Document:

ex_383367.htm

Exhibit 10.2

 

CONTRIBUTION AGREEMENT

 

 

This Contribution Agreement (this “Agreement”) is dated effective as of June 8, 2022 (the “Effective Date”), by and among NexPoint SFR Operating Partnership, L.P., a Delaware limited partnership (the “OP”), NexPoint Homes Trust, Inc., a Maryland corporation (“SFR Trust”), NexPoint Diversified Real Estate Trust, a Delaware statutory trust (“NXDT”), NRESF REIT Sub, LLC, a Delaware limited liability company (“NRESF”), NFRO REIT Sub, LLC a Delaware limited liability company (“FRO”), GAF REIT Sub II, LLC, a Delaware limited liability company (“GAF”), Hagedorn Family Investments LLC, a North Carolina limited liability company (“Hagedorn Family Investments”), Adam Levinson (“Levinson”) and Richard Scola (“Scola”).

 

WHEREAS, in connection with the closing of that certain Purchase and Sale Agreement, dated February 1, 2022 between HomeSource Operations LLC and AV HomeSource, LP, the parties hereto desire to engage in the transactions set forth in this Agreement to provide for the initial capitalization of the OP.         

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the parties do hereby agree as follows:

 

1.    Contribution. The parties hereto acknowledge and agree that the following contributions shall take place simultaneously (collectively, the “Contribution”):

 

a.    SFR Trust shall contribute, transfer and deliver to OP, and OP shall accept from SFR Trust, $50,000,000.00 aggregate principal amount in cash, in exchange for 2,000,000 Common Units (as defined in the Amended and Restated Limited Partnership Agreement of the OP, dated as of the date hereof (the “OP LPA”)), representing 54.9% of the outstanding Common Units;

 

b.    NXDT shall contribute, transfer and deliver to OP, and OP shall accept from NXDT, $25,000,000.00 aggregate principal amount in cash, in exchange for 1,000,000 Common Units, representing 27.4% of the outstanding Common Units;

 

c.    GAF shall contribute, transfer and deliver to OP, and OP shall accept from GAF, $5,000,000.00 aggregate principal amount in cash, in exchange for 200,000 Common Units, representing 5.5% of the outstanding Common Units;

 

d.    FRO shall contribute, transfer and deliver to OP, and OP shall accept from FRO, $10,000,000.00 aggregate principal amount in cash, in exchange for 400,000 Common Units, representing 11.0% of the outstanding Common Units;

 

e.    NRESF shall contribute, transfer and deliver to OP, and OP shall accept from NRESF, $100,000.00 aggregate principal amount in cash, in exchange for 4,000 Common Units, representing 0.11% of the outstanding Common Units;

 

 

 

 

f.    Hagedorn Family Investments shall contribute, transfer and deliver to OP, and OP shall accept from Hagedorn Family Investments, $350,000.00 aggregate principal amount in cash, in exchange for 14,000 Common Units, representing 0.38% of the outstanding Common Units;

 

g.    Levinson shall contribute, transfer and deliver to OP, and OP shall accept from Levinson, $350,000.00 aggregate principal amount in cash, in exchange for 14,000 Common Units, representing 0.38% of the outstanding Common Units; and

 

h.    Scola shall contribute, transfer and deliver to OP, and OP shall accept from Scola, $350,000.00 aggregate principal amount in cash, in exchange for 14,000 Common Units, representing 0.38% of the outstanding Common Units.

 

To the extent permitted under applicable law, each contribution that constitutes the Contribution is intended, for U.S. federal income tax purposes, to be a tax-deferred contribution of property to a partnership under Section 721 of the Internal Revenue Code of 1986, as amended (the “Code”). Each of the Contributions shall be treated by the parties to this Agreement in accordance with the foregoing intentions, except to the extent required by applicable law.

 

2.    Delivery of Contribution. The closing of the transactions contemplated by this Agreement shall be deemed to occur as of the Effective Date (the “Contribution Date”).

 

3.    Representations and Warranties of Each Party. Each party hereto represents and warrants: (i) that it is duly formed, validly existing and in good standing under the laws of its jurisdiction of formation; (ii) that it has all requisite power and authority to enter into and deliver this Agreement, to carry out the transactions contemplated hereby and to perform its obligations hereunder; (iii) that this Agreement has been duly and validly executed and delivered and, assuming due and valid authorization, execution and delivery hereof by the other parties, constitutes the valid and legally binding obligation of such party and is enforceable against such party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (iv) that neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby by such party will violate its organizational documents or conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice or consent under, any contract, or any franchise or permit to which such party is a party or by which such party is bound, other than those that have been previously obtained.

