# EDGAR Filing Document

**Accession Number:** 0001503658
**File Stem:** 0001493152-23-009286
**Filing Date:** 2023-3
**Character Count:** 508769
**Document Hash:** 4241cc776cac47248594406e9c407bb9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-009286.hdr.sgml**: 20230328

**ACCESSION NUMBER**: 0001493152-23-009286

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 67

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230328

**DATE AS OF CHANGE**: 20230328

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LiquidValue Development Inc.
- **CENTRAL INDEX KEY:** 0001503658
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE [6500]
- **IRS NUMBER:** 271467607
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55038
- **FILM NUMBER:** 23770004

**BUSINESS ADDRESS:**
- **STREET 1:** 4800 MONTGOMERY LANE
- **STREET 2:** SUITE 210
- **CITY:** BETHESDA
- **STATE:** MD
- **ZIP:** 20814
- **BUSINESS PHONE:** 301-971-3940

**MAIL ADDRESS:**
- **STREET 1:** 4800 MONTGOMERY LANE
- **STREET 2:** SUITE 210
- **CITY:** BETHESDA
- **STATE:** MD
- **ZIP:** 20814

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SeD Intelligent Home Inc.
- **DATE OF NAME CHANGE:** 20171019

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOMEOWNUSA
- **DATE OF NAME CHANGE:** 20101015

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

**☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended **December 31, 2022**

or

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from _________ to _________

Commission File Number: 000-55038

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| |
|:---|
| **LIQUIDVALUE DEVELOPMENT INC.**  |
| (Exact name of registrant as specified in its charter) |

---

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| | |
|:---|:---|
| **Nevada** | **27-1467607** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer Identification Number) |
| **4800 Montgomery Lane, Suite 210**<br> **Bethesda, MD 20814** | **301-971-3940** |
| (Address of Principal Executive Offices) | Registrant's telephone number, including area code |

---

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statement of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. The Company's common stock did not trade during the year ended December 31, 2022.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. As of March 28, 2023, there were 704,043,324 shares outstanding of the registrant's common stock, $0.001 par value.

DOCUMENTS INCORPORATED BY REFERENCE

None.

*Throughout this Report on Form 10-K, the terms the "Company," "we," "us," and "our" refer to LiquidValue Development Inc., and "our board of directors" refers to the board of directors of LiquidValue Development Inc.*

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION**

This Annual Report on Form 10-K contains forward-looking statements regarding, among other things, our future operating results and financial position, our business strategy, and other objectives for our future operations. The words "anticipate," "believe," "intend," "expect," "may," "estimate," "predict," "project," "potential" and similar expression are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

You should read this Report on Form 10-K and the documents that we have filed as exhibits to this Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Report on Form 10-K are made as of the date of this Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

LiquidValue Development Inc.

Form 10-K

For the Year Ended December 31, 2022

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  | [PART I](#bs_001) | 3 |
| Item 1. | [Business](#bs_002) | 3 |
| Item 1A. | [Risk Factors](#bs_003) | 12 |
| Item 1B. | [Unresolved Staff Comments](#bs_004) | 18 |
| Item 2. | [Properties](#bs_005) | 18 |
| Item 3. | [Legal Proceedings](#bs_006) | 18 |
| Item 4. | [Mine Safety Disclosures](#bs_007) | 18 |
|  | [PART II](#bs_008) | 19 |
| Item 5. | [Market for Company's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](#bs_009) | 19 |
| Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#sj_001) | 20 |
| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#sj_002) | 27 |
| Item 8. | [Financial Statements and Supplementary Data](#sj_003) | 27 |
| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](#S1_001) | 50 |
| Item 9A. | [Controls and Procedures](#S1_002) | 50 |
| Item 9B. | [Other Information](#sj_010) | 50 |
| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#item9c_001) | 51 |
|  | [PART III](#S1_003) | 52 |
| Item 10. | [Directors, Executive Officers and Corporate Governance](#S1_004) | 52 |
| Item 11. | [Executive Compensation](#S1_005) | 55 |
| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#S1_006) | 57 |
| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#S1_007) | 57 |
| Item 14. | [Principal Accounting Fees and Services](#S1_008) | 59 |
|  | [PART IV](#S1_009) | 59 |
| Item 15. | [Exhibit and Financial Statement Schedules](#S1_010) | 59 |
| Item 16. | [Form 10-K Summary](#S1_011) | 60 |
| [Signatures](#S1_012) | [Signatures](#S1_012) | 61 |

---

**PART I**

**Item 1. Business.**

**General**

LiquidValue Development Inc. (the "Company"), formerly known as SeD Intelligent Home Inc. and Homeownusa, was incorporated in the State of Nevada on December 10, 2009. Our address is 4800 Montgomery Lane, Suite 210, Bethesda, MD, 20814. Our telephone number is 301-971-3940.

On December 22, 2016 Alset International Limited (formerly known as Singapore eDevelopment Limited and referred to herein as "Alset International") acquired 74,015,730 shares of the Company's common stock. Alset International subsequently contributed its ownership in the Company to its subsidiary SeD Intelligent Home Inc, formerly known as SeD Home International, Inc. (which also owned Alset EHome Inc. until December 29, 2017, at which time SeD Intelligent Home Inc. contributed its shares of Alset EHome Inc. to the Company). On January 10, 2017, our board of directors appointed Fai H. Chan as Director. On March 10, 2017, Rongguo (Ronald) Wei was appointed as Chief Financial Officer of the Company.

On September 5, 2017, the Company changed its name to SeD Intelligent Home Inc., and increased its number of authorized shares to 1,000,000,000 (the par value per share remained $0.001). On July 7, 2020, the Company changed its name to LiquidValue Development Management Inc.

