Document:

Exhibit 10.3

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of July 27, 2016, by and between JERNIGAN CAPITAL, INC., a Delaware corporation
(the “Company”), and certain funds managed or advised by Highland Capital Management, L.P. or its controlled
affiliates (“Highland”) and identified on the signature page(s) hereto (each, a “Buyer” and
collectively, together with their permitted transferees and assigns, the “Buyers”). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Stock Purchase Agreement dated as of the date
hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Stock Purchase Agreement”).

 

RECITALS:

 

A.           Upon
the terms and subject to the conditions of the Stock Purchase Agreement, the Company has agreed to issue to the Buyers and the
Buyers have agreed to purchase shares of the Company’s Series A Preferred Stock, par value $0.01 per share (the “Series
A Preferred Stock”), pursuant to Section 1 of the Stock Purchase Agreement;

 

B.           In
connection with the sale and purchase of the Series A Preferred Stock, the Company may issue to the Buyers shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”), as dividends in respect of the Company’s
Series A Preferred Stock; and

 

C.           To
induce the Buyers to enter into the Stock Purchase Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations there under, or any similar successor statute (collectively,
the “Securities Act”), and applicable state securities laws.

 

NOW, THEREFORE, in consideration
of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:

 

ARTICLE
I

DEFINITIONS

 

The following terms, as used herein, have
the following meanings:

 

“Agreement” has the meaning
set forth in the preamble.

 

“Board of Directors”
means the Board of Directors of the Company.

 

“Business Day” means
any day on which the Principal Market is open for trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time),
including any day on which the Principal Market is open for trading for a period of time less than the customary time.

 

“Buyers” has the meaning
set forth in the preamble.

 

“Commission” means the
U.S. Securities and Exchange Commission.

 

“Common Stock” has the
meaning set forth in the recitals.

 

     

     

    

 

“Company” has the meaning
set forth in the preamble.

 

“Effectiveness Date”
has the meaning set forth in Section 2.1(a).

 

“Exchange Act” means
the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

“FINRA” has the meaning
set forth in Section 3.1(k).

 

“Holder” means any Initial
Holder and any direct or indirect transferee of any Registrable Securities.

 

“Holders’ Counsel”
means one counsel for the Holders that is selected by the Holders holding a majority of the Registrable Securities included in
the Shelf Registration Statement, with such selection being effective by written consent of Holders holding a majority of the Registrable
Securities, whether record or beneficial Holders.

 

“Indemnified Party” has
the meaning set forth in Section 4.2.

 

“Indemnifying Party”
has the meaning set forth in Section 4.2.

 

“Initial Holder” means
the Buyers in any purchase pursuant to the Stock Purchase Agreement.

 

“Initial Holder Representative”
means NexPoint Advisors, L.P.

 

“Initiating Holder” has
the meaning set forth in Section 2.2(a).

 

“Inspectors” has the
meaning set forth in Section 3.1(i).

 

“Marketed Underwritten Offering”
has the meaning set forth in Section 2.2(b).

 

“Marketed Underwritten Offering
Notice” has the meaning set forth in Section 2.2(b).

 

“Person” means any individual
or entity including any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.

 

“Principal Market” means
the New York Stock Exchange; provided, however, that in the event the Company’s Common Stock is ever primarily traded on
the Nasdaq Stock Market, the OTC Bulletin Board, or another nationally recognized market or exchange, then the “Principal
Market” shall mean such other market or exchange on which the Company’s Common Stock is then primarily listed or traded.

 

“Records” has the meaning
set forth in Section 3.1(i).

 

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“Registrable Securities”
means (1) all shares of Common Stock owned by the Initial Holders, whether owned at the time of the execution of this Agreement
or acquired after the date of this Agreement, (2) any shares of Common Stock that Holders receive as dividends on the Company’s
Common Stock or Series A Preferred Stock, and (3) any shares of Common Stock owned by a Holder that was issued or is issuable
with respect to the Series A Preferred Stock or the Common Stock by way of exchange, stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, such Registrable Securities shall only cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities has been declared effective by the Commission and such particular Registrable
Securities have been disposed of under such registration statement, (b) such time as such particular Registrable Securities
have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such securities not bearing a restrictive legend, or (c) such
particular Registrable Securities are eligible to be sold at one time under the exemption of Rule 144 free of all limitations of
such rule.

 

“Registration Default”
has the meaning set forth in Section 2.1(e).

 

“Registration Expenses”
has the meaning set forth in Section 3.2.

 

“Rule 144” means Rule
144 (or any successor rule of similar effect) promulgated under the Securities Act.

 

“Rule 415” means Rule
415 (or any successor rule of similar effect) promulgated under the Securities Act.

 

“Securities Act” has
the meaning set forth in the recitals.

 

“Selling Expenses” means
all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities.

 

“Selling Holder” means
any Holder whose Registrable Securities are entitled to be registered for resale pursuant to the terms hereof.

 

“Series A Preferred Stock”
has the meaning set forth in the recitals.

 

“Shelf Filing Date” has
the meaning set forth in Section 2.1(a).

 

“Shelf Registration Period”
has the meaning set forth in Section 2.1(b).

 

“Shelf Registration Statement”
has the meaning set forth in Section 2.1(a).

 

“Stock Purchase Agreement”
has the meaning set forth in the recitals.

 

“Successor” has the meaning
set forth in Section 5.9.

 

“Underwritten Offering Notice”
has the meaning assigned to it in Section 2.2(a).

 

“Underwriter” means a
securities dealer who purchases any Registrable Securities or other securities of the Company as principal for the resale of such
securities and not as part of such dealer’s market making activities.

 

“Underwriters’ Counsel”
means one counsel for the Underwriter(s), selected in accordance with the terms of this Agreement, of an Underwritten Offering.

 

“Underwritten Offering”
means any sale of Common Stock to an Underwriter(s) on a firm commitment basis.

 

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ARTICLE
II

REGISTRATION RIGHTS

 

Section 2.1           Shelf
Registration.

 

(a)          Subject
to Sections 2.1(c), (d) and (e) hereof, the Company shall (i) use commercially reasonable efforts to prepare and file with the
Commission, as soon as reasonably possible following the date of this Agreement but in no event later than 60 days following
the date of this Agreement unless the Initial Holder Representative shall on behalf of the Initial Holders in writing designate
a later date (the “Shelf Filing Date”), a registration statement (such registration statement, including any
replacement registration statement, the “Shelf Registration Statement”) with respect to the resale of the Registrable
Securities under the Securities Act on Form S-3 (or any similar or successor form or other form to the extent that Form S-3 is
not available), which Shelf Registration Statement (A) shall provide for the registration and the sale by the Holders of the
Registrable Securities on a continuous or delayed basis pursuant to Rule 415, (B) shall comply as to form in all material
respects with the requirements of the applicable form and include, or incorporate by reference, all financial statements required
by the Commission to be filed therewith or be incorporated therein and (C) shall be reasonably acceptable to the Holders’
Counsel, and (ii) use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective
by the Commission as soon as practicable thereafter but in no event later than 180 days after filing (the “Effectiveness
Date”). The Shelf Registration Statement shall provide for the resale of the Registrable Securities pursuant to any method
or combination of methods legally available by the Holders, and the Shelf Registration Statement and any form of prospectus included
or incorporated by reference therein (or any prospectus supplement relating thereto) shall reflect such plan of distribution or
methods of sale.

 

(b)          Subject
to Sections 2.1(c), (d) and (e), the Company shall use commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective for the period beginning on the Effectiveness Date and ending on the date that all of the Registrable Securities
registered under the Shelf Registration Statement cease to be Registrable Securities (the “Shelf Registration Period”).
During the Shelf Registration Period, the Company shall (i) subject to Section 2.1(c) hereof, prepare and file with the Commission
such supplements, amendments and/or post-effective amendments to the Shelf Registration Statement as may be (A) necessary
to keep the Shelf Registration Statement continuously effective for the Shelf Registration Period or (B) reasonably requested
by the Holders (whether or not required by the form on which the securities are being registered), including, without limitation,
to identify additional Holders in such Shelf Registration Statement or to register additional Registrable Securities under such
Self Registration Statement, and shall use commercially reasonable efforts to cause each such supplement, amendment and/or post-effective
amendment to be declared effective by the Commission, if required, as soon as practicable after the filing thereof, (ii) subject
to Section 2.1(c) hereof, use commercially reasonable efforts to cause any related prospectus to be supplemented by any required
supplement, and as so supplemented to be filed with the Commission pursuant to Rule 424 under the Securities Act (or any similar
provisions then in force under the Securities Act), to the extent required, and (iii) comply in all material respects with
the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Shelf Registration
Statement during the Shelf Registration Period in accordance with the intended methods of disposition in market transactions as
may be reasonably requested from time to time by the Holders and set forth in such Shelf Registration Statement as so amended or
supplemented or such prospectus as so supplemented.

