UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(
d
) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): March 26, 2014
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Bluerock Residential Growth REIT, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Maryland
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001-36369
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26-3136483
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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712 Fifth Avenue, 9th Floor
New York, NY 10019
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(Address of principal executive offices)
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(212) 843-1601
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(Registrant’s telephone number, including area code)
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None.
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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On
March 28, 2014, Bluerock Residential Growth REIT, Inc., a Maryland corporation, or the Company, its operating partnership, Bluerock
Residential Holdings, L.P., a Delaware limited partnership, or the Operating Partnership, and its manager, BRG Manager, LLC, a
Delaware limited liability company, or the Manager, entered into an Underwriting Agreement, or the Underwriting Agreement, with
Wunderlich Securities, Inc., or Wunderlich, as representative of the several underwriters named in Schedule A attached to the Underwriting
Agreement, or the Underwriters, in connection with the public offering, or the Offering, by the Company of 3,448,276 shares of
Class A common stock of the Company, or the Shares. The offer and sale of the Shares are registered with the Securities and Exchange
Commission, or the SEC, pursuant to a registration statement on Form S-11 (File No. 333-192610), as the same may be amended
and/or supplemented, or the Registration Statement, under the Securities Act of 1933, or the Securities Act.
The
Underwriters are offering the Shares subject to their acceptance of the Shares from the Company at a price of $13.485 per share
and subject to prior sale. The Underwriting Agreement provides that the obligations of the Underwriters to pay for and accept delivery
of the Shares are subject to the approval of certain legal matters by their counsel and to certain other conditions. The Underwriters
are obligated to take and pay for all of the Shares if any such Shares are taken. However, the Underwriters are not required to
take or pay for the Additional Shares covered by the Overallotment Option, each as described below.
The
Underwriters initially propose to offer the Shares to the public at $14.50 per Share, or the Offering Price, and part to certain
dealers, which may include the Underwriters, at the Offering Price less a selling concession not in excess of $0.609 per Share.
After the initial Offering of the Shares, the Offering Price and other selling terms may from time to time be varied by Wunderlich.
The
Company has granted to the Underwriters an overallotment option, or the Overallotment Option, exercisable for 30 days from the
date of the Company’s prospectus dated March 28, 2014, to purchase up to 517,241 additional shares of Class A common stock
of the Company, or the Additional Shares, at the Offering Price, less underwriting discounts and commissions. The Underwriters
may exercise the Overallotment Option solely for the purpose of covering over-allotments. To the extent the Overallotment Option
is exercised, each Underwriter will become obligated, subject to certain conditions, to purchase their pro rata share of the Additional
Shares based on the number of Shares initially purchased by each Underwriter.
The
Offering is expected to close on April 2, 2014, subject to customary closing conditions. Under the terms of the Underwriting Agreement,
the Company and the Operating Partnership have agreed to indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act, the Exchange Act of 1934, as amended, and other federal or state statutory laws or regulations. The Underwriting
Agreement contains customary representations, warranties and covenants.
The
foregoing description of the Underwriting Agreement is a summary and is qualified in its entirety by the terms of the Underwriting
Agreement, a copy of which is filed as Exhibit No. 1.1 to this Current Report on Form 8-K and incorporated by reference into this
Item 1.01.
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ITEM 2.01
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COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
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On March
28, 2014, BR Creekside, LLC, a special-purpose entity in which the Company holds a 24.706% indirect equity interest, or
BR Creekside, sold The Reserve at Creekside Village, a 192-unit garden-style apartment community located in
Chattanooga, Tennessee, or the Creekside Property, to SIR Creekside, LLC, which is an unaffiliated third party, or SIR
Creekside, for $18,875,000, subject to certain prorations and adjustments typical in such real estate transaction. After
deduction for payment of the existing mortgage indebtedness encumbering the Creekside Property in the approximate amount of
$13.5 million and payment of closing costs and fees, excluding disposition fees of approximately $69,946 deferred by our
advisor, Bluerock Multifamily Advisor, LLC, or our Advisor, the sale of the Creekside Property generated net proceeds to the
Company of approximately $1.2 million based on its proportionate ownership in the Creekside Property.
Certain representations
and warranties by BR Creekside contained in the Purchase and Sale Agreement and Joint Escrow Instructions, pursuant to the terms
of which BR Creekside sold the Creekside Property to SIR Creekside, will survive closing for a period of nine months if the closing
occurred without SIR Creekside’s knowledge of the existence of a pre-closing breach of such representations or warranties.
In any such event, BR Creekside would remain liable for any such pre-closing breaches under a post-closing indemnity of SIR Creekside,
the maximum aggregate liability under which shall not exceed $350,000.
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ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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On March 26, 2014,
the Board of Directors of the Company, or the Board, appointed Christopher J. Vohs, age 37, to serve as Treasurer of the Company.
Mr. Vohs was appointed to serve in such capacity, effective March 19, 2014, until his successor is elected and qualifies or until
his earlier death, resignation or removal. The appointment of Mr. Vohs as Treasurer of the Company was not made pursuant to any
arrangement or understanding between him and any other person. Mr. Vohs will continue to serve as Chief Accounting Officer of the
Company until his successor is elected and qualifies or until his earlier death, resignation or removal.
Mr. Vohs has served
as Chief Accounting Officer of the Company since August 2013. He has also served as Chief Accounting Officer for Bluerock Real
Estate, L.L.C., or Bluerock, and for our Advisor since July 2010, and as Chief
Accounting Officer for BRG Manager, LLC, or the Manager, since September 2013, all of which are affiliates of the Company. In his
role as Chief Accounting Officer for Bluerock, the Advisor, and the Manager, Mr. Vohs has been responsible for the oversight of
all financial recordkeeping and reporting aspects of those companies. Previously, Mr. Vohs served as Corporate Controller for Roberts
Realty Investors, Inc., a public multifamily REIT based in Atlanta, Georgia, from March 2009 to July 2010, where he was responsible
for the accounting and financial reporting for the REIT. From October 2004 to March 2009, Mr. Vohs worked at Pulte Homes, a nationwide
builder of single family homes, in various financial roles, including as Internal Audit Manager & Asset Manager and later as
Vice President of Finance for Pulte’s Orlando and Southeast Florida operations. As Vice President of Finance, Mr. Vohs was
responsible for all finance, accounting, and administrative operations of the division. From January 1999 to October 2004, Mr.
Vohs worked as an Audit Manager for Deloitte & Touche, an international professional services firm, where he earned his CPA
certification and focused on mid-size to large private and public companies in the manufacturing, finance, and communications industries.
Mr. Vohs received his B.A. degree in Accounting from Michigan State University in 1998.
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ITEM 5.03
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AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
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The information in
this Current Report on Form 8-K set forth under Item 8.01 is incorporated herein by reference.
Articles of Amendment Effecting Reverse
Split of Class B Common Stock and Decrease in Par Value of Class B Common Stock
On March 26, 2014,
the Company filed Articles of Amendment, or the First Articles, with the Maryland State Department of Assessments and Taxation,
or the SDAT, which First Articles amended the Second Articles of Amendment and Restatement of the Company, or the Charter, to provide
that every 2.264881 shares of Class B common stock, $0.01 par value per share, of the Company, which were issued and outstanding,
be changed into one issued and outstanding share of Class B common stock, $0.02264881 par value per share, of the Company. The
First Articles were duly approved by at least a majority of the Board as required by Maryland law and were made without action
by the stockholders of the Company pursuant to Section 2-309(e) of the Maryland General Corporation Law, or the MGCL. The First
Articles are incorporated into this Item 5.03 by reference to Exhibit No. 3.1 to this Current Report on Form 8-K and Exhibit No.
3.6 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement filed with the SEC on March 26, 2014, or Pre-Effective
Amendment No. 5.
On March 26, 2014,
the Company also filed Articles of Amendment, or the Second Articles, with the SDAT, which Second Articles further amended the
Charter to decrease the par value of the shares of the Class B common stock of the Company issued and outstanding from $0.02264881
per share to $0.01 per share. The Second Articles were duly approved by at least a majority of the Board as required by Maryland
law and were made without action by the stockholders of the Company pursuant to Section 2-605(a)(2) of the MGCL. The Second Articles
are incorporated into this Item 5.03 by reference to Exhibit No. 3.2 to this Current Report on Form 8-K and Exhibit No. 3.7 to
Pre-Effective Amendment No. 5.
On March 31, 2014,
the Company filed Articles of Amendment, or the Third Articles, with the SDAT, which Third Articles further amended the Charter
to provide that every 1.0045878 shares of Class B common stock, $0.01 par value per share, of the Company, which were issued and
outstanding, be changed into one issued and outstanding share of Class B common stock, $0.010045878 par value per share, of the
Company. The Third Articles were duly approved by at least a majority of the Board as required by Maryland law and were made without
action by the stockholders of the Company pursuant to Section 2-309(e) of the MGCL. A copy of the Third Articles is filed as Exhibit
No. 3.3 to this Current Report on Form 8-K and incorporated by reference into this Item 5.03.
On March 31, 2014,
the Company also filed Articles of Amendment, or the Fourth Articles, with the SDAT, which Fourth Articles further amended the
Charter to decrease the par value of the shares of the Class B common stock of the Company issued and outstanding from $0.010045878
per share to $0.01 per share. The Fourth Articles were duly approved by at least a majority of the Board as required by Maryland
law and were made without action by the stockholders of the Company pursuant to Section 2-605(a)(2) of the MGCL. A copy of the
Fourth Articles is filed as Exhibit No. 3.4 to this Current Report on Form 8-K and incorporated by reference into this Item 5.03.
Amendment of Bylaws
Effective March 26,
2014, the Board adopted a second amendment and restatement to the Bylaws of the Company, or the Second Amended and Restated Bylaws.
The following is a summary of the changes effected by the adoption of the Second Amended and Restated Bylaws of the Company, which
is qualified in its entirety by reference to the Second Amended and Restated Bylaws incorporated by reference to Exhibit No. 3.5
to Pre-Effective Amendment No. 5:
Article I
A provision was added
stating that a failure to hold the annual meeting of the stockholders will not invalidate the existence of, or affect any otherwise
valid acts of, the Company.
Article II
Article II of the Bylaws
was amended to provide that each of the Chairman of the Board, the Chief Executive Officer, the President and the Board itself
may call a special meeting of stockholders. Previously, only the Chief Executive Officer and the Board could call a special meeting
of the stockholders. A provision was also added to provide that a special meeting of stockholders shall be held on the date and
at the time and place set by the Chairman of the Board, the Chief Executive Officer, the President or the Board, whoever has called
the meeting.
Special meetings of
stockholders may now only be called by stockholders entitled to cast not less than a majority of all the votes entitled to be cast
at such special meeting. Previously, special meetings of stockholders could be called by stockholders entitled to cast not less
than 10% of all the votes entitled to be cast at such special meeting.
Certain provisions
were added detailing various requirements with which a stockholder must comply, including certain information which must be submitted
by a requesting stockholder, to request a special meeting of stockholders or to nominate an individual for director and establishing
procedures for setting the record dates and meeting dates for such special meetings. Additionally, a provision was added which
provides that the Chairman of the Board, the Chief Executive Officer, the President or the Board may appoint independent inspectors
of elections to act as the agent of the Company to review the validity of any special meeting request received by the Secretary
of the Company.
Quorum for any stockholder
meeting was changed from the presence in person or by proxy of stockholders entitled to cast 50% of all votes entitled to be cast
at such meeting on any matter to a majority of all votes entitled to be cast at such meeting on any matter. Voting for the election
of a director at any stockholder meeting was changed from a majority to a plurality of all of the votes cast at a stockholders
meeting at which a quorum is present. A provision was also added prohibiting cumulative voting.
The time period for
submission by a stockholder of a request for a special meeting of stockholders or nomination of a director for election at a special
meeting of stockholders was modified to no earlier than the 120
th
day (which was previously the 150
th
day)
prior to such special meeting of stockholders and no later than the 90
th
day (which was previously the 120
th
day) prior to such special meeting of stockholders or the tenth day following the day on which a public announcement is first made
of the date of such special meeting and of the nominees proposed by the Board to be elected at such meeting.
A provision was also added to allow for
the written consent of stockholders in lieu of a meeting.
Article III
A provision was added
providing that any director of the Company may resign at any time by delivering his or her resignation to the Board, the Chairman
of the Board or the Secretary, any resignation shall take effect immediately upon its receipt or at such later time specified in
the resignation and the acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the
resignation. References to the Statement of Policy Regarding Real Estate Investment Trusts adopted by the North American Securities
Administrators Association, or NASAA REIT Guidelines, and their application to the Company were removed. Additionally, the provision
providing for the filling of vacancies on the Board was amended to provide that, now that the Company is subject to Section 3-804(c)
of the MGCL, except as may be provided by the Board in setting the terms of any class or series of preferred stock, any vacancy
on the Board may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum.
Article III of the
Bylaws was further amended to remove a provision allowing for independent directors to nominate replacements for vacancy in an
independent director position. A provision was added to prohibit additional compensation to a director who is also an officer of
the Company for service as a director. Additionally, provisions were deleted which provided that no director shall be liable for
any loss due to the failure of a bank, trust company, savings and loan association or other institution with whom moneys or stock
have been deposited and that, unless required by law, no director is obligated to give bond or surety or other security for performance
of his or her duties.
Article IV
Article IV of the Bylaws
was revised to provide that committee membership will be subject to the requirements of the exchange on which the Company’s
stock is listed and to provide that committees of the Board may delegate some or all of their powers to subcommittees, subject
to any prohibition contained in such committee’s charter. Due to the requirements of the NYSE MKT, the national securities
exchange on which the Shares are listed, that certain committees of the Board be comprised solely of independent directors, language
in the Bylaws was removed which had provided that, in the absence of a committee member, the remaining members present at a committee
meeting, whether or not they constitute a quorum, could appoint another director to act in the place of such absent member.
Article V
Article V was amended
to permit delivery of notice of resignation by an officer of the Company to the Board, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary. Previously, notice of resignation by an officer of the Company was not permitted to be
given to the Chief Executive Officer. The provisions of Article V were also amended to provide that the Board may designate the
Chairman of the Board as either an executive chairman or a non-executive chairman and that the Chief Executive Officer, in addition
to the President and the Board, may assign duties to the Vice Presidents, Assistant Secretaries and Assistant Treasurers of the
Company.
Article VI
Article VI was amended
to provide that the President, in addition to the Board, the Chief Executive Officer, the Chief Financial Officer or any other
officer designated by the Board, shall deposit or invest the funds of the Company.
Article XII
A new article XII was
added to provide for the indemnification of, and advance of expenses to, officers and directors of the Company in advance of final
disposition of legal proceedings.
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ITEM 5.05
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AMENDMENTS TO THE REGISTRANT’S CODE OF ETHICS, OR WAIVER OF A PROVISION OF THE CODE OF ETHICS.
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Amendment of Code of Ethics
In conjunction with
the Company’s review of its corporate governance policies in connection with the Offering, effective March 26, 2014, the
Board amended the Code of Ethics of the Company initially adopted on January 14, 2009, or the Code of Ethics, which is now referred
to as the “Code of Business Conduct and Ethics.” The Code of Ethics applied to the Company’s principal executive
officer, principal financial officer, principal accounting officer, controller and persons performing similar functions and the
members of the Board, whereas the Code of Business Conduct and Ethics is broader in scope and describes the standards of conduct
for all employees, officers and directors of the Company, and employees, members, officers and directors of the Manager and Bluerock
who provide services to the Company. The Company’s code of conduct for its senior executive and financial officers is now
contained in its “Code of Ethics for Senior Executive and Financial Officers,” or the Code for Officers, as further
described below, and was also adopted and approved by the Board on March 26, 2014.
The following is a
general summary of the changes to the Code of Ethics in addition to the change to the scope of persons covered thereunder:
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The Company’s General Counsel is responsible for overseeing and monitoring compliance with
the Code of Business Conduct and Ethics as compared to such duties previously being the responsibility of the Company’s Compliance
Officer as appointed by the Audit Committee of the Board, or the Audit Committee;
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The provision addressing conflicts of interest was expanded to provide additional examples where
conflict of interest situations may arise and more clearly addressed where certain activities giving rise to such conflicts of
interest are prohibited or should be avoided and in which situations prior approval should be obtained from the Company’s
General Counsel;
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Provisions were added concerning the receipt of gifts, entertainment and gratuities and the offering
of gifts, entertainment and other accommodations in connection with Company business and prohibiting the receipt or giving of bribes
or kickbacks;
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The Company’s policy on recordkeeping was further expanded to include procedures for producing
documents in response to a subpoena or pending or contemplated litigation or government investigations;
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Provisions were added addressing the protection of trademarks, copyrights and other intellectual
property of the Company or licensed by the Company from third parties;
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Provisions were added describing permitted and prohibited uses of the Company’s email, voicemail,
computers and other communications resources;
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General provisions were added referencing the Company’s “Insider Trading Policy”
and its “Related Person Transaction Policy;”
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Provisions were added regarding political contributions and activities, including lobbying activities;
and
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Waivers of the policies contained in the Code of Ethics for executive officers and directors were
only permitted to be made by the Audit Committee whereas waivers of the policies contained in the Code of Business Conduct and
Ethics for executive officers and directors may be made by the Board as a whole and must be promptly disclosed to stockholders
as required by the rules of the national securities exchange on which the shares of the Company’s common stock are traded
and in accordance with any other laws, rules or regulations. A provision was also added providing that waivers by all other Company
personnel may be made by the Company’s Chief Executive Officer.
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Adoption of Code of Ethics for Senior
Executive and Financial Officers
On March 26, 2014,
the Board also adopted and approved the Code for Officers, which is applicable solely to the Company’s Chief Executive Officer,
Chief Investment Officer, Chief Operating Officer, Chief Financial Officer and Chief Accounting Officer (or persons performing
similar functions to the aforementioned officers), and sets forth specific policies to guide them in the performance of their duties,
including with regards to conflicts of interest and disclosures in compliance with applicable laws and regulations in all reports
and documents that the Company files with, or submits to, the SEC and in all other public communications made by the Company. The
Code for Officers conforms to the express language and requirements of Item 406(b) of Regulation S-K and the provisions of the
NYSE MKT LLC Company Guide.
The descriptions of
the Code of Business Conduct and Ethics and the Code for Officers contained herein are respectively qualified in their entirety
by reference to the full text of the Code of Business Conduct and Ethics filed as Exhibit No. 14.1 to this Current Report on Form
8-K and the Code for Officers filed as Exhibit No. 14.2 to this Current Report on Form 8-K, both of which are incorporated by reference
into this Item 5.05.
Filing of Second Articles of Amendment
and Restatement
On March 26, 2014,
the Company filed the Charter with the SDAT, which Charter was previously authorized and approved by the Board on December 16,
2013 and approved by the stockholders of the Company at a special meeting of the stockholders held on January 23, 2014. The Charter,
which became effective on March 26, 2014, is incorporated herein by reference to Exhibit No. 3.3 to Pre-Effective Amendment No.
5.
As previously disclosed
in the Current Report on Form 8-K filed by the Company with the SEC on January 29, 2014, which is incorporated by reference into
this Item 8.01, the Charter was amended to:
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(a)
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provide for the reclassification of certain shares of the Company’s capital stock as Class
A common stock, which Class A common stock is listed on a national securities exchange;
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(b)
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provide for the change of each share of the Company’s outstanding common stock into 1/3 of
a share of Class B-1 common stock, 1/3 of a share of Class B-2 common stock and 1/3 of a share of Class B-3 common stock immediately
prior to the listing of the common stock of the Company on a national securities exchange, and the automatic conversion of such
shares into shares of Class A common stock at 360 days, 540 days and 720 days, respectively, following the date of the initial
exchange listing;
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(c)
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remove or revise provisions regarding the Company’s equity stock and stockholders previously
required pursuant to the NASAA REIT Guidelines;
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(d)
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remove or revise provisions regarding the Board previously required by the NASAA REIT Guidelines;
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(e)
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remove or revise provisions relating to the conduct of the Company’s business that limit
or regulate certain powers of the Company previously required pursuant to the NASAA REIT Guidelines;
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(f)
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revise provisions restricting transfer and ownership of shares of the Company’s capital stock;
and
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(g)
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effectuate certain ministerial modifications, clarifications and conforming changes to, and the
restatement of, the Company’s charter.