On December 29, 2017, the Company, SeD Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company (the "Merger Sub"), Alset EHome Inc. (formerly known as Alset iHome Inc, SeD Home & REITs Inc. and SeD Home, Inc., and referred to herein as "Alset EHome"), a Delaware corporation, and SeD Intelligent Home Inc., a Delaware corporation entered into an Acquisition Agreement and Plan of Merger (the "Agreement") pursuant to which the Merger Sub was merged with and into Alset EHome, with Alset EHome surviving as a wholly-owned subsidiary of the Company. The closing of this transaction (the "Closing") also took place on December 29, 2017. The Company ceased to be a "shell company" as that term is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. The Company's business operations became those operations that Alset EHome was conducting.

Alset EHome was incorporated in Delaware on February 24, 2015, and was named SeD Home USA, Inc. before changing its name in May of 2015 to SeD Home, Inc. On February 6, 2020, this name was changed to SeD Home & REITs Inc., on July 7, 2020 the name was changed to Alset iHome Inc. and on December 9, 2020 it was changed to Alset EHome Inc. Prior to the Closing, the officers and directors of Alset EHome are the same six individuals who are the officers and directors of the Company.

With the completion of the Company's acquisition of Alset EHome, we entered into the business of land development. While the Company will own real estate, the Company does not intend to be a REIT for federal tax purposes. Alset EHome's Lakes at Black Oak (referred to herein as "Black Oak") project is a land sub-division development located north of Houston, Texas. Our Black Oak project initially consisted of 162 acres; in January of 2021, this project was expanded with the purchase of an approximately 6.3 acre tract of land. Alset EHome's Ballenger Run project is a 197-acre sub-division development near Washington D.C. in Frederick County, Maryland. Alset EHome conducts its operations through wholly and partially owned subsidiaries. Alset EHome's affiliates provide project and asset management via separate agreements with consultants.

The land development business involves converting undeveloped land into buildable lots. When possible, in future projects we will attempt to mitigate risk by attempting to enter into contracts with strategic home building partners for the sale of lots to be developed. In such circumstances, it is our intention that (i) we will conduct a feasibility study on a particular land development; (ii) both Alset EHome and the strategic home building partners will work together in connection with acquisition of the appropriate land; (iii) strategic home building partners will typically agree to enter into agreements to purchase up to 100% of the buildable lots to be developed; (iv) Alset EHome and the strategic home building partners will enter into appropriate agreements; and (v) Alset EHome will proceed to acquire the land for development and will be responsible for the infrastructure development, ensuring the completion of the project and delivery of buildable lots to the strategic home building partner.

We also intend, to the fullest extent practicable, to source land where local government agencies (including county, district and other municipalities) and public authorities, such as improvement districts, will reimburse the majority of infrastructure costs incurred by the land developer for developing the land to build taxable properties. The developers and public authorities enter into agreements whereby the developers are reimbursed for their costs of infrastructure.

The Company will also consider the potential to purchase foreclosure property development projects from banks, if attractive opportunities should arise.

The Company, utilizing the extensive business network of its management and majority shareholder, may from time to time attempt to forge joint ventures with other parties. Through its subsidiaries, Alset EHome may manage such joint ventures.

In addition to the completion of our current projects, we intend to seek additional land development projects in diverse regions across the United States. Such projects may be within both the for sale and for rent markets, and we may expand from residential properties to other property types, including but not limited to commercial and retail properties. We will consider projects in diverse regions across the United States, however, Alset EHome and its management and consultants have longstanding relationships with local owners, brokers, managers, lenders, tenants, attorneys and accountants to help it source deals throughout Maryland and Texas. Alset EHome will continue to focus on off-market deals and raise appropriate financing.

Entering into the business of building homes with the intention of owning and renting those homes would provide an opportunity for Alset EHome to create value by (i) acquiring properties for horizontal and vertical development; (ii) providing fee generation via property management and leasing; and (iii) capturing rent escalations over long term periods. Alset EHome and its affiliates would provide property management for customers seeking to offload home maintenance and lawn care.

In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas ("Alset Villas"). Alset EHome is targeting to develop approximately 63 homes at Alset Villas for rent and/or for sale. The Alset Villas project is currently in the engineering and design phase to achieve final record plat.

During 2021 and 2022, the Company purchased 112 homes in Texas from builders in different communities for our rental business. This rental business was under one of the Company's subsidiaries, American Home REIT Inc. On December 9, 2022, Alset EHome entered into Stock Purchase Agreement with Alset International Limited and Alset Inc., pursuant to which Alset EHome agreed to sell all shares of American Home REIT Inc. to Alset Inc. For further details on this transaction, refer to Note 5 to Company's Financial Statements – Related Party Transactions and Note 7 – Discontinued Operations.

Through our subsidiaries, we will explore the potential to pursue other business opportunities related to real estate. The Company is evaluating the potential to enter into activities related to solar energy and energy efficient products as well as smart home technologies, although we note that these potential opportunities remain at the exploratory stage, and we may not pursue these opportunities at the discretion of our management. Through the Company's eco-systems of businesses based around sustainable, healthy living communities, Alset EHome intends to develop single family homes which are eco-friendly. They will be fitted out with solar energy products such as photovoltaic systems, battery systems, and car charging ports for sustainable transport as well as other energy efficient systems. The Company also envisions acquiring land surrounding its communities for solar farm projects to power these communities. Alset EHome has commenced the infrastructure design and engineering for this sustainable, healthy living community concept within the Black Oak project outside of Houston, Texas. The company intends to bring this concept to other strategic parts of the US.

We also intend to enlarge the scope of property-related services. Additional planned activities, which we intend to be carried out through Alset EHome, include financing, home management, realtor services, insurance and home title validation. We may particularly provide these services in connection with homes we build. These activities are also in the planning stages.

Both land development projects and rental business are included in our only reporting segment – real estate. In determination of segments, the Company, together with its chief decision maker, who is also our CEO, considers factors that include the nature of business activities, allocation of resources and management structure.

