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): July 21, 2017

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company   ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

 

 

 

 

 

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

 

Amendment to Dealer Manager Agreement

 

On February 24, 2016, Bluerock Residential Growth REIT, Inc., a Maryland corporation, or the Company, and its operating partnership, Bluerock Residential Holdings, L.P., a Delaware limited partnership, or the Operating Partnership, entered into a Dealer Manager Agreement, or the Dealer Manager Agreement, with Bluerock Capital Markets, LLC, a Delaware limited liability company, an affiliate of the Company, or the Dealer Manager, whereby the Dealer Manager serves as the Company’s exclusive dealer manager in connection with the Company’s offering, or the Offering, of up to 150,000 shares of Series B redeemable preferred stock of the Company, or the Series B Preferred Stock, and warrants, or the Warrants, to purchase a maximum of 3,000,000 shares of our Class A common stock, or the Class A Common Stock, on a “reasonable best efforts” basis. The Series B Preferred Stock is registered with the Securities and Exchange Commission, or the SEC, pursuant to a registration statement on Form S-3 (File No. 333-200359), as the same may be amended and/or supplemented, or the Registration Statement, under the Securities Act of 1933, or the Securities Act. The Series B Preferred Stock has previously been offered and sold pursuant to a prospectus supplement dated February 24, 2016, and a base prospectus dated December 19, 2014 relating to the Registration Statement, or the Base Prospectus, and effective as of July 21, 2017, the Series B Preferred Stock will be offered and sold pursuant to a prospectus supplement dated July 21, 2017, and the Base Prospectus.

 

On July 21, 2017, the Company and the Operating Partnership entered into an Amendment to the Dealer Manager Agreement, or the DMA Amendment, with the Dealer Manager to reflect an increase in the size of the Offering to a maximum of 225,000 shares of Series B Preferred Stock, and Warrants to purchase a maximum of 4,500,000 shares of our Class A Common Stock.

 

Under the DMA Amendment, the Dealer Manager will continue to provide certain sales, promotional and marketing services to the Company in connection with the Offering , and the Company will continue to pay the Dealer Manager (i) selling commissions of 7.0% of the gross proceeds from sales of Series B Preferred Stock in the Offering, or Selling Commissions; provided, that if the Dealer Manager enters into an agreement with a participating broker-dealer providing for a maximum selling commission of less than 7.0%, then the offering price per share of Series B Preferred Stock sold through such participating broker-dealer shall be reduced by an amount equal to the reduction in selling commission paid to such participating broker-dealer ; and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the Offering, or the Dealer Manager Fee. It is anticipated that substantially all of the Selling Commissions and the Dealer Manager Fee will be reallowed by the Dealer Manager to participating broker-dealers and/or applied by the Dealer Manager in support of the Offering .

 

The terms of the DMA Amendment were approved by the Company’s board of directors, including all of its independent directors. Except as described in this Current Report on Form 8-K, the terms of the Dealer Manager Agreement otherwise remain unmodified and the Dealer Manager Agreement, as amended by the DMA Amendment, remains in full force and effect.

 

The foregoing description of the DMA Amendment is a summary and is qualified in its entirety by the terms of DMA Amendment , 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 1.01. A copy of the opinion of Venable LLP relating to the legality of the issuance and sale of the Series B Preferred Stock is attached as Exhibit 5.1 hereto, and a copy of the opinion of Vinson & Elkins LLP with respect to tax matters concerning the Series B Preferred Stock is attached as Exhibit 8.1 hereto.

 

Amendment to Amended and Restated Warrant Agreement

 

On November 3, 2016, the Company terminated American Stock Transfer & Trust Company, LLC as agent for the Company in respect of the Warrants under that certain Warrant Agreement dated February 24, 2016 (the “Initial Warrant Agreement”) in accordance with the terms thereof. On November 3, 2016, the Company entered into an amended and restated warrant agreement on substantially the same terms as the Initial Warrant Agreement, or the Warrant Agreement, with Computershare Inc., a Delaware corporation, or Computershare, and its wholly-owned subsidiary, Computershare Trust Company N.A., a federally chartered trust company, or the Warrant Agent, as agent for the Company in respect of the Warrants, which governs the Warrants issued in the Offering.