 

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(c)          If
a majority of the Board of Directors determines in its good faith judgment that the availability of the Shelf Registration Statement
or the use of any related prospectus or prospectus supplement would require the disclosure of material information that the Company
has a bona fide business purpose for preserving as confidential or the disclosure of which would impede the Company’s ability
to consummate a material transaction (which may include an offering of the Company’s securities by the Company), and that
the Company is not otherwise required by applicable securities laws or regulations to disclose, upon written notice from the Company
of such determination by the Board of Directors, the rights of the Holders to offer, sell or distribute any Registrable Securities
pursuant to the Shelf Registration Statement or to require the Company to take action with respect to the registration or sale
of any Registrable Securities pursuant to the Shelf Registration Statement, including with respect to an Underwritten Offering,
shall be suspended until the earlier of (i) the date upon which the Company notifies the Holders in writing that suspension
of such rights for the grounds set forth in this Section 2.1(c) is no longer necessary and the Holders have received copies of
any required amendment or supplement to the relevant prospectus, and (ii) 45 days following receipt of such written notice
from the Company. The Company agrees to give such notice as promptly as reasonably practicable following the date that such suspension
of rights is no longer necessary.

 

(d)          The
Company may not utilize the suspension rights under Section 2.1(c) more than one time in any three-month period nor more than two
times in any 12-month period. Each Holder agrees by acquisition of the Registrable Securities that upon receipt of any suspension
notice provided for under Section 2.1(c), such Holder will discontinue its disposition of Registrable Securities pursuant to the
Shelf Registration Statement relating to such Registrable Securities until the expiration of the applicable suspension period as
provided in Section 2.1(c).

 

(e)          If
(i) the Shelf Registration Statement has not been filed with the Commission by the Shelf Filing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commission by Effectiveness Date, or (iii) to the extent that
Registrable Securities remain outstanding, the Shelf Registration Statement is filed and declared effective but shall thereafter
cease to be effective (without being succeeded by a replacement shelf registration statement which is filed and declared effective)
or usable (including as a result of any suspension period under Section 2.1(c) hereof) for the offer and sale of such Registrable
Securities for any period of time (including any suspension period under Section 2.1(c) hereof) which shall exceed 30 consecutive
Business Days or for more than an aggregate of 90 Business Days in any 365-day period, which is not in connection with a post-effective
amendment to such Shelf Registration Statement required in the business judgment of the majority of the Board of Directors arrived
at in good faith, provided that, in connection with any post-effective amendment to such Shelf Registration Statement that
is required to be declared effective by the Commission, such lapse or unavailability may continue for a period of no more than
30 consecutive Business Days, which such period shall be extended for an additional 30 Business Days if the Company receives a
comment letter from the Commission in connection therewith (each such event referred to in the immediately preceding clauses (i),
(ii) and (iii), a “Registration Default”). THE PARTIES ACKNOWLEDGE THAT THE REMEDIES PROVIDED FOR IN THE ARTICLES
SUPPLEMENTARY TO THE COMPANY’S ARTICLES OF AMENDMENT AND RESTATEMENT FOR A FAILURE TO FILE THE REGISTRATION STATEMENT OR
A FAILURE TO HAVE THE SHELF REGISTRATION STATEMENT DECLARED OR REMAIN EFFECTIVE ARE DIFFICULT TO MEASURE AND THAT SUCH REMEDIES
PROVIDED FOR THEREIN ARE REASONABLE LIQUIDATED DAMAGES AND NOT A PENALTY. Promptly (but in no event more than five Business Days)
after the occurrence of a Registration Default, the Company shall give the Holders at such time written notice of such occurrence.

 

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Section 2.2           Underwritten
Shelf Take-Downs.

 

(a)          At
any time during which the Company has an effective Shelf Registration Statement with respect to the Registrable Securities, by
written notice to the Company specifying the intended method or methods of disposition thereof (an “Underwritten Offering
Notice”), one or more Selling Holder(s) beneficially owning at least an aggregate of 5% of the Registrable Securities
(each an “Initiating Holder”) may request an Underwritten Offering of Registrable Securities pursuant to such
Shelf Registration Statement, and the Company shall use its commercially reasonable efforts to amend or supplement the applicable
Shelf Registration Statement, if necessary, for such purpose as soon as practicable; provided, however, that (i) any Underwritten
Offering Notice shall be required to be in respect of at least $15 million in anticipated net proceeds in the aggregate and (ii)
in no event shall the Company be required to effect (a) more than one Underwritten Offering during any consecutive 90-calendar
day period,(b) more than two Underwritten Offerings during any rolling twelve-month period and (c) more than six Marketed Underwritten
Offerings under this Section 2.2.  Subject to Section 2.2(b)(ii) below, such Initiating Holders shall have the right
to select the managing Underwriter(s) to administer such offering, which managing Underwriter(s) shall be reasonably acceptable
to the Company.

 

(b)          If
any Underwritten Offering Notice requests a customary “road show” (including an “electronic road show”)
or other marketing effort by the Company and the Underwriters over a period expected to exceed 48 hours (a “Marketed Underwritten
Offering”), promptly upon delivery of such Underwritten Offering Notice (but in no event more than three (3) Business
Days thereafter), the Company shall promptly deliver a written notice (a “Marketed Underwritten Offering Notice”)
of such Marketed Underwritten Offering to all Selling Holders (other than the Initiating Holders), and the Company shall include
in such Marketed Underwritten Offering all such Registrable Securities of such Selling Holders that are registered on the Shelf
Registration Statement for which the Company has received written requests, which requests must specify the aggregate amount of
such Registrable Securities of such Selling Holders requested to be offered and sold pursuant to such Marketed Underwritten Offering,
for inclusion therein within 5 Business Days after the date that such Marketed Underwritten Offering Notice has been delivered;
provided, that if the managing Underwriter(s) of any proposed Marketed Underwritten Offering informs the Selling Holders
that have requested to participate in such Marketed Underwritten Offering in writing that, in its or their good-faith opinion,
the number of Registrable Securities which such Selling Holders intend to include in such Marketed Underwritten Offering exceeds
the number of Registrable Securities which can be sold in such offering without being likely to have a significant adverse effect
on the price, timing or distribution of the securities offered or the market for the securities offered, then the Registrable Securities
to be included in such Marketed Underwritten Offering shall be the number of Registrable Securities that, in the opinion of such
managing Underwriter(s), can be sold without having such adverse effect in such Marketed Underwritten Offering, which number shall
be allocated (i) first, to the Registrable Securities requested to be included in such Marketed Underwritten Offering by the Initiating
Holders and (ii) second, to the Registrable Securities requested to be included in such Marketed Underwritten Offering by any Selling
Holder who is not one of the Initiating Holders on a pro rata basis.  The Holders of a majority of the Registrable Securities
to be included in any Marketed Underwritten Offering shall have the right to select the managing Underwriter(s) to administer such
offering, which managing Underwriter(s) shall be reasonably acceptable to the Company. No holder of securities of the Company shall
be permitted to include such holder’s securities in any Marketed Underwritten Offering except for Holders who wish to include
Registrable Securities pursuant to this Section 2.2(b)(ii). Notwithstanding anything herein to the contrary, if an Underwritten
Offering Notice does not expressly specify that the Underwritten Offering shall include a customary road show or other substantial
marketing efforts over a period expected to exceed 48 hours, the Company shall have no obligation to deliver a Marketed Underwritten
Offering Notice to Holders.