As of December 31, 2022, we had total assets of $52,703,365 and total liabilities of $30,289,784. Total assets as of December 31, 2021 were $48,180,107 and total liabilities were $23,278,817.

**Employees**

At the present time, the Company has six full time employees. Much of our work is done by contractors retained for projects, and at the present time we have no part-time employees.

**Compliance with Government Regulation**

The development of our real estate projects will require the Company to comply with federal, state and local environmental regulations. In connection with this compliance, our real estate acquisition and development projects will require environmental studies. To date, the Company has spent approximately $71,431 on environmental studies and compliance. Such costs are reflected in construction progress costs in our financial statements.

The cost of complying with governmental regulations is significant and will increase if we add additional real estate projects and become involved in homebuilding in the future and are required to comply with certain due diligence procedures related to third party lenders.

At the present time, we believe that we have all of the material government approvals that we need to conduct our business as currently conducted. We are subject to periodic local permitting that must be addressed, but we do not anticipate that such requirements for government approval will have a material impact on our business as presently conducted. We are required to comply with government regulations and to make filings from time to time with various government entities. Such work is typically handled by outside contractors we retain.

**Impact of Recent Public Health Events**

In December 2019, a novel strain of coronavirus ("COVID-19") was first identified in Wuhan, Hubei Province, China, and has since spread to a number of other countries, including the United States. The COVID-19 pandemic, or other adverse public health developments, could have a material and adverse effect on our business operations.

In the years ended December 31, 2022 and 2021, the COVID-19 pandemic did not have a material impact on our operations. However, the extent to which the COVID-19 pandemic may impact our business in the future will depend on developments which are highly uncertain and cannot be predicted. The COVID-19 pandemic's far-reaching impact on the global economy could negatively affect various aspects of our business, including demand for real estate and the cost of materials.

The COVID-19 pandemic could impact the ability of our staff and contractors to continue to work, and our ability to conduct our operations in a prompt and efficient manner.

In addition, the COVID-19 pandemic may adversely impact the timeliness of local government in granting required approvals. Accordingly, COVID-19 may cause the completion of important stages in our real estate projects to be delayed.

At our Black Oak project in Texas, we have strategically redesigned the lots since the beginning of the COVID-19 pandemic for a smaller "starter home" products that we believe will be more resilient in fluctuating markets. We have received strong indications that buyers and renters across the country are expressing interest in moving from more densely populated urban areas to the suburbs. Should we initiate sales at Black Oak, we believe the general trend of customers' interest shifting from urban to suburban areas will be favorable such project. Our Black Oak project may include our involvement in single family rental home development.

*Impact on Staff*

Most of our staff works out of our Bethesda, Maryland office. Some of our staff has shifted to mostly working from home since March 2020, but this has had minimal impact on our operations to date. The COVID-19 pandemic initially impacted the frequency with which our management would travel to the Black Oaks project, however, this is no longer the case. Limitations on the mobility of our management and staff, should they arise in the future, could slow down our ability to enter into new transactions and expand existing projects.

We have not reduced our staff in connection with the COVID-19 pandemic. To date, we did not have to expend significant resources related to employee health and safety matters related to the COVID-19 pandemic. We have a small staff, however, and the inability of any significant number of our staff to work due to illness or the illness of a family member could adversely impact our operations.

**Intellectual Property**

At the present time, an entity affiliated with the Company has registered the trademark "Alset" in the United States and certain other countries. We anticipate filing additional trademark applications as we expand into new areas of business.

**Corporate Organization**

The following chart describes the Company's ownership of various subsidiaries:

![](form10-k_002.jpg)

**Black Oak**

Our Black Oak project is a land infrastructure development and sub-division project situated in Magnolia, Texas north of Houston. 150 Black Oak, Ltd. was a partnership formed by our former partner prior to our investment in this project. Black Oak had contracts to purchase seven contiguous parcels of land. Our initial equity investment was US$4.3 million for ownership of 60% of the partnership. Upon this initial investment in February 2014, we changed the name of the partnership to 150 CCM Black Oak, Ltd ("Black Oak") and subsequently increased our ownership to 69%. On July 23, 2018, SeD Development USA, LLC, a wholly owned subsidiary of the Company, entered into two Partnership Interest Purchase Agreements through which it purchased an aggregate of 31% of Black Oak. Prior to the Partnership Interest Purchase Agreements, the Company owned and controlled Black Oak through its 68.5% limited partnership interest and its ownership of the General Partner, 150 Black Oak GP, Inc, a 0.5% owner in Black Oak. As a result of the purchase, the Company, through its subsidiaries, now owns 100% of Black Oak. 150 Black Oak GP, Inc. is wholly owned by SeD USA, LLC, which in turn is wholly owned by Alset EHome. The limited partnership interests are owned by SeD Development USA, Inc., which is wholly owned by Alset EHome. 150 Black Oak GP, Inc. was previously jointly owned with a partner, but is now entirely owned by SeD USA, LLC.

In October 2015, the project obtained a $6.0 million construction loan from Revere High Yield Fund, LP. This loan was paid off in October of 2017. Currently the Black Oak project does not have any financing from third parties.

The site plan at Black Oak allows for approximately 550-600 residential lots of varying sizes. We anticipate that our involvement in land development aspects of this project will take approximately three to five additional years to complete. Since February of 2015, we have completed several important tasks related to the project, including clearing certain portions of the property, paving certain roads within the project and complying with the local improvement district to ensure reimbursement of these costs.

