Exhibit 10.1

CONTRIBUTION AGREEMENT

This Contribution Agreement (including all exhibits and schedules, this
“Agreement”) is made and entered into as of May 29, 2020 by and among NexPoint
Real Estate Finance, Inc., a Maryland corporation (the “Company”), NexPoint Real
Estate Finance Operating Partnership, LP, a Delaware limited partnership (the
“Operating Partnership”), and the entities listed under Contributor on Schedule
A (the “Contributors”). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms on Exhibit A.

RECITALS

WHEREAS, the Contributors own membership interests (the “Interests”) in NexPoint
Buffalo Pointe Holdings, LLC, a Delaware limited liability company (“Buffalo
Pointe”); and

WHEREAS, the Contributors desire to transfer all of their Interests in Buffalo
Pointe to the Operating Partnership (the “Contribution”). The Contributors will
receive units of the Operating Partnership (“OP Units”) in connection with the
Contribution.

AGREEMENT

NOW, THEREFORE, for and in consideration of the foregoing premises, and the
mutual undertakings set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

ARTICLE 1

CONTRIBUTION OF INTERESTS

1.1 Contribution Transaction. At the Closing (as defined below), the
Contributors shall contribute, transfer, assign, convey and deliver to the
Operating Partnership, and the Operating Partnership shall assume, free and
clear of all Liens, except as provided below in Section 1.3, all of the
Contributors’ right, title and interest in and to the Interests and the
obligations with respect thereto. The contribution of the Interests shall be
evidenced by the Transfer Documents (as defined below).

1.2 Consideration for the Interests. The Contributors will receive OP units as
set forth on Schedule B for their contribution of the Interests to the Operating
Partnership.

1.3 Existing Loans. As of the date hereof, the properties owned by Buffalo
Pointe are encumbered by liens, assignments and security interests securing the
indebtedness under the loan documents set forth on Schedule C (collectively, the
“Existing Loan Documents”; the loans evidenced by the Existing Loan Documents,
the “Existing Loans”; and the lenders of the Existing Loans, the “Existing
Lenders”). The properties owned by Buffalo Pointe will continue to be subject to
the Existing Loans and Existing Loan Documents after Closing.

1.4 Company Limitations. Upon the exercise of a Redemption Right (as such term
is defined in the partnership agreement of the Operating Partnership in effect
as of the date hereof) by any of the Contributors in connection with the OP
Units granted under this Agreement, the Company agrees that it will be
prohibited from issuing REIT Shares (as such term is defined in the partnership
agreement of the Operating Partnership in effect as of the date hereof) to such
Contributors, until the stockholders of the Company have approved the issuance
of REIT Shares to the Contributors. The Company agrees that it will also be
prohibited from permitting any of the Contributors to exercise a Redemption
Right in connection with the OP Units granted under this Agreement before such
time as the OP Units granted under this Agreement have been outstanding for one
year.

--------------------------------------------------------------------------------

ARTICLE 2

CLOSING

2.1 Conditions Precedent.

(a) The obligations of the Company and the Operating Partnership to effect the
transactions contemplated hereby shall be subject to each of the following
conditions:

(i) the delivery of good, marketable title to the Contributors’ Interests to the
Operating Partnership on or prior to the Closing Date (as defined below);

(ii) the representations and warranties of the Contributors contained in this
Agreement shall have been true and correct in all material respects on the date
such representations and warranties were made, and shall be true and correct in
all material respects on the Closing Date as if made at and as of such date;

(iii) each obligation of the Contributors contained in this Agreement shall have
been duly performed on or before the Closing Date, and each of the Contributors
shall not have materially breached any of the covenants contained herein;

(iv) concurrently with the Closing, the Contributors shall have executed and
delivered to the Operating Partnership the documents required to be delivered
pursuant to Section 2.3(a);

(v) all necessary consents or approvals of governmental authorities or third
parties, including the Existing Lenders, to the consummation of the transactions
contemplated herein shall have been obtained, but only to the extent such
consents or approvals are the responsibility of the Contributors in the context
of this Agreement; and

(vi) no order, statute, rule, regulation, executive order, injunction, stay,
decree or restraining order shall have been enacted, entered, promulgated or
enforced by any court of competent jurisdiction or Governmental Authority or
regulatory authority or instrumentality that prohibits the consummation of any
of the transactions contemplated herein, and no litigation or governmental
proceeding seeking such an order shall be pending.

In the event the foregoing conditions precedent have not been satisfied as of
the Closing, the Company and the Operating Partnership may either: (a) waive
such conditions precedent and proceed to Closing in accordance with the terms
and provisions hereof; (b) terminate this Agreement, and upon such termination,
all rights, liabilities and obligations of the parties under this Agreement
shall expire, except as otherwise expressly set forth herein, or (c) extend the
date for Closing for up to 30 days (and the Contributors’ failure to satisfy the
terms and conditions of this Agreement by such extended closing schedule shall
create a further right to terminate this Agreement and the parties hereto shall
have the rights and obligations described in the immediately preceding (a) and
(b) with respect to such termination).

