Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, Broad Street Realty, Inc. (the "Company") entered into
a purchase and sale agreement, dated December 21, 2021 (the "Agreement"), with
BBL Current Owner, LLC ("BBL Current") to acquire a mixed-use property in
Williamsburg, Virginia known as Midtown Row (the "Midtown Row Acquisition"),
which automatically terminated in accordance with its terms on July 1, 2022 as a
result of the closing not occurring by June 30, 2022. On September 1, 2022, the
Company and BBL Current entered into a third amendment and reinstatement of the
Agreement (the "Amendment"), pursuant to which the Agreement was fully
reinstated, subject to the terms of the Amendment.
The Amendment increased the purchase price for the Midtown Row Acquisition from
$122.0 million in cash to $123.3 million dollars. Pursuant to the terms of the
Amendment, the purchase price will be paid in cash and not less than $5.0
million of common units of limited partnership interest in Broad Street
Operating Partnership, LP, the operating partnership of the Company (the
"Operating Partnership"), and newly designated Series A convertible preferred
units of limited partnership interest in the Operating Partnership ("Preferred
Units"), the terms of which are described in Exhibit A to the Amendment. The
common units and Preferred Units will be valued at $2.00 per unit for purposes
of the Agreement.
In connection with the initial execution of the Agreement, the Company made a
deposit of $200,000. Pursuant to the Amendment, the Company is required to make
an additional deposit of $250,000, as well as pledge $324,468 in development
fees to which a subsidiary of the Company is entitled (the "Pledge Deposit"). In
addition, the Company is required to make an additional deposit of $1.25 million
(the "Reserve Deposit") upon the release of certain reserve funds held by one of
its lenders, the payment of which is guaranteed by the Company. In the event the
Company defaults on its obligation to complete the Midtown Row Acquisition, (i)
the Reserve Deposit, if not already provided, will become immediately due and
payable by the Company and (ii) the Company will forfeit all deposits (including
the Pledge Deposit) under the Agreement and the Amendment.
Under the Amendment, the outside closing date for the Midtown Row Acquisition
was extended to November 23, 2022. The Midtown Row Acquisition is subject to
customary closing conditions. There can be no assurances that these conditions
will be satisfied or that the Company will complete the Midtown Row Acquisition
on the terms described herein or at all.
Michael Z. Jacoby, the Company's chief executive officer and chairman of its
board of directors, Alexander Topchy, the Company's chief financial officer,
Aras Holden, the Company's vice president of asset management and acquisitions,
and Thomas M. Yockey, Daniel J.W. Neal and Jeffrey H. Foster, members of the
Company's board of directors, have indirect ownership interests in BBL Current,
and Mr. Jacoby serves as the chief executive officer and a director of BBL
Current. As a result of their indirect ownership interests in BBL Current, these
individuals are expected to receive estimated aggregate consideration of
approximately $1.4 million at closing, which will be in the form of common units
for the Company's executive officers and directors.
The description of the Amendment contained in this Item 1.01 does not purport to
be complete and is subject to and qualified in its entirety by reference to the
Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Third Amendment and Reinstatement of Purchase and Sale Agreement,
dated September 1, 2022, by and among Broad Street Realty, Inc. and BBL
Current Owner, LLC.
104 Cover Page Interactive Data File - The cover page XBRL tags are embedded
within the Inline XBRL document
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