On July 3, 2018, 150 CCM Black Oak Ltd. entered into a Purchase and Sale Agreement with Houston LD, LLC for the sale of 124 lots within the Black Oak project (the "Black Oak Purchase Agreement"). Pursuant to the Black Oak Purchase Agreement, it was agreed that 124 lots would be sold for a range of prices based on the lot type. In addition, Houston LD, LLC agreed to contribute a "community enhancement fee" for each lot, collectively totaling $310,000 which was held in escrow. 150 CCM Black Oak, Ltd. agreed to apply these funds exclusively towards an amenity package on the property. The closing of the transactions contemplated by the Black Oak Purchase Agreement was subject to Houston LD, LLC completing due diligence to its satisfaction.

On October 12, 2018, 150 CCM Black Oak, Ltd. entered into an Amended and Restated Purchase and Sale Agreement (the "Amended and Restated Black Oak Purchase Agreement") for these 124 lots. Pursuant to the Amended and Restated Black Oak Purchase Agreement, the purchase price remained at $6,175,000. 150 CCM Black Oak, Ltd. was required to meet certain closing conditions and the timing for the closing was extended.

On January 18, 2019, the sale of 124 lots at Black Oak was completed for $6,175,000 and the community enhancement fee equal to $310,000 was delivered to the escrow account, which was later drawn and closed. An impairment of real estate of approximately $2.4 million related to this sale was recorded on December 31, 2018. The revenue was recognized in January, 2019, when the sale was closed, and no gain or loss was recognized in January, 2019.

On July 20, 2018, Black Oak received $4,592,079 of district reimbursement for previous construction costs incurred in the land development. Of this amount, $1,650,000 remained on deposit in the District's Capital Projects Fund for the benefit of Black Oak and to be released upon receipt of the evidence of the: (a) execution of a purchase agreement between Black Oak and a home builder with respect to the Black Oak development and (b) of the completion, finishing and making ready for home construction of at least 105 unfinished lots in the Black Oak development. After entering the purchase agreement with Houston LD, LLC, the above requirements were met. The amount of the deposit was released to the Company after presenting the invoices paid for land development.

On November 4, 2021, Black Oak received $750,000 reimbursement from Aqua Texas pursuant to a contractual agreement whereby Aqua is obligated to pay 150 CCM Black Oak $6,000 for each connection made to an individual single family home upon sale to the end customer.

On January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County, Texas. The Company's strategic acquisition contiguous to the Black Oak project is intended to provide additional lot yield, potential additional amenities and/or a solar farm to support the Company's sustainable, healthy living concept.

On October 28, 2022, 150 CCM Black Oak Ltd. (the "Seller"), entered into a Contract for Purchase and Sale and Escrow Instructions (the "Agreement") with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the "Buyer"). Pursuant to the terms of the Agreement, the Seller agreed to sell approximately 242 single-family detached residential lots in a residential community in the city of Magnolia, Texas, known as the "Lakes at Black Oak." The parties agreed that the lots will be sold at a range of prices, and the Seller will also be entitled to receive a community enhancement fee for each lot sold. The Buyer was entitled to a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, the Buyer was entitled to decline to proceed with the closing of these transactions.

The aggregate purchase price and community enhancement fees were originally anticipated to be $12,881,000, with such purchase price to be adjusted accordingly, if the total number of lots increased or decreased prior to the closing of the transactions contemplated by the Agreement.

On November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement (the "Amendment"). Pursuant to the Amendment, the Buyer will now proceed with the purchase of approximately 131 single-family detached residential lots, instead of 242 lots, and the anticipated purchase price has been reduced.

The closing of the transactions described in the Agreement depends on the satisfaction of certain conditions set forth therein. There can be no assurance that such closings will be completed on the terms outlined herein or at all. The estimated closing date for such transaction is the second quarter of 2023.

The Seller shall be required to develop and improve the property at the Seller's cost pursuant to certain development plans and government regulations prior to the closings described above.

**Recent Agreements to Sell Additional Lots**

**Agreement to Sell 110 Lots**

On March 16, 2023, the Seller entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") with Rausch Coleman Homes Houston, LLC, a Texas limited liability company ("Rausch Coleman"). Pursuant to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots which comprise a section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $6,586,250.

The closing of the sale of these 110 lots depends on the satisfaction of certain conditions set forth in the Purchase and Sale Agreement. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Commencing on March 16, 2023, Rausch Coleman has a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Rausch Coleman may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Agreement to Sell 189 Lots**

On March 17, 2023, the Seller entered into a Contract of Sale (the "Contract of Sale") with Davidson Homes, LLC, an Alabama limited liability company ("Davidson Homes"). Pursuant to the terms of the Contract of Sale, the Seller has agreed to sell approximately 189 single-family detached residential lots comprising an additional section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $10,022,500.

The closing of the transactions described in the Contract of Sale depends on the satisfaction of certain conditions set forth therein. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Davidson Homes has agreed to purchase the lots in stages, comprising an initial closing of 94 lots, the remaining lots to be purchase on or before December 29, 2023. Commencing on March 17, 2023, Davidson Homes shall have a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Davidson Homes may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Potential Projects at Lakes at Black Oak and Alset Villas**

At the present time, the Company is also considering expanding its current policy of selling buildable lots to include a strategy of building housing for sale or rent, particularly at our Lakes at Black Oak and Alset Villas properties. The required time and expenses needed to complete the Lakes at Black Oak and Alset Villas projects will be influenced by the strategy, or mix of strategies, we utilize at each project.

**Ballenger Run**

The Company's Ballenger Run project is nearly complete, as all lots have been sold and the Company is completing its final tasks related to the project.

In November 2015, we completed the $15.65 million acquisition of Ballenger Run, a 197-acre land sub-division development located in Frederick County, Maryland. Previously, on May 28, 2014, the RBG Family, LLC entered into the Assignable Real Estate Sales Contract with NVR, Inc. ("NVR") by which RBG Family, LLC would sell the 197 acres for $15 million to NVR. On December 10, 2014, NVR assigned this contract to SeD Maryland Development, LLC in the Assignment and Assumption Agreement and entered into a series of Lot Purchase Agreements by which NVR would purchase subdivided lots from SeD Maryland Development, LLC.

