Document:

Exhibit 10.2

 

Execution Version

 

INTREPID POTASH, INC.

 

FIRST AMENDMENT TO

NOTE PURCHASE AGREEMENT

 

$60,000,000 3.23% Senior Notes, Series A, due April 16, 2020

$45,000,000 4.13% Senior Notes, Series B, due April 14, 2023

$45,000,000 4.28% Senior Notes, Series C, due April 16, 2025

 

Dated as of January 15, 2016

 

To the Holders of the Senior Notes

of Intrepid Potash, Inc.

Named in the Attached Schedule I

 

Ladies and Gentlemen:

 

Reference is made to the Note Purchase Agreement dated as of August 28, 2012 (the “Note Purchase Agreement”) among Intrepid Potash, Inc. (the “Company”) and you, pursuant to which the Company issued (i) $60,000,000 aggregate principal amount of its 3.23% Senior Notes, Series A, due April 16, 2020; (ii) $45,000,000 aggregate principal amount of its 4.13% Senior Notes, Series B, due April 14, 2023; and (iii) $45,000,000 aggregate principal amount of its 4.28% Senior Notes, Series C, due April 16, 2025 (collectively, the “Notes”). You are referred to herein individually as a “Holder” and collectively as the “Holders.” Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Note Purchase Agreement, as amended by this First Amendment to Note Purchase Agreement (this “First Amendment”).

 

The Company has requested an amendment to Sections 7.1, 10.2, and 17.1 of the Note Purchase Agreement; the inclusion of a new Section 9.9 to the Note Purchase Agreement; the modification of definitions for “Consolidated Maintenance Capital Expenditures,” “Default Rate,” and “Leverage Ratio” in Schedule B of the Note Purchase Agreement; and the addition of new definitions for “Incremental Interest” and “Unrestricted Cash” to Schedule B of the Note Purchase Agreement. You have agreed to such amendments on the terms and conditions set forth herein.

 

In consideration of the premises and for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Company and the Holders agree as follows:

 

1

 

1.                                      AMENDMENT OF NOTE PURCHASE AGREEMENT

 

1.1.                            Amendment to Section 7.1.  Section 7.1 is amended as follows:

 

(a)                                 Subsection (f) is amended by deleting the word “and” following the semicolon.

 

(b)                                 Subsection (g) is amended by deleting the period from the end of the subsection and replacing it with “; and”.

 

(c)                                  A new subsection (h) is added to the Note Purchase Agreement to read in its entirety as follows:

 

“(h)                           Ratings Information — promptly, and in any event within thirty (30) days of receipt thereof, copies of the then-current rating for such calendar year obtained pursuant to Section 9.9.”

 

1.2.                            Addition of Section 9.9.  Section 9.9 is added to the Note Purchase Agreement to read in its entirety as follows:

 

“Section 9.9.                          Maintenance of Ratings.

 

The Company shall obtain a rating each calendar year for the Notes from any nationally recognized rating agency selected by the Company and accepted by the SVO for rating corporate debt, and the Company shall maintain such rating.”

 

1.3.                            Amendment to Section 10.2. Section 10.2 is amended and restated to read as follows:

 

“The Company will not permit the Leverage Ratio, as of the end of each of its fiscal quarters, to be greater than 3.50 to 1.00; as such Leverage Ratio may be adjusted pursuant to Section 10.10 below; provided, however, that notwithstanding any such adjustment, the Company will not permit the Leverage Ratio as of the end of any fiscal quarter to be greater than 3.50 to 1.00 (the “Maximum Leverage Ratio”). In addition to the foregoing, if the Leverage Ratio exceeds 2.25 to 1.00 as of the last day of any fiscal quarter pursuant to the terms of this Section 10.2, as evidenced by an Officer’s Certificate delivered pursuant to Section 7.2(a), the interest rate payable on the Notes shall be increased by 0.25% (the “Incremental Interest”) for a period of time determined as follows: (a) such Incremental Interest shall begin to accrue on the first day of the fiscal quarter immediately following the fiscal period in respect of which such Officer’s Certificate was delivered, and (b) shall continue to accrue until the Company has provided an Officer’s Certificate pursuant to 7.2(a) demonstrating that, as of the last day of the fiscal period in respect of which such Certificate is delivered, the Leverage Ratio is not more than 2.25 to 1.00, and in the event such Officer’s Certificate is delivered, the Incremental Interest shall cease to accrue as of the last

 

2

 

day of the fiscal period in respect of which such Certificate is delivered. For the avoidance of doubt, if the Leverage Ratio exceeds 2.25 to 1.00 as of the last day of a fiscal quarter, Incremental Interest shall accrue commencing on the first day of the subsequent fiscal quarter regardless of whether an Officer’s Certificate is timely delivered pursuant to Section 7.2(a).”