 

On July 21, 2017, the Company entered into an Amendment to the Warrant Agreement, or the Warrant Agreement Amendment, with the Warrant Agent to reflect an increase in the size of the Offering to a maximum of 225,000 shares of Series B Preferred Stock, and Warrants to purchase a maximum of 4,500,000 shares of our Class A Common Stock

 

 

 

 

The terms of the Warrant Agreement Amendment were approved by the Company’s board of directors, including all of its independent directors. Except as described in this Current Report on Form 8-K, the terms of the Warrant Agreement otherwise remain unmodified and the Warrant Agreement, as amended by the Warrant Agreement Amendment, remains in full force and effect.

 

The foregoing description of the Warrant Agreement Amendment is a summary and is qualified in its entirety by the terms of Warrant Agreement Amendment , a copy of which is filed as Exhibit No. 10.2 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.

 

Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership

 

On July 21, 2017, in connection with the Offering, the Company entered into a Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership, or the Seventh Amendment, of its Operating Partnership. The Seventh Amendment provides, among other things, for the designation of an additional 75,000 Series B Redeemable Preferred Units of the Operating Partnership, or the Series B Preferred Units, and the issuance of the Series B Preferred Units to the Company in exchange for the contribution by the Company of the net proceeds of the Offering of the Series B Preferred Stock. The Series B Preferred Units will have substantially similar rights and preferences as the Series B Preferred Stock, as described below in Item 3.03.

 

The foregoing description of the Seventh Amendment is a summary and is qualified in its entirety by the terms of the Seventh Amendment, a copy of which is filed as Exhibit No. 10.3 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.

 

ITEM 3.03. MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS

 

On July 20, 2017, the Company filed Articles Supplementary, or the Articles Supplementary, with the Maryland State Department of Assessments and Taxation to classify and  designate an additional 75,000 shares of the Company’s authorized but unissued preferred stock, $0.01 par value per share, as shares of Series B Redeemable Preferred Stock, with the powers, designations, preferences and other rights as set forth therein. The Articles Supplementary became effective upon filing on July 20, 2017. The total number of shares of Series B Preferred Stock that the Company has authority to issue after giving effect to the Articles Supplementary is 225,000. There has been no increase in the authorized shares of stock of the Company effected by the Articles Supplementary.

 

The foregoing description of the Articles Supplementary is a summary and is qualified in its entirety by the terms of the Articles Supplementary, a copy of which is filed as Exhibit No. 3.1 to this Current Report on Form 8-K and incorporated by reference into this Item 3.03.

 

ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR

 

The information set forth above under Item 3.03 of this report is hereby incorporated by reference into this Item 5.03.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

 

(d) Exhibits.

 

Exhibit No.   Description
     
3.1   Articles Supplementary of the Company, dated July 20, 2017
     
5.1   Opinion of Venable LLP
     
8.1   Opinion of Vinson & Elkins LLP
     
10.1   Amendment to Dealer Manager Agreement by and among Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P. and Bluerock Capital Markets, LLC, dated July 21, 2017
     
10.2   Amendment to Amended and Restated Warrant Agreement by and between Bluerock Residential Growth REIT, Inc., Computershare Inc. and Computershare Trust Company N.A., dated July 21, 2017
     
10.3   Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of Bluerock Residential Holdings, L.P., dated July 21, 2017

 

 

 

 

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: July 21, 2017 By: /s/ Christopher J. Vohs
    Christopher J. Vohs
    Chief Accounting Officer and Treasurer

  

 

 

 

Exhibit Index

   

Exhibit No.   Description
     
3.1   Articles Supplementary of the Company, dated July 20, 2017
     
5.1   Opinion of Venable LLP
     
8.1   Opinion of Vinson & Elkins LLP
     
10.1   Amendment to Dealer Manager Agreement by and among Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P. and Bluerock Capital Markets, LLC, dated July 21, 2017
     