 

    	 	6	 

     

    

 

(c)          Notwithstanding
anything to the contrary herein, the Company shall not be obligated to effect, or take any action to effect, an Underwritten Offering
during any customary lock-up period required by the underwriters in connection with any prior primary underwritten public offering
of securities of the Company for its own account (a “Company Underwritten Offering”) or (ii) during the
period commencing on the date that is thirty (30) days prior to the Company’s good faith estimate of the date of filing of
a registration statement, prospectus or prospectus supplement relating to a Company Underwritten Offering and ending on the date
that is sixty (60) days after the filing of a final prospectus with respect to a Company Underwritten Offering (the “Black-Out
Period”). Promptly upon the commencement of any Black-Out Period, the Company shall deliver a notice of the institution
thereof (a “Black-Out Notice”), which Black-Out Notice shall provide the reason(s) for which a Black-Out Period
has been instituted. Following the delivery of a Black-Out Notice in accordance with this Section 2.2(c), the Company shall not
be obligated to effect the Underwritten Offering requested by such Underwritten Offering Notice until the expiration of the Black-Out
Period; provided, however, that the Company shall notify the Initiating Holder promptly if it elects not to pursue a Company Underwritten
Offering, in which case the Holders shall no longer be subject to the Black-Out Period and may immediately submit to the Company
a new Underwritten Offering Notice.

 

(d)          In
the event of any Company Underwritten Offering, each Holder hereby agrees that it shall not, to the extent requested by the Company
or an underwriter of securities of the Company, directly or indirectly sell, offer to sell (including without limitation any short
sale), grant any option or otherwise transfer or dispose of any Registrable Securities (other than to donees or affiliates of such
Holder who agree to be similarly bound) for a period of up to sixty (60) days following the date of any underwriting agreement
with respect to a Company Underwritten Offering; provided, however, that no Holder shall be subject to the restrictions in this
Section 2.2(d) unless (i) all executive officers and directors of the Company enter into similar agreements and (ii) any concession
or proportionate release allowed to any executive officer or director of the Company that entered into similar agreements shall
be afforded to the Holders.

 

ARTICLE
III

REGISTRATION PROCEDURES

 

Section 3.1           Filings;
Information. In connection with the registration of Registrable Securities pursuant to Sections 2.1 and 2.2:

 

(a)          The
Company will prepare and file with the Commission a Shelf Registration Statement on Form S-3 or such other form that the Company
is eligible to use and which counsel for the Company shall deem appropriate and available for the sale of the Registrable Securities
to be registered thereunder in accordance with the intended methods of distribution thereof, as may be reasonably necessary to
effect the sale of the Registrable Securities, including in an Underwritten Offering. Before filing a Shelf Registration Statement,
prospectus or any free writing prospectus, or any amendments or supplements thereto, the Company shall (x) furnish to the managing
Underwriter(s), if any, and the Holders participating in the Shelf Registration Statement or an Underwritten Offering, as applicable,
copies of all documents prepared to be filed, and provide such managing Underwriter(s), if any, and such Holders and their respective
counsel with a reasonable opportunity to review and comment on such documents prior to their filing and (y) not file any Shelf
Registration Statement or prospectus to which any such Underwriters or Holders, as applicable, shall reasonably object. The Company
may require Holders to furnish in writing to the Company such information regarding such Holders and other information as the Company
may be legally required to disclose in connection with such registration.

 

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(b)          The
Company shall, if requested, prior to filing a Shelf Registration Statement or any amendment or supplement thereto, furnish to
the Selling Holders, and each applicable managing Underwriter, if any, copies thereof, and thereafter furnish to the Selling Holders
and each such Underwriter, if any, such number of copies of such Shelf Registration Statement, amendment and supplement thereto
(in each case including all exhibits thereto and documents incorporated by reference therein, unless such exhibits and documents
are available on the Commission’s Electronic Data Gathering and Retrieval System) and the prospectus included in such Shelf
Registration Statement (including each prospectus, preliminary prospectus and prospectus supplement, as applicable) as the Selling
Holders or each such managing Underwriter, if any, may reasonably request in order to facilitate the sale of the Registrable Securities
by the Selling Holders.

 

(c)          After
the filing of the Shelf Registration Statement, the Company will promptly notify the Selling Holders and the managing Underwriter(s),
if any, of any stop order issued or, to the Company’s knowledge, threatened to be issued by the Commission and use its commercially
reasonable efforts to prevent the entry of such stop order or to remove it if entered.

 

(d)          In
addition to the requirements imposed on the Company elsewhere herein, the Company will qualify the Registrable Securities for offer
and sale under such other securities or “blue sky” laws of such jurisdictions in the United States as any Selling Holder
or managing Underwriter(s), if any, or their respective counsel reasonably request in writing for the registration or qualification
of the Registrable Securities for sale; keep any such registration or qualification (or exemption therefrom) effective during the
period in which such Shelf Registration Statement is required to be kept effective; and do any and all other acts and things which
may be necessary or advisable to enable each Selling Holder to consummate the disposition of the Registrable Securities owned by
such Selling Holder in such jurisdictions; provided, however, that the Company will not be required to (i) qualify to generally
do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.1(d), (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction where
it is not then subject.

 

(e)          The
Company will as promptly as is reasonably practicable notify the Selling Holders and the managing Underwriter(s), if any, at any
time when a prospectus relating to the sale of the Registrable Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, of the occurrence of any event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading and promptly make available to
the Selling Holders and to the managing Underwriter(s), if any, any such supplement or amendment. Upon receipt of any notice of
the occurrence of any event of the kind described in the preceding sentence, the Selling Holders will forthwith discontinue the
offer and sale of Registrable Securities pursuant to the Shelf Registration Statement covering such Registrable Securities until
receipt by the Selling Holders and the managing Underwriter(s) of the copies of such supplemented or amended prospectus and, if
so directed by the Company, the Selling Holders shall deliver to the Company all copies, other than permanent file copies then
in the possession of the Selling Holders, of the most recent prospectus covering such Registrable Securities at the time of receipt
of such notice. Furthermore, in the event the Company shall give such notice, the Company shall, as promptly as is reasonably practicable,
subject to the suspension rights under Sections 2.1(c), (d) and (e), if applicable, prepare a supplement or post-effective amendment
to the Shelf Registration Statement or a supplement to the related prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, such prospectus will not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.

 

    	 	8	 

     

    

 

(f)          [Reserved]

 

(g)          [Reserved]

 

(h)          If
requested by the managing Underwriter(s) or any Selling Holder, the Company shall promptly incorporate in a prospectus supplement
or post-effective amendment such information as the managing Underwriter(s) or any Selling Holder reasonably requests to be included
therein, including without limitation, with respect to the Registrable Securities being sold by such Selling Holder, the purchase
price being paid therefor by the Underwriters and with respect to any other terms of the Underwritten Offering of the Registrable
Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective
amendment.

 

(i)          The
Company shall promptly make available for inspection by Initial Holder Representative, any other representative designated to act
as a representative of the Holders (other than the Initial Holders) (the “Additional Representative”), or any
representative of the Underwriter(s) participating in any disposition of Registrable Securities pursuant to a Shelf Registration
Statement, Holders’ Counsel and Underwriters’ Counsel, and any accountant or other agent or representative retained
by or on behalf of the Initial Holders (as representative of any such Initial Holder), the Additional Representative, or the representative
of such Underwriter(s) (collectively, the “Inspectors”), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall reasonably be necessary to enable
them to exercise their due diligence responsibility (including the conduct of a reasonable investigation within the meaning of
Section 11 of the Securities Act), and cause the Company’s officers, directors and employees to supply all information requested
by any such Inspector in connection with such registration statement; provided, however, that unless the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in the registration statement or the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (i) if (A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (B) if
the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing
with the Commission or documents provided supplementally or otherwise.

 

(j)          The
Company shall cause the Common Stock included in any Shelf Registration Statement to be listed on each securities exchange, including,
without limitation, the Principal Market, on which securities issued by the Company are then listed, if the Registrable Securities
so qualify.

 

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(k)          The
Company shall cooperate with each Selling Holder, each Underwriter, if any, participating in the disposition of such Registrable
Securities, and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory
Authority (“FINRA”).

 

(l)          The
Company shall, as may be reasonably requested in an Underwritten Offering Notice, participate in any customary roadshow organized
for purposes of publicizing the sale or other disposition of the Registrable Securities. Such participation shall include, but
not be limited to, dispatch by the Company of personnel, on a reasonable basis and subject to the operational needs of the Company,
to assist in each presentation during made such roadshow, and provision of the Company data needed for purposes of the roadshow.

