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): September 4, 2015
| Bluerock Residential Growth REIT, Inc. | |||||||||
| (Exact Name of Registrant as Specified in Its Charter) |
| Maryland | 001-36369 | 26-3136483 | ||
|
(State or other jurisdiction of incorporation
or organization) |
(Commission File Number)
|
(I.R.S. Employer Identification No.) |
|
712 Fifth Avenue, 9th Floor New York, NY 10019 |
|||||||||
| (Address of principal executive offices) | |||||||||
| (212) 843-1601 | |||||||||
| (Registrant’s telephone number, including area code) | |||||||||
| None. | |||||||||
| (Former name or former address, if changed since last report) |
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:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. |
The disclosure under Item 3.02 of this current report on Form 8-K is responsive to this Item 1.01, and is hereby incorporated by reference.
| ITEM 3.02 | UNREGISTERED SALES OF EQUITY SECURITIES. |
Securities for Services
Pursuant to that certain Third Amended and Restated Advisory Agreement dated as of February 27, 2013, as amended from time to time, or the Advisory Agreement, by and between Bluerock Residential Growth REIT, Inc., or the Company, its operating partnership, Bluerock Residential Holdings, L.P., or the Operating Partnership, and its former advisor, Bluerock Multifamily Advisor, LLC, a Delaware limited liability company, or the Former Advisor, the Former Advisor is entitled to the payment of certain fees in compensation for advisory and general management services rendered thereunder for periods prior to the Company’s initial public offering on April 2, 2014, and reimbursements for certain costs and expenses incurred in connection with the provision thereof, in an aggregate amount of $1,179,795.95, or the Former Advisor Obligation. Effective on September 4, 2015, the Former Advisor and BRG Manager, LLC, a Delaware limited liability company, or the Manager, entered into an Assignment Agreement pursuant to which the Former Advisor assigned its right to payment of the Former Advisor Obligation to the Manager. The Manager has agreed to receive the Former Advisor Obligation entirely in LTIP units of the Operating Partnership, or LTIP Units.
On September 4, 2015, the Board, including its independent directors, approved the payment of the Former Advisor Obligation entirely in LTIP Units. The Board, including its independent directors, further approved the issuance by the Operating Partnership to the Manager, on September 14, 2015 (five business days following September 4, 2015), or the Issuance Date, of a number of LTIP Units equal to (i) the dollar amount of the Former Advisor Obligation payable in such LTIP Units (calculated as $1,179,795.95), divided by (ii) the average of the closing prices of the Company’s Class A Common Stock, $0.01 par value per share, on the NYSE MKT on the five business days prior to the Issuance Date, or the Former Advisor LTIP Units, in payment of the Former Advisor Obligation .
The Board authorized the Company, as the General Partner of the Operating Partnership, to cause the Operating Partnership to issue the Former Advisor LTIP Units to the Manager in reliance upon exemptions from registration provided by Section 4(A)(2) of the Securities Act of 1933 and Regulation D. The Manager has a substantive, pre-existing relationship with the Company and is an “accredited investor” as defined in Regulation D.
The Former Advisor LTIP Units shall be fully vested upon issuance, and may convert to OP Units upon reaching capital account equivalency with the OP Units held by the Company, and may then be settled in shares of the Company’s Class A common stock. The Manager will be entitled to receive “distribution equivalents” with respect to the Former Advisor LTIP Units at the same time distributions are paid to the holders of the Company’s Class A common stock.
The foregoing description of the Assignment Agreement is a summary and is qualified in its entirety by the terms of the Assignment Agreement, a copy of which is filed as Exhibit No. 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 3.02.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 10.1 | Assignment Agreement, between and among Bluerock Multifamily Advisor, LLC and BRG Manager, LLC, dated September 4, 2015 |
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.
| BLUEROCK RESIDENTIAL GROWTH REIT, INC. | |||
| Dated: September 11, 2015 | By: | /s/ Christopher J. Vohs | |
| Christopher J. Vohs | |||
| Chief Accounting Officer and Treasurer | |||
Exhibit Index
| Exhibit No. | Description | |
| 10.1 | Assignment Agreement, between and among Bluerock Multifamily Advisor, LLC and BRG Manager, LLC, dated September 4, 2015 |
Exhibit 10.1
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (the “ Assignment ”) is made effective as of September 4, 2015, by and between BLUEROCK MULTIFAMILY ADVISOR, LLC, a Delaware limited liability company (“ Assignor ”), and BRG MANAGER, LLC, a Delaware limited liability company (“ Assignee ”).