(b) The obligations of the Contributors to effect the transactions contemplated
hereby shall be subject to the following conditions:

(i) the representations and warranties of the Company and the Operating
Partnership contained in this Agreement shall have been true and correct in all
material respects on the date such representations and warranties were made, and
shall be true and correct in all material respects on the Closing Date as if
made at and as of such date;

 

2

--------------------------------------------------------------------------------

(ii) each obligation of the Company and the Operating Partnership contained in
this Agreement shall have been duly performed on or before the Closing Date, and
each of the Company and the Operating Partnership shall not have materially
breached any of its covenants contained herein;

(iii) concurrently with the Closing, the Company and the Operating Partnership
and their assignee shall have executed and delivered the documents required to
be delivered pursuant to Section 2.3(b);

(iv) all necessary consents or approvals of governmental authorities or third
parties, including the Existing Lenders, to the consummation of the transactions
contemplated herein shall have been obtained, but only to the extent such
consents or approvals are the responsibility of the Company and the Operating
Partnership in the context of this Agreement; and

(v) no order, statute, rule, regulation, executive order, injunction, stay,
decree or restraining order shall have been enacted, entered, promulgated or
enforced by any court of competent jurisdiction, Governmental Authority or
regulatory authority or instrumentality that prohibits the consummation of the
transactions contemplated herein, and no litigation or governmental proceeding
seeking such an order shall be pending.

In the event the foregoing conditions precedent have not been satisfied as of
the Closing, the Contributors may either: (a) waive such conditions precedent
and proceed to Closing in accordance with the terms and provisions hereof;
(b) terminate this Agreement, and upon such termination, all rights, liabilities
and obligations of the parties under this Agreement shall expire, except as
otherwise expressly set forth herein, or (c) extend the date for Closing for up
to 30 days (and the failure to satisfy the terms and conditions of this
Agreement by the Company and the Operating Partnership by such extended closing
schedule shall create a further right to terminate this Agreement and the
parties hereto shall have the rights and obligations described in the
immediately preceding (a) and (b) with respect to such termination).

2.2 Date, Time and Place of Closing. The date, time and place of the closing of
the transactions contemplated hereunder shall be on or before May 29, 2020 at
5:00 p.m. Central time, subject to any extension pursuant to Section 2.1 above
(the “Closing” or “Closing Date”). If the transfer of any of the Interests at
Closing causes a breach of, constitutes a default under or with the passage of
time or notice would cause a breach of or constitute a default under any of the
Existing Loan Documents, the transfer of such Interests will be delayed until
the necessary consents or approvals are received.

2.3 Closing Deliveries.

(a) At Closing, the Contributors shall deliver, or shall cause to be delivered,
the following:

(i) all Transfer Documents for the conveyance of the Contributors’ Interests.
“Transfer Documents” shall mean an assignment of any certificate evidencing a
Contributor’s Interests or other assignment document to effectuate the transfer
of a Contributor’s Interests, and any other documents necessary to effectuate
the conveyance of a Contributor’s Interests, including any transfer tax forms,
FIRPTA certificates and amendments to Buffalo Pointe’s governing documents to
effectuate the removal of the Contributors and the substitution of the Operating
Partnership as members of Buffalo Pointe.

 

3

--------------------------------------------------------------------------------

(ii) an investor representation letter, in the form set forth on Exhibit B,
executed by each entity receiving OP Units;

(iii) all books and records, bank accounts, title insurance policies, leases,
lease files, contracts, stock certificates, original promissory notes, or other
indicia of ownership with respect to Buffalo Pointe which are in the
Contributors’ possession or which can be obtained through the Contributors’
reasonable efforts; and

(iv) such other instruments as are reasonably required for Closing in accordance
with the terms hereof.

(b) At Closing, the Company and the Operating Partnership shall deliver or file,
or shall cause to be delivered or filed, the following:

(i) any necessary counterpart signatures to the Transfer Documents; and

(ii) such other instruments as are reasonably required for Closing in accordance
with the terms hereof.

2.4 Closing Costs. Each of Contributors and the Company shall pay the fees and
expenses of any counsel representing such party in connection with the
transaction contemplated by this Agreement. All other costs and expenses
incident to the transaction contemplated by this Agreement and the Closing shall
be paid by the party incurring same.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES, RELEASES AND INDEMNITIES

3.1 Representations and Warranties of the Company and the Operating Partnership.
Each of the Company and the Operating Partnership hereby represents and warrants
to the statements set forth on Schedule D to the Contributors as of the date
hereof and as of the Closing Date.

