Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 81

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 81
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, financial condition and ability to pay distributions.

RISKS RELATED TO THE SEPARATION AND DISTRIBUTION

Bluerock Residential may fail to perform under various transaction agreements executed as part of the Separation.

In connection with the Separation
and prior to the Distribution, we, Bluerock Residential, and certain other parties entered into the Separation and Distribution Agreement
and various other agreements, including the Tax Matters Agreement. The Separation and Distribution Agreement and the Tax Matters Agreement,
together with the documents and agreements by which the internal reorganization was effected, determined the allocation of assets and
liabilities between the companies following the Separation for those respective areas and included indemnifications related to liabilities
and obligations. We will rely on Bluerock Residential to satisfy its performance and payment obligations under these agreements. If Bluerock
Residential is unable or unwilling to satisfy its obligations under these agreements, including its indemnification obligations, we could
incur operational difficulties and/or losses.

Potential indemnification obligations owed to Bluerock Residential pursuant to the Separation and Distribution Agreement may have a material adverse effect on our business, financial condition and results of operations.

The Separation and Distribution
Agreement provides for, among other things, the principal corporate transactions required to effect the Separation and the Distribution,
certain conditions to the Separation and the Distribution and provisions governing our relationship with Bluerock Residential with respect
to and following the Distribution. Among other things, the Separation and Distribution Agreement provides for indemnification obligations
designed to make us financially responsible for substantially all liabilities that may exist related to our business activities. If we
are required to indemnify Bluerock Residential under the circumstances set forth in the Separation and Distribution Agreement, we may
be subject to substantial liabilities, which may have a material adverse effect on our business, financial condition and results of operations.

Pursuant to the Separation and Distribution Agreement and the Tax Matters Agreement, Bluerock Residential and Badger Holdco LLC, a Delaware limited liability company (“New LLC”), have indemnified us for certain pre-Distribution liabilities and liabilities related to the legacy Bluerock Residential assets. However, there can be no assurance that these indemnities will be sufficient to insure us against the full amount of such liabilities, or that Bluerock Residential’s or New LLC’s ability to satisfy their indemnification obligations will not be impaired in the future.

Pursuant to the Separation
and Distribution Agreement and the Tax Matters Agreement, Bluerock Residential and