SeD Maryland Development's acquisition of the 197 acres was funded in part from a $5.6 million deposit from NVR Inc. ("NVR"). The balance of $10.05 million was derived from a total equity contribution of $15.2 million by SeD Ballenger LLC ("SeD Ballenger") and CNQC Maryland Development LLC (a unit of Qingjian International Group Co, Ltd, China, "CNQC"). The project is owned by SeD Maryland Development, LLC ("SeD Maryland"). SeD Maryland is 83.55% owned by SeD Ballenger and 16.45% by CNQC.

SeD Maryland entered into a Project Development and Management Agreement for Ballenger Run with MacKenzie Development Company, LLC and Cavalier Development Group, LLC on February 25, 2015. MacKenzie Development Company, LLC assigned its rights and obligations to this agreement to Adams Aumiller Properties, LLC on September 9, 2017. Pursuant to this Project Development and Management Agreement, Adams Aumiller, LLC and Cavalier Development Group, LLC coordinated and managed the construction, financing, and development of Ballenger Run. SeD Maryland compensated Adams Aumiller LLC and Cavalier Development Group, LLC with a monthly aggregate fee of $14,667 until all single family and townhome lots were sold. The monthly aggregate fee was then adjusted to $11,000 which continued for approximately eight months to allow all close out items to be finished, including the release of guarantees and securities as required by government authorities. The Project Development and Management Agreement for Ballenger Run also required SeD Maryland to pay a fee of $1,200 and $500 for each single-family and townhome, respectively, sold to a third party. SeD Maryland also paid a fee of $50,000 after the sale of the parcel underlying the multi-family lots in August 2018.

This property was initially zoned for 443 entitled Residential Lots, 210 entitled Multifamily Units and 200 entitled continuing care retirement community units approved for twenty (20) years from the date of a Developers Rights & Responsibilities Agreement dated October 8, 2014, as amended on September 6, 2016. In July 2019 we received required government approval to revise the zoning of this property to include 479 entitled residential lots and 210 entitled multi-family units, with no entitled continuing care retirement community units.

Revenue from Ballenger Run was anticipated to come from three main sources:

● The
 sale of 479 entitled and constructed residential lots to NVR;

● The
 sale of the lot for the 210 entitled multi-family units; and

● The
 sale of 479 front foot benefit assessments.

Expenses from Ballenger Run include, but are not limited to costs associated with land prices, closing costs, hard development costs, cost in lieu of construction, soft development costs and interest costs. The Company anticipates that the estimated construction costs (not including land costs and financing costs) for the final phase of the Ballenger Run project will be $249,133. The expected completion date for the final phase of the Ballenger Run project is June of 2023.

Financing from Union Bank (f/k/a The Bank of Hampton Roads, Shore Bank and Xenith Bank) closed simultaneous with the settlement on the land on November 23, 2015, pursuant to a subsequent amendment to the terms of this loan, the loan provides (i) for a maximum of $11 million outstanding; (ii) that the maturity of this loan will be December 31, 2019; and (iii) includes an $800,000 letter of credit facility, with an annual rate of 1.5% on all issued letters of credit.

This loan was to fund the development of the first 276 lots, the multi-family parcel and senior living parcel, the amenities associated with these phases, and certain road improvements. The Union Bank Revolving Loan was repaid in January 2019.

On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company ("M&T Bank") which is comprised of: (1) a Note in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000, and (2) a letter of credit facility in an aggregate amount of up to $900,000 (the "L/C Facility"). The Note bears an interest rate of the one month LIBOR plus 375 basis points. Commissions on each letter of credit ("L/C") are 1.5% per annum on the face amount of the L/C. Other standard lender fees apply in the event L/C is drawn down. The Note is a revolving line of credit. The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Development Loan Agreement was secured by $2,600,000 collateral fund and a Deed of Trust issued to M&T Bank on the property owned by SeD Maryland. As of December 31, 2022 and 2021, the outstanding balance of the revolving loan was $0. On March 15, 2022 approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit.

On April 17, 2019, SeD Maryland Development LLC and Union Bank terminated the Revolving Credit Note. After termination, Union Bank still held $602,150 as collateral for these outstanding Letters of Credit (L/C). The L/C collateral was released in June 2019, when all L/Cs were transferred to the M&T Bank L/C Facility.

**Sale of Residential Lots**

The 479 Residential Lots were contracted for sale under a Lot Purchase Agreement to NVR, a company based in the US and listed on the New York Stock Exchange. NVR is a home builder which is engaged in the construction and sale of single-family detached homes, townhouses and condominium buildings. It also operates a mortgage banking and title services business. Under the Lot Purchase Agreements, NVR provided Alset EHome with an upfront deposit of $5.6 million and has agreed to purchase the lots at a range of prices. The lot types and quantities to be sold to NVR under the Lot Purchase Agreements include the following:

---

| | |
|:---|:---|
| **Lot Type** | **Quantity** |
| Single Family Detached Large | 85 |
| Single Family Detached Small | 89 |
| Single Family Detached Neo Traditional | 33 |
| Single Family Attached 28' Villa | 121 |
| Single Family Attached 20' End Unit | 46 |
| Single Family Attached 16' Internal Unit | 105 |
| Total | 479 |

---

There were five different types of Lot Purchase Agreements ("LPAs"), which were essentially the same except for the price and unit details for each type of lot. Under the LPAs, NVR was obligated to purchase 30 available lots per quarter. The LPAs provided several conditions related to preparation of the lots which had to be met so that a lot was made available for sale to NVR. SeD Maryland was to provide customary lot preparation including but not limited to survey, grading, utilities installation, paving, and other infrastructure and engineering. In the event NVR did not purchase the lots under the LPAs, SeD Maryland was entitled to keep the NVR deposit and terminate the LPAs. Should SeD Maryland breached the LPAs, it had to return the remainder of the NVR deposit that had not already been credited to NVR for any sales of lots under the LPAs and NVR was able to seek specific performance of the LPAs as well as any other rights available at law or in equity.