 

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4.    Representations and Warranties of the Contributors.

 

The Contributors (as defined below) hereby represent and warrant that the following statements, as applicable to each Contributor, are true and correct as of the date hereof:

 

a.    Consents and Approvals. Other than those that have been previously obtained, no consent, waiver, approval, authorization, notice, order, license, permit or registration of, qualification, designation, declaration, or filing with, any person or any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign (“Governmental Authority”) or under any applicable laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority, including, without limitation, zoning, land use or other similar rules or ordinances (“Laws”) is required to be obtained by the Contributors in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

 

b.    No Violation. The execution, delivery or performance by each of the Contributors of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does not or will not, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under any term or provision of any judgment, order, writ, injunction, or decree binding on each of the Contributors or any of their subsidiaries or any of their respective assets or properties.

 

c.    Licenses and Permits. All notices, licenses, permits, certificates and authorizations, required for the continued management and operation of the business of each of the Contributors, as applicable, have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and are assignable, except in each case for items that, if not so obtained, obtainable and/or transferred, would not, individually or in the aggregate, reasonably be expected to have any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects of the Contributors, taken as a whole (a “Material Adverse Effect”). There are no licenses, permits, certificates and authorizations held by the Contributors other than those copies of which have been made available to OP. No third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, nor has any of them received any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of such notice, license, permit, certificate or authorization, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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d.    Litigation.

 

(i)    To the knowledge of the undersigned (the “Contributors’ Knowledge”), there is no action, suit or proceeding pending or threatened against any of the Contributors affecting all or any portion of the Contributors’ ability to consummate the transactions contemplated hereby which, if adversely determined, would adversely affect the Contributors’ ability to so consummate the transactions contemplated hereby. To the Contributors’ Knowledge, there is no outstanding order, writ, injunction or decree of any Governmental Authority against or affecting the Contributors, which in any such case would impair the Contributors’ ability to enter into and perform all of their obligations under this Agreement.

 

(ii)    There is no action, suit or proceeding pending (for which the Contributors have been properly served or otherwise have knowledge) or, to the Contributors’ Knowledge, threatened against the Contributors or any officer, director, principal or managing member of any of the foregoing or any of its assets which, if adversely determined, would have a Material Adverse Effect. There is no material judgment, decree, injunction, or order of a Governmental Authority outstanding against the Contributors or any officer, director, principal or managing member of any of the foregoing in their capacity as such which affects the ability of the Contributors to consummate the transactions contemplated hereby.

 

e.    Compliance with Laws/Restrictions. Each of the Contributors have conducted their respective businesses in compliance with all applicable Laws, except for such failures that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Contributors’ Knowledge, no third party has been informed in writing of any continuing violation of any such Laws or that any investigation has been commenced and is continuing or is contemplated respecting any such possible violation or violations of any of such covenants, conditions or other obligations, except in each case for violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

f.    Insolvency. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or, to the Contributors’ Knowledge, threatened against the Contributors or any of the Contributed Assets (as defined below), nor are any such proceedings contemplated by the Contributors.

 

g.    Investment. The Contributors acknowledge that the offering and issuance of the securities to be acquired by the Contributors pursuant to this Agreement are intended to be exempt from registration under the Securities Act and that the issuing entities’ reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Contributors contained herein. In furtherance thereof, each of the Contributors represents and warrants to OP as follows:

 

(i)    Each of the Contributors is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act).

 

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(ii)    Each of the Contributors acknowledges that the securities have not been registered under the Securities Act and, therefore, unless registered under the Securities Act or an exemption from registration is available, must be held (and each of the Contributors must continue to bear the economic risk of the investment in the securities) indefinitely.

 

h.    Other Agreements. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) to the Contributors’ Knowledge, no party to any material agreement affecting any of the assets being contributed in the Contributions (the “Contributed Assets”), is in breach of or default under any material agreement affecting any Contributed Assets, (ii) no event has occurred or, to the Contributors’ Knowledge, has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of the Contributors or any their subsidiaries, and (iii) to the Contributors’ Knowledge, all agreements required for the ownership and continued management and servicing of such Contributed Assets are valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity.

 

i.    No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Section 4, the Contributors shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby.

