Exhibit 10.33

 

LTIP UNIT VESTING AGREEMENT

 

Under the Bluerock Residential Growth REIT, Inc.

Amended and Restated 2014 Equity Incentive Plan for Entities

 

Name of Grantee: BRG Manager, LLC No. of LTIP Units: 176,610 Grant Date: August
3, 2016 Final Acceptance Date: August 3, 2016

 

Pursuant to the Bluerock Residential Growth REIT, Inc. Amended and Restated 2014
Equity Incentive Plan for Entities, dated effective as of May 28, 2015 (the
“Plan”), and the Second Amended and Restated Agreement of Limited Partnership,
dated April 2, 2014, as amended (the “Partnership Agreement”) of Bluerock
Residential Holdings, L.P., a Delaware limited partnership (the “Partnership”),
Bluerock Residential Growth REIT, Inc., a Maryland corporation and the general
partner of the Partnership (the “Company”), and for the provision of services to
or for the benefit of the Partnership in a partner capacity or in anticipation
of being a partner, pursuant to that certain Management Agreement among the
Company, the Partnership and the Grantee dated as of April 2, 2014 (the
“Management Agreement”), hereby grants to the Grantee named above an Other
Equity-Based Award (as defined in the Plan) (an “Award”) in the form of, and by
causing the Partnership to issue to the Grantee named above, the number of LTIP
Units (as defined in the Partnership Agreement) specified above having the
rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption and conversion set forth
herein and in the Partnership Agreement. Upon acceptance of this LTIP Unit
Vesting Agreement (this “Agreement”), the Grantee shall receive, effective as of
the Grant Date, the number of LTIP Units specified above, subject to the
restrictions and conditions set forth herein and in the Partnership Agreement.

 

1.            Acceptance of Agreement. The Grantee shall have no rights with
respect to this Agreement unless he or she shall have accepted this Agreement
prior to the close of business on the Final Acceptance Date specified above by
signing and delivering to the Partnership a copy of this Agreement. Upon
acceptance of this Agreement by the Grantee, the Partnership Agreement shall be
amended to reflect the issuance to the Grantee of the LTIP Units so accepted,
effective as of the Grant Date. Thereupon, the Grantee shall have all the rights
of a Limited Partner of the Partnership with respect to the number of LTIP Units
specified above, as set forth in the Partnership Agreement, subject, however, to
the restrictions and conditions specified in Section 2 below.

 

2.            Restrictions and Conditions.

 

(a)          The records of the Partnership evidencing the LTIP Units granted
herein shall bear an appropriate legend, as determined by the Partnership in its
sole discretion, to the effect that such LTIP Units are subject to restrictions
as set forth herein and in the Partnership Agreement.

 

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(b)          LTIP Units granted herein may not be sold, transferred, pledged,
exchanged, hypothecated or otherwise disposed of by the Grantee prior to
vesting.

 

(c)          Subject to the provisions of Section 4, any LTIP Units subject to
this Award that have not become vested on or before the effective date of
termination of the Management Agreement shall be forfeited as of such effective
termination date.

 

3.            Vesting of LTIP Units. The restrictions and conditions in Section
2 of this Agreement shall lapse with respect to the number of LTIP Units
specified below on the Vesting Dates specified below, so long as the Management
Agreement remains effective from the Grant Date until such Vesting Dates.

 

Number of LTIP     Units Vested   Vesting Dates       58,870   August 3, 2017
58,870   August 3, 2018 58,870   August 3, 2019

 

Subsequent to such Vesting Dates, the LTIP Units on which all restrictions and
conditions have lapsed shall no longer be deemed restricted.

 

4.            Acceleration of Vesting in Special Circumstances. Notwithstanding
Section 2 above, all restrictions on all LTIP Units subject to this Award shall
be deemed waived by the Committee (as defined in the Plan) and all LTIP Units
granted hereby shall automatically become fully vested on the date specified
below:

 

(a)          the effective termination date of the Management Agreement upon any
termination of the Management Agreement resulting in the Termination Fee (as
defined in the Management Agreement) becoming payable to the Grantee, or
resulting in an election regarding the acquisition of the Grantee by the Company
pursuant to Section 10(f)(ii) of the Management Agreement; or

 

(b)          a Control Change Date (as defined in the Plan).