3.2 Representations and Warranties of the Contributors. Each of the Contributors
hereby represents and warrants to the statements set forth on Schedule E to the
Company and the Operating Partnership as of the date hereof and as of the
Closing Date. For purposes of Schedule E, “Contributors’ knowledge” is defined
as the actual knowledge, without investigation, of Matt McGraner.

3.3 Survival; Limitations.

(a) The representations and warranties of each of the parties will survive the
Closing for 12 months following the Closing Date (the “Survival Date”).

(b) As to any claim by the Company or the Operating Partnership against one or
more of the Contributors for breach of a representation or warranty made
hereunder, the Company or the Operating Partnership must: (i) notify the
Contributor(s) of the existence of the claim in question prior to the Survival
Date, which notification (“Claim Notice”) shall contain a description of the
nature of the claim or the facts, circumstances, conditions or events then known
to the Company or the Operating Partnership which give rise to the claim in
question; and (ii) institute legal proceedings in a court of competent
jurisdiction within 60 days after the Survival Date (“Judicial Proceedings
Date”). If a Claim Notice is not delivered by the Company or the Operating
Partnership to the Contributor(s) on or prior to the Survival Date or for which
legal proceedings are not instituted on or prior to the Judicial Proceedings
Date, then such claim shall be deemed to have been waived by the Company and the
Operating Partnership and rendered null and void and of no further force or
effect. The Contributors’ total liability in the aggregate for all claims shall
not exceed $1,000,000. The Contributors shall not be liable for any claim(s)
which, when taken in the aggregate with all other Claims timely asserted, do(es)
not exceed $50,000.

 

4

--------------------------------------------------------------------------------

3.4 General Release. As of the Closing, the Contributors irrevocably waive,
release and forever discharge the Company, the Operating Partnership, Buffalo
Pointe and the properties which Buffalo Pointe owns and their affiliates,
partners, agents, attorneys, successors and assigns of and from, any and all
charges, complaints, claims, liabilities, damages, actions, causes of action,
losses and costs of any nature whatsoever (collectively, “Contributors Claims”),
known or unknown, suspected or unsuspected, arising out of or relating to any of
the Company, the Operating Partnership, Buffalo Pointe, the properties which
Buffalo Pointe owns or any other matter which exists at the Closing, except for
claims arising from the breach of any representation, warranty, covenant or
obligation by the Company or the Operating Partnership under this Agreement or
any agreement contemplated hereby.

3.5 Indemnification.

(a) Subject to Section 3.3, the Company and the Operating Partnership shall
indemnify and hold harmless the Contributors and the Contributors’ partners,
members, directors, officers, employees, agents, representatives, beneficiaries
and affiliates (each, an “Indemnified Contributor Party”) from and against any
and all Losses arising out of or relating to, asserted against, imposed upon or
incurred by the Indemnified Contributor Party in connection with any breach of a
representation or warranty or covenant or other agreement of the Company
contained in this Agreement. Notwithstanding anything contained herein to the
contrary, no Indemnified Contributor Party shall have the right to receive or
recover special, compensatory or punitive damages against the Company and the
Operating Partnership and hereby waives any and all rights to receive such
special, compensatory or punitive damages.

(b) Subject to Section 3.3, the Contributors shall indemnify and hold harmless
the Company and the Operating Partnership and each of its partners, members,
directors, officers, employees, agents, representatives, beneficiaries and
affiliates (collectively, the “Indemnified Company and OP Parties,” each, an
“Indemnified Company and OP Party”) from and against any and all Losses arising
out of or relating to, asserted against, imposed upon or incurred by the
Indemnified Company and OP Party in connection with any breach of a
representation or warranty or covenant or other agreement of the Contributors
contained in this Agreement. Notwithstanding anything contained herein to the
contrary, no Indemnified Company and OP Party shall have the right to receive or
recover special, compensatory or punitive damages against the Contributors and
hereby waives any and all rights to receive such special, compensatory or
punitive damages.

ARTICLE 4

COVENANTS OF CONTRIBUTOR

4.1 Covenants.

(a) From the date hereof through the Closing Date, the Contributors shall,
conduct and operate the Buffalo Pointe and its properties in the ordinary course
of business, consistent with past practice, and shall, to the extent within its
control, not, without the prior written consent of the Company and the Operating
Partnership:

(i) sell or transfer (or agree to sell or transfer) or otherwise dispose of, or
cause the sale, transfer or disposition of, its Interests;

(ii) mortgage, pledge or encumber (or permit to become encumbered) Buffalo
Pointe, Buffalo Pointe’s properties or its Interests;

 

5

--------------------------------------------------------------------------------

(iii) enter into any material transaction not in the ordinary course of business
of the operation of Buffalo Pointe or its properties;

(iv) terminate or amend any existing insurance policies affecting Buffalo Pointe
or its properties that results in a material reduction in insurance coverage;

(v) knowingly cause or permit Buffalo Pointe or its properties to violate or
fail to use commercially reasonable efforts to cure any violation of any
applicable Laws; or

(vi) take any action that would render any of its representations or warranties
set forth herein untrue, incomplete or misleading in any material respect.