 

j.    Survival of Representations and Warranties. All representations and warranties of the Contributors contained in this Agreement shall survive until the first anniversary of the Effective Date (the “Expiration Date”). If written notice of a claim in accordance with indemnification has been given prior to the Expiration Date, then the relevant representation or warranty shall survive, but only with respect to such specific claim, until such claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

 

5.    Indemnification:

 

a.    Indemnification of OP. The OP and its directors, officers, employees, agents and representatives (each of which is an “Indemnified Party”), shall be indemnified and held harmless by the Contributors, under the terms and conditions of this Agreement, from and against any and all Losses arising out of or relating to, asserted against, imposed upon or incurred by the Indemnified Parties in connection with or as a result of any breach of a representation or warranty contained in Section 4 of this Agreement; provided, however, that the liability of each Contributor hereunder shall be limited to an amount equal to the aggregate principal amount in cash contributed as set forth in Section 1.

 

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b.    Claims.

 

(i)    At the time when any Indemnified Party learns of any potential claim under this Agreement (a “Claim”) against an indemnifying party, it will promptly give written notice (a “Claim Notice”) to the indemnifying party; provided that the failure to so notify the indemnifying party shall not prevent recovery under this Agreement, except to the extent that the indemnifying party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim and the amount or good faith estimate of the amount of Losses arising therefrom. The Indemnified Party shall deliver to the indemnifying party, promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by such Indemnified Party relating to a Third-Party Claim (as defined below); provided that failure to do so shall not prevent recovery under this Agreement, except to the extent that the indemnifying party shall have been materially prejudiced by such failure. Any Indemnified Party may at its option demand indemnity under this Agreement as soon as a Claim has been threatened by a third party, regardless of whether an actual Loss has been suffered, so long as the Indemnified Party shall in good faith determine that such claim is not frivolous and that the Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof.

 

(ii)    The indemnifying party shall be entitled, at its own expense, to elect, to assume and control the defense of any Claim based on claims asserted by third parties (“Third-Party Claims”), through counsel chosen by the indemnifying party and reasonably acceptable to the Indemnified Party, if it gives written notice of its intention to do so to the Indemnified Party within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their own expense. Without limiting the foregoing, in the event that the indemnifying party exercises the right to undertake any such defense against a Third-Party Claim, the Indemnified Party shall cooperate with the indemnifying party in such defense and make available to the indemnifying party, at the indemnifying party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under such Indemnified Party’s control relating thereto as is reasonably required by the indemnifying party. No compromise or settlement of such Third-Party Claim may be effected by either the Indemnified Party, on the one hand, or the indemnifying party, on the other hand, without the other party’s consent (which shall not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party, (ii) each Indemnified Party that is party to such claim is released from all liability with respect to such claim, and (iii) there is no equitable order, judgment or term that in any manner affects, restrains or interferes with the business of the Indemnified Party that is party to such claim or any of its Affiliates.

 

c.    Authorization. For purposes of this Section 5:

 

(i)    a decision, act, consent, election or instruction of any of the Contributors shall be deemed to be authorized if approved in writing by the applicable Contributor and the OP may rely upon such decision, act, consent, election or instruction as provided in this Section 5(d)(i) as being the decision, act, consent, election or instruction of the applicable Contributor. The OP, including its directors, officers, employees, agents and representatives, are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent, election or instruction. The Contributors may from time to time by written notice to the OP appoint a representative or representatives to exercise such powers with respect to one or more claims as may be delegated by the Contributors.

 

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(ii)    a decision, act, consent, election or instruction by the OP shall be deemed to be authorized if approved in writing by its general partner and the Contributors may rely upon such decision, act, consent, election or instruction as provided in this Section 5(d)(ii) as being the decision, act, consent, election or instruction of the OP. The Contributors, including their respective directors, officers, employees, agents and representatives, are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent, election or instruction. The OP may from time to time by written notice to the Contributors appoint a representative or representatives to exercise such powers with respect to one or more claims as may be delegated by the OP.

 

6.    For Sections 4 and 5 of this Agreement, the terms below have the following meanings:

 

“Contributors” means SFR Trust, NXDT, NRESF, FRO, GAF, Hagedorn Family Investments, Levinson and Scola.

 

7.    Governing Law. This Agreement shall be governed by, and shall be construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the laws of the State of Delaware.