 

1.4.                            Amendment to Section 17.1. Section 17.1(b)(i) is amended and restated to read as follows:

 

“(i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest, other than Incremental Interest, or of the Make-Whole Amount on, the Notes,”

 

1.5.                            Amendments to Schedule B.

 

(a)                                 The following definitions set forth in Schedule B are hereby amended and restated in their entirety as follows:

 

“Consolidated Maintenance Capital Expenditures” means, with reference to any period, the maintenance Capital Expenditures of the Company and its Subsidiaries calculated on a consolidated basis for such period, which, for purposes of any calculation under Section 10.1, shall equal $20,000,000 per any four fiscal quarter period.

 

“Default Rate” means that rate of interest that is the greater of (i) 2% per annum above the then-effective rate of interest of the Notes (such effective rate of interest to include any Incremental Interest pursuant to Section 10.2) or (ii) 2% over the rate of interest publicly announced by U.S. Bank National Association in New York City as its “base” or “prime” rate.

 

“Leverage Ratio” means, as of any date of calculation, the ratio of (i) the excess of Consolidated Funded Indebtedness outstanding on such date over Unrestricted Cash on such date in an amount not to exceed $75,000,000 to (ii) Consolidated EBITDA for the Company’s then most-recently ended four fiscal quarters for which financial statements have been delivered pursuant to Section 7.1.

 

(b)                                 The following definitions are added to Schedule B in the appropriate alphabetical order:

 

“Incremental Interest” is defined in Section 10.2.

 

“Unrestricted Cash” means, as of any date of determination, that portion of the Company’s and its Subsidiaries’ aggregate cash and Cash Equivalent Investments that is not encumbered by or subject to any Lien (including, without

 

3

 

limitation, any Lien permitted hereunder, other than (a) Liens, if any, securing Notes and (b) bankers’ liens), setoff (other than ordinary course setoff rights of a depository bank arising under a bank depository agreement for customary fees, charges and other account-related expenses due to such depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any Person.

 

2.                                      REAFFIRMATION; REPRESENTATION AND WARRANTIES

 

2.1.                            Reaffirmation of Note Purchase Agreement.  The Company reaffirms its agreement to comply with each of the covenants, agreements and other provisions of the Note Purchase Agreement and the Notes, as amended by this First Amendment.

 

2.2.                            No Default or Event of Default.  As of the date hereof and after giving effect to this First Amendment, there will exist no Default or Event of Default.

 

2.3.                            Authorization.  The execution, delivery and performance by the Company of this First Amendment has been duly authorized by all necessary corporate action and, except as provided herein, does not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. The Note Purchase Agreement and this First Amendment each constitute the legal, valid, and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

3.                                      EFFECTIVE DATE

 

This First Amendment shall be deemed to have been effective as of the date hereof upon the satisfaction of the following conditions:

 

3.1.                            Consent of Holders to First Amendment.  The Holders of at least 51% of the aggregate principal amount of the Notes outstanding shall have executed this First Amendment and the Holders shall have received a counterpart of this First Amendment duly executed by the Company.

 

3.2.                            Credit Agreement.  The Company shall have entered into an amendment to the Credit Agreement in substance similar to the amendments set forth herein and otherwise on terms reasonably satisfactory to the Required Holders.

 

3.3.                            Confirmation of Subsidiary Guaranty. The Holders shall have received an executed copy of the Consent and Reaffirmation attached hereto as Annex A from each Subsidiary Guarantor.

 

4

 

3.4.                            Amendment Fee. Each Holder shall have received payment of an amendment fee equal to 0.15% of the principal amount of the outstanding Notes held by such Holder.