10.2   Amendment to Amended and Restated Warrant Agreement by and between Bluerock Residential Growth REIT, Inc., Computershare Inc. and Computershare Trust Company N.A., dated July 21, 2017
     
10.3   Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of Bluerock Residential Holdings, L.P., dated July 21, 2017

 

 

 

Exhibit 3.1

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

 

ARTICLES SUPPLEMENTARY

 

 

Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST : Under a power contained in Article V of the charter of the Corporation (the “Charter”) and Section 2-105 of the Maryland General Corporation Law, the Board of Directors of the Corporation (the “Board”), by duly adopted resolutions, classified 75,000 shares of authorized but unissued preferred stock, $0.01 par value per share, of the Corporation as additional shares (the “Additional Shares”) of Series B Redeemable Preferred Stock (the “Series B Preferred Stock”), having the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption set forth in the Charter.

 

SECOND : The Additional Shares have been classified and designated by the Board under the authority contained in the Charter. After giving effect to the classification of the Additional Shares set forth herein, the total number of shares of Series B Preferred Stock that the Corporation has authority to issue is 225,000.

 

THIRD : These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.

 

FOURTH : The undersigned acknowledges these Articles Supplementary 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.

  

 

 

 

IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed in its name and on its behalf by its Chairman of the Board, Chief Executive Officer and President and attested to by its Chief Operating Officer, Secretary and General Counsel on this 20 th day of July, 2017.

 

ATTEST:   BLUEROCK RESIDENTIAL GROWTH REIT, INC.

 

/s/ Michael L. Konig   By: /s/ R. Ramin Kamfar (SEAL)
Name:  Michael L. Konig     Name:  R. Ramin Kamfar
Title: Chief Operating Officer, Secretary     Title: Chairman of the Board, Chief Executive
  and General Counsel       Officer and President

 

2  

 

 

 

Exhibit 5.1

 

July 21, 2017

 

Bluerock Residential Growth REIT, Inc.

9 th Floor

712 Fifth Avenue

New York, New York 10019

 

Re: Registration Statement on Form S-3 (File No. 333-200359)

 

Ladies and Gentlemen:

 

We have served as Maryland counsel to Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law arising out of the registration of 225,000 shares (the “Shares”) of Series B Redeemable Preferred Stock, $0.01 par value per share (the “Series B Preferred Stock”), of the Company, to be issued by the Company in a public offering covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (herein collectively referred to as the “Documents”):

 

1. The Registration Statement;

 

2. The Prospectus, dated December 19, 2014, as supplemented by a Prospectus Supplement, dated July 21, 2017 (the “Prospectus Supplement”), filed with the Commission pursuant to Rule 424(b) of the General Rules and Regulations promulgated under the 1933 Act;

 

3. The charter of the Company (the “Charter”), including, without limitation, the Articles Supplementary relating to the Series B Preferred Stock, certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);

 

4. The Second Amended and Restated Bylaws of the Company, certified as of the date hereof by an officer of the Company;

 

5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;

 

 

 

 

Bluerock Residential Growth REIT, Inc.

July 21, 2017

Page 2

 

6. Resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof relating to, among other matters, the sale, issuance and registration of the Shares (the “Resolutions”), certified as of the date hereof by an officer of the Company;

 

7. A certificate executed by an officer of the Company, dated as of the date hereof; and

 

8. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.

 

In expressing the opinion set forth below, we have assumed the following:

 

1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.

 

2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.

 

3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.

 

4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.

 

5. The Shares will not be issued or transferred in violation of any restriction or limitation on transfer and ownership of shares of stock of the Company contained in the Charter.

 

 

 

 

Bluerock Residential Growth REIT, Inc.

July 21, 2017

Page 3

 

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

 

1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.