The sale of 13 model lots to NVR began in May of 2017. During the years ended on December 31, 2022 and 2021, NVR purchased 3 lots and 88 lots, respectively. Through December 31, 2022 and 2021, NVR had purchased a total of 479 and 476 lots, respectively.

Certain arrangements for the sale of buildable lots to NVR required the Company to credit NVR with an amount equal to one year of the FFB assessment. Under ASC 606, the credits to NVR were not in exchange for a distinct good or service and accordingly, the amount of the credit was recognized as the reduction of revenue. As of December 31, 2022 and 2021, the accrued balance due to NVR was $189,475 and $188,125, respectively.

**Sale of Lots for the Multi-family Units**

In June 2016, SeD Maryland entered into a lot purchase agreement with Orchard Development Corporation relating to the sale of 210 multifamily units in the Ballenger Run Project for a total purchase price of $5,250,000, which closed on August 7, 2018.

**Sale of the Front Foot Benefit Assessments**

We have established a front foot benefit ("FFB") assessment on all of the lots sold to NVR. This was a 30-year annual assessment allowed in Frederick County which required homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments became effective as homes were settled, at which time we could sell the collection rights to investors who paid an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices ranged from $3,000 to $4,500 per home depending the type of the home. Our total revenue from the front foot benefit assessment was approximately $1.8 million. To recognize revenue of the FFB assessment, both our and NVR's performance obligations had to be satisfied. Our performance obligation was completed once we completed the construction of water and sewer facilities and closed the lot sales with NVR, which inspected these water and sewer facilities prior to the close of lot sales to ensure all specifications were met. NVR's performance obligation was to sell homes they build to homeowners. Our FFB revenue was recognized upon NVR's sales of homes to homeowners. The agreement with these FFB investors was not subject to amendment by regulatory agencies and thus our revenue from FFB assessment was not either. During the years ended December 31, 2022 and 2021, we recognized revenue in the amounts of $126,737 and $289,375 from FFB assessments, respectively.

**Wetland Impact Permit**

The Ballenger Run project required a joint wetland impact permit, which requires the review of several state and federal agencies, including the U.S. Army Corps of Engineers and Maryland Department of the Environment. The permit was primarily required for Phase 3 of construction but it also affected a pedestrian trail at the Ballenger Run project and the multi-family sewer connection. The U.S. Army Corps of Engineers allowed us to proceed with construction on Phase 1 but required archeological testing. In November 2018, the archeological testing was completed with no further recommendations on Phase 1 of the project. The U.S. Army Corps of Engineers and Maryland Department of the Environment permits were issued in June 2019. A modification to the permit for a temporary stream crossing was also issued in October 2019 allowing for the commencement of construction on Phase 3.

**K-6 Grade School Site**

In connection with getting the necessary approvals for the Ballenger Project, we agreed to transfer thirty acres of land that abuts the development for the construction of a local K-6 grade school. We are not involved in the construction of such school.

**Planned Alset Villas Project in Texas**

In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas ("Alset Villas"). Alset EHome is targeting to develop approximately 63 homes at Alset Villas for rent and/or for sale. The Alset Villas project is currently in the engineering and design phase to achieve final record plat.

**Competition**

There are a number of companies engaged in the development of land. Should we expand our operations into the business of constructing homes ourselves, we will face increased competition, including competition from large, established and well-financed companies, some of which may have considerable ties and experience in the geographical areas in which we seek to operate. Similarly, as we consider other opportunities, we may wish to pursue in addition to our current land development business, we anticipate that we will face experienced competitors.

We will compete in part on the basis of the skill, experience and innovative nature of our management team, and their track record of success in diverse industries.

**Additional Information**

The Company is subject to the information requirements of the Exchange Act, and, in accordance therewith, files annual, quarterly, and special reports, proxy statements and other information with the Commission. The Commission maintains an internet website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. The periodic reports, proxy statements and other information that the Company files with the Commission are available for inspection on the Commission's website free of charge as soon as reasonably practicable after they are electronically filed with or furnished to the Commission.

**Item 1A. Risk Factors.**

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this report before making a decision to invest in our common stock. If any of the following risks and uncertainties develop into actual events, our business, results of operations and financial condition could be adversely affected. In those cases, the trading price of our common stock could decline and you may lose all or part of your investment. As a "smaller reporting company", the Company is not required to provide the information required by this item, but below are the risk factors the Company believes investors should consider before purchasing any of the Company's securities.

**Risks Related to Our Company**

**Management has identified a material weakness in the design and effectiveness of our internal controls, which, if not remediated, could affect the accuracy and timeliness of our financial reporting and result in misstatements in our financial statements.**

In connection with the preparation of our Report on Form 10-K, an evaluation was carried out by management, with the participation of our Co-Chief Executive Officers and Co-Chief Financial Officers, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act") as of December 31, 2022. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to management, including the Co-Chief Executive Officers and Co-Chief Financial Officers, to allow timely decisions regarding required disclosure.

During evaluation of disclosure controls and procedures as of December 31, 2022, conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective. Management determined that at December 31, 2022, we had a material weakness that relates to the relatively small number of staff. This limited number of staff prevents us from segregating duties within our internal control system.

This material weakness, which remained unremedied by the company as of December 31, 2022, could result in a misstatement to the accounts and disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected. If we do not remediate the material weakness or if other material weaknesses are identified in the future, we may be unable to report our financial results accurately or to report them on a timely basis, which could result in the loss of investor confidence and have a material adverse effect on our stock price as well as our ability to access capital and lending markets.