 

3.5.                            Expenses.  The Company shall have paid all reasonable and documented fees and expenses of Foley & Lardner LLP, special counsel to the Holders, to the extent invoiced.

 

Each Holder, by delivering its signature page to this Amendment, shall be deemed to have acknowledged and agreed that Section 10.10 of the Note Purchase Agreement shall not apply to the changes to the Financial Covenants effected by the amendment to the Credit Agreement described in Section 3.2 above.

 

4.                                      MISCELLANEOUS

 

4.1.                            Ratification.  Except as amended hereby, the Note Purchase Agreement remains in full force and effect and is ratified, approved and confirmed in all respects as of the date hereof.

 

4.2.                            Reference to and Effect on the Note Purchase Agreement.  Upon the effectiveness of this First Amendment, each reference in the Note Purchase Agreement and in other documents describing or referencing the Note Purchase Agreement to the “Agreement,” “Note Purchase Agreement,” “hereunder,” “hereof,” “herein,” or words of like import referring to the Note Purchase Agreement shall mean and be a reference to the Note Purchase Agreement, as amended hereby.

 

4.3.                            Binding Effect.  This First Amendment shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto.

 

4.4.                            Governing Law.  This First Amendment shall be governed by and construed in accordance with New York law, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

 

4.5.                            Counterparts.  This First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but altogether only one instrument.

 

[Signature Pages Follow]

 

5

 

IN WITNESS WHEREOF, the Company and the Holders have caused this First Amendment to be executed and delivered by their respective officer or officers thereunto duly authorized.

 

 

	
 
    	
INTREPID POTASH, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    

 

S-1

 

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

 

 

	
By:
    	
/s/ Laura Parrott
    	
 
    
	
Name:
    	
Laura Parrott
    	
 
    
	
Title:
    	
Senior Director
    	
 
    

 

S-2

 

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

 

 

	
By:
    	
/s/ Brian Keating
    	
 
    
	
Name:
    	
Brian Keating
    	
 
    
	
Title:
    	
Managing Director
    	
 
    

 

S-3

 

COBANK, ACB

 

 

	
By:
    	
/s/ Kristina Jensen
    	
 
    
	
Name:
    	
Kristina Jensen
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

S-4

 

AGFIRST FARM CREDIT BANK

 

 

	
By:
    	
/s/ Bruce B. Fortner
    	
 
    
	
Name:
    	
Bruce B. Fortner
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

S-5

 

FARM CREDIT BANK OF TEXAS

 

 

	
By:
    	
/s/ Luis M. H. Requejo
    	
 
    
	
Name:
    	
Luis M. H. Requejo
    	
 
    
	
Title:
    	
Director Capital Markets
    	
 
    

 

S-6

 

GREENSTONE FARM CREDIT SERVICES, ACA/FLCA

 

 

	
By:
    	
/s/ Curtis Flammini
    	
 
    
	
Name:
    	
Curtis Flammini
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

S-7

 

1ST FARM CREDIT SERVICES, PCA

 

 

	
By:
    	
/s/ Corey J. Waldinger
    	
 
    
	
Name:
    	
Corey J. Waldinger
    	
 
    
	
Title:
    	
Vice President, Capital Markets Group
    	
 
    

 

S-8

 

FARM CREDIT SERVICES OF AMERICA, PCA

 

 

	
By:
    	
/s/ Steven L. Moore
    	
 
    
	
Name:
    	
Steven L. Moore
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

S-9

 

ANNEX A

 

FORM OF CONSENT AND REAFFIRMATION

 

Each of the undersigned hereby acknowledges receipt of a copy of the foregoing First Amendment to Note Purchase Agreement (the “First Amendment”) dated as of January 15, 2016, among Intrepid Potash, Inc. (the “Company”) and certain of the Holders party to the Note Purchase Agreement, dated as of August 28, 2012 (as amended, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”). Capitalized terms used in this Consent and Reaffirmation and not defined herein shall have the meanings given to them in the Note Purchase Agreement. Without in any way establishing a course of dealing by the Holders, each of the undersigned consents to the First Amendment and reaffirms the terms and conditions of the Subsidiary Guaranty executed by it and acknowledges and agrees that such Subsidiary Guaranty executed by the undersigned in connection with the Note Purchase Agreement remains in full force and effect and is hereby reaffirmed, ratified, and confirmed. All references to the Note Purchase Agreement contained in the above-referenced document shall be a reference to the Note Purchase Agreement as so modified by the First Amendment and as the same may from time to time hereafter be amended, modified, or restated.