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Press Releases Announcing Pricing
of Offering and Information Disclosed in this Current Report on Form 8-K
On March 28, 2014,
the Company issued a press release announcing the pricing of the Offering. The press release, a copy of which is filed as Exhibit
No. 99.1 to this Current Report on Form 8-K, is incorporated by reference into this Item 8.01.
On April 1, 2014, the
Company issued a press release announcing the information contained in this Current Report on Form 8-K. The press release, a copy
of which is filed as Exhibit No. 99.2 to this Current Report on Form 8-K, is incorporated by reference into this Item 8.01.
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ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS.
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1.1
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Underwriting Agreement by and among Wunderlich Securities, Inc., as representative of the several
underwriters named in Schedule A attached thereto, Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P.
and BRG Manager, LLC, dated March 28, 2014.
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3.1
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
26, 2014, incorporated by reference to Exhibit No. 3.6 to Pre-Effective Amendment No. 5 to the registrant’s Registration
Statement on Form S-11 (No. 333-192610).
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3.2
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
26, 2014, incorporated by reference to Exhibit No. 3.7 to Pre-Effective Amendment No. 5 to the registrant’s Registration
Statement on Form S-11 (No. 333-192610).
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3.3
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
31, 2014.
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3.4
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
31, 2014.
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14.1
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Code of Business Conduct and Ethics, effective March
26, 2014.
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14.2
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Code of Ethics for Senior Executive and Financial Officers,
effective March 26, 2014.
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99.1
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Press Release, dated March 28, 2014.
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99.2
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Press Release, dated April 1, 2014.
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SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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BLUEROCK RESIDENTIAL GROWTH REIT, INC.
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Dated: April 1, 2014
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By:
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/s/ R. Ramin Kamfar
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R. Ramin Kamfar
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Chief Executive Officer and President
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Exhibit Index
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1.1
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Underwriting Agreement by and among Wunderlich Securities, Inc., as representative of the several
underwriters named in Schedule A attached thereto, Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P.
and BRG Manager, LLC, dated March 28, 2014.
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3.1
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
26, 2014, incorporated by reference to Exhibit No. 3.6 to Pre-Effective Amendment No. 5 to the registrant’s Registration
Statement on Form S-11 (No. 333-192610).
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3.2
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
26, 2014, incorporated by reference to Exhibit No. 3.7 to Pre-Effective Amendment No. 5 to the registrant’s Registration
Statement on Form S-11 (No. 333-192610).
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3.3
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
31, 2014.
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3.4
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Articles of Amendment to the Second Articles of Amendment and Restatement, effective as of March
31, 2014.
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14.1
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Code of Business Conduct and Ethics, effective March
26, 2014.
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14.2
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Code of Ethics for Senior Executive and Financial Officers,
effective March 26, 2014.
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99.1
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Press Release, dated March 28, 2014.
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99.2
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Press Release, dated April 1, 2014.
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3,448,276 Shares
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
March 28,
2014
Wunderlich Securities, Inc.
2200 Clarendon Boulevard
Arlington, VA 22201
As Representative of the Several Underwriters
Named in Schedule A Hereto
Dear Ladies and Gentlemen:
Bluerock Residential
Growth REIT, Inc., a Maryland corporation (the “
Company
”), together with Bluerock Residential Holdings, L.P.,
a Delaware limited partnership (the “
Operating Partnership
” and together with the Company, the “
Transaction
Entities
”) and BRG Manager, LLC, a Delaware limited liability company (the “
Manager
”), agrees with
Wunderlich Securities, Inc., as the representative (the “
Representative
”) of the several Underwriters named
in
Schedule A
hereto (collectively, the “
Underwriters
”) to issue and sell to the several Underwriters
3,448,276 shares (the “
Firm Shares
”) of its Class A common stock, par value $0.01 per share (the “
Common
Stock
”), and also proposes to issue and sell to the Underwriters, at the option of the Underwriters, an aggregate of
not more than 517,241 additional shares of its Common Stock (the “
Optional Shares
”) as set forth below. The
Firm Shares and the Optional Shares are herein collectively called the “
Offered Shares
.” Pursuant to the Second
Amended and Restated Agreement of Limited Partnership (the “
OP Agreement
”) of the Operating Partnership, upon
receipt of the net proceeds of (a) the sale of the Firm Shares on the First Closing Date (as defined below) and (b) any and all
Optional Shares on each Optional Closing Date (as defined below), the Company, through its wholly-owned subsidiary, Bluerock REIT
Holdings, LLC, a Delaware limited liability company (“
Holdings LLC
”), will contribute such net proceeds to the
Operating Partnership in exchange for a number of common units of partnership interest in the Operating Partnership (the “
OP
Units
”) that is equivalent to the number of Firm Shares and Optional Shares sold to the Underwriters (the “
Company
OP Units
”).
Substantially concurrently
with the First Closing Date, the Company will acquire, directly or indirectly through the Operating Partnership, in a series of
transactions (the “
Contribution Transactions
”) the equity interests and other assets described in the Registration
Statement, the General Disclosure Package and the Prospectus (each, as defined below), the consideration and related payments for
which will be in cash and a number of shares of Common Stock (the “
Contribution Shares
”), LTIP Units (as defined
below) and OP Units as described in the Registration Statement, the General Disclosure Package and the Prospectus (collectively
referred to as the “
Contribution Securities
”). All references herein to subsidiaries of the Company or the Operating
Partnership shall be understood to refer to the subsidiaries of the Company or the Operating Partnership, respectively, after giving
effect to the Contribution Transactions.
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1.
|
Representations and Warranties of the Transaction Entities
.
|
|
|
(a)
|
Representations and Warranties
. The Transaction Entities, jointly and severally, represent
and warrant to, and agree with, the several Underwriters that:
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(i)
|
Filing and Effectiveness of Registration Statement; Certain Defined Terms
. The Company has
filed with the Commission a registration statement on Form S-11 (No. 333-192610) covering the registration of the Offered Shares
under the Act, including a related preliminary prospectus or prospectuses. At any particular time, this initial registration statement,
in the form then on file with the Commission, including all information contained in the registration statement pursuant to Rule
424 or otherwise deemed to be part of the registration statement pursuant to Rule 430A, that in any case has not then been superseded
or modified, shall be referred to as the “
Initial Registration Statement
.” The Company may also have filed,
or may file with the Commission, a Rule 462(b) registration statement covering the registration of additional shares of Common
Stock. At any particular time, this Rule 462(b) registration statement, in the form then on file with the Commission, including
the contents of the Initial Registration Statement incorporated by reference therein and including all 430A Information, that in
any case has not then been superseded or modified, shall be referred to as the “
Additional Registration Statement
.”
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As of the time of execution and
delivery of this Agreement, the Initial Registration Statement and any post-effective amendment thereto has been declared effective
under the Act and is not proposed to be amended. Any Additional Registration Statement has or will become effective upon filing
with the Commission pursuant to Rule 462(b) and is not proposed to be amended. The Offered Shares all have been or will be duly
registered under the Act pursuant to the Initial Registration Statement and, if applicable, the Additional Registration Statement.
No stop order suspending the effectiveness of or use of the Initial Registration Statement and any Additional Registration Statement
has been issued under the Act, and no order preventing or suspending the use of any preliminary prospectus or the Prospectus has
been issued and no proceedings for any such purposes have been instituted and are pending or, to the knowledge of the Company,
are contemplated by the Commission, and any request on the part of the Commission for additional information from the Company in
connection with the Initial Registration Statement and any Additional Registration Statement has been complied with.
For purposes of this Agreement:
“
430A Information
,”
with respect to any registration statement, means information included in a prospectus and retroactively deemed to be a part of
such registration statement pursuant to Rule 430A(b).
“
Act
” means
the Securities Act of 1933, as amended.
“
Applicable Time
”
means 9:30 am (Eastern time) on the date of this Agreement.
“
BRG LOC
”
means that certain working capital line of credit by and among the Company, Bluerock Special Opportunity + Income Fund II, LLC
and Bluerock Special Opportunity + Income Fund III, LLC, dated as of October 2, 2012, as amended.
“
Closing Date
”
has the meaning defined in
Section 3
hereof.
“
Commission
”
means the Securities and Exchange Commission.
“
Effective Time
”
with respect to the Initial Registration Statement or, if filed prior to the execution and delivery of this Agreement, the Additional
Registration Statement, means the date and time as of which such Registration Statement was declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c). If an Additional Registration Statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the Representative that it proposes to file one, “Effective
Time” with respect to such Additional Registration Statement means the date and time as of which such Registration Statement
is filed and becomes effective pursuant to Rule 462(b).
“
Environmental Law
”
means any federal, state or local law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to health, safety or the protection, cleanup or restoration
of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of Hazardous Materials.
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended.
“
General Disclosure
Pack
age” means any General Use Issuer Free Writing Prospectus (as defined below) issued prior to the Applicable Time,
the preliminary prospectus included in the Registration Statement at the Applicable Time (which is the most recent Statutory Prospectus
distributed to investors generally, including that dated March 14, 2014) and the information, if any, included on
Schedule B
to this Agreement, all considered together.
“
General Use Issuer
Free Writing Prospectus
” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “
bona fide
electronic road show,” as defined in Rule 433 (the “
Bona Fide Electronic
Road Show
”)), as evidenced by its being so specified in
Schedule B
to this Agreement.
“
Hazardous Materials
” means any material (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes),
the presence of which in the environment is prohibited, regulated or serves as the basis of liability as defined, listed or regulated
by any Environmental Law.
“
Issuer
Free Writing Prospectus
” means any “issuer free writing prospectus,” as defined in Rule 433, relating to
the Offered Shares, including, without limitation, any “free writing prospectus” (as defined in Rule 405) relating
to the Offered Shares that is (i) required to be filed with the Commission by the Company, (ii) a road show that is a written communication
within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with
the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Offered Shares or of the offering of the
Offered Shares that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“
Joint Ventures
”
means the Managing Members and SP JVs.
“
Limited
Use Issuer Free Writing Prospectus
” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing
Prospectus.
The Initial Registration Statement
and the Additional Registration Statement are referred to collectively as the “
Registration Statements
” and
individually as a “
Registration Statement
.” A “Registration Statement” with reference to a particular
time means the Initial Registration Statement and any Additional Registration Statement as of such time. A “Registration
Statement” without reference to a time means such Registration Statement as of its Effective Time. For purposes of the foregoing
definitions, 430A Information with respect to a Registration Statement shall be considered to be included in such Registration
Statement as of the time specified in Rule 430A.
“
LTIP Units
”
means the special units of partnership interest of the Operating Partnership having the rights, preferences and other privileges
designated in Section 4.04 and elsewhere in the OP Agreement.
“
Managing Member
”
or “
Managing Members
” means: BR Springhouse Managing Member, LLC; BR Augusta JV Member, LLC; BR Oak Crest Villas,
LLC; BR Waterford JV Member, LLC; BR VG Ann Arbor JV Member, LLC; BR Enders Managing Member, LLC; BR Berry Hill Managing Member,
LLC; BR VG MDA JV Member, LLC; and BR Creekside Managing Member, LLC.
“
Prospectus
”
means the Statutory Prospectus (in the form first used to confirm sales of the Offered Shares or in the form first made available
to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173) that discloses the final public offering
price, other 430A Information and other final terms of the Offered Shares and otherwise satisfies the requirements of Section 10(a)
of the Act.
“
REIT Property Sub
”
or “
REIT Property Subs
” means BEMT Springhouse, LLC; BEMT Augusta, LLC; BEMT Enders, LLC; BEMT Berry Hill, LLC;
BEMT MDA, LLC; BRG Oak Crest, LLC, BRG Waterford, LLC; BRG Ann Arbor, LLC; BRG North Park Towers, LLC; and BEMT Creekside, LLC.
“
Rules
and Regulations
” means the rules and regulations of the Commission.
“
Securities Laws
”
means, collectively, the Sarbanes-Oxley Act of 2002 (“
Sarbanes-Oxley
”), the Act, the Exchange Act, the Rules
and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined
in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the
NYSE MKT, LLC (the “
NYSE MKT
”)] (“
Exchange Rules
”).
“
SP JV
” or
“
SP JVs
” means: BR Hawthorne Springhouse JV, LLC; BSF/BR Augusta JV, LLC; Oak Crest Villas JV, LLC; Bell BR
Waterford Crossing JV, LLC; Village Green of Ann Arbor Associates, LLC; Waypoint Enders Owner, LLC; Waypoint Bluerock Enders JV,
LLC; BR Stonehenge 23Hundred JV, LLC; MDA City Apartments, LLC; and BR Hawthorne Creekside JV, LLC.
“
Statutory Prospectus
”
with reference to a particular time means the prospectus included in a Registration Statement immediately prior to that time, including
any 430A Information with respect to such Registration Statement. For purposes of the foregoing definition, 430A Information shall
be considered to be included in the Statutory Prospectus as of the actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b) and not retroactively.
“
Subsidiary
”
or “
Subsidiaries
” means each of the entities listed on Exhibit 21 to the Registration Statement, which comprise
all of the subsidiaries of the Transaction Entities, including the entities in which the Operating Partnership owns, directly or
indirectly, all of the membership interests.
“
Title
Holder
” or “
Title Holders
” means: BR Springhouse, LLC; BSF/BR Augusta, LLC; Villas Partners, LLC;
Bell BR Waterford Crossing JV, LLC; Village Green of Ann Arbor Associates, LLC; Waypoint Enders Owner, LLC; BRG North Park Towers,
LLC; 23HUNDRED, LLC; MDA City Apartments, LLC; and BR Creekside, LLC. Unless otherwise specified, a reference to a “
rule
”
or “
Rule
” is to the indicated rule under the Act.
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(ii)
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Compliance with Securities Act Requirements
. (A) (1) At their respective Effective Times,
(2) on the date of this Agreement and (3) on each Closing Date, each of the Initial Registration Statement or any post-effective
amendment thereto and the Additional Registration Statement (if any) complied and will comply in all respects to the requirements
of the Act and the Rules and Regulations thereunder, and did not, does not and will not include any untrue statement of a material
fact or omitted, omits or will omit to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; (B) the preliminary prospectus included
in the General Disclosure Package and furnished to the Underwriters for delivery to prospective investors (the “
Preliminary
Prospectus
”) complied in all material respects with the Act (including without limitation Section 10 of the Act) and
at no time during the period that begins on the date of the Preliminary Prospectus and the date on which the Preliminary Prospectus
was filed with the Commission and ends immediately prior to the execution of this Agreement did the Preliminary Prospectus contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; and (C) the Prospectus and each amendment or supplement
thereto, as of their respective issue dates, complied and will comply in all material respects with the Act and the Rules and Regulations
thereunder, and neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue
date, at the time of any filing with the Commission pursuant to Rule 424(b) and at each Closing Date, included, includes or will
include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading. The representation and warranties
contained herein do not apply to statements in or omissions from any document discussed herein based upon written information furnished
to the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that
such information is only that described as such in
Section 7(c)
hereof (collectively, the “
Underwriter Information
”).
Each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with the offering of the Common
Stock were or will be substantially identical to the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
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(iii)
|
General Disclosure Package
. As of the Applicable Time and on each Closing Date, none of
(A) the General Disclosure Package, (B) any individual Limited Use Issuer Free Writing Prospectus, when considered together with
the General Disclosure Package and/or (C) each road show, if any, when considered together with the General Disclosure Package,
included, includes or will include any untrue statement of a material fact or omitted, omits or will omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus, Issuer Free Writing Prospectus
or road show made in reliance upon and in conformity with the Underwriter Information.
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(iv)
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Issuer Free Writing Prospectuses
. Each Issuer Free Writing Prospectus, as of its issue date
and at all subsequent times through the completion of the public offer and sale of the Offered Shares did not, does not and will
not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration
Statement. Each Issuer Free Writing Prospectus conformed, conforms or will conform in all respects to the requirements of the Act
and the Rules and Regulations thereunder. The Company has not made any offer relating to the Offered Shares that would constitute
an Issuer Free Writing Prospectus without the prior written consent of the Representative; provided that such consent is deemed
to have been given with respect to each Issuer Free Writing Prospectus identified on
Schedule B
to this Agreement. The Company
(A) has filed or will file each Issuer Free Writing Prospectus required to be filed with the Commission pursuant to the Act and
the Rules and Regulations thereunder in accordance therewith and/or (B) has retained or will retain in accordance with the Act
and the Rules and Regulations thereunder all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the
Act and the Rules and Regulations thereunder. The Company has made a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(i)
such that no filing of any road show (as defined in Rule 433(h)) is required in connection with the offering of the Common Stock.
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(v)
|
Ineligible Issuer Status
. (A) At the time of initial filing of the Initial Registration
Statement and any post-effective amendment thereto and (B) at the date of this Agreement, the Company was not and is not an “ineligible
issuer” in connection with the offering of the Offered Shares pursuant to Rules 164, 405 and 433, including (x) the Company
or its subsidiaries in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject
of a judicial or administrative decree or order as described in Rule 405 and (y) the Company or its subsidiaries in the preceding
three years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration
statement be the subject of a proceeding or examination under Section 8 of the Act and not being the subject of a pending proceeding
under Section 8A of the Act in connection with an offering, all as described in Rule 405.
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(vi)
|
Good Standing of the Transaction Entities
. The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of Maryland and is in good standing with the State Department of
Assessments and Taxation of Maryland, with the full corporate power and authority to own its properties and conduct its business
as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its
obligations under this Agreement and each of the Contribution Transaction documents to which it is a party; and the Company is
duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, result in a material adverse effect on the condition (financial or otherwise), results of operations,
earnings, business, properties or prospects of the Transaction Entities and each of their respective Subsidiaries, taken as a whole
(a “
Material Adverse Effect
”). The Operating Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware, with power and authority to own its properties and conduct
its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and
perform its obligations under this Agreement and each of the Contribution Transaction documents to which it is a party; and the
Operating Partnership is duly qualified to do business as a foreign organization in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to
be so qualified would not, individually or in the aggregate, result in a Material Adverse Effect.
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(vii)
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Subsidiaries
. Each Subsidiary (including, without limitation, each REIT Property Sub and
Holdings) has been duly incorporated or organized and is validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, with power and authority (corporate or other) to own its properties and conduct its business
as described in the Registration Statement, the General Disclosure Package and the Prospectus; and each Subsidiary is duly qualified
to do business as a foreign corporation or organization in good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, result in a Material Adverse Effect; all of the issued and outstanding capital stock, partnership
interests or membership interests of each Subsidiary has been duly authorized and validly issued and is fully paid and nonassessable
(except with respect to future contributions as provided in the Operating Agreement made subsequent to the date hereof); and the
capital stock or membership interests of each Subsidiary held by the Transaction Entities or a Subsidiary, as applicable, is owned
(or with respect to Subsidiaries acquired upon completion of the Contribution Transactions, will be owned) by the Company or the
Operating Partnership, directly or through subsidiaries, free from liens, encumbrances and defects, except as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus.