**We will need additional capital to expand our current operations or to enter into new fields of operations.**

Both the expansion of our current land development operations into new geographic areas and the proposed expansion of the Company into new businesses in the real estate industry will require additional capital. We will need to seek additional financing either through borrowing, private offerings of our securities or through strategic partnerships and other arrangements with corporate partners. We cannot be assured that additional financing will be available to us, or if available, will be available to us on terms favorable to us. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or expand our operations.

**We must retain key personnel for the success of our business.**

Our success is highly dependent on the skills and knowledge of our management team, including their knowledge of our projects and network of relationships. If we are unable to retain the members of such team, or adequate substitutes, this could have a material adverse effect on our business and financial condition.

**If we fail to effectively manage our growth our future business results could be harmed and our managerial and operational resources may be strained.**

As we proceed with the expansion of our operations, we expect to experience significant and rapid growth in the scope and complexity of our business. We will need to hire additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a materially adverse effect on our business and financial condition.

**There are risks related to conflicts of interest with our partners in the Ballenger Run Project.**

The Company owns the Ballenger Run Project with another LLC member. This entity is controlled, however, by the Company not only through the Company's majority voting interest in such project, but also through the control of the entity responsible for such project's day-to-day operations. The project will be dependent upon SeD Development Management LLC, a subsidiary of Alset EHome, for the services required for its operations. The Company's control of both the voting control of this project as well as the control of the entity responsible for the day-to-day interests of the project could create conflicts of interest between our Company and our partner in the project. SeD Maryland, the owner of the project, has no employees, and this project will be dependent upon SeD Development Management LLC and its affiliates for the services required for its operations.

The terms of the Management Agreement between SeD Maryland and SeD Development Management LLC were not negotiated at arm's-length, although it was adopted by CNQC, the other member. Pursuant to the Management Agreement, the owners of SeD Maryland, SeD Ballenger and CNQC, have delegated the day-to-day operations of developing Ballenger Run to SeD Development Management, LLC.

Despite this delegation, potential conflict between CNQC and SeD Development Management, LLC regarding the management of day-to-day operations of Ballenger Run could undermine our ability to effectively implement our vision for these projects, and could result in costly and time-consuming litigation.

**Members of our management may face competing demands relating to their time, and this may cause our operating results to suffer.**

Fai H. Chan, one of our Co-Chief Executive Officers, is both an officer and director of Alset International, the entity which owns SeD Intelligent Home Inc., our majority shareholder. Fai H. Chan is also the Chairman and Chief Executive Officer of Alset Inc., a Nasdaq listed company that owns the majority of Alset International. Fai H. Chan is involved in a number of other projects other than our Company's real estate business and will continue to be so involved. Moe T. Chan, our other Co-Chief Executive Officer, is both an officer and director of Alset International and will also be involved in projects other than our Company's real estate business. Both of our Co-Chief Executive Officers have their primarily residences and business offices in Asia, and accordingly, there will be limits on how often they are able to visit the locations of our real estate projects. Similarly, our Co-Chief Financial Officers are both engaged in non-real estate activities of Alset International and Alset Inc., and only one of our Co-Chief Financial Officers resides and works in the United States (at an office located in Bethesda, MD).

**Since some members of our board of directors are not residents of the United States, shareholders may not be able to enforce a U.S. judgment for claims brought against such directors.**

Several members of our senior management team, including our Co-Chief Executive Officers, have their primary residences and business offices in Asia, and some portion of the assets of these directors are located outside the United States. As a result, it may be more difficult for shareholders to enforce a lawsuit within the United States against these non-U.S. residents than if they were residents of the United States. Also, it may be more difficult for shareholders to enforce any judgment obtained in the United States against the assets of our non-U.S. resident management located outside the United States than if these assets were located within the United States. A foreign court may not enforce liabilities predicated on U.S. federal securities laws in original actions commenced in certain foreign jurisdictions, or judgments of U.S. courts obtained in actions based upon the civil liability provisions of U.S. federal securities laws.

**Concentration of ownership of our common stock by our majority shareholder will limit other investors from influencing significant corporate decisions.**

Our majority shareholder will be able to make decisions such as (i) making amendments to our certificate of incorporation and by-laws, (ii) whether to issue additional shares of common stock and preferred stock, (iii) employment decisions, including compensation arrangements, (iv) whether to enter into material transactions with related parties, (v) election and removal of directors and (vi) any merger or other significant corporate transactions. The interests of our majority shareholder may not coincide with the interests of other shareholders.

**Our relationship with our majority shareholder and its parent and affiliates may be on terms which are perceived by investors as more or less favorable than those that could be obtained from third parties.**

Our majority shareholder, SeD Intelligent Home Inc., presently owns 99.99% of our issued and outstanding common stock. While we anticipate that such percentage will be diluted over time, our majority shareholder, its parent and affiliates will be perceived as having influence over our management and operations, and any loans or other agreements which we may enter into with our majority shareholder and its parent and affiliates may be perceived by investors as being on terms that are less favorable than we could otherwise receive; such perception could adversely impact the price of our common stock. Similarly, such agreements could be perceived as being on terms more favorable than those that could be obtained from third parties, and any unwillingness by our majority shareholder and its parent and affiliates to engage with our common stock could discourage investors.

**Risks Relating to the Real Estate Industry**

**The market for real estate is subject to fluctuations that may impact the value of the land or housing inventory that we hold, which may impact the price of our common stock.**

Investors should be aware that the value of any real estate we own may fluctuate from time to time in connection with broader market conditions and regulatory issues which we cannot predict or control, including interest rates, the availability of credit, the tax benefits of homeownership and wage growth, unemployment and demographic trends in the regions in which we conduct business. Should the price of real estate decline in the areas in which we have purchased land, the price at which we will be able to sell lots to home builders, or if we build houses, the price at which can sell such houses to buyers, will decline.