 

2. The issuance of the Shares has been duly authorized and, when and if issued and delivered against payment therefor in accordance with the Registration Statement, the Prospectus Supplement and the Resolutions, the Shares will be validly issued, fully paid and nonassessable.

 

The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with any federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

 

The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

 

This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Current Report on Form 8-K relating to the Offering (the “Current Report”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by
reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.

 

  Very truly yours,
   
  /s/ Venable LLP

  

 

Exhibit 8.1

 

 

 

July 21, 2017

 

Bluerock Residential Growth REIT, Inc.

712 Fifth Avenue

9th Floor

New York, New York 10019

 

Re: Bluerock Residential Growth REIT, Inc. Qualification as Real Estate Investment Trust

 

Ladies and Gentlemen:

 

We have acted as special tax counsel to Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “ Company ”), in connection with the offer and sale of up to 225,000 units consisting of 225,000 shares of Series B Redeemable Preferred Stock, par value $0.01 per share, of the Company, and Warrants to purchase 4,500,000 shares of Class A Common Stock, par value $0.01 per share, of the Company pursuant to a prospectus supplement filed on July 21, 2017 (the “ Prospectus Supplement ”), forming part of the Registration Statement on Form S-3 (File No. 333-200359) filed with the Securities and Exchange Commission on November 18, 2014 (the “ Registration Statement ”). You have requested our opinion regarding certain U.S. federal income tax matters.

 

In connection with the opinions rendered in (a) and (b) below (together, the “ Tax Opinion ”), we have examined the following:

 

1. the Registration Statement, the prospectus filed as part of the Registration Statement (the “ Prospectus ”), and the Prospectus Supplement;

 

2. the Company’s Second Articles of Amendment and Restatement filed on March 26, 2014, the Company’s First Articles of Amendment to the Second Articles of Amendment and Restatement filed on March 26, 2014, the Company’s Second Articles of Amendment to the Second Articles of Amendment and Restatement filed on March 26, 2014, the Company’s Third Articles of Amendment to the Second Articles of Amendment and Restatement filed on March 31, 2014, the Company’s Fourth Articles of Amendment to the Second Articles of Amendment and Restatement filed on March 31, 2014 with the Department of Assessments and Taxation of the State of Maryland, the Articles Supplementary designating the Company’s 8.250% Series A Cumulative Redeemable Preferred Stock, the Articles Supplementary designating the Company’s Series B Redeemable Preferred Stock, the Articles Supplementary designating the Company’s 7.625% Series C Cumulative Redeemable Preferred Stock, and the Articles Supplementary designating the Company’s 7.125% Series D Cumulative Preferred Stock;

 

Vinson & Elkins LLP Attorneys at Law

Austin Beijing Dallas Dubai Hong Kong Houston London Moscow New York

Palo Alto Richmond Riyadh San Francisco Taipei Tokyo Washington 

2200 Pennsylvania Avenue NW, Suite 500 West

Washington, DC 20037-1701

Tel +1.202.639.6500 Fax +1.202.639.6604 www.velaw.com

 

 

 

 

V&E_BLACK July 21, 2017   Page 2

 

3. the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the First Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the Third Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the Fifth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership; and the Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership; and

 

4. such other documents as we have deemed necessary or appropriate for purposes of this opinion.

 

In connection with the Tax Opinion rendered below, we have assumed, with your consent, that:

 

1.       each of the documents referred to above has been duly authorized, executed, and delivered; is authentic, if an original, or is accurate, if a copy; and has not been amended;

 

2.       during its taxable year ending December 31, 2017, and future taxable years, the Company will operate in a manner that will make the factual representations contained in a certificate, dated the date hereof and executed by a duly appointed officer of the Company (the “ Officer’s Certificate ”), true for such years;

 

3.       the Company will not make any amendments to its organizational documents or the organizational documents of the Operating Partnership after the date of this opinion that would affect its qualification as a real estate investment trust (a “ REIT ”) for any taxable year; and

 

4.       no action will be taken by the Company or the Operating Partnership after the date hereof that would have the effect of altering the facts upon which the opinions set forth below are based.