 

8.    Binding Effect. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors and permitted assigns.

 

9.    Severability. If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

 

10.    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

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11.    Further Assurances. At any time or from time to time after the date hereof, at the request of a party hereto and without further consideration, the other parties hereto and its successors or assigns, shall execute and deliver, or shall cause to be executed and delivered, such other instruments or documents and take such other actions as such party may reasonably request to further the purposes of this Agreement and the transactions contemplated by this Agreement. The parties hereto further agree that in all instances they will take all actions, and to do, or cause to be done, all things necessary to give effect to the transactions contemplated hereby in all manners including, without limitation, economically as of the Effective Date.

 

12.    Entire Agreement. This Agreement delivered in connection herewith constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, representations and warranties and agreements, both written and oral, with respect to such subject matter.

 

13.    Successors and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

 

14.    Headings. The headings in this Agreement are for reference only and shall not affect the interpretations of this Agreement.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties hereto as of the date and year first above written.

 

 

 

	 	OP:	 	 
	 	NexPoint SFR Operating Partnership, L.P.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Brian Mitts	 
	 	
			Name: Brian Mitts

			Title: Chief Financial Officer, Treasurer and

			Assistant Secretary

				 
	 	 	 	 
	 	 	 	 
	 	
			SFR TRUST:

			 

			NexPoint Homes Trust, Inc.

				 
	 	 	 
	 	By:	/s/ Brian Mitts	 
	 	
			Name: Brian Mitts

			Title: President, Chief Executive Officer, Chief

			Financial Officer, Treasurer and Assistant

			Secretary

				 

 

[Signature Page to Contribution Agreement]

 

 

 

 

	 	
			NXDT: 

				 
	 	 	 
	 	NexPoint Diversified Real Estate Trust	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ James Dondero	 
	 	
			Name: James Dondero

			Title: President and Principal Executive Officer

				 
	 	 	 	 
	 	NRESF:	 
	 	 	 	 
	 	NRESF REIT Sub, LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Brian Mitts	 
	 	
			Name: Brian Mitts

			Title: Executive Vice President, Chief

				 
	 	
			Financial Officer and Principal Financial

			and Accounting Officer

				 
	 	 	 	 
	 	FRO:	 
	 	NFRO REIT Sub, LLC	 
	 	 	 	 
	 	By:	/s/ Brian Mitts	 
	 	
			Name: Brian Mitts

			Title: Executive Vice President, Chief

				 
	 	
			Financial Officer and Principal Financial

			and Accounting Officer

				 
	 	 	 	 
	 	 	 	 
	 	GAF:	 
	 	 	 	 
	 	GAF REIT Sub II, LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Brian Mitts	 
	 	
			Name: Brian Mitts

			Title: Authorized Signatory

				 

 

[Signature Page to Contribution Agreement]

 

 

 

 

	 	Hagedorn Family Investments:	 
	 	 	 	 
	 	/s/ Randy Hagedorn	 
	 	By: Randy Hagedorn	 
	 	Title: Managing Member and Authorized	 
	 	Signatory	 
	 	 	 	 
	 	 	 	 
	 	Levinson:	 
	 	 	 	 
	 	 	 	 
	 	/s/ Adam Levinson	 
	 	Adam Levinson	 
	 	 	 	 
	 	 	 	 
	 	Scola:	 
	 	 	 	 
	 	 	 	 
	 	/s/ Richard Scola	 
	 	Richard Scola	 

 

[Signature Page to Contribution Agreement]ex_383008.htm

Exhibit 10.3

 

THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS.

 

CONVERTIBLE PROMISSORY NOTE

 

 

	U.S. $50,000,000.00  	[DATE], 2022

 

FOR VALUE RECEIVED, NexPoint Homes Trust, Inc., having an address at 300 Crescent Court, Suite 700, Dallas, Texas 75201 (the “Maker”), hereby promises to pay to the order of VineBrook Homes Operating Partnership, L.P. (“Holder”), at its address at 300 Crescent Court, Suite 700, Dallas, Texas 75201 or such other address as it may designate, the principal sum of FIFTY MILLION DOLLARS ($50,000,000), and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

 

1.    Interest. The principal amount hereof outstanding from time to time shall bear interest until paid in full at the Note Rate. Interest at the Note Rate shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

 

2.    Maximum Lawful Rate. It is the intent of Maker and Holder to conform to and contract in strict compliance with applicable usury law from time to time in effect. In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the rate of interest taken, reserved, contracted for, charged or received under this Note exceed the highest lawful interest rate permitted under applicable law. If Holder shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the highest lawful interest rate permitted under applicable law, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loan in the inverse order of its maturity and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal. All interest paid or agreed to be paid to the holder hereof shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Loan so that the amount of interest on account of such obligation does not exceed the maximum permitted by applicable law. As used in this Section, the term "applicable law" shall mean the laws of the State of Texas or the federal laws of the United States, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future.