 

(m)          The
Company shall, during the period when the prospectus is required to be delivered under the Securities Act, use commercially reasonable
efforts to promptly file all documents required to be filed with the Commission pursuant to Section 13(a) of the Exchange Act.

 

Section 3.2           Registration
Expenses. In connection with any registration effected hereunder, the Company shall pay all expenses incurred in connection
with such registration (the “Registration Expenses”), including without limitation: (i) registration and
filing fees with the Commission and FINRA, (ii) all fees and expenses, if any, of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing
expenses, messenger and delivery expenses, (iv) fees and expenses incurred in connection with the listing or quotation of
the Registrable Securities, (v) fees and expenses of counsel to the Company and the fees and expenses of independent certified
public accountants for the Company (including fees and expenses associated with any special audits or the delivery of comfort letters),
(vi) fees and expenses of Holders’ counsel, (vii) the fees and expenses of any additional experts retained by the
Company in connection with such registration and (viii) the fees and expenses of other persons retained by the Company, whether
or not any Shelf Registration Statement becomes effective; provided that in no event shall Registration Expenses include any Selling
Expenses or the fees or expenses of counsel to the Underwriters.

 

Section 3.3           Underwriters;
Due Diligence. In the case of an Underwritten Offering, the Company will:

 

(a)          make
such customary representations and warranties to the applicable Selling Holders and the Underwriters or agents, if any, in form,
substance and scope as are customarily made by issuers in secondary Underwritten Offerings, (b) enter into such customary agreements
(including underwriting agreements in customary form, which shall include, without limitation, customary indemnification provisions)
and take all such other actions as any Selling Holder or the managing Underwriter(s), if any, reasonably request in order to expedite
or facilitate the Registration and disposition of such Registrable Securities, (c) obtain for delivery to Holders’ Counsel
and Underwriters’ Counsel and to the Underwriter(s), if any, an opinion or opinions from counsel for the Company dated the
date of the closing under the underwriting agreement, in customary form, scope and substance (including any customary REIT tax
opinions), which opinions shall be reasonably satisfactory to Holders’ Counsel and Underwriters’ Counsel, and (d) obtain
for delivery to the Company and the managing Underwriter(s), with copies to Holders’ Counsel and Underwriters’ Counsel,
a comfort letter from the Company’s independent certified public accountants in customary form and covering such matters
of the type customarily covered by comfort letters as the managing Underwriter(s) reasonably request, dated the date of execution
of the underwriting agreement and brought down to the date of the closing of the Underwritten Offering, as specified in the underwriting
agreement.

 

    	 	10	 

     

    

 

(b)          use
commercially reasonable efforts to cause appropriate officers and employees to be reasonably available, on a customary basis and
upon commercially reasonable notice, to meet with prospective investors in presentations, meetings and road shows and otherwise
to facilitate, cooperate with, and participate in each such proposed Underwritten Offering to the extent reasonably requested by
the managing Underwriter(s).

 

Section 3.4           Duties
of Selling Holders in Underwritten Offerings.

 

(a)          In
the case of an Underwritten Offering, the Selling Holders agree to timely furnish to the Company any information regarding the
Holder and the distribution of such Holder’s Registrable Securities as the Company reasonably determines is required to be
included in any Registration Statement or any prospectus or prospectus supplement relating to an Underwritten Offering.

 

(b)          With
respect to Underwritten Offerings, (i) the right of any Holder to include such Holder’s Registrable Securities in an Underwritten
Offering shall be conditioned upon such Holder’s participation in the process and required delivery of information for such
Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent
provided herein, (ii) each Holder participating in such Underwritten Offering agrees to enter into an underwriting agreement in
customary form and sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved
by those entitled to select the managing Underwriter(s) hereunder and (iii) each Holder participating in such Underwritten Offering
agrees to complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up agreements
and other documents reasonably required under the terms of such underwriting arrangements. The Company hereby agrees with each
Holder that, in connection with any Underwritten Offering in accordance with the terms hereof, it will negotiate in good faith
and execute all indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting
arrangements, including using all commercially reasonable efforts to procure customary legal opinions and auditor “comfort”
letters provided for herein.

 

    	 	11	 

     

    

 

ARTICLE
IV

INDEMNIFICATION AND CONTRIBUTION

 

Section 4.1           Indemnification
By the Company. The Company agrees to indemnify, and hold harmless each Selling Holder and their respective officers, directors,
partners, shareholders, members, employees, agents and representatives and each Person (if any) which controls a Selling Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) caused by, arising
out of, resulting from or related to any untrue statement or alleged untrue statement of a material fact contained or incorporated
by reference in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, including all documents
attached thereto or incorporated by reference therein, or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by or based upon any information furnished in writing to the Company by or on behalf of such
Selling Holder or by such Selling Holder’s failure to deliver a copy of the registration statement or prospectus or any amendments
or supplements thereto after the Company has furnished such Selling Holder with copies of the same; provided, however, that the
Company shall have no obligation to indemnify under this sentence to the extent any such losses, claims, damages or liabilities
have been finally and non-appealability determined by a court of competent jurisdiction to have resulted from such Selling Holder’s
willful misconduct or gross negligence or an intentional act or omission in violation of applicable laws. The Company also agrees
to indemnify any Underwriter of the Registrable Securities, their officers and directors and each person who controls such Underwriter
on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 4.1, except insofar
as such losses, claims, damages or liabilities are caused by or based upon any information furnished in writing to the Company
by or on behalf of such Underwriter or by such Underwriter’s failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has furnished the Underwriter with copies of the same; provided, however,
that the Company shall have no obligation to indemnify under this sentence to the extent any such losses, claims, damages or liabilities
have been finally and non-appealably determined by a court to have resulted from any such Underwriter’s willful misconduct
or gross negligence. The obligations of the Company under this Section 4.1 shall be in addition to any liability that the Company
may otherwise have to any Indemnified Person and the obligations of any Indemnified Person under this Section 4.1 shall be in addition
to any liability that such Indemnified Person may otherwise have to the Company. The remedies provided in this Section 4.1 are
not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in
equity.

 

Section 4.1           Indemnification
By Selling Holders. Each Selling Holder agrees to indemnify, and hold harmless the Company, its officers and directors, and
each Person, if any, that controls the Company within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages, liabilities, costs and expenses (including reasonable
attorneys’ fees) caused by, arising out of, resulting from or related to any untrue statement or alleged untrue statement
of a material fact contained or incorporated by reference in any registration statement or prospectus relating to the Registrable
Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, including all documents attached thereto or incorporated by reference therein, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
but only with respect to information furnished in writing by or on behalf of such Selling Holder specifically for use in any registration
statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto or any preliminary prospectus.
Each Selling Holder also agrees to indemnify and hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the
Company provided in this Section 4.2, but only with reference to information furnished in writing by or on behalf of such Selling
Holder specifically for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment
or supplement thereto or any preliminary prospectus. Each such Selling Holder’s liability under this Section 4.2 shall be
limited to an amount equal to the net proceeds (after deducting the applicable underwriting discount and expenses associated with
such Selling Holder’s Registrable Securities sold thereunder) received by such Selling Holder from the sale of such Registrable
Securities by such Selling Holder in the applicable offering. Notwithstanding anything herein to the contrary, the obligations
of each Selling Holder under this Article IV shall be several and not joint.

 

    	 	12	 

     

    

 

Section 4.2           Conduct
Of Indemnification Proceedings. In case any proceeding (including any investigation by any court, governmental, regulatory
or administrative agency or commission or other governmental authority or instrumentality, domestic (federal, state or municipal)
or foreign governmental entity) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to
Section 4.1 or Section 4.2, such Person (the “Indemnified Party”) shall promptly notify the Person against whom
such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party, and the Indemnifying
Party shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Indemnified
Party. Any Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party except to the extent that
(1) the employment thereof has been specifically authorized by the Indemnifying Party in writing, (2) the Indemnifying Party has
failed after a reasonable period of time to assume such defense and to employ counsel or (3) in such action there is, in the reasonable
opinion of counsel, a material conflict on (or a potential material conflict with respect to) any material issue between the position
of the Indemnifying Party and the position of such Indemnified Party, in which case the Indemnifying Party shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Indemnifying Party will not be liable to any
Indemnified Party under this Agreement (y) for any settlement by a Indemnified Party effected without the Indemnifying Party’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent,
that a loss, claim, damage or liability is determined in a final, non-appealable judgment, to directly result from any Indemnified
Party’s breach of its representations, warranties or covenants under this Agreement or any conduct by such Indemnified Party
which constitutes fraud, gross negligence or willful misconduct. The indemnification required by this Article IV shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Indemnified
Party against the Indemnifying Party or others and any liabilities the Indemnifying Parties may be subject to pursuant to applicable
law.