(b) Subject to Section 2.1 hereof, the Contributors shall use commercially
reasonable efforts to obtain any approvals, waivers or other consents of third
parties, Governmental Authorities and agencies required to permit it to effect
the transactions contemplated by this Agreement.

(c) [Reserved.]

(d) The Contributors shall take any and all actions necessary in order to comply
with the provisions of any transfer tax laws and regulations applicable to this
Agreement or the conveyance of its Interests, including the payment of any
transfer tax which may be determined to be due in respect of such Interests
under any such law or regulation and the preparation, execution and filing of
any and all affidavits and questionnaires required by any such law or
regulation. The Contributors shall pay any such tax which may be determined to
be due under any such law or regulation.

ARTICLE 5

TAX MATTERS

5.1 [Reserved.]

5.2 [Reserved.]

ARTICLE 6

MISCELLANEOUS

6.1 Notice. All notices, demands and requests which may be given or which are
required to be given by any party to another, and any exercise of a right of
termination provided by this Agreement, shall be in writing and shall be deemed
effective: (a) on the date personally delivered to the intended recipient’s
address below, as evidenced by written receipt therefor, whether or not actually
received by the Person to whom addressed; (b) on the 3rd Business Day after
being sent, by certified or registered United States Postal Service mail,
postage prepaid, return receipt requested, addressed to the intended recipient
at the address specified below; (c) on the 1st Business Day after being
deposited into the custody of a nationally recognized overnight delivery service
such as FedEx or UPS, addressed to the intended recipient at the address
specified below; or (d) on the same day as delivered by electronic mail pursuant
to the email addresses below (for the Company and the Operating Partnership) or
on the signature pages (for the Contributors). For purposes of this Section 6.1,
the addresses of the parties for all notices are as set forth below (unless
changed by similar notice in writing given by the particular Person whose
address is to be changed).

 

6

--------------------------------------------------------------------------------

To the Company and/or Operating Partnership:

Brian Mitts

300 Crescent Court, Suite 700

Dallas, Texas 75201

Email: bmitts@nexpointsecurities.com

To a Contributor:

As set forth on that Contributor’s Investor Representation Letter.

6.2 Further Assurances. The Contributors shall take such other actions and
execute and deliver such additional documents following the Closing as the
Company and the Operating Partnership may reasonably request in order to effect
the transactions contemplated hereby (subject to the Contributors’ reasonable
approval as to the form and substance of such documents).

6.3 Counterparts. This Agreement may be executed in one or more counterparts and
by facsimile and/or scanned and emailed, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

6.4 Governing Law. This Agreement shall be governed by the internal laws of the
State of Delaware, without regard to the principles of conflict of laws.

6.5 Amendment; Waiver. Any amendment hereto shall be in writing and signed by
all parties hereto. No waiver of any provisions of this Agreement shall be valid
unless in writing and signed by the party against whom enforcement is sought.

6.6 Entire Agreement. This Agreement and all related agreements referred to
herein constitute the entire agreement and supersede conflicting provisions set
forth in all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

6.7 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and assigns; provided,
however, that this Agreement may not be assigned (except by operation of law) by
any party without the prior written consent of the other party, and any
attempted assignment without such consent shall be void and of no effect.

6.8 Titles. The titles and captions of the Articles, Sections and paragraphs of
this Agreement are included for convenience of reference only and shall have no
effect on the construction or meaning of this Agreement.

6.9 Severability. If any provision of this Agreement, or the application
thereof, is for any reason held to any extent to be invalid or unenforceable,
the remainder of this Agreement and application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision and to execute any amendment,
consent or agreement deemed necessary or desirable by the parties to effect such
replacement.

6.10 Survival. The provisions of Section 1.4 of this Agreement will survive
Closing and will remain in effect until such provisions are no longer
applicable.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of
the date first written above.

 

COMPANY:

NEXPOINT REAL ESTATE FINANCE, INC.,

a Maryland corporation

By:  

/s/ Brian Mitts

Name:   Brian Mitts Title:   Chief Financial Officer, Executive Vice
President-Finance, Secretary and Treasurer

 

OPERATING PARTNERSHIP:

NEXPOINT REAL ESTATE FINANCE

OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

By:  

/s/ Brian Mitts

Name:   Brian Mitts Title:   Chief Financial Officer, Executive Vice
President-Finance, Secretary and Treasurer

 

[Contribution Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of
the date first written above.