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(viii)
|
Joint Ventures and Title Holders
. Each Joint Venture and Title Holder has been duly incorporated
or organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
with power and authority (corporate or other) to own its properties and conduct its business as described in the Registration Statement,
the General Disclosure Package and the Prospectus; and each Joint Venture and Title Holder is duly qualified to do business as
a foreign corporation or organization in good standing in all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or
in the aggregate, result in a Material Adverse Effect; all of the issued and outstanding capital stock, partnership interests or
membership interests of each Joint Venture and Title Holder has been duly authorized and validly issued and is fully paid and nonassessable,
except with respect to future capital contributions as provided in the operating agreement of a Joint Venture or Title Holder,
as applicable; and the membership interests of each Managing Member owned by each applicable REIT Property Sub and the membership
interests of each SP JV owned by each applicable Managing Member, is free from liens, encumbrances and defects, except as set forth
in the Registration Statement, the General Disclosure Package and the Prospectus.
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(ix)
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Subsidiaries of Transaction Entities
. The Transaction Entities do not own or control, directly
or indirectly, any corporation, association or other entity other than (i) the subsidiaries listed in Exhibit 21 to the Registration
Statement and (ii) such other entities omitted from Exhibit 21 which, when such omitted entities are considered in the aggregate
as a single subsidiary, would not constitute a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation
S-X.
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(x)
|
Authorization of Underwriting Agreement
. This Agreement has been duly authorized, executed
and delivered by each of the Transaction Entities.
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(xi)
|
Shares
. The Offered Shares, Contribution Shares and all outstanding shares of capital stock
of the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus under the caption “Capitalization”; all outstanding shares
of capital stock of the Company are, and, when the Offered Shares have been delivered and paid for in accordance with this Agreement
on each Closing Date, and when the Contribution Shares have been delivered and paid for in accordance with the Transaction Documents
(as defined herein), such Offered Shares and Contribution Shares will have been, validly issued, fully paid and nonassessable,
will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description
of such Offered Shares and Contribution Shares contained therein; the stockholders of the Company have no preemptive rights with
respect to the Offered Shares and the Contribution Shares; none of the outstanding shares of Common Stock have been issued in violation
of any preemptive or similar rights of any security holder; the forms of certificates used to represent the Offered Shares and
the Contribution Shares comply in all material respects with all applicable statutory requirements and with any applicable requirements
of the Organizational Documents of the Company, and with any requirements of the NYSE MKT; the Common Stock has been registered
pursuant to Section 12(b) of the Exchange Act and the Company has not received any notification that the Commission is contemplating
terminating such registration;. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus,
there are and, after giving effect to the Contribution Transactions, will be no outstanding (a) securities of the Company reserved
for any purpose (other than with respect to certain OP Units and LTIP Units disclosed in the General Disclosure Package and the
Prospectus), (b) securities or obligations of the Company convertible into or exchangeable for any shares of Common Stock, (c)
warrants, rights or options to subscribe for or purchase from the Company any such shares of Common Stock or any such convertible
or exchangeable securities or obligations or (d) obligations of the Company to issue or sell any shares of Common Stock, any such
convertible or exchangeable securities or obligations, or any such warrants, rights or options. After giving effect to the Contribution
Transactions, there will be 4,495,744 shares of Common Stock outstanding, 325,578 LTIP Units outstanding (including 179,562 LTIP
Units to be issued to the Manager) and 5,839,393 OP Units outstanding, and each such class of securities conforms to the description
set out in the Registration Statement, the General Disclosure Package and the Prospectus.
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(xii)
|
No Equity Awards
. Except for grants (including those subject to the consummation of the
Offering) disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not granted,
and does not intend to grant within six months of this Agreement, to any person or entity a stock option or other equity-based
award of or to purchase Common Stock pursuant to an equity-based compensation plan or otherwise.
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(xiii)
|
OP Units and Former Advisor LTIP Units
.
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(1)
|
OP Units. The Company OP Units and all outstanding OP Units have been duly authorized; all outstanding
OP Units are, and, when the Company OP Units have been delivered and paid for in accordance with the OP Agreement and in connection
with the Contribution Transactions, the Company OP Units will be validly issued and will conform to the information in the Registration
Statement, the General Disclosure Package and the Prospectus and to the description of such Company OP Units contained therein;
the holders of the outstanding OP Units have no preemptive rights with respect to the outstanding OP Units; none of the outstanding
OP Units have been issued in violation of any preemptive or similar rights of any security holder; all outstanding OP Units have
been, and all Company OP Units will be, issued and sold in compliance with all applicable federal and state securities laws. Except
as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are and, after giving effect
to the Contribution Transactions, will be no outstanding (a) securities of the Operating Partnership reserved for any purpose,
(b) securities or obligations of the Operating Partnership convertible into or exchangeable or redeemable for any partnership interests
of the Operating Partnership, (c) warrants, rights or options to subscribe for or purchase from the Operating Partnership any such
partnership interests or any such convertible or exchangeable securities or obligations or (d) obligations of the Operating Partnership
to issue or sell any partnership interests, any such convertible or exchangeable securities or obligations, or any such warrants,
rights or options. After giving effect to the Contribution Transactions, there will be 5,839,393 OP Units outstanding, of which
the Company will own, directly or indirectly, 5,556,633OP Units.
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(2)
|
Former Advisor LTIP Units
. The LTIP Units to be issued to Bluerock Multifamily Advisor,
LLC, in connection with the Contribution Transactions (“
Former Advisor LTIP Units
”) have been duly authorized;
when the Former Advisor LTIP Units have been delivered and paid for in connection with the Contribution Transactions, the Former
Advisor LTIP Units will be validly issued and will conform to the information in the Registration Statement, the General Disclosure
Package and the Prospectus and to the description of the Former Advisor LTIP Units contained therein; and all LTIP Units will be,
issued and sold in compliance with all applicable federal and state securities laws.
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(xiv)
|
No Finder’s Fee
. Except for the Underwriters’ discounts and commissions payable
by the Company to the Underwriters in connection with the Offered Shares contemplated herein or as otherwise disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, there are no contracts, agreements or understandings that would give
rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment
in connection with this offering.
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(xv)
|
Registration Rights
. Except as described in the Registration Statement, General Disclosure
Package and the Prospectus, there are no contracts, agreements or understandings by either of the Transaction Entities or their
respective Subsidiaries, on the one hand, and any person, on the other hand, granting such person the right to require either of
the Transaction Entities or such Subsidiaries to file a registration statement under the Act with respect to any securities of
either of the Transaction Entities or their respective Subsidiaries owned or to be owned by such person or to require either of
the Transaction Entities or such Subsidiaries to include such securities in the securities registered pursuant to a Registration
Statement or in any securities being registered pursuant to any other registration statement filed by either of the Transaction
Entities or such Subsidiaries under the Act (collectively, “
Registration Rights
”).
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(xvi)
|
No Registration Required for Sale of OP Units, LTIP Units and Contribution Shares
. No registration
of the OP Units or LTIP Units under the Act is required for the offer, sale and delivery by the Operating Partnership of the OP
Units or LTIP Units in the manner contemplated in the Contribution Transaction Documents. No registration of the Contribution Shares
under the Act is required for the offer, sale and delivery by the Company of the Contribution Shares in the manner contemplated
in the Contribution Transaction Documents.
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|
(xvii)
|
Listing
. The Offered Shares have been approved for listing on the NYSE MKT, subject to official
notice of issuance.
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|
(xviii)
|
Absence of Further Requirements
. No consent, approval, authorization, or order of, or filing
or registration with, any governmental agency or body or any court is required for the consummation of the transactions contemplated
by this Agreement, the OP Agreement or the other agreements pursuant to which the Contribution Transactions will be effected or
in connection with the offering, issuance and sale of the Offered Shares and the Contribution Shares by the Company or the issuance
and sale of the OP Units (including the Company OP Units) and LTIP Units by the Operating Partnership, except such as have been
already obtained or as may be required under the Securities Act, Exchange Act Regulations, state securities laws, FINRA or the
NYSE MKT.
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(xix)
|
Title to Membership Interests in Managing Member
. Upon consummation of the Contribution
Transactions, the Transaction Entities will hold, directly or indirectly through their respective Subsidiaries that are wholly
owned, good and marketable title to their respective membership interests in the Managing Members, in each case free and clear
of any lien or security interest, except as described in the Registration Statement, the General Disclosure Package and the Prospectus,
subject only to restrictions on transfer imposed under applicable U.S. federal and state securities laws and the limited liability
company agreement of each Managing Member; and have not conveyed, transferred, assigned, pledged or hypothecated any of their respective
membership interests in the Managing Members, in whole or in part, or granted any rights, options or rights of first refusal or
first offer to purchase any of such interests or any portion thereof.
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(xx)
|
Managing Member Title to Membership Interests in SP JVs
. Upon consummation of the Contribution
Transactions, the Managing Members will hold good and marketable title to their respective membership interests in the SP JVs,
in each case free and clear of any lien or security interest, except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities
laws and the limited liability company agreement of each SP JV; and have not conveyed, transferred, assigned, pledged or hypothecated
any of their respective membership interests in the SP JVs, in whole or in part, or granted any rights, options or rights of first
refusal or first offer to purchase any of such interests or any portion thereof.
|
|
|
(xxi)
|
SP JV Title to Membership Interests in Title Holder
. Upon consummation of the Contribution
Transactions, the SP JVs that are not also Title Holders will hold good and marketable title to their respective membership interests
in the Title Holders, in each case free and clear of any lien or security interest, except as described in the Registration Statement,
the General Disclosure Package and the Prospectus, subject only to restrictions on transfer imposed under applicable U.S. federal
and state securities laws and the limited liability company agreement of each Title Holder; and have not conveyed, transferred,
assigned, pledged or hypothecated any of their respective membership interests in the SP JVs, in whole or in part, or granted any
rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof.
|
|
|
(xxii)
|
Title to Property
. (1) Upon consummation of the Contribution Transactions, the Transaction
Entities will hold, directly or indirectly through their respective Subsidiaries and Joint Ventures, good and marketable fee simple
title to all of the real property described in the Registration Statement, the General Disclosure Package and the Prospectus and
the improvements (exclusive of improvements owned by tenants, if applicable) located thereon (individually, a “
Property
”
and collectively, the “
Properties
”), in each case, free and clear of all liens, encumbrances, claims, security
interests, restrictions and defects, except such as are disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, or do not materially affect the value of such Properties as a whole and do not materially interfere with the
use made and proposed to be made of such Properties as a whole by the Company; (2) except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus, none of the Transaction Entities or any of their respective Subsidiaries owns
any real property other than the Properties; (3) except as set forth in the Registration Statement, the General Disclosure Package
and the Prospectus, the mortgages or deeds of trust that encumber certain of the Properties are not convertible into debt or equity
securities of the Transaction Entities and their respective Subsidiaries and such mortgages and deeds of trust are not cross-defaulted
with any loan not made to, or cross-collateralized to any property not owned directly or indirectly by, the Transaction Entities
or their respective Subsidiaries; (4) each of the Properties complies with all applicable codes, laws and regulations (including
without limitation, building and zoning codes, laws and regulations and laws relating to access to the Properties), except as would
not individually or in the aggregate materially affect the value of the Properties or interfere in any material respect with the
use made and proposed to be made of the Properties by the Transaction Entities; (5) except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus, neither of the Transaction Entities nor their respective Subsidiaries has received
from any governmental authority any written notice of any condemnation of or zoning change affecting the Properties or any part
thereof which if consummated would reasonably be expected to have a Material Adverse Effect on the Transaction Entities and their
respective Subsidiaries, taken as a whole, and none of the Transaction Entities and their respective Subsidiaries know of any such
condemnation or zoning change which is threatened and, in each case, which if consummated would reasonably be expected to have
a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business; (6) no third party has an option or a right of first refusal to purchase
any Property or any portion thereof or direct interest therein, except as such is set forth in the Registration Statement, the
General Disclosure Package and the Prospectus; and (7) each of the Transaction Entities or one of its respective Subsidiaries or
a Joint Venture has obtained an owner’s title insurance policy, from a title insurance company licensed to issue such policy,
on each Property that insures the Transaction Entities’, the respective Subsidiary’s or the Joint Ventures’ fee
interest in such Property.
|
|
|
(xxiii)
|
Leases
. (1) Upon consummation of the Contribution Transactions, each of the Transaction
Entities or one of its Subsidiaries or Joint Ventures will hold the lessor’s interest under the applicable leases with any
tenants occupying each Property (collectively, the “
Leases
”); (2) other than the Leases, none of the Transaction
Entities or their respective Subsidiaries has entered into any agreements that would materially affect the value of the Properties
as a whole or would materially interfere with the use made and proposed to be made of such Properties as a whole by the Transaction
Entities; (3) none of the Transaction Entities, their respective Subsidiaries, or, to the Transaction Entities’ knowledge,
any other party to any Lease, is or, upon consummation of the Contribution Transactions, will be in breach or default of any such
Lease, except as to any such breach or default as would not have a Material Adverse Effect on the Transaction Entities and their
respective Subsidiaries, taken as a whole; (4) no event has occurred or, to the Transaction Entities’ knowledge, has been
threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together
with all such other events, constitute a default under any Lease, or would, permit termination, modification or acceleration under
such Lease, except as to any such default as would not have a Material Adverse Effect on the Transaction Entities and their respective
Subsidiaries, taken as a whole; (5) each of the Leases is valid and binding and in full force and effect, subject to applicable
bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity;
and (6) none of the Transaction Entities, their respective Subsidiaries, or, to the Transaction Entities’ knowledge, any
other party to any Lease, is a party to any ground lease, sublease or operating sublease relating to any of their Properties.
|
|
|
(xxiv)
|
Utilities
. To the knowledge of the Transaction Entities and their respective Subsidiaries,
water, stormwater, sanitary sewer, electricity and telephone service are all available at the property lines of each Property over
duly dedicated streets or perpetual easements of record benefiting the applicable Property.
|
|
|
(xxv)
|
Absence of Defaults and Conflicts Resulting from Transaction
. The execution, delivery and
performance of this Agreement, the OP Agreement and the applicable agreements (including each exhibit and appendix referenced therein)
listed on
Schedule D
hereto (collectively referred to as the “
Contribution Transaction Documents
”), and
the issuance and sale of the Offered Shares and the Contribution Shares by the Company and the issuance and sale of the OP Units
(including the Company OP Units) and LTIP Units by the Operating Partnership, and the use of net proceeds therefrom as contemplated
by the Registration Statement, the General Disclosure Package and the Prospectus, will not result in a breach or violation of any
of the terms or provisions of, or constitute a default or, to the extent applicable, a Debt Repayment Triggering Event (as defined
below) under or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Transaction Entities
or any of their respective Subsidiaries pursuant to (A) the Organizational Documents (as defined below) of the Transaction Entities
or any of their respective Subsidiaries, (B) any statute, rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Transaction Entities or any of their respective Subsidiaries or any of their
Properties, or (C) any agreement or instrument to which the Transaction Entities or any of their respective Subsidiaries is a party
or by which the Transaction Entities or any of their respective Subsidiaries is bound or to which any of the Properties of the
Transaction Entities or any of their respective Subsidiaries is subject (other than the amount outstanding under the BRG LOC to
be repaid with the net proceeds of the Offering as described in the Use of Proceeds section of the Statutory Prospectus), and except
in case of clause (B) only, for such defaults, violations, liens, charges or encumbrances that would not, individually or in the
aggregate, result in a Material Adverse Effect.
|
A “
Debt Repayment Triggering
Event
” means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness by the Transaction Entities or any of their respective
Subsidiaries.
The term “
Organizational
Documents
” as used herein means (a) in the case of a trust, its declaration of trust and bylaws; (b) in the case of a
corporation, its charter and bylaws; (c) in the case of a limited or general partnership, its partnership certificate, certificate
of formation or similar organizational documents and its partnership agreement; (d) in the case of a limited liability company,
its articles of organization, certificate of formation or similar organizational documents and its operating agreement, limited
liability company agreement, membership agreement or other similar agreement; and (e) in the case of any other entity, the organizational
and governing documents of such entity.
|
|
(xxvi)
|
Absence of Existing Defaults and Conflicts
. Neither of the Transaction Entities nor any
of their respective Subsidiaries is (A) in violation of its respective Organizational Documents; (B) in default (or with the giving
of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of
them is bound or to which any of the properties of any of them is subject; or (C) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except in the case of clauses (B)
and (C) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
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|
|
(xxviii)
|
Possession of Licenses and Permits
. Upon completion of the Contribution Transactions, the
Transaction Entities and each of their respective Subsidiaries possess, and are in compliance with the terms of, all adequate certificates,
authorizations, franchises, licenses and permits (“
Licenses
”) necessary or material to the conduct of the business
now conducted or proposed in the Registration Statement, the General Disclosure Package and the Prospectus to be conducted by them
and have not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined
adversely to the Transaction Entities or any of their respective Subsidiaries, would, individually or in the aggregate, have a
Material Adverse Effect.
|
|
|
(xxix)
|
Absence of Labor Dispute
. No labor dispute with the employees of the Transaction Entities
or their respective Subsidiaries exists, except as described in the Registration Statement, General Disclosure Package or Prospectus,
or, to the knowledge of the Transaction Entities, is imminent, which, in any such case, would, singly or in the aggregate, result
in a Material Adverse Effect.
|
|
|
(xxx)
|
Possession of Intellectual Property
. The Transaction Entities and their respective Subsidiaries
have access to, adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade
names or other intellectual property necessary to conduct the business now operated by them; and neither the Transaction Entities
nor their respective Subsidiaries have received any notice of infringement of or conflict with asserted rights of others with respect
to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole.
|
|
|
(xxxi)
|
Environmental Laws
.