 

Dated: January 15, 2016

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Consent and Reaffirmation to be executed by its officers thereunto duly authorized, as of the date first written above.

 

 

	
 
    	
INTREPID POTASH — MOAB, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Intrepid Potash, Inc., its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INTREPID POTASH — WENDOVER, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Intrepid Potash, Inc., its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INTREPID POTASH — NEW MEXICO, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Intrepid Potash, Inc., its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian D. Frantz
    
	
 
    	
Name:
    	
Brian D. Frantz
    
	
 
    	
Title:
    	
Senior Vice President and
    
	
 
    	
 
    	
Chief Accounting Officer
    
					

 

[Signature Page to Consent and Reaffirmation]

 

 

SCHEDULE I

 

	
Holder
    	
 
    	
Aggregate
    Principal
    Amount of
    Series A Notes
    Outstanding
    	
 
    	
Aggregate
    Principal
    Amount of
    Series B Notes
    Outstanding
    	
 
    	
Aggregate
    Principal
    Amount of
    Series C Notes
    Outstanding
    	
 
    
	
Teachers Insurance and Annuity   Association of America
    	
 
    	
$
    	
0
    	
 
    	
$
    	
0
    	
 
    	
$
    	
37,500,000
    	
 
    
	
The Guardian Life Insurance   Company of America
    	
 
    	
$
    	
0
    	
 
    	
$
    	
23,500,000
    	
 
    	
$
    	
7,500,000
    	
 
    
	
CoBank, ACB
    	
 
    	
$
    	
25,000,000
    	
 
    	
$
    	
0
    	
 
    	
$
    	
0
    	
 
    
	
AgFirst Farm Credit Bank
    	
 
    	
$
    	
15,000,000
    	
 
    	
$
    	
0
    	
 
    	
$
    	
0
    	
 
    
	
Farm Credit Bank of Texas
    	
 
    	
$
    	
10,000,000
    	
 
    	
$
    	
0
    	
 
    	
$
    	
0
    	
 
    
	
Greenstone Farm Credit Services,   ACA/FLCA
    	
 
    	
$
    	
10,000,000
    	
 
    	
$
    	
7,000,000
    	
 
    	
$
    	
0
    	
 
    
	
1st Farm Credit Services, PCA
    	
 
    	
$
    	
0
    	
 
    	
$
    	
7,500,000
    	
 
    	
$
    	
0
    	
 
    
	
Farm Credit Services of America,   PCA
    	
 
    	
$
    	
0
    	
 
    	
$
    	
7,000,000
    	
 
    	
$
    	
0
    	
 
    
	
Totals
    	
 
    	
$
    	
60,000,000
    	
 
    	
$
    	
45,000,000
    	
 
    	
$
    	
45,000,000Exhibit
10.1

 

FORM
OF AMENDMENT TO NOTE AND WARRANT

 

This
AMENDMENT TO NOTE AND WARRANT (the “Amendment”), dated effective as of December 9, 2015 (the “Effective
Date”), is made by and between REALSOURCE RESIDENTIAL, INC., a Nevada corporation (the “Company”),
and _____________________ (the “Holder”).

 

A.
On December 9, 2013, the Company issued to the Holder that certain 12% Series A Senior Convertible Promissory Note (the “Note”)
in the principal amount of $____________;

 

B.
On December 9, 2013, the Company issued to the Holder a Common Stock Purchase Warrant (the “Warrant”) to purchase
________ shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”);

 

C.
The Note was issued as party of a series of similar promissory notes (collectively, the “2013 Notes” and the
holders thereof, the “2013 Noteholders”), which Notes have, as of the Effective Date, an aggregate principal
amount of $2,310,000 (the “Aggregate Principal”) and aggregate accrued interest of $554,400 (the “Aggregate
Interest”);

 