 

CONTRIBUTORS: THE DUGABOY INVESTMENT TRUST By:  

/s/ Nancy Dondero

Name:   Nancy Dondero Title:   Family Trustee TWENTYSIX INVESTMENT TRUST By:  

/s/ Matt McGraner

Name:   Matt McGraner Title:   Trustee

HIGHLAND CAPITAL MANAGEMENT

REAL ESTATE HOLDINGS II, LLC,

a Nevada limited liability company

By:  

CEV Holdings, LLC,

its manager

  By:  

/s/ Matt DiOrio

  Name:   Matt DiOrio   Title:   Manager

 

[Contribution Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

DEFINITIONS

“Business Day” shall mean a day on which commercial banks are not authorized or
not required by applicable law to close in New York.

“Code” shall mean the Internal Revenue Code of 1986.

“Governmental Authority” shall mean any and all applicable courts, boards,
agencies, commissions, offices or authorities of any nature whatsoever for any
governmental or quasi- governmental unit (federal, state, county, township,
district, municipal, city, departmental or otherwise) whether now or hereafter
in existence.

“Laws” shall mean all laws, statutes, ordinances, codes, rules, decrees and
regulations of the United States of America or any state, commonwealth, city,
county, township, municipality or department or agency thereof, or of any other
Governmental Authority.

“Liens” means all mortgages, deeds of trust, pledges, liens, options, charges,
security interests, restrictions, prior assignments, encumbrances, covenants,
encroachments, assessments, purchase rights, rights of others, licenses,
easements, voting agreements, liabilities or claims of any kind or nature
whatsoever, direct or indirect, including, without limitation, interests in or
claims to revenues.

“Losses” shall mean any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges, fees, judgments,
awards, amounts paid in settlement of whatever kind or nature (including but not
limited to legal fees and other costs of defense).

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or governmental entity.

“Taxes” means any federal, state, local or foreign income, gross receipts,
branch profits, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, ad valorem, value added, escheat, alternative or add -on minimum
or estimated tax or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not, including any liability
for any of the foregoing arising as a result of being or having been a member of
an affiliated, consolidated, combined or unitary group, or a party to any tax
sharing, tax indemnity, or other agreement or arrangement.

 

A-1

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF INVESTOR REPRESENTATION LETTER

NexPoint Real Estate Finance, Inc.

NexPoint Real Estate Finance Operating Partnership, LP.

300 Crescent Court, Suite 700

Dallas, Texas 75201

Attention: Matt McGraner (mmcgraner@nexpointadvisors.com)

In connection with the acquisition by the undersigned (the “Investor”) of the
limited partnership units of NexPoint Real Estate Finance Operating Partnership,
L.P. (the “OP”), which may be redeemed for shares of common stock (together with
the OP units, the “Securities”) of NexPoint Real Estate Finance, Inc. (the
“Company”) pursuant to the terms of the OP partnership agreement, the Investor
hereby certifies to the Company and the OP, as of the date indicated on the
signature page below, as follows:

 

  1.

The Investor is an “accredited investor” as defined in Rule 501(a) under the
Securities Act of 1933 (the “Securities Act”).

 

  2.

The Investor has such knowledge and experience in financial, business and
investment matters that it is capable of evaluating the merits and risks of
acquiring the Securities, and it has the ability to bear the economic risk of
investment in the Securities.

 

  3.

The Purchaser is acquiring the Securities for its own account and not with a
view to their distribution.

 

  4.

The Securities were offered to the Investor without the use of general
advertising or a general solicitation (within the meaning of Rule 502(c) under
the Securities Act).

 

  5.

The Investor understands that the Securities have not been registered under the
Securities Act or any applicable state securities laws and may not be sold or
transferred in the absence of an effective registration statement under the
Securities Act or an available exemption from registration thereunder.

 

  6.

The Investor acknowledges that a notation will be affixed to the certificate or
book entry designation representing the Investor’s Securities substantially as
follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION
THEREUNDER.”

 

  7.

Either (a) no portion of the assets used by the Investor to acquire or hold the
Securities constitutes the assets of any (i) employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) that is subject to Title I of ERISA, (ii) plan, individual
retirement account or other arrangement to which Section 4975 of the Internal
Revenue Code of 1986 (the “Code”) applies, (iii) entity whose underlying assets
include “plan assets” by

 

B-1

--------------------------------------------------------------------------------

  reason of any such employee benefit plan or plan’s investment in such entity,
or (iv) governmental plan (as defined in Section 3(32) of ERISA), church plan
(as defined in Section 3(33) of ERISA) that has not made an election under
Section 410(d) of the Code, or non-U.S. plan, or (b) the acquisition and holding
of the Securities by the Investor will not constitute a non-exempt prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code or a similar violation under any federal, state, local, non-U.S. or other
laws, rules or regulations that regulate a governmental plan, church plan or
non-U.S. plan’s investment in the Securities.