Except as described in the Registration
Statement, General Disclosure Package and the Prospectus and except as would not reasonably be expected to result, singly or in
the aggregate, in a Material Adverse Effect, neither of the Transaction Entities nor any of their respective Subsidiaries (and,
to the knowledge of the Transaction Entities, no tenant or subtenant of any Property or portion thereof owned or leased by the
Transaction Entities or their respective Subsidiaries) is in violation of any Environmental Law, including relating to the release
of Hazardous Materials, and there are no pending or, to the knowledge of the Transaction Entities, threatened administrative, regulatory
or judicial actions, suits, demands, claims, liens, notices of noncompliance, investigations or proceedings relating to any such
violation or alleged violation. There are no past or present events, conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise to any costs or liabilities to the Transaction Entities or any
of their respective Subsidiaries under, or to interfere with or prevent compliance by the Transaction Entities or any of their
respective Subsidiaries with, Environmental Laws, except as such would not have a Material Adverse Effect. There are no costs or
liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) that would, singly or in the aggregate, have a Material
Adverse Effect.
|
|
|
(xxxii)
|
Accurate Disclosure
. The statements in the Registration Statement, the General Disclosure
Package and the Prospectus under the captions “Prospectus Summary,” “Management,” “Our Manager and
Related Agreements,” “Certain Relationships and Related Party Transactions,” “Our Business and Properties,”
“The Operating Partnership Agreement,” “Description of Capital Stock,” “Important Provisions of Maryland
Corporate Law and Our Charter and Bylaws,” “Shares Eligible for Future Sale,” “Material Federal Income
Tax Considerations,” “ERISA Considerations” and “Underwriting,” insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements,
documents or proceedings and present the information required to be shown.
|
|
|
(xxxiii)
|
Absence of Manipulation
. None of the Transaction Entities, any of their respective Subsidiaries
or any affiliates of the Transaction Entities, has taken, directly or indirectly, any action that is designed to or that has constituted
or that would cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Offered Shares.
|
|
|
(xxxiv)
|
Statistical and Market-Related Data
. Any third-party statistical and market-related data
included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources
that the Transaction Entities believe to be reliable and accurate and, to the extent required, they have obtained written consent
to use such data from such sources.
|
|
|
(xxxv)
|
Compliance with the Sarbanes-Oxley Act
. There is and has been no failure on the part of
the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects
with any applicable provision of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith, including
Section 402 related to loans and Sections 302 and 906 related to certifications.
|
|
|
(xxxvi)
|
Internal Controls
. The Transaction Entities and each of their respective subsidiaries maintain
(A) effective internal controls over financial reporting (as defined under Rule 13a-15 and Rule 15d-15 under the Exchange Act)
and (B) a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. generally accepted accounting principles (“
GAAP
”)
and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i)
no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change
in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting. The Company’s auditors and the Audit Committee of
the board of directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting that have adversely affected or are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant role in the Company’s internal controls over
financial reporting.
|
|
|
(xxxvii)
|
Disclosure Controls
. The Company and its subsidiaries maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) and Rule 15d-15 under the Exchange Act) that complies with the requirements
of the Exchange Act and that has been designed to provide reasonable assurances that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information
is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure,
and such disclosure controls and procedures are effective in all material respects to perform the functions for which they were
established.
|
|
|
(xxxviii)
|
XBRL
. The interactive data in extensible Business Reporting Language included in the Registration
Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.
|
|
|
(xxxix)
|
Litigation
. Other than as described in the Registration Statement, General Disclosure Package
and Prospectus, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental
agency or body, domestic or foreign) against or affecting the Transaction Entities or any of their respective Subsidiaries or Properties
that, if determined adversely to the Transaction Entities or any of their respective Subsidiaries or Properties, would materially
and adversely affect the ability of the Transaction Entities to perform their respective obligations under this Agreement, or which
are otherwise material in the context of the sale of the Offered Shares; and no such actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency or body, domestic or foreign) are threatened or, to the Transaction
Entities’ knowledge, contemplated against the Transaction Entities, Holdings LLC, REIT Property Subs or the Managing Members
and, to the best knowledge of the Transaction Entities, no such actions, suits or proceedings (including any inquiries or investigations
by any court or governmental agency or body, domestic or foreign) are threatened or contemplated against the SP JVs, the Title
Holders or the Properties.
|
|
|
(xl)
|
Financial Statements; Non-GAAP Financial Measures
. The financial statements of the Company
and its consolidated subsidiaries included in the Registration Statement, the General Disclosure Package and the Prospectus, together
with the related schedules and notes, present fairly in all material respects the financial position of the Company and its consolidated
subsidiaries as of the dates indicated, and the balance sheet, statements of operations, changes in members’ equity and cash
flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared
in conformity with GAAP applied on a consistent basis throughout the periods involved and comply with the Commission’s rules
and guidelines with respect thereto. The supporting schedules included in the Registration Statement, the General Disclosure Package
and the Prospectus relating to the Company and its consolidated subsidiaries present fairly in accordance with GAAP the information
required to be stated therein. The combined statements of revenue and certain expenses included in the Registration Statement,
the General Disclosure Package and the Prospectus, together with the related notes, comply with Rule 8-06 of Regulation S-X and
present fairly in all material respects the revenue and certain expenses of the applicable Property for the periods specified;
said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved
and comply with the Commission’s rules and guidelines with respect thereto. The selected financial data and the summary financial
information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the audited, or unaudited as applicable, financial statements
of the Company and its consolidated Subsidiaries included therein and comply with the Commission’s rules and guidelines with
respect thereto. The pro forma financial statements and the related notes thereto included in the Registration Statement, the General
Disclosure Package and the Prospectus present fairly in all material respects the information shown therein, comply with the Commission’s
rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. Except as included therein, no historical or pro forma financial statements
or supporting schedules are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus
under the Act or Rules and Regulations thereunder. All disclosures contained in the Registration Statement, the General Disclosure
Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the Rules and Regulations
) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act to the extent applicable.
|
|
|
(xli)
|
No Material Adverse Change in Business
. Except as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus, since the end of the period covered by the latest audited financial statements
included therein (A) there has been no change, nor any development or event involving a prospective change, in the condition (financial
or otherwise), results of operations, business, earnings, properties or prospects of the Transaction Entities and their respective
subsidiaries, taken as a whole, that is material and adverse, (B) there has been no dividend or distribution of any kind declared,
paid or made by the Transaction Entities and the Subsidiaries, on any class of the capital stock, membership interest or other
equity interest, as applicable, (C) there has been no material change in the capital shares of stock, short-term indebtedness,
long-term indebtedness, net current assets or net assets of the Transaction Entities or any of their respective Subsidiaries, (D)
there has not been any material transaction entered into or any material transaction that is probable of being entered into by
the Transaction Entities and their respective Subsidiaries, other than transactions in the ordinary course of business and changes
and transactions disclosed or described in the Registration Statement, the General Disclosure Package and the Prospectus, (E) there
has not been any obligation, direct or contingent, which is material to the Transaction Entities and their respective Subsidiaries,
taken as a whole, incurred by the Transaction Entities and their respective Subsidiaries, except obligations incurred in the ordinary
course of business and changes and transactions disclosed or described in the Registration Statement, the General Disclosure Package
and the Prospectus, and (F) none of the Transaction Entities or any of their subsidiaries has sustained any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance
or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority that would, singly
or in the aggregate, have a Material Adverse Effect.
|
|
|
(xlii)
|
Investment Company Act
. Neither of the Transaction Entities are, nor after giving effect
to the offering and sale of the Offered Shares and the application of the proceeds thereof as described in the Registration Statement,
the General Disclosure Package and the Prospectus, will be required to register as an “investment company” as defined
in the Investment Company Act of 1940, as amended (the “
Investment Company Act
”).
|
|
|
(xliii)
|
Indebtedness
. Neither the Transaction Entities nor their respective Subsidiaries has any
indebtedness as of the date of this Agreement, and neither the Transaction Entities nor any of their respective Subsidiaries will
have any indebtedness immediately prior to the sale of the Firm Shares on the First Closing Date, in each case except as disclosed
in the Registration Statement, the General Disclosure Package and the Prospectus.
|
|
|
(xliv)
|
Insurance
. The Transaction Entities and each of their respective Subsidiaries are insured
by insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are prudent and
customary for the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Transaction
Entities, their respective Subsidiaries or their respective businesses, assets, employees, officers and directors are in full force
and effect; neither of the Transaction Entities nor any of their respective Subsidiaries has been refused any insurance coverage
sought or applied for; neither of the Transaction Entities nor any of their respective Subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a similar cost as currently paid, except as set forth in or contemplated
in the Registration Statement, the General Disclosure Package and the Final Prospectus; and the Company has obtained or will obtain
directors’ and officers’ insurance in such amounts as is customary for companies engaged in the type of business conducted
by the Company.
|
|
|
(xlv)
|
Tax Law Compliance
. Each of the Transaction Entities and the Subsidiaries has timely filed
all federal, state and local tax returns that are required to be filed or has timely requested extensions thereof (“
Returns
”),
except for any failures to file that, individually or collectively, would not result in a Material Adverse Effect, and has paid
all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessments, fines or penalties that are currently being contested in good faith
or that, individually or collectively, would not result in a Material Adverse Effect. No audits or other administrative proceedings
or court proceedings are presently pending against any of the Transaction Entities or the Subsidiaries with regard to any Returns,
and no taxing authority has notified any of the Transaction Entities or the Subsidiaries that it intends to investigate its tax
affairs, except for any such audits or investigations that, individually or collectively, would not result in the assessment of
material taxes.
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|
|
(xlvi)
|
Real Estate Investment Trust
. The Company has been organized and has operated in conformity
with the requirements for qualification and taxation as a real estate investment trust (a “
REIT
”) under the
Internal Revenue Code of 1986, as amended (the “
Code
”), for its taxable years ended December 31, 2010 through
December 31, 2013, and the Company’s organization and method of operation (as described in the Registration Statement, the
General Disclosure Package and the Prospectus) will enable the Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code for its taxable year ending December 31, 2014 and thereafter. All statements regarding the Company’s
qualification and taxation as a REIT set forth in the Registration Statement, the General Disclosure Package and the Prospectus
are correct in all material respects.
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|
|
(xlvii)
|
Accuracy of Exhibits
. There are no contracts or other documents that are required to be
described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
|
|
|
(xlviii)
|
No Restriction on Subsidiaries
. No Subsidiary of the Company is currently prohibited, directly
or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company,
from making any other distribution on such Subsidiary’s capital stock or membership interest, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s properties or assets
to the Company or any other Subsidiary of the Company, except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus.
|
|
|
(xlix)
|
No Unlawful Payments
. None of the Transaction Entities, any of their respective Subsidiaries,
any director or officer or, to the knowledge of the Transaction Entities, any agent, employee or other person associated with or
acting on behalf of the Transaction Entities or any of their respective Subsidiaries, has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; or (iv) made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
|
|
|
(l)
|
Compliance with Anti-Money Laundering Laws
. The operations of the Transaction Entities and
their respective Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable anti-money laundering
statutes of all jurisdictions in which the Transaction Entities and their respective Subsidiaries conduct business or whose Anti-Money
Laundering Laws (as defined below) apply to the Transaction Entities, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “
Anti-Money
Laundering Laws
”) and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Transaction Entities or any of their respective Subsidiaries with respect to the Anti-Money Laundering
Laws is pending or, to the knowledge of the Transaction Entities, threatened.
|
|
|
(li)
|
Compliance with OFAC
. None of the Transaction Entities, any of their respective subsidiaries
or, to the knowledge of either of the Transaction Entities, any director, officer, agent, employee or affiliate thereof is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“
OFAC
”);
and the Company will not, directly or indirectly, use the proceeds of the offering of the Common Stock hereunder, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
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(lii)
|
Prior Sales of Common Stock or OP Units or LTIP Units
. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, the Company has not sold, issued or distributed any Common Stock
and the Operating Partnership has not issued, sold or distributed any OP Units or LTIP Units during the six-month period preceding
the date hereof.
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(liv)
|
Independent Accountants
. BDO USA, LLP , Plante Moran, PLLC, and KPMG LLP, who have certified
the financial statements and supporting schedules included in the Registration Statement, the General Disclosure Package and the
Prospectus are independent public accountants as required by the Act, the Rules and Regulations and the Public Company Accounting
Oversight Board.
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(lv)
|
ERISA Matters
. The Transaction Entities and each of their Subsidiaries is in compliance
in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“
ERISA
”); no “reportable event”
(as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Transaction
Entities and each Subsidiary would have any liability; the Transaction Entities and each Subsidiary has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan”
or (ii) Sections 412, 403, 431, 432 or 4971 of the Code; and each “pension plan” for which the Transaction Entities
or any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
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(lvi)
|
Enforceability of Management Agreement
. The Management Agreement, to be effective on the
First Closing Date, by and among the Transaction Entities and the Manager (the “
Management Agreement
”), has
been duly authorized by the Transaction Entities and, on the First Closing Date, will constitute a valid and binding agreement
of the Transaction Entities enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion
of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at
law or in equity).
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(lvii)
|
Subsidiary Partnership Tax Classification
. Each of the Operating Partnership and each Subsidiary
that is a partnership or a limited liability company under state law has been at all relevant times properly classified as a partnership
or a disregarded entity, and not as a corporation or an association taxable as a corporation, for federal income tax purposes.
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(lviii)
|
Related-Party Transactions
. There are no relationships, whether direct or indirect, or related-party
transactions involving the Transaction Entities or any of their respective Subsidiaries or any other person required to be described
in the Registration Statement, the General Disclosure Package or the Prospectus that have not been described as required by the
Act.
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(b)
|
Certificates of Officers
. Any certificate signed by any officer of either Transaction Entity,
as applicable, and delivered to the Representative or counsel for the Underwriters in connection with the offering of the Offered
Shares shall be deemed a representation and warranty by each Transaction Entity, as applicable, as to matters covered thereby,
to each Underwriter.
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2.
|
Representations and Warranties Regarding the Manager.
|
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|
(a)
|
Representations and Warranties
. The Manager represents and warrants to each Underwriter
and agrees with the Underwriters that:
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(i)
|
Good Standing of the Manager
. The Manager has been duly organized and is validly existing
as a limited liability company in good standing under the laws of the State of Delaware and has full power and authority to own,
lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure
Package and the Prospectus and to enter into and perform its obligations under this Agreement; and the Manager and each of its
Subsidiaries is duly qualified as a foreign entity to transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.
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(ii)
|
Authorization of Agreement
. This Agreement has been duly authorized, executed and delivered
by the Manager.
|
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(iii)
|
Absence of Further Requirements
. No consent, approval, authorization, or order of, or filing
or registration with, any court or governmental authority or agency is necessary or required for the performance by the Manager
of its obligations under this Agreement and the Management Agreement, except such as have been already obtained or as may be required
under the Securities Act, Exchange Act Regulations, state securities laws, FINRA or the NYSE MKT.
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(iv)
|
Absence of Defaults and Conflicts
. The Manager is not in violation of its organizational
documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Manager
is a party or will be a party in connection with this Agreement (including the Management Agreement) or by which it may be bound,
or to which any of the property or assets of the Manager is subject (collectively, “Manager’s Agreements and Instruments”),
except for such violations or defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance
of this Agreement do not and will not, andin the case of the performance of the Management Agreement, will not, whether with or
without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or repayment event
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Manager pursuant
to, the Manager’s Agreements and Instruments (except for such conflicts, breaches, defaults or repayment events or liens,
charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of (A)
the provisions of the Organizational Documents of the Manager or (B) any statute, law, rule, regulation, or order of any government
agency or body or any court, domestic or foreign, having jurisdiction over the Manager or any of its assets, properties or operations,
except in the case of clause (B) only, for any such violation that would not result in a Material Adverse Effect.
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(v)
|
Possession of Licenses and Permits
. The Manager possesses, and is incompliance with the
terms of, all Licenses necessary or material to the conduct of the business of the Manager now conducted or proposed in the Registration
Statement, the General Disclosure Package and the Prospectus to be conducted by the Manager, except where the failure to possess
such Licenses would not, singly or in the aggregate, result in a Material Adverse Effect, and has not received any notice of proceedings
relating to the revocation or modification of any Licenses that, if determined adversely to the Manager would, individually or
in the aggregate, have a Material Adverse Effect.
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(vi)
|
Employment; Noncompetition; Nondisclosure
. The Manager has not been notified that any of
its executive officers or key employees named in the Registration Statement, the General Disclosure Package and the Prospectus
(each, a “Company-Focused Professional”) plans to terminate his or her employment with the Manager. Neither the Manager
nor, to the knowledge of the Manager, any Company-Focused Professional is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the present or proposed business activities of the Company
or the Manager as described in the Registration Statement, the General Disclosure Package and the Prospectus.
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(vii)
|
Accurate Disclosure
. The statements regarding the Manager in the Registration Statement,
the General Disclosure Package and the Prospectus under the captions “Prospectus Summary—Our Manager and Bluerock,”
“Prospectus Summary—Compensation to Our Manager,” “Prospectus Summary—Benefits of the Offering and
Contribution Transactions to Related Parties,” “Prospectus Summary—Conflicts of Interest,” “Our Business
and Properties — Overview of Our Business Objectives and Strategy,” “Our Business and Properties—Our Manager
and Bluerock,” “Our Business and Properties—Our Manager’s Approach to Evaluating Potential Investments,”
“Our Manager and Related Agreements” and “Certain Relationships and Related Party Transactions” are true
and correct in all material respects.
|
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(viii)
|
Absence of Manipulation
. The Manager has not taken, and will not take, directly or indirectly,
any action that is designed to or that has constituted or that would be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of the Offered Shares.
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(ix)
|
Absence of Proceedings
. There are no actions, suits or proceedings (including any inquiries
or investigations by any court or governmental agency or body, domestic or foreign) now pending, or, to the knowledge of the Manager,
threatened against or affecting the Manager that, if determined adversely to the Manager, would, individually or in the aggregate,
have a Material Adverse Effect.
|
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(x)
|
Investment Advisers Act
. The Manager is not prohibited by the Investment Advisers Act of
1940, as amended, or the rules and regulations thereunder, from performing its obligations under the Management Agreement as described
in the Registration Statement, the General Disclosure Package and the Prospectus.
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(xi)
|
Enforceability of Management Agreement
. The Management Agreement has been duly authorized
by all necessary action and, upon its execution on the First Closing Date, will constitute a valid and binding agreement of the
Manager enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the
court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or
in equity).
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(xii)
|
Internal Controls
. The Manager intends to operate under the Company’s system of internal
accounting controls in order to provide reasonable assurances that (A) transactions effectuated by it on behalf of the Company
pursuant to its duties set forth in the Management Agreement are executed in accordance with management’s general or specific
authorization; and (B) access to the Company’s assets is permitted only in accordance with management’s general or
specific authorization.
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(xiii)
|
Resources
. The Manager has the financial and other resources available to it necessary for
the performance of its services and obligations as contemplated hereby and in the Management Agreement, the Registration Statement,
the General Disclosure Package and the Prospectus.
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(b)
|
Certificates of Officers
. Any certificate signed by any officer of the Manager and delivered
to the Representative or counsel for the Underwriters shall be deemed a representation and warranty by the Manager as to matters
covered thereby, to each Underwriter.
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3.
|
Purchase, Sale and Delivery of Offered Shares
.
|
On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $13.485 per
share, the respective number of Firm Shares set forth opposite the names of the Underwriters in
Schedule A
hereto.
The Company will deliver the
Firm Shares to or as instructed by the Representative for the accounts of the several Underwriters in a form reasonably acceptable
to the Representative against payment of the purchase price by the Underwriters in Federal (same day) funds by wire transfer to
an account at a bank acceptable to the Representative drawn to the order of the Company at the office of Bass, Berry & Sims
PLC (“
BBS
”), at 10:00 A.M., New York time, on April 2, 2014, or at such other time not later than seven (7)
full business days thereafter as the Representative and the Company determine, such time being herein referred to as the “
First
Closing Date
.” For purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Shares
sold pursuant to the offering. The Firm Shares so to be delivered or evidence of their issuance will be made available for review
at the above office of BBS at least 24 hours prior to the First Closing Date.
In addition, upon written notice
from the Representative given to the Company from time to time not more than 30 days subsequent to the date of the Prospectus,
the Underwriters may purchase all or less than all of the Optional Shares at the purchase price per share to be paid for the Firm
Shares, less an amount per share equal to any dividends or distribution declared by the Company and payable on the Firm Shares
but not payable on the Optional Shares. The Company agrees to sell to the Underwriters the number of Optional Shares specified
in such notice and the Underwriters agree, severally and not jointly, to purchase such number of Optional Shares. Such Optional
Shares shall be purchased for the account of each Underwriter in the same proportion as the number of Firm Shares set forth opposite
such Underwriter’s name bears to the total number of Firm Shares (subject to adjustment by the Representative to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the
sale of the Firm Shares. No Optional Shares shall be sold or delivered unless the Firm Shares previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Shares or any portion thereof may be exercised from time to time and
to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representative to the Company.
Each time for the delivery of
and payment for the Optional Shares, being herein referred to as an “
Optional Closing Date
,” which may be the
First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “
Closing
Date
”), shall be determined by the Representative but shall be not later than three full business days after written
notice of election to purchase Optional Shares is given. The Company will deliver the Optional Shares being purchased on each Optional
Closing Date to or as instructed by the Representative for the accounts of the several Underwriters in a form reasonably acceptable
to the Representative against payment of the purchase price therefor in Federal (same day) funds by wire transfer to an account
at a bank acceptable to the Representative drawn to the order of the Company at the above office of BBS. The Optional Shares being
purchased on each Optional Closing Date or evidence of their issuance will be made available for review at the above office of
BBS at a reasonable time in advance of such Optional Closing Date.
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4.
|
Offering by Underwriters
. It is understood that the several Underwriters propose to offer
the Offered Shares for sale to the public as set forth in the Prospectus. The Company is advised that the Underwriters propose
to make a public offering of their respective portions of the Offered Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company is further advised by you that the Offered Shares
are to be offered to the public initially at $14.50 per share (the “
Public Offering Price
”) and to certain dealers
selected by you at a price that represents a concession not in excess of $0.609 per share under the Public Offering Price.
