the negative version of
such words and expressions. These forward-looking statements are based upon the
Company's present expectations, estimates and projections about the industry and
markets in which the Company operates and beliefs of and assumptions made by
Company management, involve uncertainty that could cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements and are not guaranteed to occur. Furthermore, the
Company disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying assumptions or
factors, new information, data or methods, future events or other changes.
Investors should not place undue reliance upon these forward-looking statements.
Although the Company believes that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, the Company's
actual results and performance could differ materially from those set forth in
these forward-looking statements due to numerous factors. Factors that could
have a material adverse effect on our operations, future prospects, the
Acquisition and the Spin-Off include, but are not limited to: the occurrence of
any event, change or other circumstance that could give rise to the termination
of the merger agreement between the Company and Blackstone Real Estate's
affiliates; the failure to satisfy any of the conditions to the completion of
the Acquisition or the Spin-Off; the risks that the market does not value BHM
shares at net asset value; the failure to recognize the potential benefits of
the Spin-Off due to, among other reasons, BHM's lack of liquidity, small market
size or inability to grow and expand revenues and earnings following the
Spin-Off; shareholder litigation in connection with the Acquisition or the
Spin-Off, which may affect the timing or occurrence of the Acquisition or the
Spin-Off or result in significant costs of defense, indemnification and
liability; the effect of the announcement of the Acquisition and the Spin-Off on
the ability of the Company to retain and hire key personnel and maintain
relationships with its tenants, vendors and others with whom it does business,
or on its operating results and businesses generally; risks associated with the
disruption of management's attention from ongoing business operations due to the
Acquisition and the Spin-Off; the ability to meet expectations regarding the
timing and completion of the Acquisition and the Spin-Off; the possibility that
any opinions, consents or approvals required in connection with the Spin-Off
will not be received or obtained in the expected time frame, on the expected
terms or at all; and significant transaction costs, fees, expenses and charges.
There can be no assurance that the Acquisition, the Spin-Off or any other
transaction described above will in fact be consummated in the expected time
frame, on the expected terms or at all. There can be no assurance as to the
impact of COVID-19 and other potential future outbreaks of infectious diseases
on the Company's or BHM's financial condition, results of operations, cash flows
and performance and those of their respective tenants as well as on the economy
and real estate and financial markets, which may impact the timing or occurrence
of the Acquisition or the Spin-Off. For further discussion of the factors that
could affect outcomes, please refer to the risk factors set forth in Item 1A of
the Company's Annual Report on Form 10-K filed by the Company with the SEC on
March 11, 2022, the risk factors set forth in Item 1A of the Company's Quarterly
Reports on Form 10-Q filed by the Company with the SEC on May 10, 2022 and
August 8, 2022, and subsequent filings by the Company with the SEC. Any
forward-looking statement speaks only as of the date on which it is made, and
the Company assumes no obligation to update or revise such statement, whether as
a result of new information, future events or otherwise, except as required by
applicable law. The Company claims the safe harbor protection for forward
looking statements contained in the Private Securities Litigation Reform Act of
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