Exhibit 10.69

NOTE EXCHANGE AND SUBSCRIPTION AGREEMENT

THIS NOTE EXCHANGE AND SUBSCRIPTION AGREEMENT (this “Agreement”) is effective as
of May 23, 2018 (the “Effective Date”) by Comstock Holding Companies, Inc., a
Delaware corporation (the “Company”), and Comstock Growth Fund II, L.C. (the
“Noteholder”). The Company and the Noteholder are sometimes referred to herein
individually as a “Party” or collectively as the “Parties.”

ARTICLE I

EXCHANGE OF NOTE FOR PREFERRED STOCK

1.01    Exchange. Subject to the terms and conditions of this Agreement, on the
Effective Date, the Noteholder hereby exchanges the Revolving Line of Credit
Promissory Note dated December 29, 2015 in the original maximum principal amount
of $10,000,000 issued by the Company to the Noteholder (as amended, extended,
supplemented or otherwise modified, the “Note”) for 738,390 shares of the
Company’s existing Series C Non-Convertible Preferred Stock (the “Preferred
Stock”). The number of shares of Preferred Stock received by the Noteholder in
exchange for the Note hereunder represents the principal amount outstanding plus
all accrued but unpaid interest under the Note as of March 31, 2018. The balance
due under the Note, as of March 31, 2018, was $3,691,948.26. Interest accrued
under the Note from April 1, 2018 through the Effective Date hereof is to be
paid by the Company in cash and the Note shall be delivered to the Company on
the Effective Date and cancelled.    Following the Effective Date, the
Noteholder agrees to deliver a portion of the shares of the Preferred Stock, or
other evidence of ownership of such shares of the Preferred Stock, to any party
holding a participation interest in the Note.

1.02    Fair Market Values for Tax Reporting; Tax Indemnity.

(a).     The Parties agree that the fair market value of the Note exchanged
under this Agreement is $____________ and that the fair market value of each
share of Preferred Stock exchanged under this Agreement is $5.00. The balance
due under the Note, as of March 31, 2018, was $3,691,948.26. Interest accrued
under the Note from April 1, 2018 through the Effective Date hereof is to be
paid by the Company in cash. Each Party agrees that all federal, state and local
tax filings and reportings made by such Party in connection with the
transactions contemplated by this Agreement shall be consistent with the
foregoing agreed-upon fair market values.

(b)    In consideration of the conversion of the Note to the Preferred Stock
pursuant to this Agreement, the Company shall indemnify the Noteholder and any
participants in the Note against, and reimburse the Noteholder and any
participants in the Note for, any and all taxes imposed upon or incurred by the
Noteholder or such participants solely as a result of the exchange and
cancellation of the Note as provided in this Agreement. The Company shall
reimburse the Noteholder and any participants as soon as practicable following
the payment of such taxes by the Noteholder or such participant, but in any
event no later than 30 days after the Company receives a written demand for said
reimbursement from the Noteholder or such participant.

 

1

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

ARTICLE II

REPRESENTATIONS, WARRANTIES AND UNDERSTANDINGS OF THE NOTEHOLDER

The Noteholder hereby represents and warrants to the Company as follows:

2.01    Ownership. The Noteholder is the sole record holder and beneficial owner
of the Note bearing its name as payee. The Noteholder owns the Note free and
clear of all liens, pledges, mortgages, charges, security interests or
encumbrances of any kind whatsoever, except for certain participation interests
in the Note sold to third parties. Except for any loan participation agreements
with respect to the Note, the Noteholder is not a party to any agreement or
arrangement which will impose any such encumbrance upon the Note as a result of
the transactions contemplated hereby.

2.02    Power and Authority; Enforceability. The Noteholder has the power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
constitutes a legal, valid, and binding obligation of the Noteholder, and is
enforceable against the Noteholder in accordance with its terms.

2.03    Approvals. No consent, approval, authorization or order of any person,
entity, court, administrative agency or governmental authority is required for
the execution, delivery or performance of this Agreement by the Noteholder.

2.04    Conflicts. The execution, delivery and performance of this Agreement by
the Noteholder will not (a) conflict with, or result in a breach of, or
constitute a default under, or result in violation of, any agreement or
instrument to which the Noteholder is a party or by which the property of the
Noteholder is bound or (b) result in the violation of any applicable law or
order, judgment, writ, injunction, decree or award of any court, administrative
agency or governmental authority.

2.05    Acquiring for Investment. The Noteholder is acquiring the Preferred
Stock for its own account, for investment purposes only and not with a view
towards or in connection with the public sale or distribution thereof in
violation of the Securities Act of 1933, as amended (the “Securities Act”). The
Noteholder will not, directly or indirectly, offer, sell, pledge or otherwise
transfer its Preferred Stock, or any interest therein, except pursuant to
transactions that are exempt from the registration requirements of the
Securities Act and/or sales registered under the Securities Act. The Noteholder
understands and acknowledges that there is no public market for the Preferred
Stock and it is unlikely that any public market will develop. There can be no
assurance that the Noteholder will be able to sell or otherwise dispose of the
Preferred Stock. The Noteholder acknowledges that it must bear the economic risk
of the Noteholder’s investment in the Preferred Stock indefinitely, unless the
Preferred Stock is registered pursuant to the Securities Act and any applicable
state securities laws or an exemption from such registration is available, and
that the Company has no present intention of registering any such Securities or
any obligation to do so in the future.

 

2

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

2.06    Accredited Investor Status. The Noteholder is: (a) an “accredited
investor” within the meaning of Rule 501 of Regulation D under the Securities
Act; (b) experienced in making investments of the kind contemplated by this
Agreement; and (c) capable, by reason of its business and financial experience,
of evaluating the relative merits and risks of an investment in the Preferred
Stock.