 

Section 4.3           Contribution.

 

(a)          If
the indemnification provided for in this Article IV is, by operation of law unavailable to an Indemnified Party in respect of any
losses, claims, damages or liabilities in respect of which indemnity is to be provided hereunder, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law, contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate
to reflect the relative fault of such party in connection with the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company, a Selling Holder
and the Underwriter shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party and
the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

    	 	13	 

     

    

 

(b)          The
Company and each Selling Holder agrees that it would not be just and equitable if contribution pursuant to this Section 4.3 were
determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Each Selling Holder shall not be required pursuant to Article IV to contribute any amount in
excess of the amount by which the proceeds of any sale (before deducting the applicable underwriting discount and expenses associated
with such Selling Holder’s Registrable Securities in the applicable offering) received by such Selling Holder exceeds the
amount of any damages that such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

ARTICLE
V

MISCELLANEOUS

 

Section 5.1           Participation
In Underwritten Offerings. No Selling Holder may participate in any Underwritten Offering contemplated hereunder, unless such
Selling Holder (a) agrees to sell its Registrable Securities on the basis provided in any underwriting arrangements approved by
those entitled hereunder to approve such arrangements, (b) completes and executes all (to the extent reasonable and customary)
questionnaires, powers of attorney, custody arrangements, of such underwriting arrangements and this Agreement and (c) furnishes
in writing to the Company such information regarding such Selling Holder and other information as the Company may reasonably request
or as may legally be required in connection with such Underwritten Offering; provided, however, that no such Selling Holder shall
be required to make any representations or warranties in connection with any such Underwritten Offering other than representations
and warranties as to (i) such Selling Holder’s ownership of its Registrable Securities to be sold or transferred in a manner
that is free and clear of all liens, claims and encumbrances, (ii) such Selling Holder’s power and authority to effect such
transfer and (iii) such matters pertaining to compliance with applicable securities laws as may reasonably be requested; provided
further, however, that the obligation of such Selling Holder to indemnify pursuant to any such underwriting agreements shall be
several, and not joint, among such Selling Holder selling Registrable Securities, and the liability of each such Selling Holder
will be in proportion to, and, provided further that such liability will be limited to, the net amount received by such Selling
Holder from the sale of such Selling Holder’s Registrable Securities pursuant to such Underwritten Offering.

 

Section 5.2           Rule
144. The Company shall use commercially reasonable efforts to file any and all reports required to be filed by it under the
Securities Act and the Exchange Act and shall take such further action as the Holders may reasonably request to the extent required
from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement
as to whether it has complied with such reporting requirements.

 

Section 5.3           Amendments,
Waivers, Etc. This Agreement may not be amended, waived or otherwise modified or terminated except by an instrument in writing
signed by the Company and the Holders of at least two-thirds of the Registrable Securities then held by all the Holders.

 

    	 	14	 

     

    

 

Section 5.4           Counterparts.
This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

Section 5.5           Entire
Agreement. This Agreement, together with the Stock Purchase Agreement and the other agreements, instruments and documents referred
to herein and therein, constitutes the entire agreement of the parties hereto and supersedes all prior agreements, letters of intent
and understandings, both written and oral, among the parties with respect to the subject matter hereof.

 

Section 5.6           Articles,
Sections. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement.

 

Section 5.7           Governing
Law; Jurisdiction; Jury Trial. THE CORPORATE LAWS OF THE STATE OF MARYLAND SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE
RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND HOLDERS
HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH
ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY HOLDER, ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.
EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

    	 	15	 

     

    

 

Section 5.8           Assignment
of Registration Rights. No Holder of Registrable Securities may assign all or any part of its rights under this Agreement to
any person without the prior written consent of the Company, which consent shall not be unreasonably withheld; provided, however,
that the rights under this Agreement may be assigned to any Affiliate of the Holders to whom Registrable Securities have been transferred
without requiring the Company’s consent, provided that the transferring Holder promptly provides notice of such assignment
and the transferee agrees in writing to be bound by the terms and conditions of this Agreement.

 

Section 5.9           Parties
in Interest. This Agreement shall be binding upon and inure to the benefit of the Company and any successor organization that
shall succeed to substantially all of the business and property of the Company, whether by merger, consolidation, acquisition of
all or substantially all of the assets of the Company or otherwise, including by operation of law (each, a “Successor”).
The Company hereby covenants and agrees that it shall cause any Successor to adopt and assume this Agreement. If a parent entity
of the Company or its Successor becomes the issuer of the Registrable Securities, then the Company or such Successor shall cause
such parent entity to adopt and assume this Agreement to the same extent as if the parent entity were the Company or such Successor.

 

Section 5.10         Notices.
Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (a) upon receipt when delivered personally; (b) upon receipt when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c)
one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

	If to the Company:
	 
	Jernigan Capital, Inc.
	6410 Poplar Avenue, Suite 650
	Memphis, TN 38119
	Telephone:	901-567-9510
	Facsimile:	901-567-9557
	Attention:	John A. Good
	Attention:	William H. Mathieu
	 	 
	With a copy to:
	 
	Morrison & Foerster LLP
	2000 Pennsylvania Avenue, Suite 6000
	Washington, DC 20006
	Telephone:	202-887-1554
	Facsimile:	202-785-7522
	Attention:	David P. Slotkin
	 	 
	If to the Initial Holders:
	 
	NexPoint Advisors, L.P.
	300 Crescent Court, Suite 700
	Dallas, TX  75201
	Telephone:	972-628-4100
	Facsimile:	972-628-4147
	Attention:	Matt McGraner

 

    	 	16	 

     

    

 

	With a copy to:
	 
	Highland Capital Management, L.P.
	300 Crescent Court, Suite 700
	Dallas, TX  75201
	Telephone:	972-628-4100
	Facsimile:	972-628-4147
	Attention:	Thomas Surgent
	 	 
	and	 
	 	 
	Jones Day
	2727 North Harwood Street
	Dallas, TX  75201
	Telephone:	214-220-3939
	Facsimile:	214-969-5100
	Attention:	Charles Haag

 

or at such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified by written notice given to each other party one Business Day
prior to the effectiveness of such change. Written confirmation of receipt (x) given by the recipient of such notice, consent or
other communication, (y) mechanically or electronically generated by the sender’s facsimile machine containing the time,
date, and recipient facsimile number or (z) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of receipt in accordance with clause (a), (b) or (c) above, respectively.

 

Section 5.11         Headings.
The headings contained in this Agreement are for convenience of reference only and are not part of the substance of this Agreement.

 

Section 5.12         Limitations
on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of not less than two-thirds of the then outstanding Registrable Securities, enter into any agreement with
any holder or prospective holder of any equity securities of the Company that would allow such holder or prospective holder (a) to
include such equity securities in any registration statement filed for the Registrable Securities pursuant to the terms of this
Agreement, unless under the terms of such agreement, such holder or prospective holder may include such equity securities in any
such registration only to the extent that the inclusion of its equity securities will not reduce the amount of Registrable Securities
of the Holders or (b) to have its equity securities registered on a registration statement that is declared effective prior
to the Effectiveness Date (exclusive of a registration statement filed on Form S-8).

 

Section 5.13         Initial
Holder Representative. Each Initial Holder hereby acknowledges and agrees that it has irrevocably approved and appointed the
designation of, and hereby irrevocably designates, NexPoint Advisors, L.P. as the Initial Holder Representative and NexPoint Advisors,
L.P. is hereby appointed as of the date hereof as the true and lawful agent and attorney in fact of the Initial Holders as the
Initial Holder Representative for and on behalf of the Initial Holders to give and receive notices and communications in connection
with this Agreement and all related matters, to take all actions, and to take all other actions that the Initial Holder Representative
deems necessary hereunder. In fulfilling its duties hereunder, the Initial Holder Representative shall act in good faith and in
a manner that the Initial Holder Representative reasonably believes to be in the best interests of the Initial Holders, taken as
a whole. Notices or communications to or from the Initial Holder Representative shall constitute notice to or from the Initial
Holders. Each Initial Holder hereby agrees to receive correspondence from the Initial Holder Representative, including in electronic
form. It is understood by all parties that NexPoint Advisors, L.P. is executing this Agreement solely in its capacity as the Initial
Holder Representative. The Initial Holder Representative shall be entitled to act in its sole and absolute discretion and shall
incur no liability whatsoever to the Initial Holders for any act done or omitted hereunder as the Initial Holder Representative,
including errors in judgment, while acting in good faith or in reliance on the advice of counsel, accountants, or other advisors,
consultants, or experts.