 

5.            Merger-Related Action. In contemplation of and subject to the
consummation of a consolidation or merger or sale of all or substantially all of
the assets of the Company in which outstanding common shares are exchanged for
securities, cash, or other property of an unrelated corporation or business
entity or in the event of a liquidation of the Company (in each case, a
“Transaction”), the Board of Directors of the Company, or the board of trustees
or directors of any corporation assuming the obligations of the Company (the
“Acquiror”), may, in its discretion, take any one or more of the following
actions, as to the outstanding LTIP Units subject to this Award: (i) provide
that such LTIP Units shall be assumed or equivalent awards shall be substituted,
by the acquiring or succeeding entity (or an affiliate thereof), and/or (ii)
upon prior written notice to the LTIP Unitholders (as defined in the Partnership
Agreement) of not less than 30 days, provide that such LTIP Units shall
terminate immediately prior to the consummation of the Transaction. The right to
take such actions (each, a “Merger-Related Action”) shall be subject to the
following limitations and qualifications:

 

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(a)          if all LTIP Units awarded to the Grantee hereunder are eligible, as
of the time of the Merger-Related Action, for conversion into Common Units (as
defined and in accordance with the Partnership Agreement) and the Grantee is
afforded the opportunity to effect such conversion and receive, (A) in
consideration for the Common Units into which the Grantee’s LTIP Units shall
have been converted, the same kind and amount of consideration as other holders
of Common Units in connection with the Transaction, or (B) the kind and amount
of consideration payable to holders of the number of common shares into which
such Common Units could be exchanged (including the right to make elections as
to the type of consideration), then Merger-Related Action of the kind specified
in (i) or (ii) of the first paragraph of Section 5 above shall be permitted and
available to the Company and the Acquiror;

 

(b)          if some or all of the LTIP Units awarded to the Grantee hereunder
are not, as of the time of the Merger-Related Action, so eligible for conversion
into Common Units (in accordance with the Partnership Agreement), and the
acquiring or succeeding entity is itself, or has a subsidiary which is organized
as a partnership or limited liability company (consisting of a so-called
“UPREIT” or other structure substantially similar in purpose or effect to that
of the Company and the Partnership), then Merger-Related Action of the kind
specified in clause (i) of this Section 5 above must be taken by the Acquiror
with respect to all LTIP Units subject to this Award which are not so
convertible at the time, whereby all such LTIP Units covered by this Award shall
be assumed by the acquiring or succeeding entity, or equivalent awards shall be
substituted by the acquiring or succeeding entity, and the acquiring or
succeeding entity shall preserve with respect to the assumed LTIP Units or any
securities to be substituted for such LTIP Units, as far as reasonably possible
under the circumstances, the distribution, special allocation, conversion and
other rights set forth in the Partnership Agreement for the benefit of the LTIP
Unitholders; and

 

(c)          if some or all of the LTIP Units awarded to the Grantee hereunder
are not, as of the time of the Merger-Related Action, so eligible for conversion
into Common Units (in accordance with the Partnership Agreement), and after
exercise of reasonable commercial efforts the Company or the Acquiror is unable
to treat the LTIP Units in accordance with Section 5(b), then Merger-Related
Action of the kind specified in clause (ii) of this Section 5 above must be
taken by the Company or the Acquiror, in which case such action shall be subject
to a provision that the settlement of the terminated award of LTIP Units which
are not convertible into Common Units requires a payment of the same kind and
amount of consideration payable in connection with the Transaction to a holder
of the number of Common Units into which the LTIP Units to be terminated could
be converted or, if greater, the consideration payable to holders of the number
of common shares into which such Common Units could be exchanged (including the
right to make elections as to the type of consideration) if the Transaction were
of a nature that permitted a revaluation of the Grantee’s capital account
balance under the terms of the Partnership Agreement, as determined by the
Committee in good faith in accordance with the Plan.

 

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6.            Distributions. Distributions on the LTIP Units shall be paid
currently to the Grantee in accordance with the terms of the Partnership
Agreement. The right to distributions set forth in this Section 6 shall be
deemed a Dividend Equivalent Right for purposes of the Plan.