2.07    Access to Information; Advice. The Noteholder has had the opportunity to
discuss the transactions contemplated hereby with the management of the Company
and has had the opportunity to obtain such information pertaining to the Company
as has been requested. The Noteholder understands that an investment in the
Company involves substantial risks. The Noteholder (a) can bear the economic
risk of losing its entire investment in the Company and has adequate means for
providing for its current financial needs and contingencies and (b) has the
financial acumen and sophistication to make an informed investment decision with
respect to the transactions contemplated hereby and the Preferred Stock to be
issued hereunder. The Noteholder is relying solely upon the advice of its own
legal, tax and financial advisers with respect to the tax and other legal
aspects of an investment in the Preferred Stock.

2.08    Exemption of Offering. The Noteholder understands that the Preferred
Stock is being issued in reliance upon an exemption from the registration
requirements of the Securities Act, and applicable state securities laws, and
that the Company is relying upon the accuracy of, and the Noteholder’s
compliance with, the Noteholder’s representations, warranties and covenants set
forth in this Agreement to determine the availability of such exemption.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Noteholder as follows:

3.01    Organization. The Company is duly formed and validly existing under the
laws of the State of Delaware, with full power and authority to conduct its
business as it is currently being conducted and to own its assets; and has
secured any other authorizations, approvals, permits and orders required by law
for the conduct by the Company of its business as it is currently being
conducted.

3.02    Power and Authority; Enforceability. The Company has the power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
constitutes a legal, valid, and binding obligation of the Company, and is
enforceable against the Company in accordance with its terms.

3.03    Approvals. Subject to the accuracy of the Noteholder’s representations
and warranties herein, no consent, approval, authorization or order of, or
filing or registration with, any governmental authority or other person is
required to be obtained or made by the Company for the execution, delivery and
performance of this Agreement or the consummation of any of the transactions
contemplated hereby.

 

3

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

3.04    No Default. The Company and its subsidiaries are not, and, immediately
after the consummation of the transactions contemplated hereby, none will be, in
material default of (whether upon the passage of time, the giving of notice or
both) any term of its certificate of incorporation or its bylaws or any
provision of any equity security issued by the Company.

3.05    Securities Laws. All notices, filings, registrations, or qualifications
under state securities or “blue sky” laws, that are required in connection with
the offer, issuance, sale and delivery of the Preferred Stock pursuant to this
Agreement, have been, or will be, completed by the Company.

ARTICLE IV

TRANSFER RESTRICTIONS

4.01    Transfer Restriction. Except as permitted by Section 1.01, the Preferred
Stock may not be transferred without the consent of the Company.

4.02    Transfer of Preferred Stock. The Noteholder acknowledges that the shares
of Preferred Stock are restricted securities and in addition to the restriction
contained in Section 4.01 may be transferred only pursuant to: (a) an effective
registration statement under the Securities Act and applicable state securities
laws pertaining to such securities or an available exemption therefrom; and
(b) Rule 144 of the Securities and Exchange Commission (or any similar rule or
rules then in force) if such rule or rules are available.

4.03    Restrictive Legend. The Noteholder acknowledges and agrees that, upon
issuance pursuant to this Agreement, the certificates representing the Preferred
Stock shall have endorsed thereon a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE, AND ARE
BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS. TRANSFER OR THESE
SECURITIES IS FURTHER RESTRICTED BY THE TERMS OF THE NOTE EXCHANGE AND
SUBSCRIPTION AGREEMENT EFFECTIVE AS OF MAY 23, 2018.”

ARTICLE V

MISCELLANEOUS PROVISIONS

5.01    Survival of Representations; Entire Agreement. All representations and
warranties made by the Parties pursuant to this Agreement shall survive the
execution and delivery of this Agreement. This Agreement and the related
documents referred to herein constitute the entire understanding between the
Parties with respect to the subject matter contained herein and therein and
supersede any prior or contemporaneous understandings and agreements among them
respecting such subject matter. Except as specifically set forth herein or
therein, neither the Company nor the Noteholder makes any representation,
warranty, covenant or undertaking with respect to such matters.

 

4

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

5.02    Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia, without
regard to its conflict of laws principles. Any suit brought hereunder shall be
brought in the state or federal courts sitting in Fairfax County, Virginia, and
the Parties hereby waive any claim or defense that such forum is not convenient
or proper.

5.03    Amendments; Counterparts. This Agreement may be amended only by a
written instrument duly executed by each of the Parties. This Agreement may be
executed in counterparts, each of which when executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. In order to facilitate execution of
this Agreement, this Agreement may be duly executed and delivered by facsimile
or other electronic transmission.

5.04    Further Assurances. The Parties agree to (a) furnish upon request to
each other such further information, (b) execute and deliver to each other such
other documents, and (c) do such other acts and things, all as the other Party
may reasonably request for the purpose of carrying out the intent of this
Agreement and the transactions contemplated by this Agreement.

5.05    Notices. All notices or other communications given or made hereunder
shall be in writing and shall be delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, to the Parties at their
respective addresses set forth below:

If to the Company:

Comstock Holding Companies, Inc.

1886 Metro Center Drive, 4th Floor

Reston, Virginia 20190

Attn: Chief Financial Officer

If to the Holder:

Comstock Growth Fund II, LC

1886 Metro Center Drive, 4th Floor

Reston, Virginia 20190

Attn: Chistopher Clemente

5.06    Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

5

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

5.07    Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
Effective Date.

 

COMPANY: Comstock Holding Companies, Inc. By:     Name:   Christopher Conover
Title:   Chief Financial Officer HOLDER: Comstock Growth Fund II, L.C. Comstock
Development Services, LC, Sole Member By:     Name:   Christopher Clemente
Title:   Manager

 

6