D.
As of the Effective Date, the Company’s assets include: (i) a deposit of $1.537,636 made in the real property asset known
as in Cambridge Apartments in Gulfport, Mississippi (“Cambridge”), which deposit, with accrued interest, is
$1,891,298 (the “Cambridge Deposit”) , it being acknowledged that Cambridge is owned by RS Cambridge Apartments,
LLC, an entity controlled and partially owned by the Chairman, President and CEO of the Company (“RS Cambridge”);
(ii) a $100,000 equity investment (the “Heron Equity”) in the Heron Walk Apartments in Jacksonville, Florida;
(iii) a $400,000 of equity investment (“Bakken Equity”) in two properties in North Dakota (collectively, “Bakken”)
that do not currently generate cash flow to the owner of Bakken as the lender is entitled to all cash flow until such time as
the properties have long-term leases in excess of one year (which they presently do not have), and (iv) approximately $179,000
in cash.

 

E.
The Note is currently past due, and as such, and taking into consideration the Company’s present assets, the Company and
Holder desire to enter into this Amendment to amend certain terms of the Note and the Warrant as provided for herein.

 

NOW
THEREFORE, in consideration of the foregoing mutual premises and the covenants and agreements hereinafter set forth, and for
other good and valuable consideration, the receipt, and legal adequacy of which is hereby acknowledged, the parties hereto, intending
to be legally bound, and pursuant to Section 10 of the Note and Section 11(a) of the Warrant, the Company and the Holder hereby
agree to amend the Note and Warrant as follows:

 

1.
PREAMBLE; DEFINED TERMS. The Company and the Holder agree that the preamble paragraphs to this Amendment constitute agreed
upon and operative provisions of this Amendment. All capitalized terms used but not defined in this Amendment shall have the meanings
ascribed to them in the Note or the Warrant, as the case may be. In addition, as used herein, the term “Pro Rata Portion”
means the Holder’s pro rata portion of the Aggregate Principal and Aggregate Interest determined by dividing, as the case
may be: (i) the principal amount of the Note by the Aggregate Principal or (ii) the accrued interest under the Note as of the
Effective Date by the Aggregate Interest.

 

    	 	1	 

    	 	 	 

    

 

2.
PRINCIPAL AND INTEREST CURRENTLY DUE. The Company and the Holder agree that the principal and interest due to Holder under
the Note as of the Effective Date is $74,400.00,
consisting of a principal amount of $_________ and
accrued interest of $__________ (the “Accrued
Interest”).

 

3.
AMENDMENTS AND AGREEMENTS. The Note is hereby amended, and the Comp864any and the Holder hereby additionally agree, as
follows:

 

(a)
The third paragraph of the preamble to the Note is hereby amended and restated to (i) extend the Maturity Date of the Note by
six months, from December 9, 2015 to June 9, 2016, and (ii) provide that, from the date of this Amendment, interest shall be paid
on an amount less than the original principal amount of the Note as a result of the assignment of the Bakken Equity as provided
for herein. Such paragraph is amended and restated in its entirety to read as follows: 

 

“FOR
VALUE RECEIVED, the Company promises to pay to ________________, the registered holder hereof, and such party’s successors
and assigns (the “Holder”), the principal sum of $____________ (representing the Holder’s accrued principal
and interest as of December 9, 2015) less: (i) $___________ (representing the Holders Pro Rata Portion (based on the Aggregate
Principal) of the Bakken Equity and the Herron Equity) and $_________ (representing the Mandatory Conversion Amount) on or prior
to June 9, 2016 (the “Maturity Date”) as provided hereunder and, following December 9, 2015, to pay interest
to the Holder on such principal sum of this Note, at the rate of 12% per annum, which interest shall be payable on the Maturity
Date and on any Conversion Date (as defined in Section 4) with respect to such principal amount then outstanding hereunder.”

 

(b)
The Company and the Holder agree that, by no later than February 15, 2016, the Company will establish a new limited liability
company (“Newco 1”) and assign to Newco 1 the Bakken Equity and the Heron Equity. The Holder will be given
a Pro Rata Portion (based on the Aggregate Principal) of the equity in Newco 1, entitling the Holder to a Pro Rata Portion of
all cash flows, profits and losses generated by Newco 1’s holdings of the Bakken Equity and the Heron Equity. The Holder
agrees that the Holder shall have no voting, management, consent or approval rights whatsoever over the business or operations
of Newco 1 (save as required by law), all such rights to be vested in the Company or its affiliates as the sole managing member
of Newco 1. The Holder agrees to enter into a customary limited liability company operating agreement relating to Newco 1 to memorialize
the foregoing.