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5.
|
Certain Agreements of the Transaction Entities and the Manager
.
|
|
|
(a)
|
The Transaction Entities agree with the several Underwriters that:
|
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|
(i)
|
Additional Filings
. Unless filed pursuant to Rule 462(c) as part of the Additional Registration
Statement in accordance with the last sentence, the Company will file the Prospectus, in a form approved by the Representative,
with the Commission pursuant to and in accordance with Rule 424(b) and Rule 430A and during the time period specified by Rule 424(b)
and Rule 430A. The Company will advise the Representative promptly of any such filing pursuant to Rule 424(b) and provide satisfactory
evidence to the Representative of such timely filing. If an Additional Registration Statement is necessary to register a portion
of the Offered Shares under the Act but the Effective Time thereof has not occurred as of the execution and delivery of this Agreement,
the Company will file the Additional Registration Statement or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, on or prior to the time the Prospectus is finalized and distributed to any Underwriter, or will make such filing
at such later date as shall have been consented to by the Representative.
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(ii)
|
Filing of Amendments; Response to Commission Requests
. The Company, subject to Section 5(a)(iii)
hereof, will comply with the requirements of Rule 430A and will promptly advise the Representative of any proposal to amend or
supplement at any time the Initial Registration Statement, any Additional Registration Statement or any Statutory Prospectus and
will not affect such amendment or supplementation without the Representative’s consent; and the Company will also advise
the Representative promptly of (A) the effectiveness of any Additional Registration Statement (if its Effective Time is subsequent
to the execution and delivery of this Agreement), (B) any amendment or supplementation of a Registration Statement or any Statutory
Prospectus, (C) any request by the Commission or its staff for any amendment to any Registration Statement, for any supplement
to any Statutory Prospectus or for any additional information, (D) the institution by the Commission of any stop order proceedings
in respect of a Registration Statement or, to the Company’s knowledge, the threatening of any proceeding for that purpose,
and (E) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Shares
in any jurisdiction or the institution or, to the Company’s knowledge, the threatening of any proceedings for such purpose.
The Company will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal thereof.
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|
|
(iii)
|
General Disclosure Package
. If the General Disclosure Package is being used to solicit offers
to buy the Offered Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur
or condition exist as a result of which it is necessary to amend or supplement the General Disclosure Package in order to make
the statements therein, in the light of the circumstances, not misleading, or if any event occurs or condition exists as a result
of which the General Disclosure Package conflicts with the information contained in the Registration Statement then on file, or
if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the General Disclosure Package to comply
with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to
any dealer upon request, either amendments or supplements to the General Disclosure Package so that the statements in the General
Disclosure Package as so amended or supplemented will not, in the light of the circumstances when the General Disclosure Package
is delivered to a prospective purchaser, be misleading or so that the General Disclosure Package, as amended or supplemented, will
no longer conflict with the Registration Statement, or so that the General Disclosure Package, as amended or supplemented, will
comply with applicable law.
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|
(iv)
|
Continued Compliance with Securities Laws
. To comply with the Act and the Rules and Regulations
thereunder so as to permit the completion of the distribution of the Offered Shares as contemplated in this Agreement and in the
General Disclosure Package and the Prospectus. If, during such period after the first date of the public offering of the Offered
Shares as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a))
is (or, but for the exception afforded by Rule 172, would be) required by law to be delivered in connection with sales by an Underwriter
or dealer, any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Underwriters
or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure
Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or
the Prospectus, as the case may be, in order to comply with the requirements of the Act or the Rules and Regulations thereunder,
the Company will promptly (A) notify the Representative of such event, (B) prepare any amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement and (C) file with the Commission any such amendment or supplement;
provided
, that the
Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall
reasonably object. The Company will give the Representative notice of its intention to make any filings pursuant to the Exchange
Act or Rules and Regulations thereunder from the date of this Agreement to any Closing Date and will furnish the Representative
with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file
or use any such document to which the Representative or counsel for the Underwriters shall reasonably object, other than such filings
as are required to be made pursuant to the Exchange Act or the Rules and Regulations thereunder.
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(v)
|
Rule 158
. The Company will timely file such reports pursuant to the Exchange Act as are
necessary in order to make generally available to its stockholders as soon as practicable an earnings statement for the purposes
of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the Act.
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(vi)
|
Furnishing of Registration Statements and Prospectuses
. The Company will furnish to the
Representative signed copies of each Registration Statement (including all exhibits thereto), each related Statutory Prospectus,
and, so long as a prospectus relating to the Offered Shares is (or but for the exemption in Rule 172 would be) required to be delivered
under the Act, the Prospectus and all amendments and supplements to such documents, in each case in such quantities as the Representative
requests. The Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the business day following the execution
and delivery of this Agreement, or at such time as otherwise agreed to by the Representative. All other documents shall be so furnished
as soon as available. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.
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|
(vii)
|
Blue Sky Qualifications
. The Company will arrange for the qualification of the Offered Shares
for sale under the laws of such jurisdictions as the Representative designates and will continue such qualifications in effect
so long as required for the distribution but in no event longer than one year.
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(viii)
|
Reporting Requirements
. The Company, during the period when a prospectus relating to the
Offered Shares is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Act, will file
all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange
Act and Rules and Regulations related thereto.
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(ix)
|
Payment of Expenses
. The Transaction Entities will pay all expenses incident to the performance
of its obligations under this Agreement, all costs and expenses of the Transaction Entities in connection with the Contribution
Transactions, and all the costs and expenses in connection with the offering of the Offered Shares including but not limited to
(A) any filing fees and other expenses (including fees and expenses of counsel to the Underwriters set forth in section (C) below)
incurred in connection with qualification of the Offered Shares for sale under the laws of such jurisdictions as the Representative
designates and the preparation and printing of blue sky surveys or legal investment surveys relating thereto, (B) costs and expenses
related to the review by the Financial Industry Regulatory Authority, Inc. (“
FINRA
”) of the Offered Shares (including
filing fees and the fees and expenses of counsel for the Underwriters relating to such review), (C) up to and including $225,000
in the aggregate of the costs and expenses of legal counsel for the Underwriters incurred in connection with this Agreement and
the offering of the Offered Shares, (D) costs and expenses of the Company relating to investor presentations and any road show
in connection with the offering and sale of the Offered Shares including, without limitation, (1) any travel expenses of the Company’s
officers and employees and (2) any other expenses of the Company, (E) all actually and reasonably incurred costs and expenses of
the Underwriters relating to the investor presentations and any roadshow in connection with the offering and sale of the Offered
Shares, (F) the fees and expenses incident to listing the Offered Shares on the NYSE MKT, (G) the fees and expenses in connection
with the registration of the Offered Shares under the Exchange Act, (H) expenses incurred in distributing preliminary prospectuses
and the Prospectus (including any amendments and supplements thereto) to the Underwriters, (I) expenses incurred for preparing,
printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors, and (J) stamp duties, similar
taxes or duties or other similar fees or charges, if any, incurred by the Underwriters in connection with the offering and sale
of the Offered Shares. The foregoing payment by the Company to the Underwriters in this paragraph (ix) is limited to up to $350,000
in the aggregate (including up to $225,000 in fees and expenses of counsel to the Underwriters set forth in section (C) above).
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(x)
|
Use of Proceeds
. The Company will use the net proceeds received in connection with the offering
and sale of the Offered Shares and will cause the Operating Partnership to use the net proceeds received in connection with the
issuance and sale of the Company OP Units in the manner described in the “Use of Proceeds” section of the Registration
Statement, the General Disclosure Package and the Prospectus, and, except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company does not intend to use any of the proceeds from the sale of the Offered Shares
hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.
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|
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(xi)
|
Absence of Manipulation
. The Transaction Entities will not, and will cause each of its subsidiaries
and controlled affiliates not to, take, directly or indirectly, any action designed to or that would constitute or that might cause
or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the
Offered Shares.
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(xii)
|
Listing
. The Company will use its reasonable best efforts to effect and maintain the listing
of the Common Stock (including the Offered Shares) on the NYSE MKT.
|
|
|
(xiii)
|
Sarbanes-Oxley Act
. The Company will use its reasonable best efforts to comply with all
applicable provisions of the Sarbanes-Oxley Act.
|
|
|
(xiv)
|
Company Restriction on Sale of Common Stock
. For the period specified below (the “
Lock-Up
Period
”), the Company will not, directly or indirectly, take any of the following actions with respect to its Common
Stock or any securities convertible into or exchangeable, exercisable or redeemable for any of its Common Stock, LTIP Units or
OP Units (“
Lock-Up Securities
”): (A) offer, sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up
Securities, (B) offer, sell, issue, contract to sell, contract to purchase or grant any option, right or warrant to purchase Lock-Up
Securities, (C) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences
of ownership of Lock-Up Securities, (D) establish or increase a put equivalent position or liquidate or decrease a call equivalent
position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (E) file with the Commission a registration
statement under the Act relating to Lock-Up Securities (except for a registration statement on Form S-8 relating to the Company’s
equity incentive plan), or publicly disclose the intention to take any such action, without the prior written consent of the Representative;
provided
,
however
, that the Lock-Up Period shall not apply to (A) the sale of Lock-Up Securities to the Underwriters,
(B) the issuance by the Company of shares of Common Stock upon the exercise of an option or a warrant or the conversion of a security
outstanding on the First Closing Date of which the Underwriters have been advised in writing (C) any shares of Common Stock issued,
options to purchase shares of Common Stock or LTIP Units granted pursuant to existing equity incentive plans of the Company disclosed
in the Prospectus, (D) the issuance of Common Stock or securities exchangeable or exercisable for or convertible into Common Stock
(including OP Units and LTIP Units), in the aggregate not to exceed 10% of the number of shares of Common Stock outstanding, on
a fully diluted basis, as consideration for the acquisition of real estate assets provided, however, that the recipients of shares
of Common Stock or securities exchangeable or exercisable for or convertible into Common Stock issued in connection with such an
acquisition shall be required to agree in writing not to sell, offer, dispose of or otherwise transfer any such shares during the
remainder of the Lock-Up Period without the prior written consent of the Representative (which consent may be withheld at the sole
discretion of the Representative), (E) the issuance of shares of Common Stock, Former Advisor LTIP Units and OP Units in connection
with the Contribution Transactions, and LTIP Units pursuant to the Management Agreement, and as disclosed in the General Disclosure
Package and the Prospectus, and (F) with respect to our directors and our officers, the establishment of a trading plan pursuant
to Rule 10b5-1 under the Exchange Act, for the transfer of shares of Common Stock, provided that (i) such plan does not provide
for the transfer of shares of Common Stock during the Lock-Up Period and (ii) to the extent a public announcement or filing under
the Exchange Act, if any, is required of or voluntarily made regarding the establishment of such plan, such announcement or filing
shall include a statement to the effect that no transfer of shares of Common Stock may be made under such plan during the Lock-Up
Period. The “
Lock-Up Period
” will commence on the date hereof and continue for 180 days after the date hereof
or such earlier date that the Representative consents to in writing;
provided
,
however
, that if (1) during the last
17 days of the Lock-Up Period, the Company releases earnings results or material news or a material event relating to the Company
occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during
the 16-day period beginning on the last day of the Lock-Up Period, then in each case the Lock-Up Period will be extended until
the expiration of the 18-day period beginning on the date of release of the earnings results or the occurrence of the materials
news or material event, as applicable, unless the Representative waives, in writing, such extension. The Company will provide the
Representative with notice of any announcement described in clause (2) of the preceding sentence that gives rise to an extension
of the Lock-Up Period.
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(xv)
|
Qualification and Taxation as a REIT
. The Company will use its best efforts to qualify for
taxation as a REIT under the Code for its taxable year ending December 31, 2014 and thereafter, unless the board of directors of
the Company determines that it is no longer in the best interests of the Company to continue to qualify as REIT.
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(xviii)
|
Investment Company
. The Company will not be or become, at any time prior to the expiration
of three years after the date of this Agreement, an “investment company,” as such term is defined in the Investment
Company Act; provided, however, that this provision shall not be applicable and shall have no legal force or effect in the event
that the Company becomes deemed an “investment company” solely as a result of the Commission amending, revising, rescinding
or otherwise modifying the Investment Company Act, the rules and regulations promulgated thereunder or the Commission’s interpretations
and guidance relating thereto after the Closing Date.
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(b)
|
The Manager agrees with the several Underwriters that:
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(i)
|
Restriction on Sale of Securities
. For the Lock-Up Period, the Manager will not, directly
or indirectly, take any of the following actions with respect to the Lock-Up Securities: (A) offer, sell, issue, contract to sell,
pledge or otherwise dispose of Lock-Up Securities, (B) offer, sell, issue, contract to sell, contract to purchase or grant any
option, right or warrant to purchase Lock-Up Securities, (C) enter into any swap, hedge or any other agreement that transfers,
in whole or in part, the economic consequences of ownership of Lock-Up Securities, (D) establish or increase a put equivalent position
or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act
or (E) file with the Commission a registration statement under the Act relating to Lock-Up Securities, or publicly disclose the
intention to take any such action, without the prior written consent of the Representative
|
Notwithstanding
the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company releases earnings results or material news or
a material event relating to the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, then in each case the
Lock-Up Period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings results
or the occurrence of the materials news or material event, as applicable, unless the Representative waives, in writing, such extension.
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(ii)
|
Reporting of Material Events
. The Manager agrees that, during the period when the Prospectus
is required to be delivered under the Act or the Exchange Act, it shall notify the Representative and the Transaction Entities
of the occurrence of any material events respecting its activities or condition, financial or otherwise, and the Manager will forthwith
supply such information to the Transaction Entities as shall be necessary in the opinion of counsel to the Transaction Entities
and the Underwriters for the Transaction Entities to prepare any necessary amendment or supplement to the Prospectus so that, as
so amended or supplemented, the Prospectus will not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading.
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(iii)
|
No Stabilization or Manipulation
. Not to take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of any securities
of the Company to facilitate the sale or resale of the Offered Shares.
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(iv)
|
Investment Adviser
. The Manager will not be or become, at any time prior to the expiration
of three years after the date of this Agreement, an “investment adviser,” as such term is defined in the Investment
Advisers Act of 1940, as amended (the “
Investment Advisers Act
”); provided, however, that this provision shall
not be applicable and shall have no legal force or effect in the event that the Manager becomes deemed an “investment adviser”
solely as a result of the Commission amending, revising, rescinding or otherwise modifying the Investment Advisers Act, the rules
and regulations promulgated thereunder or the Commission’s interpretations and guidance relating thereto after the First
Closing Date.
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6.
|
Free Writing Prospectuses
. The Company represents and agrees that, unless it obtains the
prior consent of the Representative, and each Underwriter represents and agrees that, unless it obtains the prior consent of the
Company and the Representative, it has not made and will not make any offer relating to the Offered Shares that would constitute
an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the Commission; provided, that such consent is deemed to have been given with respect to each Issuer
Free Writing Prospectus identified on
Schedule B
hereto and any “road show that is a written communication”
within the meaning of Rule 433(d)(8)(i) that has been reviewed and approved by the Representative. Any such free writing prospectus
consented to by the Company and the Representative is hereinafter referred to as a “
Permitted Free Writing Prospectus
.”
The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and
433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record
keeping. The Company represents that it has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement
to file with the Commission any Bona Fide Electronic Road Show. If at any time following the issuance of a Permitted Free Writing
Prospectus there occurred or occurs an event or development as a result of which such Permitted Free Writing Prospectus conflicted
or would conflict with the information contained in the Registration Statement, the General Disclosure Package or the Prospectus,
or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the
Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Permitted Free
Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
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7.
|
Conditions of the Obligations of the Underwriters
. The obligations of the several Underwriters
to purchase and pay for the Firm Shares on the First Closing Date and the Optional Shares to be purchased on each Optional Closing
Date will be subject to the accuracy of the representations and warranties of the Transaction Entities and the Manager herein (as
though made on such Closing Date), to the accuracy of the statements of the Transaction Entities and the Manager made pursuant
to the provisions hereof, to the performance by the Transaction Entities and the Manager of their obligations hereunder and to
the following additional conditions precedent:
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(a)
|
Accountants’ Comfort Letters and CAO Certificates
.
|
|
|
(i)
|
The Representative shall have received letters, dated, respectively, the date hereof and each Closing
Date, of BDO USA, LLP, Plante Moran, PLLC and KPMG LLP, substantially in the forms of
Annex I-A,I-B
and I-C
hereto,
confirming that they are a registered public accounting firm and independent public accountants within the meaning of the Securities
Laws and in form and substance satisfactory to the Representative, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to financial statements and certain financial
information of the Company contained in the Registration Statement, the General Disclosure Package and the Prospectus (except that,
in any letter dated a Closing Date, the specified date referred to in
Annex I-A, I-B and I-C
hereto shall be a date no more
than three (3) days prior to such Closing Date).
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(ii)
|
Should the Representative deem appropriate, the Representative shall have received a certificate,
dated the date hereof, of Christopher J. Vohs, in his capacity as the Chief Accounting Officer and Principal Financial Officer
of the Company, substantially in the form of
Annex I-B
hereto.
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(b)
|
Effectiveness of Registration Statement
. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later
than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is finalized and distributed
to any Underwriter, or shall have occurred at such later time as shall have been consented to by the Representative. The Prospectus
shall have been filed with the Commission in accordance with the Rule 424(b) under the Act and
Section 5(a)
hereof. Prior
to such Closing Date, no stop order suspending the effectiveness of a Registration Statement, Statutory Prospectus or the Prospectus
shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or the
Representative, shall be contemplated by the Commission.
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(c)
|
No Material Adverse Change
. Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial
or otherwise), results of operations, business, earnings, properties or prospects of the Transaction Entities and their respective
Subsidiaries, taken as a whole, that, in the sole judgment of the Representative, is material and adverse and makes it impractical
or inadvisable to market the Offered Shares; (ii) any change in either U.S. or international financial, political or economic conditions
or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representative,
impractical to market or to enforce contracts for the sale of the Offered Shares, whether in the primary market or in respect of
dealings in the secondary market; (iii) any suspension or material limitation of trading in securities generally on the NYSE MKT,
or any setting of minimum or maximum prices for trading on such exchange; (iv) or any suspension of trading of any securities of
the Company on any national securities exchange or in the over-the-counter market; (v) any banking moratorium declared by any U.S.
federal or New York authorities; (vi) any major disruption of settlements of securities, payment, or clearance services in the
United States or any other country where such securities are listed; or (vii) any attack on, outbreak or escalation of hostilities
or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity
or emergency if, in the judgment of the Representative, the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency is such as to make it impractical or inadvisable to market the Offered Shares or to enforce contracts for
the sale of the Offered Shares.
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(d)
|
Opinion of Counsel for the Transaction Entities
. The Representative shall have received
an opinion, dated each Closing Date, of Kaplan, Voekler, Cunningham & Frank, PLC, counsel for the Transaction Entities, substantially
in the form attached hereto as
Annex III-A
and a letter substantially in the form attached hereto as
Annex III-B
.
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(e)
|
Opinion of Maryland Counsel for Company
. The Representative shall have received an opinion,
dated each Closing Date, of Venable LLP, Maryland counsel for the Company, substantially in the form attached hereto as
Annex
IV
.
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(f)
|
Tax Opinion
. The Representative shall have received a tax opinion, dated each Closing Date,
of Hunton & Williams LLP, counsel for the Company, substantially in the form attached hereto as
Annex V
.
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(g)
|
Opinion of Counsel for Underwriters
. The Representative shall have received from Bass, Berry
& Sims PLC, counsel for the Underwriters, such opinion or opinions, dated each Closing Date, with respect to such matters as
the Representative may require. In rendering such opinion, Bass, Berry & Sims PLC, may (i) rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of responsible officers of the Transaction Entities,
their respective Subsidiaries, the Manager and of public officials and (ii) rely as to matters involving the application of the
laws of the state of Maryland upon the opinion of Venable LLP.