 

7.            Incorporation of Plan. Notwithstanding anything herein to the
contrary, this Agreement shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms used in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.

 

8.            Covenants. The Grantee hereby covenants as follows:

 

(a)          So long as the Grantee holds any LTIP Units, the Grantee shall
disclose to the Partnership in writing such information as may be reasonably
requested with respect to ownership of LTIP Units as the Partnership may deem
reasonably necessary to ascertain and to establish compliance with provisions of
the Code applicable to the Partnership or to comply with requirements of any
other appropriate taxing authority.

 

(b)          The Partnership and the Grantee hereby agree to treat the Grantee
as the owner of the LTIP Units from the Grant Date. The Grantee hereby agrees to
take into account the distributive share of Partnership income, gain, loss,
deduction, and credit associated with the LTIP Units in computing the Grantee’s
income tax liability for the entire period during which the Grantee has the LTIP
Units.

 

(c)          The Grantee hereby recognizes that the IRS has proposed regulations
under Sections 83 and 704 of the Code that may affect the proper treatment of
the LTIP Units for federal tax purposes. In the event that those proposed
regulations are finalized, the Grantee hereby agrees to cooperate with the
Partnership in amending this Agreement and the Partnership Agreement, and to
take such other action as may be required, to conform to such regulations.

 

(d)          The Grantee hereby recognizes that the U.S. Congress is considering
legislation that could change the federal tax consequences of owning and
disposing of LTIP Units.

 

9.            Transferability. This Agreement is personal to the Grantee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution, without
the prior written consent of the Company.

 

10.           Amendment. The Grantee acknowledges that the Plan may be amended
or terminated in accordance with Article XVI thereof and that this Agreement may
be amended or canceled by the Committee, on behalf of the Partnership, for the
purpose of satisfying changes in law or for any other lawful purpose, provided
that no such action shall adversely affect the Grantee’s rights under this
Agreement without the Grantee’s written consent. The provisions of Section 5 of
this Agreement applicable to the termination of the LTIP Units covered by this
Award in connection with a Transaction (as defined in Section 5 of this
Agreement) shall apply, mutatis mutandi to amendments, discontinuance or
cancellation pursuant to this Section 10 or the Plan.

 

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11.           Notices. Notices hereunder shall be mailed or delivered to the
Partnership at its principal place of business and shall be mailed or delivered
to the Grantee at the address on file with the Partnership or, in either case,
at such other address as one party may subsequently furnish to the other party
in writing.

 

12.           Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, applied without regard to
conflict of law principles. The parties agree that any action or proceeding
arising directly, indirectly or otherwise in connection with, out of, related to
or from this Agreement, any breach hereof or any action covered hereby, shall be
resolved within the State of Delaware and the parties hereto consent and submit
to the jurisdiction of the federal and state courts located within the District
of Delaware. The parties hereto further agree that any such action or proceeding
brought by either party to enforce any right, assert any claim, obtain any
relief whatsoever in connection with this Agreement shall be brought by such
party exclusively in federal or state courts located within the District of
Delaware.

 

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

 

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The foregoing LTIP Unit Vesting Agreement is hereby agreed to by the Company,
the Partnership and the Grantee on the date shown below.

 

Date:   August 3, 2016 COMPANY:       Bluerock Residential Growth REIT, Inc.   a
Maryland corporation         By: /s/ R. Ramin Kamfar   Name: R. Ramin Kamfar  
Title: President and CEO

 

  PARTNERSHIP:       Bluerock Residential Holdings, L.P.   a Delaware limited
partnership       By:   Bluerock Residential Growth REIT, Inc.,   its General
Partner         By: /s/ R. Ramin Kamfar   Name: R. Ramin Kamfar   Title:
President and CEO

 

  GRANTEE:       BRG Manager, LLC   a Delaware limited liability company        
By: /s/ R. Ramin Kamfar   Name: R. Ramin Kamfar   Title: Authorized Signatory  
    Grantee’s address:       c/o Bluerock Real Estate, L.L.C.   712 Fifth
Avenue, 9th Floor   New York, NY 10019   Attn:  R. Ramin Kamfar & Michael L.
Konig

 

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