The Investor understands that the Company, OP and/or its counsel will be relying
on this letter of representation on or after the date hereof.

 

B-2

--------------------------------------------------------------------------------

Signature Page to Investor Representation Letter

 

Very truly yours, Investor

 

Name of Investor By:  

 

Name:  

 

Title:  

 

 

cc:   Winston & Strawn LLP   2121 North Pearl Street, Suite 900   Dallas, Texas
75201   Attention: Charles Haag (chaag@winston.com)

 

Date:   Address of Investor:  

 

Telephone Number of Investor:  

 

Facsimile Number of Investor:  

 

Email Address of Investor:  

 

Contact Person at Investor:  

 

 

B-3

--------------------------------------------------------------------------------

SCHEDULE A

CONTRIBUTION DETAILS

 

Contributor    Interests The Dugaboy Investment Trust    70% Preferred
Membership Interests TwentySix Investment Trust    25% Preferred Membership
Interests Highland Capital Management Real Estate Partners II, LLC    5%
Preferred Membership Interests

 

Schedule A - 1

--------------------------------------------------------------------------------

SCHEDULE B

CONSIDERATION

 

Contributor    Consideration The Dugaboy Investment Trust    395,033.86 OP Units
TwentySix Investment Trust    141,083.52 OP Units Highland Capital Management
Real Estate Partners II, LLC    28,216.70 OP Units

 

Schedule B - 1

--------------------------------------------------------------------------------

SCHEDULE C

LOAN DOCUMENTS

 

1.

Multifamily Loan and Security Agreement, dated May 1, 2020, in the original
principal amount of $37,000,000, made by Jones Lang LaSalle Multifamily, LLC, a
Delaware limited liability company, to NexPoint Buffalo Pointe, LLC, a Delaware
limited liability company and wholly owned subsidiary of Buffalo Pointe.

 

Schedule C - 1

--------------------------------------------------------------------------------

SCHEDULE D

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY AND THE OPERATING PARTNERSHIP

(a) Organization; Authority. It has been duly organized or formed, as
applicable, and is validly existing under the laws of the state of its
organization or formation, as applicable, and has all requisite corporate or
limited partnership power, as applicable, and authority to enter this Agreement
and all agreements contemplated hereby and to carry out the transactions
contemplated hereby and thereby, and the requisite approval of such
transactions. The persons and entities executing this Agreement on its behalf
have, and the persons and entities that will execute all agreements contemplated
hereby on its behalf will have, the power and authority to enter into this
Agreement or such other contemplated agreements, as applicable.

(b) Due Authorization. The execution, delivery and performance of this Agreement
has been duly and validly authorized by all necessary action. This Agreement and
each agreement, document and instrument executed and delivered by or on its
behalf pursuant to this Agreement constitutes, or when executed and delivered
will constitute a legal, valid and binding obligation, enforceable against it in
accordance with its terms, as such enforceability may be limited by bankruptcy
or the application of equitable principles.

(c) Non-Contravention and Consent. The execution, delivery and performance of
its obligations under this Agreement and all agreements contemplated hereby will
not contravene any provision of applicable Laws, its organizational documents,
or any agreement or other instrument binding upon it or any applicable Laws,
judgment, order or decree of any governmental body, agency or court having
jurisdiction over it, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance of its obligations under this Agreement and all other agreements
contemplated hereby.

(d) No Brokers. It has not entered into, and covenants that it will not enter
into, any agreement, arrangement or understanding with any person or firm that
will result in the obligation of the Contributors to pay any finder’s fee,
brokerage commission or similar payment in connection with the transactions
contemplated hereby.

(e) Consents and Approvals. No consent, waiver, approval or authorization of any
third party, including any Governmental Authority, is required to be obtained by
it in connection with the execution, delivery and performance of the Agreement,
the documents required pursuant thereto and the transactions contemplated hereby
and thereby.

(f) No Violation. None of the execution, delivery or performance of the
Agreement, the documents required pursuant thereto and the transactions
contemplated hereby and thereby does or will, with or without the giving of
notice, lapse of time, or both, contravene, violate, conflict with, result in a
breach of, or constitute a default under or give to others any right of
termination, cancellation or amendment of (i) its organizational documents,
(ii) any material agreement, document or instrument to which it is a party or by
which it or any of its assets or properties are bound or (iii) to its knowledge,
any applicable Law, or term or provision of any judgment, order, writ,
injunction, or decree of any Governmental Authority or regulatory authority,
which is binding on it or by which it or any of its respective assets or
properties are bound or subject.

 

Schedule D - 1

--------------------------------------------------------------------------------

SCHEDULE E

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS

(a) Organization, Power and Authority. It is duly organized or formed, as
applicable, validly existing and in good standing under the laws of its state of
organization or formation, as applicable, with full power and authority to
execute, deliver and perform this Agreement, the Transfer Documents and all
other documents required to be delivered at Closing (together with the Transfer
Documents, the “Closing Documents”).