 

3.    Note Rate. “Note Rate” means a rate per annum equal to seven and a half percent (7.50%).

 

4.    Interest Period. “Interest Period” shall mean the period beginning on the date first set forth above (the “Note Date”) and ending on the Maturity Date.

 

5.    Payments. Borrower shall make a payment in full of principal and accrued interest on the Maturity Date.

 

 

 

 

6.    Maturity Date. The indebtedness evidenced hereby shall mature on [DATE], 2027. On the Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

 

7.    Conversion.

 

	 	
			(a)

				
			Subject to Section 7(b), beginning on August 1, 2022 through March 31, 2027, the Holder may elect to convert all or any part of the outstanding principal and accrued but unpaid interest due hereunder, and all other amounts due and payable to the Holder hereunder or in connection herewith, into shares of Class A Common Stock, par value $0.01 per share (“Common Stock”) of the Maker (the “Conversion Interest”), as calculated based on the current net asset value at the time of conversion (measured by the valuation methodology approved by the board of directors of the Maker).

			

 

	 	
			(b)

				
			The Maker may prohibit the Holder from converting all or any part of the outstanding principal and accrued but unpaid interest due hereunder, and all other amounts due and payable to the Holder hereunder or in connection herewith, into Common Stock if:

			

 

A.    such conversion would result in a negative impact to the real estate investment trust status of the Maker;

 

B.    such conversion would create an event of default under any Loan Document;

 

C.    such conversion would trigger change of control provisions under any agreement or contract the Maker is then a party to; or

 

D.    the Maker reasonably believes such conversion would have a negative regulatory impact on the Maker and its subsidiaries.

 

As used herein, the term “Loan Documents” shall mean all documents now or in the future executed by Maker or its subsidiaries in connection with any loan provided by any lender which is secured by a mortgage or deed of trust on any property.

 

	 	
			(c)

				
			In order to exercise its right to Conversion Interests under this Section 7, the Holder must provide written notice to the Maker of its election to convert to Conversion Interests at least 30 days prior to the requested conversion date.

			

 

	 	
			(d)

				
			The issuance of certificates, if any, for the Conversion Interests upon conversion of this Note shall be made without charge to the Holder hereof for any issuance tax in respect thereof or other cost incurred by the Maker in connection with such conversion and the related issuance of the Conversion Interests. Upon conversion of this Note, the Maker shall take all such actions as are necessary in order to insure that the Conversion Interests issuable with respect to such conversion shall be validly issued, fully paid and nonassessable.

			

 

	 	
			(e)

				
			Subject to Section 7(b), the Maker shall not close its books against the transfer of the Conversion Interests issued or issuable upon conversion of this Note in any manner which interferes with the timely conversion of this Note. The Maker shall assist and cooperate with any Holder required to make any governmental filings or obtain any governmental approval prior to or in connection with the conversion of this Note (including, without limitation, making any filings required to be made by the Maker).

			

 

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8.    General Provisions.

 

	 	
			(a)

				
			Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth‐in‐Lending Act, 15 U.S.C. § 1601, et seq.

			

 

	 	
			(b)

				
			This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Holder, together with its successors and assigns, including each owner and holder from time to time of this Note.

			

 

	 	
			(c)

				
			Time is of the essence as to all dates set forth herein.

			

 

	 	
			(d)

				
			To the fullest extent permitted by applicable law, Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Holder; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Holder with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

			

 

	 	
			(e)

				
			To the fullest extent permitted by applicable Law, Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

			

 

	 	
			(f)

				
			If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys’ fees and disbursements.

			

 

	 	
			(g)

				
			To the fullest extent permitted by applicable law, all parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due amounts following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Holder thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by the laws of the State. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

			

 

	 	
			(h)

				
			Irrespective of the place of execution and/or delivery, this Note shall be governed by, and shall be construed in accordance with, the laws of the State of Texas.

			

 

[Signature page follows.]

 

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Maker has delivered this Note as of the day and year first set forth above.

 

MAKER:

 

 

NEXPOINT HOMES TRUST, INC.

 

 

By:                                                                

Name:                                                           

Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00345-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00345-of-00352.parquet"}]]