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(h)
|
Company Officers’ Certificate
. The Representative shall have received a certificate,
dated each Closing Date, of the Chief Executive Officer of the Company and the Chief Accounting Officer of the Company, in his
capacity as the Principal Financial Officer of the Company, in which such officers shall state that: the representations and warranties
of the Transaction Entities in this Agreement are true and correct as of such date; each of the Transaction Entities has complied
with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the best of their knowledge and after reasonable investigation, are contemplated by the Commission;
the Additional Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely
filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with the applicable Rules and Regulations;
and, subsequent to the date of the most recent financial statements in the Registration Statement, the General Disclosure Package
and the Prospectus, there has been no change, nor any development or event involving a prospective change, in the condition (financial
or otherwise), results of operations, earnings, business, properties or prospects of the Transaction Entities and their respective
Subsidiaries, taken as a whole, that is material and adverse, except as set forth in the Registration Statement, the General Disclosure
Package and the Prospectus or as described in such certificate.
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(i)
|
Manager Officer’s Certificate
. The Representative shall have received a certificate,
dated each Closing Date, of the Chief Executive Officer of the Manager in which such officer shall state that: the representations
and warranties of the Manager in this Agreement are true and correct as of such date and that the Manager has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date.
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(j)
|
Lock-up Agreements
. On or prior to the date hereof, the Representative shall have received
a lock-up letter in the form of
Annex II
hereto executed by each of the persons listed on
Schedule C
hereto.
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(k)
|
Contribution Transactions
. The transactions contemplated by the Contribution Transaction
Documents shall have been, or shall be substantially concurrently with the First Closing Date, consummated in accordance with the
terms of such documents and each other of the Contribution Transactions as set forth in the General Disclosure Package shall have
been consummated on, prior to, or substantially concurrently with, the First Closing Date.
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(l)
|
Debt Pay Off
. The Representative shall have received payoff letters from each holder of
the indebtedness to be repaid as described in the Use of Proceeds section of the Statutory Prospectus, which shall indicate the
amount required to discharge such indebtedness on the Closing Date and an undertaking by each holder of such indebtedness to discharge
any security interests securing any portion of such indebtedness.
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(m)
|
Company Good Standing
. The Representative shall have received a certificate of good standing
of the Company certified by the Maryland State Department of Assessments and Taxation as of a date within five (5) business days
of the First Closing Date.
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(n)
|
Operating Partnership Good Standing
. The Representative shall have received a certificate
of good standing of the Operating Partnership certified by the Secretary of State of the State of Delaware as of a date within
five (5) business days of the First Closing Date.
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(o)
|
Manager Good Standing
. The Representative shall have received a certificate of good standing
of the Manager certified by the Secretary of State of the State of Delaware as of a date within five (5) business days of the First
Closing Date.
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(p)
|
Subsidiary Good Standings
. The Representative shall have received a certificate of good
standing certified by the Secretary of State (or equivalent governmental authority) of the state of incorporation or formation
as of a recent date, for each entity listed on
Schedule E
hereto.
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(q)
|
Secretary’s Certificate of the Company
. The Representative shall have received a certificate
of the secretary of the Company certifying resolutions of the board of directors of the Company approving the Underwriting Agreement,
the Contribution Transaction Documents and the transactions contemplated thereby.
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(r)
|
Secretary’s Certificate of the Manager
. The Representative shall have received a certificate
of the secretary of the Manager certifying resolutions of the Manager’s managing member approving the Underwriting Agreement
and the Management Agreement.
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(s)
|
General Partner Certificate of the Operating Partnership
. The Representative shall have
received a certificate of the general partner of the Operating Partnership certifying resolutions of the Operating Partnership
approving the Underwriting Agreement, the Contribution Transaction Documents and the transactions contemplated thereby.
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(t)
|
FINRA Approval
. The Representative shall have received a clearance letter from the Corporate
Finance Department of FINRA with respect to the offering.
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(u)
|
Listing
. The Offered Shares shall have been approved for listing on the NYSE MKT.
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(v)
|
Reverse Stock Split
. The Company shall have authorized and filed an amendment to its Second
Amended and Restated Charter with the Maryland State Department of Assessments and Taxation (“SDAT”)
effecting
a 1.00458751 to 1 reverse stock split of the shares of Class B-1 Common Stock, $0.01 par value per share, the shares of
Class B-2 Common Stock, $0.01 par value per share, and the shares of Class B-3 Common Stock, $0.01 par value per share, each as
currently outstanding as of the Applicable Time (the “Reverse Split Amendment”), and the Representative shall have
received a copy of the filed and effective Reverse Split Amendment certified by the SDAT.
|
The Transaction Entities will
furnish the Representative with such conformed copies of such opinions, certificates, letters and documents as the Representative
reasonably requests. The Representative may in its sole discretion waive on behalf of the Underwriters compliance with any conditions
to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.
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8.
|
Indemnification and Contribution
.
|
|
|
(a)
|
Indemnification of Underwriters by the Transaction Entities
. Each of the Transaction Entities
will, jointly and severally, indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees,
agents, affiliates and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act (each, an “
Indemnified Party
”), against any and all losses, claims, damages or liabilities,
joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory
law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration
Statement at any time, any Statutory Prospectus as of any time, the Prospectus or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation,
investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced,
and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred;
provided
,
however
, that neither of the Transaction Entities will be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter
through the Representative specifically for use therein, it being understood and agreed that such information furnished by any
Underwriter consists only of the information described as such in
Section 8(c)
below.
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(c)
|
Indemnification of Company, Directors and Officers
. Each Underwriter will severally and
not jointly indemnify and hold harmless each of the Transaction Entities, their directors and each of their officers who signs
a Registration Statement and each person, if any, who controls either of the Transaction Entities within the meaning of Section
15 of the Act or Section 20 of the Exchange Act (each, an “
Underwriter Indemnified Party
”), against any losses,
claims, damages or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act,
other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained
in any part of any Registration Statement at any time, any Statutory Prospectus as of any time, the Prospectus or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written
information furnished to either of the Transaction Entities by such Underwriter through the Representative specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection
with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon
any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being
understood and agreed that the only such information furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter the third, seventh, twelfth and fourteenth full paragraphs under the caption
“Underwriting,” under the caption “Other Relationships” and under the caption “Selling Restrictions,”
in each case, only to the extent that such statements relate only to the Underwriters.
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(d)
|
Actions against Parties; Notification
. Promptly after receipt by an indemnified party of
notice of the commencement of any action against such indemnified party, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under subsections (a), (b) or (c) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsections
(a), (b) or (c) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and
provided
further
that the failure to notify the indemnifying party shall not relieve
it from any liability that it may have to an indemnified party otherwise than under subsections (a), (b) or (c) above. In case
any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified
party under this
Section 8(d)
for any legal or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party
has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party
shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those
available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interest between them. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action
and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified
party.
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(e)
|
Contribution
. If the indemnification provided for in this
Section 8
is unavailable
or insufficient to hold harmless an indemnified party under subsections (a), (b) or (c) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred
to in subsections (a), (b) or (c) above (i) in such proportion as is appropriate to reflect the relative benefits received by the
Transaction Entities on the one hand and by the Underwriters on the other hand from the offering of the Offered Shares or (ii)
if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and
the Underwriters, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative benefits received by the Transaction Entities
on the one hand and by the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this
Section 8(e)
shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which
is the subject of this
Section 8(e)
. Notwithstanding the provisions of this
Section 8(e)
, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the Common Stock underwritten by it
and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this
Section 8(e)
to contribute are several in proportion to their
respective underwriting obligations and not joint. The Transaction Entities and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this
Section 8(e)
were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to in this
Section 8(e)
.
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9.
|
Default of Underwriters
. If any Underwriter or Underwriters default in their obligations
to purchase Offered Shares hereunder on either the First Closing Date or any Optional Closing Date and the aggregate number of
Offered Shares that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total
number of Offered Shares that the Underwriters are obligated to purchase on such Closing Date, the Representative may make arrangements
satisfactory to the Company for the purchase of such Offered Shares by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Offered Shares that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate number of Offered Shares with respect
to which such default or defaults occur exceeds 10% of the total number of Offered Shares that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to the Representative and the Company for the purchase of such Offered
Shares by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company, except as provided in
Section 10
hereof (provided that if such default
occurs with respect to Optional Shares after the First Closing Date, this Agreement will not terminate as to the Firm Shares or
any Optional Shares purchased prior to such termination). As used in this Agreement, the term “
Underwriter
”
includes any person substituted for an Underwriter under this
Section 9
. Nothing herein will relieve a defaulting Underwriter
from liability for its default.
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10.
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Survival of Certain Representations and Obligations
. The respective indemnities, agreements,
representations, warranties and other statements of the Transaction Entities, the Manager or their respective officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Underwriter, the Transaction Entities, the Manager or any of
their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for
the Offered Shares. If the purchase of the Offered Shares by the Underwriters is not consummated for any reason other than solely
because of the termination of this Agreement pursuant to
Section 9
hereof, the Company will reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering
of the Offered Shares, and the respective obligations of the Transaction Entities and the Manager, on the one hand, and the Underwriters,
on the other hand, pursuant to
Section 8
hereof shall remain in effect. In addition, if any Offered Shares have been purchased
hereunder, the representations and warranties in
Sections 2 through 3
and all obligations under
Section 5
shall also
remain in effect.
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11.
|
Notices
. All communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed or delivered and confirmed to the Representative, c/o Wunderlich Securities, Inc., 2200 Clarendon Boulevard, Arlington,
VA 22201, Attention: N. David Doyle, with a copy to Bass, Berry & Sims PLC, 150 Third Avenue South, Suite 2800, Nashville,
TN 37201, Attention: Lori B. Morgan, or, if sent to the Transaction Entities or the Manager, will be mailed or delivered and confirmed
to it at c/o Bluerock Residential Growth REIT, Inc., 712 Fifth Avenue, 9th Floor, New York, NY 10019, Attention: Michael L. Konig,
with a copy to Kaplan, Voekler, Cunningham & Frank, PLC, 1401 East Cary Street, Richmond, Virginia 23239, Attention: Richard
P. Cunningham, Jr.;
provided
,
however
, that any notice to an Underwriter pursuant to
Section 9
will be mailed
or delivered and confirmed to such Underwriter.
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12.
|
Successors
. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers, directors and controlling persons referred to in
Section 9
, and
no other person will have any right or obligation hereunder.
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13.
|
Representation of Underwriters
. The Representative will act for the several Underwriters
in connection with this financing, and any action under this Agreement taken by the Representative will be binding upon all the
Underwriters. By participating in this offering, each Underwriter agrees that it, each of its affiliates participating in this
offering as underwriter or financial intermediary and each controlling person of it and each such participating affiliate are bound
by the Agreement Regarding Oral Due Diligence and currently in effect between the Representative and the accounting firm or firms
that participate in oral due diligence in this offering.
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14.
|
Counterparts
. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
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15.
|
Headings
. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
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16.
|
Entire Agreement
. This Agreement represents the entire agreement between the Transaction
Entities and the Manager, on the one hand, and the Underwriters, on the other, with respect to the preparation of any Registration
Statement, the General Disclosure Package, the Prospectus, the conduct of the offering, and the purchase and sale of the Offered
Shares.
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17.
|
Absence of Fiduciary Relationship
. The Transaction Entities and the Manager each acknowledge
and agree that:
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(a)
|
No Other Relationship
. The Underwriters have been retained solely to act as underwriters
in connection with the sale of Offered Shares and that no fiduciary, advisory or agency relationship between the Transaction Entities
and the Manager on the one hand, and the Underwriters on the other has been created in respect of any of the transactions contemplated
by this Agreement or the Prospectus, irrespective of whether the Underwriters have advised or is advising either of the Transaction
Entities or the Manager on other matters;
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(b)
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Arms’ Length Negotiations
. The price of the Offered Shares set forth in this Agreement
was established by the Company following discussions and arms’ length negotiations with the Underwriters, and the Transaction
Entities and Manager are capable of evaluating and understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated by this Agreement;
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(c)
|
Absence of Obligation to Disclose
. The Transaction Entities and the Manager have been advised
that the Underwriters and their affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Transaction Entities and the Manager, and that the Underwriters have no obligation to disclose such interests
and transactions to Transaction Entities and the Manager by virtue of any fiduciary, advisory or agency relationship; and
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(d)
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Waiver
. Each of the Transaction Entities and the Manager waives, to the fullest extent permitted
by law, any claims they may have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and
agree that the Underwriters shall have no liability (whether direct or indirect) to either of the Transaction Entities or the Manager
in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Transaction
Entities or the Manager, including stockholders, holders of membership interests, employees or creditors of the Transaction Entities
or the Manager.
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18.
|
Trial by Jury
.
Each of the Transaction Entities and the Manager (on its behalf and,
to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
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19.
|
Applicable Law
. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
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20.
|
Jurisdiction
. Each of the Transaction Entities and the Manager hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby. Each of the Transaction Entities and the Manager
irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The City of
New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit or proceeding
in any such court has been brought in an inconvenient forum.
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21.
|
Termination
. Until the First Closing Date, this Agreement may be terminated by the Representative
by giving notice (in the manner prescribed by Section 11 hereof) to the Company, if (i) the Company shall have failed, refused
or been unable, at or prior to the First Closing Date, to perform any agreement on its part to be performed hereunder unless the
failure to perform any agreement is due to the default or omission by any Underwriter; (ii) any other condition of the obligations
of the Underwriters hereunder is not fulfilled; (iii) trading in securities generally on the NYSE, NYSE MKT, or Nasdaq shall have
been suspended or minimum or maximum prices shall have been established on either of such exchanges or such market by the Commission
or by such exchange or other regulatory body or governmental authority having jurisdiction; (iv) trading or quotation in any of
the Company’s securities shall have been suspended or materially limited by the Commission or by the NYSE MKT, NYSE or Nasdaq
or other regulatory body of governmental authority having jurisdiction; (v) a general banking moratorium has been declared by Federal
or New York authorities; (vi) a material disruption in securities settlement, payment or clearance services in the United States
shall have occurred; (vii) there shall have been any material adverse change in general economic, political or financial conditions
in the United States or in international conditions on the financial markets in the United States, in each case, the effect of
which is such as to make it, in the Representative’s reasonable judgment, inadvisable to proceed with the delivery of the
Securities; or (viii) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving the
United States or any other national or international calamity or emergency (including but not limited to attacks on, outbreaks
or escalations of hostilities, declarations of war or acts of terrorism arising from tensions between Russia and the Ukraine) has
occurred if, in the Representative’s reasonable judgment, the effect of any such attack, outbreak, escalation, declaration,
act, calamity or emergency makes it impractical or inadvisable to proceed with the completion of the public offering or the delivery
of the Securities. Any termination of this Agreement pursuant to this Section 21 shall be without liability on the part of the
Company or any Underwriter, except as otherwise provided in Sections 5(a), 7, 8 and 9 hereof.
|
If the foregoing is in accordance with
the Representative’s understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement among the Transaction Entities, the Manager and the several Underwriters in accordance
with its terms.
[Signature Page Follows]
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Very truly yours,
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BLUEROCK RESIDENTIAL GROWTH REIT, INC.
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By:
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/s/ R. Ramin Kamfar
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Name: R. Ramin Kamfar
|
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Title: Chief Executive Officer
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BLUEROCK RESIDENTIAL HOLDINGS, L.P.
|
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By: Bluerock Residential Growth REIT, Inc.
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Its: General Partner
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By:
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/s/ R. Ramin Kamfar
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Name: R. Ramin Kamfar
|
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Title: Chief Executive Officer
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BRG MANAGER, LLC
|
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By: Bluerock Real Estate, L.L.C.
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Its: Sole Member
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By:
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s/ R. Ramin Kamfar
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s/ R. Ramin Kamfar
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Title: Chief Executive Officer
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[Signature Page to Underwriting
Agreement]
The foregoing Agreement is hereby confirmed and accepted as
of the date first above written.
Acting on behalf of itself and as the
Representative of the several Underwriters.
|
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WUNDERLICH SECURITIES, INC.
|
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By:
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/s/ Chad D. Champion
|
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Name: Chad D. Champion
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Title: Managing Director
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[Signature Page to Underwriting
Agreement]
SCHEDULE
A
|
Underwriter
|
|
Number of Firm Shares
|
|
|
Wunderlich Securities, Inc.
|
|
|
2,172,415
|
|
|
BB&T Capital Markets, a division of BB&T Securities, LLC
|
|
|
482,759
|
|
|
National Securities Corporation
|
|
|
448,275
|
|
|
Boenning & Scattergood, Inc.
|
|
|
344,827
|
|
|
Total
|
|
|
3,448,276
|
|
BLUEROCK
RESIDENTIAL GROWTH REIT, Inc.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST
: The charter (the “Charter”)
of Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Corporation”), is hereby amended to provide
that, immediately upon the acceptance of these Articles of Amendment for record (the “Effective Time”) by the State
Department of Assessments and Taxation of Maryland, every 2.264881 shares of common stock, $0.01 par value per share, of the Corporation
which were issued and outstanding immediately prior to the Effective Time shall be changed into one issued and outstanding share
of common stock, $0.02264881 par value per share, of the Corporation.
SECOND
: The amendment to the Charter
as set forth above has been duly approved by at least a majority of the entire Board of Directors as required by law. The amendment
set forth herein is made without action by the stockholders of the Corporation, pursuant to Section 2-309(e) of the Maryland General
Corporation Law.
THIRD
: There has been no increase in
the authorized shares of stock of the Corporation effected by the amendment to the Charter as set forth above.
FOURTH
: The undersigned acknowledges
these Articles of Amendment to be the corporate act of the Corporation and as to all matters or facts required to be verified under
oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused
these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and President and attested
to by its Chief Operating Officer, General Counsel and Secretary on this 26
th
day of March, 2014.
|
ATTEST:
|
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
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|
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|
|
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|
/s/ Michael L. Konig
|
|
By:
|
/s/ R. Ramin Kamfar
|
(SEAL)
|
|
Name: Michael L. Konig
|
|
|
Name: R. Ramin Kamfar
|
|
|
Title: Chief Operating Officer, General
|
|
|
Title: Chief Executive Officer and President
|
|
|
Counsel and Secretary
|
|
|
|
|
BLUEROCK
RESIDENTIAL GROWTH REIT, Inc.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST
: The charter (the “Charter”)
of Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Corporation”), is hereby amended to decrease
the par value of the shares of common stock of the Corporation issued and outstanding immediately prior to the filing of these
Articles of Amendment from $0.02264881 per share to $0.01 per share.
SECOND
: The amendment to the Charter
as set forth above has been duly approved by at least a majority of the entire Board of Directors as required by law. The amendment
set forth herein is made without action by the stockholders of the Corporation, pursuant to Section 2-605(a)(2) of the Maryland
General Corporation Law.
THIRD
: There has been no increase in
the authorized shares of stock of the Corporation effected by the amendment to the Charter as set forth above.
FOURTH
: The undersigned acknowledges
these Articles of Amendment to be the corporate act of the Corporation and as to all matters or facts required to be verified under
oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused
these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and President and attested
to by its Chief Operating Officer, General Counsel and Secretary on this 26
th
day of March, 2014.
|
ATTEST:
|
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
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/s/ Michael L. Konig
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By:
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/s/ R. Ramin Kamfar
|
(SEAL)
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|
Name: Michael L. Konig
|
|
|
Name: R. Ramin Kamfar
|
|
|
Title: Chief Operating Officer, General
|
|
|
Title: Chief Executive Officer and President
|
|
|
Counsel and Secretary
|
|
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|
|
BLUEROCK
RESIDENTIAL GROWTH REIT, Inc.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST
: The charter (the “Charter”)
of Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Corporation”), is hereby amended to provide
that, immediately upon the acceptance of these Articles of Amendment for record (the “Effective Time”) by the State
Department of Assessments and Taxation of Maryland, every 1.0045878 shares of Class B Common Stock, $0.01 par value per share,
of the Corporation which were issued and outstanding immediately prior to the Effective Time shall be changed into one issued and
outstanding share of Class B Common Stock, $0.010045878 par value per share, of the Corporation.