(b) Binding Agreement. The execution, delivery and performance of this
Agreement, and each of the Closing Documents to which it is a party, has been
duly and validly authorized by all necessary action (including any necessary
approvals of the equity holders of the Contributors) on its part. This Agreement
has been, and the Closing Documents, as applicable, will be duly executed and
delivered by it. This Agreement constitutes, and when so executed and delivered
the Closing Documents, as applicable, will constitute a legal, valid and binding
obligation, enforceable against it in accordance with its terms, as such
enforceability may be limited by bankruptcy or the application of equitable
principles.

(c) No Violation. None of the execution, delivery or performance of the
Agreement, the documents required pursuant thereto and the transactions
contemplated hereby and thereby does or will, with or without the giving of
notice, lapse of time, or both, contravene, violate, conflict with, result in a
breach of, or constitute a default under or give to others any right of
termination, cancellation or amendment of (i) its organizational documents,
(ii) any material agreement, document or instrument to which Buffalo Pointe or
its properties are a party or by which it, Buffalo Pointe or its properties or
any of their assets or properties are bound or (iii) to its knowledge, any
applicable Law, or term or provision of any judgment, order, writ, injunction,
or decree of any Governmental Authority or regulatory authority, which is
binding on it or by which it or any of its respective assets or properties are
bound or subject.

(d) Title to Interests. It owns good title to the Interests free and clear of
all Liens, claims and encumbrances, except for any Liens created by the existing
Loan Documents. There are no outstanding agreements (written or oral) pursuant
to which it has agreed to sell or has granted an option, call or right of first
refusal or first or last offer to purchase its Interests except as set forth in
Buffalo Pointe’s governing documents.

(e) Third Party Consents and Approval. Except for the Existing Lenders, if any,
no approval, consent, waiver, filing, registration or qualification of or with
any third party, including, but not limited to, any Governmental Authority is
required to be made, obtained or given for the execution, delivery and
performance of this Agreement.

(f) No Bankruptcy. It is not in the hands of a receiver; it has not filed a
petition for relief, or been the subject of the filing of a petition for relief,
under the United States Bankruptcy Code or state insolvency law; and no order
for creditors’ relief has been entered with respect to it.

(g) No Brokers. Neither it nor any of its respective officers, directors or
employees has employed or made any agreement with any broker, finder or similar
agent or any person or firm that will result in the obligation of the Company,
the Operating Partnership or any of its affiliates to pay any finder’s fee,
brokerage fees or commissions or similar payment in connection with the
transactions contemplated by this Agreement.

(h) Non-Foreign Status. It is not a foreign person for purposes of
Section 1445(a) of the Code, and is, therefore, not subject to the provisions of
the Code relating to the withholding of sales proceeds to foreign persons.

 

Schedule E - 1

--------------------------------------------------------------------------------

(i) Buffalo Pointe Agreement. The limited liability company agreement of Buffalo
Pointe (the “Buffalo Pointe Agreement”) is in full force and effect. There are
no defaults under the Buffalo Pointe Agreement and no event has occurred which
but for the passage of time, or notice, or both would constitute a default under
the Buffalo Pointe Agreement. All capital contributions and other sums due and
payable under the Buffalo Pointe Agreement have been paid in full. No party
under the Buffalo Pointe Agreement has commenced any action or has given or
received any notice for the purpose of terminating the Buffalo Pointe Agreement.

(j) Litigation. To Contributors’ knowledge, there are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or other
agency now pending or threatened against or affecting Buffalo Pointe or its
properties, which actions, suits or proceedings, if determined against Buffalo
Pointe or its properties, might materially adversely affect the condition
(financial or otherwise) or business of Buffalo Pointe or its properties.

(k) Compliance With Law. To Contributors’ knowledge, Buffalo Pointe and the
properties which it owns comply in all material respects with all applicable
Laws, including, without limitation, all environmental laws, building and zoning
ordinances and codes. Neither Buffalo Pointe or its properties, is in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority.

(l) Change in Facts or Circumstances. To Contributors’ knowledge, all
information submitted by Buffalo Pointe and its properties to the Company and
the Operating Partnership in the ordinary course of business and in all
financial statements, rent rolls, reports, certificates and other documents
submitted to the Company and the Operating Partnership in the ordinary course of
business are accurate, complete and correct in all material respects. To
Contributors’ knowledge, Buffalo Pointe and its properties have provided to the
Company and the Operating Partnership the financial statements of Buffalo Pointe
and its properties as of and for the most recent quarter end. To Contributors’
knowledge, Buffalo Pointe and its properties have provided to the Company and
the Operating Partnership the rent rolls for the properties which Buffalo Pointe
owns as of the most recent month end. To Contributors’ knowledge, there has been
no material adverse change in any condition, fact, circumstance or event that
would make any such information inaccurate, incomplete or otherwise misleading
in any material respect or that otherwise materially and adversely affects or
might materially and adversely affect the use, operation or value of the
properties Buffalo Pointe owns. To Contributors’ knowledge, it has disclosed to
the Company and the Operating Partnership all material facts and has not failed
to disclose any material fact that could cause any information described in this
representation or warranty materially misleading.