 

 

 

 

V&E_BLACK July 21, 2017   Page 3

 

In connection with the Tax Opinion rendered below, we also have relied upon the correctness of the factual representations contained in the Officer’s Certificate. No facts have come to our attention that would cause us to question the accuracy and completeness of such factual representations. Furthermore, where such factual representations involve terms defined in the Internal Revenue Code of 1986, as amended (the “ Code ”), the Treasury regulations thereunder (the “ Regulations ”), published rulings of the Internal Revenue Service (the “ Service ”), or other relevant authority, we have reviewed with the individuals making such representations the relevant provisions of the Code, the applicable Regulations and published administrative interpretations thereof.

 

Based solely on the documents and assumptions set forth above, the representations set forth in the Officer’s Certificate, and the discussions in the Prospectus under the caption “Material Federal Income Tax Considerations” and in the Prospectus Supplement under the caption “Additional Material Federal Income Tax Considerations” (which are incorporated herein by reference), we are of the opinion that:

 

(a)       the Company qualified to be taxed as a REIT pursuant to sections 856 through 860 of the Code for its taxable years ended December 31, 2010 through December 31, 2016, and the Company’s organization and current and proposed method of operation will enable it to continue to qualify for taxation as a REIT under the Code for its taxable year ending December 31, 2017 and thereafter; and

 

(b)       the descriptions of the law and the legal conclusions in the Prospectus under the caption “Material Federal Income Tax Considerations” and in the Prospectus Supplement under the heading “Additional Material Federal Income Tax Considerations” are correct in all material respects.

 

We will not review on a continuing basis the Company’s compliance with the documents or assumptions set forth above, or the representations set forth in the Officer’s Certificate. Accordingly, no assurance can be given that the actual results of the Company’s operations for any given taxable year will satisfy the requirements for qualification and taxation as a REIT. Although we have made such inquiries and performed such investigations as we have deemed necessary to fulfill our professional responsibilities as counsel, we have not undertaken an independent investigation of all of the facts referred to in this letter or the Officer’s Certificate. In particular, we note that the Company has engaged in transactions in connection with which we have not provided legal advice and may not have reviewed.

 

Moreover, we have not participated in the preparation of the Registration Statement, except with respect to the section entitled “Material Federal Income Tax Considerations” in the Prospectus and the section entitled “Additional Material Federal Income Tax Considerations” in the Prospectus Supplement, and we do not assume any responsibility for, and make no representation that we have independently verified, the accuracy, completeness, or fairness of the statements contained in the Registration Statement, except to the extent described above with respect to the section entitled “Material Federal Income Tax Considerations” in the Prospectus and the section entitled “Additional Material Federal Income Tax Considerations” in the Prospectus Supplement.

 

 

 

 

V&E_BLACK July 21, 2017   Page 4

 

The foregoing opinions are based on current provisions of the Code, the Regulations, published administrative interpretations thereof, and published court decisions. The Service has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT.

 

The foregoing opinions are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other U.S. federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. We undertake no obligation to update the opinions expressed herein after the date of this letter. This opinion letter speaks only as of the date hereof. Except as provided in the next paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document, or filed with any governmental agency without our express written consent.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus Supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the Securities and Exchange Commission.

 

  Very truly yours,
   
  /s/ VINSON & ELKINS LLP
   
  Vinson & Elkins LLP

 

 

 

Exhibit 10.1

 

 

 

AMENDMENT TO DEALER MANAGER AGREEMENT

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

 

July 21, 2017

  

Bluerock Capital Markets, LLC

17900 Skypark Circle, Suite 260

Irvine, California 92614

 