W I T N E S S E T H:
WHEREAS, R. Ramin Kamfar controls and is the direct or indirect owner of (i) 98.5% of Assignor and (ii) 52.421875% of Assignee.
WHEREAS, pursuant to that certain Third Amended and Restated Advisory Agreement, dated as of February 27, 2013 by and between Bluerock Residential Growth REIT, Inc. (“ BRG ”), Bluerock Residential Holdings, L.P., a Delaware limited partnership (the “ Operating Partnership ”) and Assignor (as amended from time to time, the “ Advisory Agreement ”), Assignor is entitled to the payment of (i) certain fees in compensation for advisory services and certain general management services rendered thereunder, and (ii) certain reimbursements for costs and expenses incurred in connection with the provision thereof (collectively, the “ Fees and Expenses ”), in an aggregate amount of $1,179,795.95 ( the “ Former Advisor Obligation ”).
WHEREAS, Assignor wishes to assign its right to payment of the Former Advisor Obligation to Assignee, and Assignee wishes to accept such assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Assignment . Assignor hereby assigns to the Assignee all of its right, title and interest in the Former Advisor Obligation as defined above. The foregoing assignment is intended to apply to, and effectuate without any further action required, an assignment of all past Fees and Expenses otherwise payable to Assignor and its affiliated parties pursuant to the Advisory Agreement, it being the intent of the parties that all past Fees and Expenses are to be the subject of this Assignment, and it being agreed by the parties that the Former Advisor Obligation comprises all past Fees and Expenses.
2. Acceptance . Assignee hereby accepts the assignment of the Former Advisor Obligation .
3. Further Assurances . Assignor represents and warrants that it has made no prior assignment of its right, title and interest in and to the Former Advisor Obligation , and that it has full right, power and authority to assign its rights in and to the Former Advisor Obligation and to enter into this Assignment. Each of the parties hereto agrees to execute such other, further and different documents and perform such other, further and different acts as may be reasonably necessary or desirable to carry out the intent and purpose of this Assignment.
4. Successors and Assigns . This Assignment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.
5. Governing Law . This Assignment shall be governed in all respects, including validity, interpretation and effect, by and shall be enforceable in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles.
6. Entire Agreement . This Assignment contains the entire agreement between the parties regarding the subject matter hereof. Any prior agreements, discussions or representations not expressly contained herein shall be deemed to be replaced by the provisions hereof and no party has relied on any such prior agreements, discussions or representations as an inducement to the execution hereof.
7. Counterpart Execution . This Assignment may be executed in multiple counterparts, each one of which will be deemed an original, but all of which shall be considered together as one and the same instrument. Execution by a party of a signature page hereto shall constitute due execution and shall create a valid, binding obligation of the party so signing, and it shall not be necessary or required that the signatures of all parties appear on a single signature page hereto.
[Remainder of page intentionally left blank. Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment effective as of the day and year written above.
| ASSIGNOR: | |||
| BLUEROCK MULTIFAMILY ADVISOR, LLC, | |||
| a Delaware limited liability company | |||
| By: | /s/ R. Ramin Kamfar | ||
| Name: | R. Ramin Kamfar | ||
| Its: | Authorized Signatory | ||
| ASSIGNEE: | |||
| BRG MANAGER, LLC, | |||
| a Delaware limited liability company | |||
| By: | /s/ R. Ramin Kamfar | ||
| Name: | R. Ramin Kamfar | ||
| Its: | Authorized Signatory | ||