(m) Insurance. To Contributors’ knowledge, Buffalo Pointe and its properties now
have in force normal and customary insurance policies. Neither Buffalo Pointe
nor its properties have received any written notice of cancellation or
non-renewal with respect to, or disallowance of any claim for any matter under
its insurance policies. To Contributors’ knowledge, neither Buffalo Pointe nor
its properties have been refused any insurance nor has the coverage of Buffalo
Pointe or its properties been limited by any insurance carrier to which either
of them has applied for insurance or with which either of them has carried
insurance during the last five years (or any shorter period of time, as the case
may be, in which it has held an interest in Buffalo Pointe or its properties).

(n) Conduct of Business. To Contributors’ knowledge, Buffalo Pointe and its
properties have all the certificates, licenses and permits which are required
for the lawful ownership, use, occupancy, operation, maintenance or other
conduct of its business. To Contributors’ knowledge, Buffalo Pointe and its
properties have not incurred any liabilities or entered into any material
leases, loans or other agreements since the last balance sheet date except as
previously disclosed to the Company and the Operating Partnership or which were
incurred in the ordinary course of the business of Buffalo Pointe or its
properties. To Contributors’ knowledge, none of the employees at Buffalo Pointe
or its properties are employed by

 

Schedule E - 2

--------------------------------------------------------------------------------

Buffalo Pointe or its properties. To Contributors’ knowledge, all such employees
are employed by it or its affiliates. To Contributors’ knowledge, none of
Buffalo Pointe or the properties Buffalo Pointe owns now has, and at no time
ever had, any employees.

(o) Taxes.

(i) No Contributor has any liability for unpaid Taxes that are or could become
an encumbrance on the Interests or any asset of Buffalo Pointe, and to
Contributors’ knowledge there are no liens for Taxes on the assets and
properties of Buffalo Pointe, except in either case, liens for current Taxes not
yet due and payable.

(ii) To Contributors’ knowledge, Buffalo Pointe has filed all federal, state and
local Tax returns required by law, which returns are complete and accurate in
all material respects. To Contributors’ knowledge, Buffalo Pointe has timely
paid all Taxes that are due and payable for all Tax periods, whether or not
shown on any return. To Contributors’ knowledge, Buffalo Pointe has timely and
properly withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, creditor, equity holder, or other third party, and has complied in
all material respects with all laws relating to the payment, reporting and
withholding of Taxes.

(iii) To Contributors’ knowledge, there are no existing or, to the knowledge of
the Contributors, proposed penalty, interest or deficiency assessments in
respect to any Tax returns filed by Buffalo Pointe.

(iv) To Contributors’ knowledge, Buffalo Pointe (a) has not waived any statute
of limitations in respect of income Taxes or agreed to any extension of time for
the assessment of any Tax, (b) is not currently under audit or investigation by
any Taxing authority, and (c) has not received written notice of any actual or
proposed deficiencies or assessments for Taxes. To Contributors’ knowledge, no
claim has ever been made by a governmental entity in a jurisdiction in which
Buffalo Pointe does not file a Tax return that it or any of its interest holders
is or may be subject to Tax by that jurisdiction.

(v) To Contributors’ knowledge, Buffalo Pointe has not participated in a listed
transaction as defined in Treasury Regulation Section 1.6011-4(b)(2).

(vi) To Contributors’ knowledge, Buffalo Pointe has been properly classified as
a partnership for federal, state and local income tax purposes at all times
since its formation. To Contributors’ knowledge, Buffalo Pointe has never made
an election to be classified as an association taxable as a corporation for
federal income tax purposes.

(vii) To Contributors’ knowledge, Buffalo Pointe does not hold, or has not held,
equity interests in any entity that is classified as a corporation for federal
income tax purposes.

(viii) To Contributors’ knowledge, Buffalo Pointe is not the beneficiary of any
tax holiday or other tax incentive, including any property tax reduction or
exemption, that would terminate or be subject to recapture or clawback by reason
of the transactions contemplated hereby.

(ix) To Contributors’ knowledge, no asset of Buffalo Pointe is tax-exempt use
property under Code Section 168(h). No portion of the cost of any asset of
Buffalo Pointe has been financed directly or indirectly from the proceeds of any
tax-exempt state or local government obligation described in Code
Section 103(a).

 

Schedule E - 3