BLUEROCK RESIDENTIAL GROWTH REIT, INC. ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. Credit Facility
On
The Credit Facility has an initial maturity date of
The Loan Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, contain certain ongoing operational requirements, and restrict, subject to certain exceptions, the incurrence of liens, the ability of the Borrowers and certain affiliates to enter into mergers, consolidations, sales of assets and similar transactions, the making of dividends and other distributions and the consummation of transactions with affiliates. In addition, the Borrowers will be subject to the following financial maintenance covenants: (1) maximum ratio of total indebtedness to total value of the financed assets of 72.5%, (2) minimum ratio of underwritten net cash flow to total interest expense of 1.25 to 1.00, and (3) minimum ratio of underwritten net cash flow to total outstanding debt amounts of 6.25%.
The Loan Agreement contains events of default relating to customary matters, including, among other things, payment defaults, covenant defaults, acceleration of other material indebtedness, bankruptcy events, judgment defaults and change of control events. The occurrence of an event of default will limit the ability of the Borrowers to make distributions and may result in the termination of the Credit Facility, acceleration of repayment obligations and the exercise of other remedies by the Lenders.
In connection with the Loan Agreement, Bluerock Residential entered into a
Sponsor Guaranty, dated
The foregoing descriptions of the Loan Agreement, the BRG Sponsor Guaranty and BHM Sponsor Guaranty do not purport to be complete descriptions and are qualified in their entirety by reference to the Loan Agreement, the BRG Sponsor Guaranty and BHM Sponsor Guaranty, which are filed herewith as Exhibits 10.1, 10.2 and 10.3 hereto, and incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information contained in Item 1.01 of this report is incorporated by reference in this Item 2.03.
Forward-Looking Statements
This communication 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, of 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 Merger
and the Separation and the Distribution 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; the failure to satisfy any of the
conditions to the completion of the Merger, the Separation or the Distribution;
the risks that the market does not value BHM shares at net asset value; the
failure to recognize the potential benefits of the Separation and the
Distribution due to, among other reasons, BHM's lack of liquidity, small market
size or inability to grow and expand revenues and earnings following the
Distribution; shareholder litigation in connection with the Merger, the
Separation or the Distribution, which may affect the timing or occurrence of the
Merger, the Separation or the Distribution or result in significant costs of
defense, indemnification and liability; the effect of the announcement of the
Merger and the Separation and the Distribution 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 Merger and the Separation
and the Distribution; the ability to meet expectations regarding the timing and
completion of the Merger and the Separation and the Distribution; the
possibility that any opinions, consents or approvals required in connection with
the Separation and the Distribution 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 Merger, the Separation, the Distribution 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 Merger, the
Separation or the Distribution. 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
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The following exhibits are filed with this report:
Exhibit Number Description 10.1 Loan Agreement, datedApril 6, 2022 , by and among persons that are party thereto listed as Borrowers, persons party thereto that are listed as Equity Owners,Bluerock Residential Holdings, LP , persons that are party thereto listed as Lenders,Deutsche Bank Securities Inc. , Deutsche Bank AG,New York Branch andComputershare Trust Company , N.A. 10.2 Sponsor Guaranty, datedApril 6, 2022 , by and betweenBluerock Residential Growth REIT, Inc. and Deutsche Bank AG,New York Branch. 10.3 Sponsor Guaranty, datedApril 6, 2022 , by and betweenBluerock Homes Trust, Inc. and Deutsche Bank AG,New York Branch. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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