 

(c)
The Note is hereby amended to add the following new Section 1A relating to the Holder’s right to a partial prepayment of
the Note and certain related rights:

 

    	 	2	 

    	 	 	 

    

 

“1A.
Mandatory Prepayment; Cambridge Newco.

 

(a)
In the event that, prior to the Maturity Date, RS Cambridge sells Cambridge, thus generating a return of the Cambridge Deposit
to the Company, the Company shall, within thirty (30) days of such sale, prepay, without penalty, a portion of the Note equal
to the Holder’s Pro Rata Portion (based on the Aggregate Principal) of the Cambridge Deposit.

 

(b)
The Company and the Holder agree that in the event (and only in the event) that RS Cambridge fails to close on the sale of Cambridge
by the Maturity Date, the Company will establish a new limited liability company (“Cambridge Newco”) and assign
to Cambridge Newco all right, title and interest in Cambridge. The Holder will be given a Pro Rata Portion (based on the Aggregate
Principal) of the equity in Cambridge Newco, entitling the holder to a pro rata portion of all cash flows, profits and losses
generated by Cambridge Newco’s holdings of Cambridge, subject to the existing $9.5 million first priority secured mortgage
interest in Cambridge. Following the granting of the equity in Cambridge Newco to the Holder, all principal and interest under
the Note (taking into effect the Mandatory Conversion and the Holder’s interest in Newco 1) shall be deemed fully paid and
satisfied. The Holder agrees that the Holder shall have no voting, management, consent or approval rights whatsoever over the
business or operations of Cambridge Newco (save as required by law), all such rights to be vested in the Company or its affiliates
as the sole managing member of Cambridge Newco. The Holder agrees to enter into a customary limited liability company operating
agreement relating to Cambridge Newco to memorialize the foregoing.”

 

(d)
A new section (d) will be added to Section 3 of the Note to provide for the Mandatory Conversion (as defined below), that will
take place effective as of the Effective Date. Such new Section 3(d) shall read as follows:

 

“(d)
Mandatory Conversion of Interest as of December 9, 2015. $__________ (the “Mandatory Conversion Amount”)
of the Accrued Interest as of December 9, 2015 (the “Conversion Date”), will be converted as of the Conversion
Date into shares of Common Stock (the “Mandatory Conversion”). The number of shares of Common Stock to be issued
upon the Mandatory Conversion shall equal _________ shares, derived by dividing (1) the Mandatory Conversion Amount by
(2) $0.10.”

 

4.
AMENDMENTS TO WARRANT. The
Company and the Holder hereby amend the Warrant as follows:

 

(a)
The Exercise Price is hereby amended to be $0.50 per Warrant Share.

 

(b)
The Expiration Time is hereby amended to be 5:00 p.m., New York time, on December 9, 2020.

 

5.
miscellanous.

 

(a)
No Further Amendment. Except for the amendments to the Note and the Warrant set forth and referred to in this Amendment,
the Note and the Warrant shall remain unchanged and in full force and effect. To the extent of any inconsistency between the terms
of the Note or the Warrant, as the case may be, and this Amendment, the terms of this Amendment shall govern.

 

    	 	3	 

    	 	 	 

    

 

(b)
No Third Party Beneficiaries. This Amendment is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(c)
No Strict Construction. The language used in this Amendment will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.

 

(d)
Counterparts. This Amendment may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature delivered by fax or e-mail/.pdf transmission shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile
signature, and deliver by such means shall be due deliver hereof.

 

(e)
Headings. The headings of this Amendment are for convenience of reference and shall not form part of, or affect the interpretation
of, this Amendment.

 

[Signature
Page Follows]

 

    	 	4	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this Amendment to be duly executed
as of the date first written above.

 

	 	COMPANY:
	 	 
	 	REALSOURCE RESIDENTIAL, INC.
	 	 	 
	 	By:	
	 	Name:	V.
    Kelly Randall
	 	Title:
    	Chief
    Operating Officer

 

	 	HOLDER:
	 	 
	 	By:	 
	 	Name:	 
	 	Title:
    	 

 

    	 	5

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