 

    	 	17	 

     

    

 

IN WITNESS WHEREOF, the Buyers and
the Company have caused this Agreement to be duly executed as of the date first written above.

 

	 	THE COMPANY:
	 	 
	 	JERNIGAN CAPITAL, INC.
	 	 	 
	 	By:	/s/ John A. Good
	 	Name: John A. Good 
	 	Title: President and Chief Operating Officer

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	INITIAL HOLDER Representative:
	 	 
	 	NexPoint Advisors, L.P.
	 	By:	NexPoint Advisors GP, LLC, its general partner 
	 		 
	 	By:  	/s/ Brian Mitts
	 	Name:	Brian Mitts
	 	Title:	Executive Vice President 

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	BUYERS:
	 	 
	 	NexPoint Real Estate Strategies Fund
	 	 	 
	 	By: 	/s/ Brian Mitts
	 	Name:  Brian Mitts
	 	Title:  Vice President, Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer    
	 	 
	 	NexPoint Real Estate Capital, LLC
	 	 	 
	 	By: 	/s/ Brian Mitts
	 	Name: Brian Mitts
	 	Title:  Chief Financial Officer and Executive Vice President
	 	 	 
	 	 	 
	 	NexPoint Real Estate Opportunities, LLC
	 	 
	 	By: NexPoint Advisors, L.P., its Manager
	 	By: NexPoint Advisors GP, LLC, its general partner
	 	 	 
	 	By: 	/s/ Brian Mitts
	 	Name: Brian Mitts
	 	Title:  Executive Vice President

 

[Signature Page to Registration Rights Agreement]EX-4.1

 Exhibit 4.1 
  

 
  

PIEDMONT NATURAL GAS COMPANY, INC. 

AND 
 THE BANK OF NEW YORK
MELLON 
 TRUST COMPANY, N.A., AS TRUSTEE 

EIGHTH SUPPLEMENTAL INDENTURE 

DATED AS OF JULY 28, 2016 

SUPPLEMENT TO INDENTURE DATED AS OF APRIL 1, 1993 

3.64% SENIOR NOTES, DUE 2046 
  

 
  

 TABLE OF CONTENTS1 

 

					
	 	  	Page	 
		
	 ARTICLE 1 3.64% Senior Notes Due 2046
	  	 	2	  
		
	 SECTION 101. Establishment
	  	 	2	  
		
	 SECTION 102. Definitions
	  	 	2	  
		
	 SECTION 103. Payment of Principal and Interest
	  	 	3	  
		
	 SECTION 104. Denominations
	  	 	4	  
		
	 SECTION 105. Book-Entry Debt Securities
	  	 	4	  
		
	 SECTION 106. Transfer
	  	 	5	  
		
	 SECTION 107. Redemption at the Company’s Option
	  	 	5	  
		
	 ARTICLE 2 Miscellaneous Provisions
	  	 	5	  
		
	 SECTION 201. Concerning the Trustee
	  	 	5	  
		
	 SECTION 202. Defeasance; Satisfaction and Discharge
	  	 	6	  
		
	 SECTION 203. Sinking Fund
	  	 	6	  
		
	 SECTION 204. Notices
	  	 	6	  
		
	 SECTION 205. Miscellaneous
	  	 	6	  
		
	 EXHIBIT A FORM OF NOTE
	  			
		
	 EXHIBIT B CERTIFICATE OF AUTHENTICATION
	  			

  

	1 	This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. 

  
 i 

 THIS EIGHTH SUPPLEMENTAL INDENTURE (this “Eighth Supplemental Indenture”), dated
as of July 28, 2016, between PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized and existing under the laws of the State of North Carolina (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national
banking association duly organized and existing under the laws of the United States, as successor to Citibank, N.A. (the “Trustee”). 

WITNESSETH: 
 WHEREAS, a
predecessor to the Company has heretofore executed and delivered to the Trustee an Indenture dated as of April 1, 1993 (the “Base Indenture”, as amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture and the Fourth Supplemental Indenture (each as defined below), the “Original Indenture”); 
 WHEREAS, the
Company has heretofore executed and delivered to the Trustee a First Supplemental Indenture dated as of February 25, 1994 (the “First Supplemental Indenture”) pursuant to which the Company assumed all of the obligations of its
predecessor company under the Base Indenture; 
 WHEREAS, the Company has heretofore executed and delivered to the Trustee a Second
Supplemental Indenture dated as of June 15, 2003 (the “Second Supplemental Indenture”) pursuant to which Section 4.07 (“Limitation on Liens”) of the Base Indenture was amended, applicable to all Series of Debt
Securities issued after June 15, 2003; 
 WHEREAS, the Company has heretofore executed and delivered to the Trustee a Third
Supplemental Indenture dated as of June 20, 2006 (the “Third Supplemental Indenture”) pursuant to which (i) the Company issued $200,000,000 in aggregate principal amount of its 6.25% Insured Quarterly Notes Series 2006 due 2036
and (ii) the Limitation on Liens and related definitions in Section 1.01 of the Base Indenture were amended, applicable to all series of Debt Securities issued on or after June 20, 2006; 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a Fourth Supplemental Indenture dated as of May 6, 2011 (the
“Fourth Supplemental Indenture”) pursuant to which Section 5.03 of the Base Indenture was amended, applicable to all series of Debt Securities issued on or after May 6, 2011; 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a Fifth Supplemental Indenture dated as of August 1, 2013
pursuant to which the Company issued $300,000,000 in aggregate principal amount of its 4.65% Senior Notes due 2043; 
 WHEREAS, the Company
has heretofore executed and delivered to the Trustee a Sixth Supplemental Indenture dated as of September 18, 2014 pursuant to which the Company issued $250,000,000 in aggregate principal amount of its 4.10% Senior Notes due 2034; 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a Seventh Supplemental Indenture dated as of September 14, 2015
pursuant to which the Company issued $150,000,000 in aggregate principal amount of its 3.60% Senior Notes due 2025. 
 WHEREAS, the Original
Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Eighth Supplemental Indenture, is herein called the “Indenture”; 

 WHEREAS, the Original Indenture provides that the Company and the Trustee may from time to time
enter into indentures supplemental thereto to issue and establish the form or terms of a new series of Debt Securities; 
 WHEREAS, the
Company proposes to issue under the Indenture a new series of Debt Securities; and 
 WHEREAS, the Company represents that all acts and
things necessary to constitute this Eighth Supplemental Indenture and the Notes (as defined below), when executed by the Company and authenticated and delivered by the Trustee, the valid, binding and enforceable obligations of the Company have been
done and performed, and the execution of this Eighth Supplemental Indenture has in all respects been duly authorized, and the Company, in the exercise of legal right and power in it vested, is executing this Eighth Supplemental Indenture. 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other valuable consideration, the
receipt whereof is hereby acknowledged, the parties have executed and delivered this Eighth Supplemental Indenture and the Company covenants and agrees with the Trustee as follows: 

ARTICLE 1 
 3.64% Senior
Notes Due 2046 
 SECTION 101. Establishment. There is hereby established a new series of Debt Securities to be issued
under the Indenture, to be designated as the Company’s 3.64% Senior Notes Due 2046 (the “Notes”).  
 There are to be
initially authenticated and delivered $300,000,000 aggregate principal amount of Notes; provided, however, that the authorized aggregate principal amount of the Notes may be increased above such amount without the consent of the Holders of any then
outstanding Notes by a Board Resolution authorizing such increase; provided, further, that any additional Notes issued pursuant to such increase that are not fungible with the initially issued Notes for U.S. Federal income tax purposes will have a
different CUSIP number. The Notes shall be issued in definitive fully registered form. 
 The Notes shall be issued in the form of a
Book-Entry Debt Security in substantially the form set out in Exhibit A hereto. The Depository with respect to the Notes shall be The Depository Trust Company. 