RE: Offering of shares of Series B Redeemable Preferred Stock (the “ Series B Redeemable Preferred Stock ”) of Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “ Company ”) and Warrants to purchase shares of Class A Common Stock of the Company (the “ Warrants ,” and together with the Series B Redeemable Preferred Stock, the “ Units ”); Amendment to Dealer Manager Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Dealer Manager Agreement dated February 24, 2016 (the “ DMA ”) between the Company, Bluerock Residential Holdings, L.P., a Delaware limited partnership (the “ Operating Partnership ”) and Bluerock Capital Markets, LLC, a Massachusetts limited liability company (the “ Dealer Manager ”), regarding the offering and sale (“ Offering ”) by the Company of the Units pursuant to the Registration Statement and Prospectus (as each such term is defined in the DMA). Capitalized terms used but not defined in this letter amendment (this “ Amendment ”) shall have the meanings ascribed to them in the DMA.

 

In connection with the issuance by the Company of a Takedown Supplement which among other changes increases the size of the Offering from a maximum of 150,000 Units to a maximum of 225,000 Units (the “ Takedown Supplement ”), the parties desire to amend the DMA as set forth in this letter amendment (this “Amendment”).

 

Accordingly, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the Company, the Operating Partnership and Dealer Manager agree as follows:

 

1. The first sentence of the DMA is hereby deleted in its entirety, and is replaced with the following sentence:

 

“Bluerock Residential Growth REIT, Inc. a Maryland corporation (the “ Company ”), has proposed to offer for public sale (the “ Offering ”) a maximum of $225,000,000 of Units, consisting of 225,000 Shares of Series B Redeemable Preferred Stock, $0.01 par value per share (the “ Series B Redeemable Preferred Stock ”), and Warrants to purchase 4,500,000 Shares of Class A Common Stock (the “ Warrants ,” and together with the Series B Redeemable Preferred Stock, the “ Units ”).”

 

2, The following two sentences are hereby added at the end of Section 5.2(a) of the DMA:

 

“The Company agrees that if the Dealer Manager enters into a Participating Broker-Dealer Agreement providing for a maximum selling commission of less than 7.0% of the gross proceeds of the Units sold, then the offering price per Unit sold through any applicable Participating Broker-Dealer shall be reduced by an amount equal to the reduction in maximum selling commission to such Participating Broker-Dealer. For example, if the Dealer Manager and a Participating Broker-Dealer enter into a Participating Broker-Dealer Agreement providing for a maximum selling commission of 5.5% of the gross proceeds of the Units sold, then the per Unit offering price would be reduced by 1.5% from $1,000 to $985 per Unit.”

 

 

 

 

Except as set forth in this Amendment, the DMA shall remain unmodified and in full force and effect, and is hereby ratified, approved and affirmed by the Company, the Operating Partnership and the Dealer Manager.

 

This Amendment shall become effective as of the date the Takedown Supplement is filed with the Commission.

 

[Remainder of page intentionally left blank. Signature page follows.]

 

2  

 

 

Very truly yours,

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.,

a Maryland corporation

 

By: /s/ Michael L. Konig  
Name:  Michael L. Konig  
Its: Chief Operating Officer and General Counsel  

 

BLUEROCK RESIDENTIAL HOLDINGS, L.P.,

a Delaware limited partnership

 

By: /s/ Michael L. Konig  
Name:  Michael L. Konig  
Its: Chief Operating Officer and General Counsel  

  

BLUEROCK CAPITAL MARKETS, LLC,

a Massachusetts limited liability company

 

By: /s/ Paul Dunn  
Name:  Paul Dunn  
Its: Executive Vice President  

  

3  

 

Exhibit 10.2

 

 

AMENDMENT TO AMENDED AND RESTATED WARRANT AGREEMENT

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

and

COMPUTERSHARE, INC. and COMPUTERSHARE TRUST COMPANY N.A.

 

July 21, 2017

 

Computershare

250 Royall Street

Canton, MA 02021

 

RE: Amendment to Amended and Restated Warrant Agreement dated November 3, 2016 (the “ Warrant Agreement ”) among Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “ Company ”), and Computershare Inc., a Delaware corporation (“ Computershare ”), and its wholly-owned subsidiary, Computershare Trust Company N.A., a federally chartered trust company, collectively as warrant agent (collectively, “ Warrant Agent ”).