SECOND
: The amendment to the Charter
as set forth above has been duly approved by at least a majority of the entire Board of Directors as required by law. The amendment
set forth herein is made without action by the stockholders of the Corporation, pursuant to Section 2-309(e) of the Maryland General
Corporation Law.
THIRD
: There has been no increase in
the authorized shares of stock of the Corporation effected by the amendment to the Charter as set forth above.
FOURTH
: The undersigned acknowledges
these Articles of Amendment to be the corporate act of the Corporation and as to all matters or facts required to be verified under
oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused
these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and President and attested
to by its Chief Operating Officer, General Counsel and Secretary on this 31
st
day of March, 2014.
|
ATTEST:
|
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
|
|
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|
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|
/s/ Michael L. Konig
|
|
By:
|
/s/ R. Ramin Kamfar
|
(SEAL)
|
|
Name: Michael L. Konig
|
|
|
Name: R. Ramin Kamfar
|
|
|
Title: Chief Operating Officer, General
|
|
|
Title: Chief Executive Officer and President
|
|
|
Counsel and Secretary
|
|
|
|
|
BLUEROCK
RESIDENTIAL GROWTH REIT, Inc.
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST
: The charter (the “Charter”)
of Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Corporation”), is hereby amended to decrease
the par value of the shares of Class B Common Stock of the Corporation issued and outstanding immediately prior to the filing of
these Articles of Amendment from $0.010045878 per share to $0.01 per share.
SECOND
: The amendment to the Charter
as set forth above has been duly approved by at least a majority of the entire Board of Directors as required by law. The amendment
set forth herein is made without action by the stockholders of the Corporation, pursuant to Section 2-605(a)(2) of the Maryland
General Corporation Law.
THIRD
: There has been no increase in
the authorized shares of stock of the Corporation effected by the amendment to the Charter as set forth above.
FOURTH
: The undersigned acknowledges
these Articles of Amendment to be the corporate act of the Corporation and as to all matters or facts required to be verified under
oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused
these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and President and attested
to by its Chief Operating Officer, General Counsel and Secretary on this 31
st
day of March, 2014.
|
ATTEST:
|
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
|
|
|
|
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/s/ Michael L. Konig
|
|
By:
|
/s/ R. Ramin Kamfar
|
(SEAL)
|
|
Name: Michael L. Konig
|
|
|
Name: R. Ramin Kamfar
|
|
|
Title: Chief Operating Officer, General
|
|
|
Title: Chief Executive Officer and President
|
|
|
Counsel and Secretary
|
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|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
I. PUTTING THIS CODE OF BUSINESS CONDUCT
AND ETHICS TO WORK
About this Code of Business Conduct
and Ethics
We at Bluerock Residential
Growth REIT, Inc. (the “
Company
”) are committed to the highest standards of business conduct in our relationships
with each other, with companies with which we do business and with our stockholders and others. This requires that we conduct our
business in accordance with all applicable laws and regulations and in accordance with the highest standards of business ethics.
This Code of Business Conduct and Ethics (this “
Code
”) helps each of us in this endeavor by providing a statement
of the fundamental principles and key policies and procedures that govern the conduct of our business. This Code operates in conjunction
with, and in addition to, the policies of the Company’s external manager (the “
Manager
”) and Bluerock
Real Estate, L.L.C., the Company’s sponsor (“
Bluerock
”). This Code describes standards of conduct for
all employees, officers and directors of the Company, and employees, members, officers and directors of the Manager and Bluerock
who provide services to the Company (collectively, “
Company Personnel
”). This Code is a statement of the Company’s
expectations for Company Personnel. Neither the adoption of this Code nor any description of its provisions constitutes a representation
that all of the Company’s employees, officers and directors are at any time in full compliance therewith. For the avoidance
of doubt, in the event the policies and/or procedures of this Code differ from the policies and/or procedures of the Company’s
Code of Ethics for Senior Executive and Financial Officers (the “
SOX Code
”), the policies and/or procedures
of the SOX Code will control for purposes of the Company Personnel who are subject to the SOX Code.
The purpose of this
Code is to deter wrongdoing and to promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships, (ii) full, fair, accurate, timely and understandable disclosure
in our Securities and Exchange Commission reports and other public communications, (iii) compliance with applicable laws, rules
and regulations, including insider trading laws, (iv) prompt internal reporting of violations of the Code to appropriate persons
identified in the Code, and (v) accountability for adherence to the Code.
Our business depends
on the quality of the Company’s reputation and, in turn, on all of us to exhibit integrity and engage only in principled
business conduct. Thus, in many instances, the policies referenced in this Code go beyond the requirements of the law.
This Code is a statement
of policies for individual and business conduct and does not, in any way, constitute an employment contract or an assurance of
continued employment. Employees of the Company are employed at-will except when they are covered by an express, written employment
agreement. This means that an employee may choose to resign his or her employment at any time, for any reason or for no reason
at all. Similarly, the Company may choose to terminate an individual’s employment at any time, for any legal reason or for
no reason at all.
Meeting Our Shared Obligations
Each of us is responsible
for knowing and understanding the policies and guidelines contained in the following pages. If questions arise, ask them; if there
are ethical concerns, raise them. The Company’s General Counsel is responsible for overseeing and monitoring compliance with
this Code, and the other resources set forth in this Code are available to answer questions and provide guidance and for all to
report suspected misconduct. Our conduct must reflect the Company’s values, demonstrate ethical leadership and promote a
work environment that upholds the Company’s reputation for integrity, ethical conduct and trust.
II. RESPONSIBILITY TO OUR ORGANIZATION
Company Personnel are
expected to dedicate their best efforts to the business of the Company and to avoid any conflicts with the interests of the Company.
Conflicts of Interest
The identification
and management of all conflicts of interest must be fundamental considerations in all of your business-related activities. Broadly
speaking, a conflict of interest may be present whenever your interests are inconsistent with, or appear to be inconsistent with,
those of the Company. Conflicts of interest, if not properly addressed, can cause serious harm to the Company. Even the mere appearance
of a conflict of interest (i.e., where no conflict may actually exist) can result in potentially irreversible damage to the Company’s
reputation. As such, it is the responsibility of each of us to help in the effort to identify actual or potential conflicts of
interest associated with the Company’s business and promptly bring any such issues to the attention of the Company’s
General Counsel.
In order to maintain
the highest degree of integrity in the conduct of the Company’s business and to maintain independent judgment, Company Personnel
must avoid any activity or personal interest that creates or appears to create a conflict between personal interests and the interests
of the Company. A conflict of interest occurs when the individual’s private interests interfere in any way, or even appear
to interfere, with the interests of the Company as a whole. A conflict situation can arise when the individual takes actions or
has interests that make it difficult for the individual to perform his or her work objectively and effectively. Company Personnel
should never act in a manner that could cause them to lose their independence and objectivity or that could adversely affect the
confidence of the companies with which we do business or fellow Company Personnel, or the integrity of the Company or its procedures.
Although we cannot
list every conceivable conflict, the following are some common examples that illustrate actual or apparent conflicts of interest
that should be avoided:
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|
•
|
Improper Personal Benefits from the Company
. Conflicts of interest arise when Company Personnel,
or members of the family of Company Personnel, receive improper personal benefits as a result of a position with the Company, the
Manager or Bluerock. Loans to, or guarantees of obligations of, such persons are of special concern. Company Personnel may not
accept any benefits from the Company that have not been duly authorized and approved pursuant to Company policy and procedures.
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|
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•
|
Business Arrangements with the Company
. Other than in their roles as employees, members,
officers and/or directors of the Manager or Bluerock, Company Personnel may not participate in a joint venture, partnership or
other business arrangement with the Company, without the prior approval of a majority of the Company’s Board of Directors
(the “
Board
”).
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•
|
Outside Employment or Activities
. Other than employment with, or being a member of, or serving
as an officer or director of, the Manager or Bluerock or with the prior written consent of the Company’s General Counsel,
simultaneous employment with any other entity, serving as a trustee/director of a significant competitor of the Company, serving
as a trustee/director of any entity in which the Company is invested or engaging in any activity that Company Personnel should
reasonably expect to advance a competitor’s interests is strictly prohibited. It is the responsibility of such person to
consult with the Company’s General Counsel to determine whether a planned activity will compete impermissibly with any of
the Company’s business activities before such person pursues the activity in question.
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•
|
Charitable, Government and Other Outside Activities
. The Company encourages all Company
Personnel to participate in projects and causes that further the welfare of our local communities. However, Company Personnel must
obtain the prior written approval of the Company’s General Counsel before serving as a trustee/director of any not-for-profit,
for-profit or other entity or before running for election or seeking appointment to any government-related position.
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•
|
Family Members Working In The Industry
. Company Personnel may find themselves in a situation
where their spouse or significant other, one or more of their children, parents or in-laws, or someone else with whom they have
a familial relationship is employed by a competitor of the Company or a company with which we do business. Such situations are
not prohibited, but they call for extra sensitivity to security, confidentiality and conflicts of interest. There are several factors
to consider in assessing such a situation. Among them: the relationship between the Company and the other company; the nature of
the responsibilities of the applicable Company Personnel with respect to the Company and those of the other person; and the access
each of them has to their respective employer’s confidential information. Such a situation, however harmless it may appear,
could arouse suspicions among associates that might affect working relationships. The very appearance of a conflict of interest
can create problems, regardless of the propriety of the individual’s behavior.
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To remove any such doubts or
suspicions, Company Personnel must disclose their specific situation to the Company’s General Counsel to assess the nature
and extent of any concern and how it can be resolved. In some instances, any risk to the Company’s interests may be sufficiently
remote such that the Company’s General Counsel may only remind you to guard against inadvertently disclosing Company confidential
information and not to be involved in decisions on behalf of the Company that involve the other company.
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Potential Company Conflicts of Interest
. There are a variety of situations in which the
Company itself may be viewed as having a conflict of interest. Ultimately, each of us is responsible for helping to identify Company-related
conflicts of interest and promptly raising them with the Company’s General Counsel.
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Company Opportunities
Company Personnel owe
a duty to the Company to advance its legitimate interests when the opportunity to do so arises. Company Personnel may not take
for themselves personally opportunities that are discovered through the use of Company property, information or position or use
Company property, information or position for personal gain. Nor may they compete with the Company.
Entertainment, Gifts and Gratuities
When Company Personnel
are involved in making business decisions on behalf of the Company, their decisions must be based on uncompromised objectivity
of judgment. Individuals interacting with any person who has business dealings with the Company (including companies with which
the Company does business, competitors, contractors and consultants) must conduct such activities in the best interest of the Company.
Company Personnel must not accept any gifts, entertainment or gratuities that could influence or be perceived to influence decisions
about the Company’s best interests.
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Receipt of Gifts and Entertainment
. Company Personnel must not accept any gifts, entertainment
or gratuities that could influence or be perceived to influence their business decisions on behalf of the Company. They must never
request or ask for gifts, entertainment or any other business courtesies from people doing business with the Company. Unsolicited
gifts and business courtesies, including meals and entertainment, are permissible if they are customary and commonly accepted business
courtesies; are not excessive in value; and are given and accepted without an express or implied understanding that the individual
is in any way obligated by his or her acceptance of the gift. Gifts that are outside these guidelines may not be accepted without
the prior written approval of the Company’s General Counsel. Gifts of cash or cash equivalents (including gift certificates,
securities, below-market loans, etc.) in any amount are prohibited and must be returned promptly to the donor. Loans (not including
loans at market rates from financial institutions made in the ordinary course of business) from any counter-party, or entity in
which the Company has an interest, are prohibited.
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Offering Gifts and Entertainment
. When the Company is providing a gift, entertainment or
other accommodation in connection with Company business, it must do so in a manner that is in good taste and without excessive
expense. Company Personnel may not furnish or offer to furnish any gift that goes beyond the common courtesies associated with
accepted business practices or that is excessive in value. The above guidelines for receiving gifts should be followed in determining
when it is appropriate to give gifts and when prior written approval is necessary. Companies with which we do business likely have
gift and entertainment policies of their own. We must be careful never to provide a gift or entertainment that violates the other
company’s gift and entertainment policy.
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What is acceptable in the commercial
business environment may be entirely unacceptable in dealings with the government. There are strict laws that govern providing
gifts, including meals, entertainment, transportation and lodging, to government officials and employees. Company Personnel are
prohibited from providing gifts or anything of value to government officials or employees or members of their families in connection
with Company business without the prior written approval of the Company’s General Counsel. For more information, see the
section of this Code entitled “Interacting with Government.”
Giving or receiving any payment
or gift in the nature of a bribe or kickback is absolutely prohibited.
Company Personnel who encounter
an actual or potential conflict of interest, face a situation where declining the acceptance of a gift may jeopardize a Company
relationship, are requested to pay a bribe or provide a kickback or encounter a suspected violation of this Code must immediately
report the situation to the Company’s General Counsel.
Protection and Proper Use of Company
Assets
We each have a duty
to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the
Company’s profitability. We should take measures to prevent damage to and theft or misuse of Company property. All Company
assets should be used for legitimate business purposes. When an individual leaves the Company, all Company property must be returned
to the Company. Incidental and occasional personal use of the Company’s electronic mail and telephone systems is permitted.
However, please be aware that even personal messages on the Company’s computer and telephone systems are Company property
and individuals therefore have no expectation of personal privacy in connection with their use of these resources, except as specifically
authorized in this Code or elsewhere.
Company Books and Records
All Company documents
must be completed accurately, truthfully and in a timely manner, including all travel and expense reports. When applicable, documents
must be properly authorized. The Company’s financial activities must be recorded in compliance with all applicable laws and
accounting practices. The making of false or misleading entries, records or documentation is strictly prohibited. Company Personnel
must never create a false or misleading report or make a payment or establish an account on behalf of the Company with the understanding
that any part of the payment or account is to be used for a purpose other than as described by the supporting documents.
Record Retention
In the course of its
business, the Company produces and receives large numbers of documents. Numerous laws require the retention of certain Company
documents for various periods of time. The Company is committed to compliance with all applicable laws and regulations relating
to the preservation of records. The Company’s policy is to identify, maintain, safeguard and destroy or retain, as determined
to be required, all records in the Company’s possession on a systematic and regular basis.
An individual who learns
of a subpoena or a pending or contemplated litigation or government investigation should immediately contact the Company’s
General Counsel. The individual must retain and preserve all records that may be responsive to the subpoena or relevant to the
litigation or that may pertain to the investigation until he or she is advised by the Company’s General Counsel as to how
to proceed. The individual must also affirmatively preserve from destruction all relevant records that, without intervention, would
automatically be destroyed or erased (such as e-mails and voicemail messages). Destruction of such records, even if inadvertent,
could seriously prejudice the Company. Any questions regarding whether a particular record pertains to a pending or contemplated
investigation or litigation or may be responsive to a subpoena or regarding how to preserve particular types of records should
be directed to the Company’s General Counsel.
Confidential Information
Company Personnel may
learn, to a greater or lesser degree, facts about the Company’s business, plans, operations or “secrets of success”
that are not known to the general public or to competitors. Sensitive information such as data of companies with which we do business,
the terms and prices offered or paid and marketing or strategic plans are examples of the Company’s confidential information
or trade secrets. Confidential information includes all nonpublic information that might be of use to competitors, or harmful to
the Company or companies with which we do business, if disclosed. During the course of performing their responsibilities, individuals
may obtain information concerning possible transactions with other companies or receive confidential information concerning other
companies that the Company may be under an obligation to maintain as confidential.
Individuals must maintain
the confidentiality of information entrusted to them by the Company or companies with which the Company does business, except when
disclosure is authorized or legally mandated. Company Personnel who possess or have access to confidential information or trade
secrets must:
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not use the information for their benefit or the benefit of persons inside or outside the Company,
the Manager or Bluerock.
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carefully guard against disclosure of that information to people outside the Company. For example,
such matters should not be discussed with family members or business or social acquaintances or in places where the information
may be overheard, such as taxis, public transportation, elevators or restaurants.
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not disclose confidential information to other Company Personnel unless such Company Personnel
need the information to carry out business responsibilities.
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Confidentiality agreements
are commonly used when the Company needs to disclose confidential information to others. A confidentiality agreement puts the person
receiving confidential information on notice that he or she must maintain the secrecy of such information. If, in doing business
with persons not employed by or otherwise providing services to the Company, an individual foresees that he or she may need to
disclose confidential information, he or she should call the Company’s General Counsel and discuss the utility of entering
into a confidentiality agreement.
The obligation to treat
information as confidential does not end when an individual leaves the Company, the Manager or Bluerock, as the case may be. Upon
separation from the Company, the Manager or Bluerock, as the case may be, everything that belongs to the Company, including all
documents and other materials containing confidential information of the Company, or that of companies with which we do business,
must be returned. Confidential information must not be disclosed to a new employer or to others after separation from the Company.
Likewise a previous
employer’s confidential information must not be disclosed to the Company. Of course, individuals may use general skills and
knowledge acquired during their previous employment.
Trademarks, Copyrights and Other
Intellectual Property
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Trademarks
. Company Personnel must always properly use our trademarks and advise the Company’s
General Counsel of infringements by others. Similarly, the trademarks of third parties must be used properly.
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Copyright Compliance
. All software or programs created by Company Personnel in connection
with their association with the Company or provision of services to the Company are “works for hire” and are the sole
property of the Company. Company Personnel understand that they have no right, title or interest in any intellectual property created
by them in connection with their employment or provision of services to the Company unless otherwise expressly agreed to in writing
by the Company’s General Counsel.
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Works of authorship such as books,
articles, drawings, computer software and other such materials may be covered by copyright laws. It is a violation of those laws
and of the Company’s policies to make unauthorized copies of or derivative works based upon copyrighted materials. The absence
of a copyright notice does not necessarily mean that the materials are not copyrighted.
The Company licenses the use
of some of its computer software from outside companies. In most instances, this computer software is protected by copyright. Company
Personnel may not make, acquire or use unauthorized copies of computer software. Any questions concerning copyright laws should
be directed to the Company’s General Counsel.
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Intellectual Property Rights of Others
. It is Company policy not to infringe upon the intellectual
property rights of others. When using the name, trademarks, logos or printed materials of another company, including any such uses
on the Company’s website, if any, individuals must do so properly and in accordance with applicable law.
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Computer and Communication Resources
The Company’s
communication resources, including computers, voicemail and e-mail, provide substantial benefits, but they also present significant
security and liability risks to individuals and the Company. It is extremely important that Company Personnel take all necessary
measures to secure their computer and any computer or voicemail passwords. All sensitive, confidential or restricted electronic
information must be password protected, and, if sent across the Internet, must be protected by Company-approved encryption software.
If an individual has any reason to believe that his or her password or the security of a Company computer or communication resource
has in any manner been compromised, he or she must change the password immediately and report the incident to the Company’s
General Counsel.
When using Company
resources to send e-mail, voicemail or to access Internet services, Company Personnel are acting as representatives of the Company.
Any improper use of these resources may reflect poorly on the Company, damage its reputation and expose the individual and the
Company to legal liability.
All of the computing
resources used to provide computing and network connections throughout the Company are the property of the Company and are intended
for use by Company Personnel to conduct the Company’s business. All e-mail, voicemail and personal files stored on Company
computers are Company property. Company Personnel should therefore have no expectation of personal privacy in connection with these
resources. The Company may, from time to time and at its sole discretion, review any files stored or transmitted on its computer
and communication resources, including e-mail messages, for compliance with Company policy. Incidental and occasional personal
use of electronic mail and telephones is permitted, but such use should be minimized and the length of the messages should be kept
as short as possible, as these messages cost the Company in both productive time and money. Even personal messages on the Company’s
e-mail and voicemail systems are Company property.