The form of the Trustee’s Certificate of Authentication for the Notes shall be in substantially the form set forth in Exhibit B hereto.

 Each Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from
the most recent Interest Payment Date to which interest has been paid or duly provided for. 
 SECTION 102. Definitions. The
following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original
Indenture.  

  
 2 

 “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that the Notes matured on the Par Call Date) that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. 

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations, or (3) if only one such Reference Treasury Dealer Quotation is received, such quotation. 
 “Interest Payment
Dates” means May 1 and November 1 of each year, commencing May 1, 2017. 
 “Original Issue Date” means
July 28, 2016. 
 “Par Call Date” means May 1, 2046. 

“Quotation Agent” means a Reference Treasury Dealer appointed by the Company. 

“Reference Treasury Dealer” means (1) each of (i) RBC Capital Markets, LLC and (ii) Wells Fargo Securities, LLC, or
their respective affiliates which are primary U.S. government securities dealers in the United States of America (each, a “Primary Treasury Dealer”) and their respective successors, and (2) two other Primary Treasury Dealers that the
Company selects; provided, however, that if any of the foregoing or their affiliates shall cease to be a Primary Treasury Dealer, the Company shall select another Primary Treasury Dealer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such redemption date. 
 “Stated Maturity” means November 1,
2046. 
 “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date. 
 SECTION 103. Payment of Principal and Interest. The principal of the Notes shall be
due at the Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Notes shall bear interest at the rate of 3.64% per annum until paid or duly provided for. Interest shall be paid
semi-annually in arrears on each Interest Payment Date to the Person in whose name the Notes are registered at the close of business on the Record Date for such Interest Payment Date, provided that interest
payable at the Stated Maturity of principal or on a redemption date as provided herein will be paid to the Person to whom principal is payable. Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable
to the Holders on such Record Date and will be paid to the Person in whose name the Notes are registered on a subsequent record date established for the payment of such defaulted interest by notice given by mail or on behalf of the Company to the
Holders no less than fifteen (15) days preceding such subsequent record date, such record date to be not less than five (5) days preceding the date of payment of such defaulted interest or in any other lawful manner acceptable to the
Trustee. 

  
 3 

 Payments of interest on the Notes will include interest accrued to but excluding the respective
Interest Payment Date. Interest payments for the Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months (and for any partial periods shall be calculated on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months). In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable. 

Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Notes shall be made upon surrender of the Notes
at the Corporate Trust Office of the Trustee. The principal of and interest on the Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Payments of the principal and interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by wire transfer to the Holders entitled thereto who have
provided appropriate wire transfer instructions to the Trustee, or by check mailed to the Holders of the Notes entitled thereto at their last addresses as they appear on the Debt Security Register or (ii) if the Notes are Book-Entry Debt
Securities, the Depository, as Holder of the Notes, shall be entitled to receive payment of interest by wire transfer of immediately available funds. 

SECTION 104. Denominations. The Notes may be issued in denominations of $1,000, or any integral multiple thereof. 

SECTION 105. Book-Entry Debt Securities. The Notes will be issued in the form of a
Book-Entry Debt Security registered in the name of the Depository or its nominee. Except under the limited circumstances described below, Notes represented by the
Book-Entry Debt Security will not be exchangeable for, and will not otherwise be issuable as, Notes in definitive, non-global form. The Book-Entry Debt Securities
described above may not be transferred except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or to a successor Depository or its nominee. 

Owners of beneficial interests in such a Book-Entry Debt Security will not be considered the Holders
thereof for any purpose under the Indenture, and no Book-Entry Debt Security representing a Note shall be exchangeable, except for another Book-Entry Debt Security of like denomination and tenor to be
registered in the name of the Depository or its nominee or to a successor Depository or its nominee. The rights of Holders of such Book-Entry Debt Security shall be exercised only through the Depository. 

Subject to the procedures of the Depository, a Book-Entry Debt Security shall be exchangeable for
Notes registered in the names of persons other than the Depository or its nominee only if (i) the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such
Book-Entry Debt Security and no successor Depository shall have been appointed by the Company, or if at any time the Depository ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, at a time when the Depository is required to be so registered to act as such Depository and no successor Depository shall have been appointed by the Company, in each case within 60 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Book-Entry Debt Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default
with respect to the Notes. Any Book-Entry Debt Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Notes registered in such names as the Depository shall direct. 

  
 4 

 SECTION 106. Transfer. No service charge will be made for the exchange or to
register a transfer of Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. 

The Company shall not be required to exchange or register a transfer of (a) Notes for a period of fifteen (15) days next preceding
the mailing of the notice of any redemption of Notes to be redeemed, or (b) Notes selected, called or being called for redemption, except, in the case of Notes to be redeemed in part, the portion thereof not to be so redeemed. 

SECTION 107. Redemption at the Company’s Option. Prior to the Par Call Date, the Company shall have the right to redeem the
Notes, at its option, at any time in whole, or from time to time in part, at a redemption price calculated by the Company equal to the greater of: 

(i) 100% of the principal amount of the Notes to be redeemed; and 

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed
that would be due if the Notes matured on the Par Call Date (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points; 

plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the redemption date. 

On or after the Par Call Date, the Company shall have the right to redeem the Notes, at its option, at any time in whole, or from time to time
in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date. 

Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on an Interest Payment Date falling on or prior
to a redemption date shall be payable on such Interest Payment Date to the Holders as of the close of business on the relevant Record Date. 

On or after the date of redemption, interest will cease to accrue on the Notes or portion of the Notes redeemed. However, interest will
continue to accrue if the Company defaults in the payment of the amount due upon redemption. 
 ARTICLE 2 

Miscellaneous Provisions 

SECTION 201. Concerning the Trustee. The Trustee accepts the trusts of the Indenture and agrees to perform the same, but only
upon the terms and conditions set forth in the Indenture, to which the parties hereto and the Holders from time to time agree. Without limiting the generality of the foregoing, the Trustee assumes no responsibility for the correctness of the
recitals herein contained, which shall be taken as the statements of the Company. The Trustee makes no representation or warranty as to, and assumes no responsibility for, the validity or adequacy of this Eighth Supplemental Indenture or the Notes,
it shall not be accountable for the Company’s use of proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Eighth Supplemental Indenture or in any document issued in connection with the sale of the
Notes or in the Notes other than the Trustee’s certificate of authentication. 

  
 5 

 SECTION 202. Defeasance; Satisfaction and Discharge. The provisions of Article
Thirteen of the Base Indenture shall apply to the Notes. 
 SECTION 203. Sinking Fund. The Notes are not entitled to the
benefits of any sinking fund. 
 SECTION 204. Notices. The address for any notice or demand under this Eighth Supplemental
Indenture for each of the parties shall be as follows: 
 If to the Company: 

Piedmont Natural Gas Company, Inc. 

4720 Piedmont Row Drive 

Charlotte, North Carolina 28210 

Attention: Treasurer 

With a copy to: 

Piedmont Natural Gas Company, Inc. 

4720 Piedmont Row Drive 

Charlotte, North Carolina 28210 

Attention: General Counsel 

If to the Trustee: 

The Bank of New York Mellon Trust Company, N.A. 

10161 Centurion Parkway 

Jacksonville, Florida 32256 

Attention: Corporate Trust Administration 

SECTION 205. Miscellaneous. 

(a) Except as hereby expressly amended hereby with respect to the Notes, the Original Indenture is in all respects ratified and confirmed and
all the terms, provisions and conditions thereof shall be and remain in full force and effect. 
 (b) All the covenants, stipulations,
promises and agreements in this Eighth Supplemental Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not. 

(c) This Eighth Supplemental Indenture and each Note shall be deemed to be a contract made under the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with the laws of said State. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
 (d) If any provision
of the Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of or govern the Indenture, such latter provision shall control. If any provision of the Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to the Indenture as so modified or to be excluded, as the case may be. 

  
 6 

 (e) The titles and headings of the sections of this Eighth Supplemental Indenture have been
inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. 

(f) This Eighth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original, and such
counterparts shall together constitute one and the same instrument. 
 (g) In case any provision in this Eighth Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof or of the Indenture shall not in any way be affected or impaired thereby. 