 

Ladies and Gentlemen:

 

Reference is made to the Warrant Agreement as attached hereto as Exhibit A . Capitalized terms used but not defined in this letter amendment (this “ Amendment ”) shall have the meanings ascribed to them in the Warrant Agreement. The Company is offering for sale (the “ Offering ”) units (the “ Units ”) comprised of one share of Series B Redeemable Preferred Stock (the “ Series B Stock ”) and one warrant to purchase 20 shares of the Company’s Class A Common Stock (the “ Warrants ”). Pursuant to the Warrant Agreement, the Company appointed the Warrant Agent as warrant agent for the Warrants and the Warrant Agent accepted such appointment.

 

The Company has determined it to be in its best interests to increase the size of the Offering from 150,000 Units to 225,000 Units. In connection therewith, the parties desire to amend the Warrant Agreement as set forth in this letter amendment (this “ Amendment ”).

 

Accordingly, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the Company and Warrant Agent agree as follows:

 

1.       The first recital of the Warrant Agreement is hereby deleted in its entirety, and is replaced with the following recital:

 

“WHEREAS, the Company has proposed to issue up to 225,000 units (the “ Units ”) in connection with the Company’s public offering (the “ Series B Offering ”), with each unit comprised of (i) one share of Series B Redeemable Preferred Stock (the “ Series B Preferred Stock ”), and (ii) one warrant (each, a “ Warrant ,” and collectively, the “ Warrants ”) to purchase 20 shares of Class A common stock of the Company, par value $0.01 (the “ Common Stock ”). The Units will not be certificated. The shares of Series B Preferred Stock and the Warrants are immediately detachable and will be issued separately;”

 

As a further consideration for the Warrant Agent’s entrance into this Amendment, the Company hereby represents and warrants to the Warrant Agent that, as of the date of this Amendment: (i) there are 225,000 shares of the Company’s capital stock classified as Series B Stock, of which 99,666 are issued and outstanding; (ii) there are 4,500,000 shares of the Company’s Common Stock reserved for issuance upon exercise of the Warrants; and (iii) there are 99,666 Warrants outstanding for the purchase of 1,993,320 shares of Common Stock.

 

Except as set forth in this Amendment, the Warrant Agreement shall remain unmodified and in full force and effect, and is hereby ratified, approved and affirmed by the Company and the Warrant Agent.

 

[Remainder of page intentionally left blank. Signature page follows.]

 

 

 

 

Very truly yours,

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

a Maryland corporation

 

By: /s/ Michael L. Konig  
Name:  Michael L. Konig  
Its: Chief Operating Officer and General Counsel  

 

Computershare Trust Company, N.A. and Computershare Inc.,

On behalf of both entities

 

By:  /s/ Dan DeWeever  
Name:  Dan DeWeever  
Its: Product Director  

 

2  

 

 

Exhibit 10.3

 

SEVENTH AMENDMENT TO THE

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP OF

BLUEROCK RESIDENTIAL HOLDINGS, L.P.

 

DESIGNATION OF ADDITIONAL SERIES B

REDEEMABLE PREFERRED UNITS

 

JULY 21, 2016

 

Pursuant to Section 4.02 and Article XI of the Second Amended and Restated Agreement of Limited Partnership of Bluerock Residential Holdings, L.P. (the “Partnership Agreement”), the General Partner hereby amends the Partnership Agreement as follows:

 

1.             Designation and Number . The number of authorized Series B Preferred Units shall be 225,000.

 

2.            Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and confirms.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first set forth above.

 

  GENERAL PARTNER:
     
     
  BLUEROCK RESIDENTIAL GROWTH REIT, INC.
  a Maryland corporation
     
     
  By: /s/ Michael L. Konig
  Name:  Michael L. Konig
  Title: Chief Operating Officer, Secretary and General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signature page for OP Amendment re: Additional Series B Preferred Units – July 2017 ]