Company resources must
not be used in a way that may be disruptive or offensive to others or unlawful. At all times when sending e-mail or transmitting
any other message or file, individuals should not transmit comments, language, images or other files that the Company would be
embarrassed to have read by any person. Remember that “private” e-mail messages are easily forwarded to a wide audience.
In addition, do not use these resources in a wasteful manner. Unnecessarily transmitting messages and other files wastes not only
computer resources but also the time and effort of Company Personnel who then have to sort and read through unnecessary email.
Use of computer and
communication resources must be consistent with all other Company policies, including those relating to harassment, privacy, copyright,
trademark, trade secret and other intellectual property considerations.
Insider Trading
You are prohibited
by Company policy and by law from buying or selling publicly traded securities for any purpose at a time when you are in possession
of “material nonpublic information.” This conduct is known as “insider trading.” Insider trading is both
unethical and illegal. Passing such information on to someone who may buy or sell securities – known as “tipping”
– is also illegal. Information is considered “material” if a reasonable investor would consider it important
in arriving at a decision to buy, sell or hold securities. If you have any question about whether a particular transaction may
constitute insider trading, you should consult the Company’s Insider Trading Policy which has been provided to you and, prior
to trading, consult with the Company’s General Counsel.
Related Person Transactions
All Company Personnel
must promptly disclose to the Company’s Nominating and Corporate Governance Committee any “related person transaction”
(defined as any existing or proposed transaction, arrangement, relationship or series of similar transactions, arrangements or
relationships in which the Company is or was a participant and the amount involved exceeds $120,000 and in which any related person
had or will have a direct or indirect material interest) and all material facts about the transaction. If you have any question
about whether a particular transaction may qualify as a related person transaction, you should consult the Company’s “Related
Person Transaction Policy” which has been provided to you, and consult with the Company’s General Counsel.
Responding to Inquiries from Press
and Others
Company Personnel who
are not official spokespersons for the Company may not speak with the press, securities analysts, other members of the financial
community, stockholders or groups or organizations as a representative of the Company or about the Company’s business unless
specifically authorized to do so by the Company’s Chief Executive Officer. Requests for financial or other information about
the Company from the media, the press, the financial community, stockholders or the public should be referred to the Company’s
Chief Operating Officer. Requests for information from regulators or the government should be referred to the Company’s General
Counsel.
III. FAIR DEALING
The Company depends
on its reputation for quality and integrity. The way we deal with competitors and companies with which we do business molds our
reputation, builds long term trust and ultimately determines our success. Company Personnel should endeavor to deal fairly with
the Company’s suppliers, competitors and employees. None should take unfair advantage of anyone through manipulation, concealment,
abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.
IV. INTERACTING WITH GOVERNMENT
Prohibition on Gifts to Government
Officials and Employees
The various branches
and levels of government have different laws restricting gifts, including meals, entertainment, transportation and lodging that
may be provided to government officials and government employees. Company Personnel are prohibited from providing gifts, meals
or anything of value to government officials or employees or members of their families without the prior written approval of the
Company’s General Counsel.
Political Contributions and Activities
Laws of certain jurisdictions
prohibit the use of Company funds, assets, services or facilities on behalf of a political party or candidate. Payments of corporate
funds to any political party, candidate or campaign may be made only if permitted under applicable law and approved in writing
and in advance by the Company’s General Counsel.
Work time may be considered
the equivalent of a contribution by the Company. Therefore, Company Personnel will not be paid by the Company for any time spent
running for public office, serving as an elected official or campaigning for a political candidate. Nor will the Company compensate
or reimburse them, in any form, for a political contribution that they intend to make or have made.
Lobbying Activities
Laws of some jurisdictions
require registration and reporting by anyone who engages in a lobbying activity. Generally, lobbying includes: (1) communicating
with any member or employee of a legislative branch of government for the purpose of influencing legislation; (2) communicating
with certain government officials for the purpose of influencing government action; or (3) engaging in research or other activities
to support or prepare for such communication.
So that the Company
may comply with lobbying laws, Company Personnel must notify the Company’s General Counsel before engaging in any activity
on behalf of the Company that might be considered “lobbying” as described above.
Bribery of Foreign Officials
Company policy, the
U.S. Foreign Corrupt Practices Act (the “
FCPA
”) and the laws of many other countries prohibit the Company, Company
Personnel and agents from giving or offering to give money or anything of value to a foreign official, political party, party official
or candidate for political office in order to influence official acts or decisions of that person or entity, to obtain or retain
business or to secure any improper advantage. A foreign official is an officer or employee of a government or any department, agency
or instrumentality thereof, or of certain international agencies, such as the World Bank or the United Nations, or any person acting
in an official capacity on behalf of one of those entities. Officials of government-owned corporations are considered to be foreign
officials.
Payments need not be
in cash to be illegal. The FCPA prohibits giving or offering to give “anything of value.” Over the years, many non-cash
items have been the basis of bribery prosecutions, including travel expenses, golf outings, automobiles, and loans with favorable
interest rates or repayment terms. Indirect payments made through agents, contractors or other third parties are also prohibited.
Company Personnel may not avoid liability by “turning a blind eye” when circumstances indicate a potential violation
of the FCPA.
The FCPA does allow
for certain permissible payments to foreign officials. Specifically, the law permits “facilitating” payments, which
are payments of small value to effect routine government actions such as obtaining permits, licenses, visas, mail, utilities hook-ups
and the like. However, determining what is a permissible “facilitating” payment involves difficult legal judgments.
Therefore, Company Personnel must obtain permission from the Company’s General Counsel before making any payment or gift
thought to be exempt from the FCPA.
V. IMPLEMENTATION OF THIS CODE
Responsibilities
While each of us is
individually responsible for putting this Code to work, we need not go it alone. The Company has a number of resources, people
and processes in place to answer our questions and guide us through difficult decisions.
Copies of this Code
are available from the Company’s General Counsel. A statement acknowledging compliance with this Code must be signed by all
Company Personnel.
Seeking Guidance
This Code cannot provide
definitive answers to all questions. If you have questions regarding any of the policies discussed in this Code, or if you are
in doubt about the best course of action in a particular situation, you should seek guidance from your supervisor or the Company’s
General Counsel.
Reporting Violations
If you know of or suspect
a violation of applicable laws or regulations, this Code or the Company’s related policies, you must immediately report that
information to the Company’s General Counsel. No one will be subject to retaliation because of a good faith report of suspected
misconduct.
Investigations of Suspected Violations
All reported violations
will be promptly investigated and treated confidentially to the greatest extent possible. It is imperative that reporting persons
not conduct their own preliminary investigations. Investigations of alleged violations may involve complex legal issues, and acting
on your own may compromise the integrity of an investigation and adversely affect both you and the Company.
Discipline for Violations
The Company intends
to use every reasonable effort to prevent the occurrence of conduct not in compliance with this Code and to halt any such conduct
that may occur as soon as reasonably possible after its discovery. Subject to applicable laws, rules, regulations and agreements,
Company Personnel who violate this Code and/or other Company policies and procedures may be subject to disciplinary action, up
to and including termination of their employment and/or association with the Company, and if the complaint involves any employee,
member, officer or director of the Manager or Bluerock that provides services to the Company, the Company may also notify the Manager
or Bluerock of the matter, as appropriate.
Waivers of this Code
The Company will waive
application of the policies set forth in this Code only where circumstances warrant granting a waiver. Waivers of this Code for
executive officers or directors may be made only by the Board as a whole and must be promptly disclosed to stockholders as required
by (i) the rules of the New York Stock Exchange, NYSE MKT LLC or any other nationally recognized securities exchange on which the
Company’s securities are traded or (ii) any other law, rule or regulation. Waivers of this Code for other Company Personnel
may be made by the Company’s Chief Executive Officer and only upon such person making full disclosure in advance of the initiation
or continuation of the conduct in question. This Code may be amended in whole or in part at any time with the approval of a majority
of the Board.
No Rights Created
This Code is a statement
of the fundamental principles and key policies and procedures that govern the conduct of the Company’s business. It is not
intended to and does not create any rights in any officer, employee, director, partner, supplier, competitor or stockholder of
the Company or any other person or entity.
Remember
The ultimate responsibility
to assure that the Company complies with the many laws, rules, regulations and ethical standards affecting our business rests with
each of us. You must become familiar with and conduct yourself strictly in compliance with those laws, rules, regulations and ethical
standards and the Company’s policies and guidelines pertaining to them.
ACKNOWLEDGMENT FORM
I have received and
read the Bluerock Residential Growth REIT, Inc. Code of Business Conduct and Ethics (the “
Code
”), and I understand
its contents. I agree to comply fully with the standards, policies and procedures contained in the Code and the Company’s
related policies and procedures. I understand that I have an obligation to report to the Company’s General Counsel any suspected
violations of this Code of which I am aware. I acknowledge that this Code is a statement of policies for business conduct and does
not, in any way, constitute an employment contract or an assurance of continued employment.
___________________________
Signature
___________________________
Printed Name
___________________________
Date
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
CODE OF ETHICS
FOR
SENIOR EXECUTIVE AND FINANCIAL OFFICERS
Bluerock Residential
Growth REIT, Inc. (the “
Company
”) is committed to conducting our business in accordance with applicable laws,
rules and regulations and the highest standards of business conduct, and to full and accurate financial disclosure in compliance
with applicable law. This Code of Ethics for Senior Executive and Financial Officers (“
Code of Ethics
”), applicable
to the Company's Chief Executive Officer, Chief Investment Officer, Chief Operating Officer, Chief Financial Officer and Chief
Accounting Officer (or persons performing similar functions to the aforementioned officers) (together, the “
Senior Officers
”),
sets forth specific policies to guide you in the performance of your duties.
As a Senior Officer,
you must not only comply with applicable law. You also have a responsibility to conduct yourself in an honest and ethical manner
and must abide by the Company’s “Code of Business Conduct and Ethics,” “Related Person Transaction Policy,”
“Insider Trading Policy,” and other Company policies and procedures that govern the conduct of our business. Your leadership
responsibilities include creating a culture of high ethical standards and commitment to compliance, maintaining a work environment
that encourages employees to raise concerns, and promptly addressing employee compliance concerns.
Compliance with Laws, Rules and Regulations
You are required to
comply with the laws, rules and regulations that govern the conduct of our business and to report any suspected violations in accordance
with the section below entitled “Compliance with Code of Ethics.”
Conflicts of Interest
A conflict of interest
occurs when your private interests interfere in any way, or even appear to interfere, with the interests of the Company. Your obligation
to conduct the Company's business in an honest and ethical manner includes the ethical handling of actual or apparent conflicts
of interest between personal and professional relationships. Before making any investment, accepting any position or benefits,
participating in any transaction or business arrangement or otherwise acting in a manner that creates or appears to create a conflict
of interest, you must make full disclosure of all facts and circumstances to the chair of the Audit Committee of the Company’s
Board of Directors (the “
Audit Committee
”), and obtain the prior written approval of the Audit Committee.
Disclosures
It is Company policy
to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all
reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in all other public
communications made by the Company. As a Senior Officer, you are required to promote compliance by all employees with this policy
and to abide by Company standards, policies and procedures designed to promote compliance with this policy.
Compliance with Code of Ethics
If you know of or suspect
a violation of applicable laws, rules or regulations or this Code of Ethics, you must immediately report that information to the
General Counsel and the Chairperson of the Audit Committee. After reporting such information, you may conduct an investigation
if authorized by the Company's procedures. Company policy prohibits retaliation against employees because of a good faith report
of a suspected violation.
Violations of this
Code of Ethics may result in disciplinary action, up to and including discharge. The Audit Committee shall determine, or shall
designate appropriate persons to determine, appropriate action in response to violations of this Code of Ethics.
Waivers of Code of Ethics
If you would like to
seek a waiver of this Code of Ethics you must make full disclosure of your particular circumstances to the Audit Committee. Any
waivers of this Code of Ethics will be publicly disclosed as required by applicable law and regulations.
No Rights Created
This Code of Ethics
is a statement of certain fundamental principles, policies and procedures that govern the Senior Officers in the conduct of the
Company's business. It is not intended to and does not create any rights in any employee, advisor, agent, contractor, service provider,
customer/client, visitor, supplier, competitor, shareholder or any other person or entity.
ACKNOWLEDGEMENT FORM
I have received and
read the Bluerock Residential Growth REIT, Inc. Code of Ethics for Senior Executive and Financial Officers, and I understand its
contents. I agree to be bound by the terms hereof.
___________________________
Signature
___________________________
Printed Name
___________________________
Title
___________________________
Date
Corporate Headquarters
712 Fifth Avenue, 9
th
Floor
New York, NY 10019
877.826.BLUE (2583)
PRESS RELEASE
For Immediate Release
Bluerock Residential Growth REIT (BRG)
Prices Public Offering
at $14.50 per Share
New York, NY – March 28, 2014
- Bluerock Residential Growth REIT (NYSE MKT: BRG) (the “Company”) today announced the pricing of its public offering
of 3,448,276 shares of Class A common stock, at a price to the public of $14.50 per share, for a total of approximately $44.4 million
of net proceeds after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
All of the shares are being offered by the Company.
The offering is expected to close on
April 2, 2014. The Company has granted the underwriters a 30-day option to purchase up to an additional 517,241 shares to cover
overallotments, if any.
The Company will contribute the net
proceeds of this offering to its operating partnership in exchange for OP units. The Company, through its operating partnership,
intends to use the net proceeds of the offering for the acquisition of and investment in identified pipeline assets, for the payment
of acquisition and lender-related fees in connection with the contribution transactions, for the repayment of borrowing under the
Company’s line of credit, and for general corporate and working capital purposes, including future acquisitions, the repayment
of other indebtedness and the funding of capital improvements of the Company’s properties.
A registration statement relating to
the offering of the Company’s shares of Class A common stock discussed above was declared effective by the Securities and
Exchange Commission on March 28, 2014. This press release shall not constitute an offer to sell or a solicitation of an offer to
buy, nor shall there be any sale of, or any solicitation of an offer to buy, these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such
state or jurisdiction.
Wunderlich Securities, Inc. is serving
as sole book-running manager for the offering, and BB&T Capital Markets, National Securities Corporation and Boenning &
Scattergood, Inc. are serving as co-managers.
A copy of the prospectus relating to
the offering may be obtained by contacting: Wunderlich Securities, Inc., 6000 Poplar Avenue, Suite 150, Memphis, Tennessee 38119.
About Bluerock Residential Growth
REIT, Inc.
Bluerock Residential Growth REIT, Inc.
(NYSE MKT: BRG) is a real estate investment trust formed to acquire a diversified portfolio of institutional-quality apartment
properties in demographically attractive growth markets throughout the United States. The Company has elected to be taxed as a
real estate investment trust (REIT) for U.S. federal income tax purposes.
Forward Looking Statements
This press release contains forward
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.
These forward looking statements are based upon the Company’s present expectations, but these statements are not guaranteed
to occur. For example, because this offering has priced may imply that the offering will close, but the closing is subject to certain
conditions customary in transactions of this type and may be delayed or may not occur at all. In addition, the underwriters’
option to purchase additional shares may imply that this option will be exercised; however, the underwriters are not under any
obligation to exercise this option, or any portion of it, and may not do so. Investors should not place undue reliance upon forward
looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors”
section of the prospectus.
Contact
(Media)
Josh Hoffman
(208) 475.2380
jhoffman@bluerockre.com
##
Bluerock Residential Growth REIT,
Inc. Announces Sale of Creekside Property, Appointment of Treasurer and Updates to Corporate Governance Documents
Company Release - 4/1/2014 [
INSERT
TIME
]
NEW YORK--(BUSINESS WIRE)—Bluerock
Residential Growth REIT (NYSE MKT: BRG) (the “Company”) today announced the sale by BR Creekside, LLC, a special-purpose
entity in which the Company holds a 24.706% indirect equity interest, of The Reserve at Creekside Village, a 192-unit garden-style
apartment community located in Chattanooga, Tennessee. The Creekside property was sold to SIR Creekside, LLC, an unaffiliated third
party, for $18,875,000, subject to certain prorations and adjustments typical in a real estate transaction. After deduction for
payment of the existing mortgage indebtedness encumbering the Creekside property in the approximate amount of $13.5 million and
payment of closing costs and fees, excluding disposition fees of approximately $69,946 deferred by the Company’s former advisor,
the sale of the Creekside property generated net proceeds to the Company of approximately $1.2 million based on its proportionate
ownership therein.
The Company today also announced its
entry into an Underwriting Agreement with Wunderlich Securities, Inc., as representative of the underwriters, on March 28, 2014,
in connection with the pricing of its initial public offering, as previously announced by the Company, of 3,448,276 shares of Class
A common stock, at a price to the public of $14.50 per share, for a total of approximately $44.4 million of net proceeds after
deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
In addition, the Company today announced that on March 26, 2014,
its Board of Directors appointed Christopher J. Vohs, age 37, to serve as the Treasurer of the Company, effective as of March 19,
2014.
The Company further announced today that
on March 26, 2014, the Company amended and restated its charter pursuant the Second Articles of Amendment and Restatement of the
Company, as previously authorized and approved by the Company’s Board of Directors on December 16, 2013 and approved by the
stockholders of the Company at a special meeting of the stockholders held on January 23, 2014.
The Company also announced today that on March 26, 2014, the
Company further amended its charter to provide for a 2.264881-to-1 reverse stock split of its issued and outstanding Class B common
stock, and to decrease the par value of such Class B common stock from $0.02264881 per share to $0.01 per share. In addition, the
Company announced that on March 31, 2014, the Company further amended its charter to provide for a 1.0045878-to-1 reverse stock
split of its issued and outstanding Class B common stock, and to decrease the par value of such Class B common stock from $0.010045878
per share to $0.01 per share.
The Company today also announced that effective March 26, 2014,
its Board of Directors adopted a second amendment and restatement to the Bylaws of the Company.
In addition, the Company announced today
that in conjunction with its review of its corporate governance policies in connection with its initial public offering, effective
March 26, 2014, its Board of Directors amended the Company’s Code of Ethics originally adopted on January 14, 2009, which
will now be referred to as the “Code of Business Conduct and Ethics.” The Code of Business Conduct and Ethics describes
the standards of conduct for all employees, officers and directors of the Company, and for all employees, members, officers and
directors of the Company’s manager and of Bluerock Real Estate, L.L.C. who provide services to the Company.The Company also
announced today that effective as of March 26, 2014, its Board of Directors adopted and approved the Company’s code of conduct
for its senior executive and financial officers, which will be referred to as the “Code of Ethics for Senior Executive and
Financial Officers.”
These items were addressed and disclosed
by the Company in a Current Report on Form 8-K filed today with the Securities and Exchange Commission.
About Bluerock Residential Growth
REIT, Inc.
Bluerock Residential Growth REIT, Inc.
(NYSE MKT: BRG) is a real estate investment trust formed to acquire a diversified portfolio of institutional-quality apartment
properties in demographically attractive growth markets throughout the United States. The Company has elected to be taxed as a
real estate investment trust (REIT) for U.S. federal income tax purposes.
Forward Looking Statements
This press release contains forward
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.
These forward looking statements are based upon the Company’s present expectations, but these statements are not guaranteed
to occur. For example, the pricing of the initial public offering may imply that the offering will close, but the closing is subject
to certain conditions customary in transactions of this type and may be delayed or may not occur at all. In addition, the underwriters’
option to purchase additional shares may imply that this option will be exercised; however, the underwriters are not under any
obligation to exercise this option, or any portion of it, and may not do so. Investors should not place undue reliance upon forward
looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors”
section of the prospectus.