[Signature page to follow.] 

  
 7 

 IN WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to be duly
executed, and attested, all as of the date first above written. 
  

											
	ATTEST:	  		  		  		  	
				
		  		  		  	PIEDMONT NATURAL GAS COMPANY, INC.
					
	By:	  	 /s/ Judy Z. Mayo
	  		  	By:	  	 /s/ Karl W. Newlin

		  	Secretary	  		  		  	Name:	  	Karl W. Newlin
		  		  		  		  	Title:	  	Senior Vice President and Chief Financial Officer
			
	ATTEST:	  		  	 THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A.,
 as Trustee

					
	By:	  	 /s/ Manjari Purkayastha
	  		  	By:	  	 /s/ Valere Boyd

		  		  		  		  	Name:	  	Valere Boyd
		  		  		  		  	Title:	  	Vice President

 EXHIBIT A 

FORM OF NOTE 
 UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

THIS DEBT SECURITY IS A BOOK-ENTRY DEBT SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR
A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS DEBT SECURITY IS EXCHANGEABLE FOR DEBT SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
NO TRANSFER OF THIS DEBT SECURITY (OTHER THAN A TRANSFER OF THIS DEBT SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED
EXCEPT IN SUCH LIMITED CIRCUMSTANCES. 
 PIEDMONT NATURAL GAS COMPANY, INC. 

3.64% SENIOR NOTES DUE 2046 
  

					
	 No. R-1
	  	$	300,000,000	  

 CUSIP No. 720186 AK1 

PIEDMONT NATURAL GAS COMPANY, INC., a corporation validly existing under the laws of the State of North Carolina (herein called the
“Company”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of THREE HUNDRED MILLION
DOLLARS ($300,000,000) on November 1, 2046 and to pay interest thereon from July 28, 2016 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on May 1 and
November 1 (each an “Interest Payment Date”) in each year, commencing May 1, 2017 at the rate of 3.64% per annum, until the principal hereof is paid or made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of 3.64% per annum on any overdue principal and on any overdue installment of interest. The amount of interest payable on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note is registered at the close of business on the regular Record Date for such interest, which shall be the April 15 and October 15 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a redemption date as provided in the Indenture will be paid to the Person to whom principal is payable. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the Holder on such regular Record Date and will be paid to the Person in whose name the Notes are 

  
 A-1 

 
registered at the close of business on a subsequent record date established for the payment of such defaulted interest by notice given by mail or on behalf of the Company to the Holders no less
than fifteen (15) days preceding such subsequent record date, such record date to be not less than five (5) days preceding the date of payment of such defaulted interest or in any other lawful manner acceptable to the Trustee. 

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Date. Interest payments for
this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months (and for any partial periods shall be calculated on the basis of the number of days elapsed in a 360-day year of twelve 30-day months). In the event that any
Interest Payment Date would otherwise be a day that is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on the date the payment was originally payable. 
 Payment of the principal of and
interest on this Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest on this Note (other than interest payable at maturity)
will be made, at the option of the Company, by wire transfer to the Holders entitled thereto who have provided appropriate wire transfer instructions to the Trustee or by check mailed to the address of the Holder as such address shall appear in the
Debt Security Register; provided, however, that if this Note is a Book-Entry Debt Security the Depository, as Holder of this Note, shall be entitled to receive payment of interest by wire transfer of immediately available funds. Notices regarding
changes of address shall be effective upon recordation in the Debt Securities Register. Payment of the principal of and interest on this Note payable at maturity will be made in immediately available funds upon surrender of this Note at the
corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or such other office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, provided, however, that if this
Note is a Book-Entry Debt Security the Depository, as Holder of this Note, shall be entitled to receive payment of interest by wire transfer of immediately available funds in accordance with the arrangements with the Depository. 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place. 
 Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 A-2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal. 
 Dated:             , 2016 

 

									
	ATTEST:	  	                	  	PIEDMONT NATURAL GAS COMPANY, INC.
					
	By:	  	  
	  		  	By:	  	  

		  	(Signature)	  		  		  	(Authorized Signature)

 [Seal] 

  
 A-3 

 (Reverse Side of Note) 

This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), issued and to be issued in one
or more series under an Indenture, dated as of April 1, 1993, as amended (as amended and supplemented the “Indenture”), between Piedmont Natural Gas Company, Inc., a New York corporation and the predecessor to the Company and The Bank
of New York Mellon Trust Company, N.A. (as successor to Citibank N.A.), as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. This Note is a global Book-Entry Debt Security and is limited initially in the aggregate principal amount of $300,000,000; provided however that the authorized aggregate principal amount of this Note may be increased
above such amount by a Board Resolution authorizing such increase. 
 Prior to May 1, 2046 (the “Par Call Date”), the Company
shall have the right to redeem this Note, at its option, at any time in whole, or from time to time in part, at a redemption price calculated by the Company equal to the greater of (i) 100% of the principal amount to be redeemed and
(ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Note to be redeemed that would be due if the Notes matured on the Par Call Date (not including any portion of such payments of interest
accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points; plus, in each case, accrued and unpaid interest on the principal amount of this Note being redeemed to the redemption date. 

On or after the Par Call Date, the Company shall have the right to redeem this Note, at its option, at any time in whole, or from time to time
in part, at a redemption price equal to 100% of the principal amount of this Note to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date. 

For purposes of determining the redemption price: 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of this Note to be redeemed (assuming, for this purpose, that the Notes matured on the Par Call Date) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the remaining term of this Note. 
 “Comparable Treasury
Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if
the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations, or (3) if only one such Reference Treasury Dealer Quotation is received, such quotation. 

“Quotation Agent” means a Reference Treasury Dealer appointed by the Company. 

“Reference Treasury Dealer” means (1) each of (i) RBC Capital Markets, LLC and (ii) Wells Fargo Securities,
LLC, or their respective affiliates which are primary U.S. government securities dealers in the United States of America (each, a “Primary Treasury Dealer”) and their respective successors, and (2) two other Primary Treasury Dealers
that the Company selects; provided, however, that if any of the foregoing or their affiliates shall cease to be a Primary Treasury Dealer, the Company shall select another Primary Treasury Dealer. 

 “Reference Treasury Dealer Quotations” means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the
Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. 

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. 
 This Note will not have a sinking fund. 

If an Event of Default with respect to the Notes shall occur and be continuing, the aggregate principal amount of the Notes may be declared
due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. 
 The Indenture contains provisions
for defeasance at any time of (a) the entire indebtedness of this Note and (b) certain restrictive covenants, in each case upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Note. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of at least a 66 2/3% in aggregate principal amount of
such Debt Securities. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Debt Securities of each series at the time Outstanding, on behalf of the Holders of all Debt Securities of such
series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfers hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 

As provided in the Indenture and subject to certain limitations herein and therein set forth, the transfer of this Note is registrable in the
Debt Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transfers or transferees. 
 This global
Book-Entry Debt Security is exchangeable for Notes in definitive, non-global form only under certain limited circumstances set forth in the Indenture. Notes of this series so issued are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. 

 No service charge shall be made for any such registration of transferor exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
 All terms used in this Note
which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according
to applicable laws or regulations: 
  

											
	TEN COM-	  	as tenants in common	  	UNIF GIFT MIN ACT-        	  	                    	  	Custodian	  	                    
	  
 TEN ENT-
	  	  
 as tenants by the entireties as joint tenants
	  		  	(Cust)	  		  	(Minor)
	  	  		  	  
 under Uniform Gifts to Minors Act

	  
 JT TEN-
	  	  
 with right of survivorship and not as tenants in
common
	  		  	  

	  	  		  		  	(State)	  	

 Additional abbreviations may also be used 

though not on the above list. 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto 

 
  

(please insert Social Security or other identifying number of assignee) 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE 
  

 
  

 
 the within Note and all rights thereunder, hereby
irrevocably constituting and appointing 
  
  

 
  

agent to transfer said Note on the books of the Company, with full power of substitution in the premises. 

Dated:                       

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration
or enlargement, or any change whatever. 

 EXHIBIT B 

CERTIFICATE OF AUTHENTICATION 

This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. 

Dated:             , 2016 

 

			
	THE BANK OF NEW YORK MELLON
	TRUST COMPANY, N.A., as Trustee
		
	By:	 	  

		 	(Authorized Signature)

  
 B-1

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