**The coronavirus or other adverse public health developments could have a material and adverse effect on our business operations, financial condition and results of operations.**

In December 2019, a novel strain of coronavirus was first identified in Wuhan, Hubei Province, China, and has since spread to a number of other countries, including the United States. The coronavirus, or other adverse public health developments, could have a material and adverse effect on our business operations. The coronavirus' far-reaching impact on the global economy could negatively affect various aspects of our business, including demand for real estate. In addition, the coronavirus could directly impact the ability of our staff and contractors to continue to work, and our ability to conduct our operations in a prompt and efficient manner. The coronavirus may adversely impact the timeliness of local government in granting required approvals. Accordingly, the coronavirus may cause the completion of important stages in our projects to be delayed. The extent to which the coronavirus may impact our business will depend on future developments, which are highly uncertain and cannot be predicted. For more information on this matter, see "Management's Discussion and Analysis of Financial Condition and Results of Operations- Financial Impact of the COVID-19 Pandemic."

**The regulation of mortgages could adversely impact home buyers' willingness to buy new homes which we may be involved in building and selling.**

If we become active in the construction and sale of homes to customers, the ability of home buyers to get mortgages could have an impact on our sales, as we anticipate that the majority of home buyers will be financed through mortgage financing.

**An increase in interest rates will cause a decrease in the willingness of buyers to purchase land for building homes and completed homes.**

An increase in interest rates will likely impact sales, reducing both the number of homes and lots we can sell and the price at which we can sell them.

**Our business, results of operations and financial condition could be adversely impacted by significant inflation or deflation.**

Significant inflation could have an adverse impact on us by increasing the costs of land, materials and labor. We may not be able to offset cost increases caused by inflation. In addition, our costs of capital, as well as those of our future business partners, may increase in the event of inflation, which may cause us to need to cancel projects. Significant deflation could cause the value of our inventories of land or homes to decline, which could sharply impact our profits.

**New environmental regulations could create new costs for our land development business, and other business in which we may commence operations.**

At the present time, we are subjected to a number of environmental regulations. If we expand into the business of building homes ourselves, we will be subjected to an increasing number of environmental regulations. The number and complexity of local, state and federal regulations may increase over time. Additional environmental regulations can add expenses to our existing business, and to businesses which we may enter into the future, which may reduce our profits.

**Zoning and land use regulations impacting the land development and homebuilding industries may limit our activities and increase our expenses, which would adversely affect our profits.**

We must comply with zoning and land use regulations impacting the land development and home building industries. We will need to obtain the approval of various government agencies to expand our operations as currently into new areas and to commence the building of homes. Our ability to gain the necessary approvals is not certain, and the expense and timing of approval processes may increase in ways that adversely impact our profits.

**The availability and cost of skilled workers in the building trades may impact the timing and profitability of projects that we participate in.**

Should there be a lack of skilled workers to be retained by our Company and its partners, the ability to complete land development and potential construction projects may be delayed.

**Shortages in required materials could impact the profitability of construction partnerships we may participate in.**

Should a shortage of required materials occur, such shortage could cause added expense and delays that will undermine our profits.

**Our ability to have a positive relationship with local communities could impact our profits.**

Should we develop a poor relationship with the communities in which we will operate, such relationship will impact our profits.

**We may face litigation in connection with either our current activities or activities which we may conduct in the future.**

As we expand our activities, the likelihood of litigation shall increase. The expenses of such litigation may be substantial. We may be exposed to litigation for environmental, health, safety, breach of contract, defective title, construction defects, home warranty and other matters. Such litigation could include expensive class action matters. We could be responsible for matters assigned to subcontractors, which could be both expensive and difficult to predict.

**As we expand operations, we will incur greater insurance costs and likelihood of uninsured losses.**

If we expand our operations into home building, we may experience material losses for personal injuries and damage to property in excess of insurance limits. In addition, our premiums may raise.

**Health and safety incidents that occur in connection with our potential expansion into the home building business could be costly.**

If we commence operations in the homebuilding business, we will be exposed to the danger of health and safety risks to our employees and contractors. Health and safety incidents could result in the loss of the services of valued employees and contractors and expose us to significant litigation and fines. Insurance may not cover, or may be insufficient to cover, such losses.

**Adverse weather conditions, natural disasters and man-made disasters may delay our projects or cause additional expenses.**

The land development operations which we currently conduct and the construction projects which we may become involved in at a later date may be adversely impacted by unexpected weather and natural disasters, including but not limited to storms, hurricanes, tornados, floods, blizzards, fires or earthquakes. Man-made disasters including terrorist attacks, electrical outages and cyber-security incidents may also impact the costs and timing of the completion of our projects. Cyber-security incidents, including those that result in the loss of financial or other personal data, could expose us to litigation and reputational damage. If insurance is unavailable to us on acceptable terms, or if our insurance is not adequate to cover business interruptions and losses from the conditions described above and similar incidents, or results of operations will be adversely affected. In addition, damage to new homes caused by these conditions may cause our insurance costs to increase.

**Risks Associated with Real Estate Related Debt and Other Investments**

**Any real estate debt security that we originate or purchase is subject to the risks of delinquency and foreclosure.**

We may originate and purchase real estate debt securities, which are subject to numerous risks including delinquency and foreclosure. We will not have recourse to the personal assets of our tenants. The ability of a lessee to pay rent depends primarily upon the successful operation of the property, rather than upon the existence of independent income or assets of the tenant.

**Any hedging strategies we utilize may not be successful in mitigating our risks.**

We may enter into hedging transactions to manage, for example, the risk of interest rate or price changes. To the extent that we may occasionally use derivative financial instruments, we will be exposed to credit, basis and legal enforceability risks. Derivative financial instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. We may not be able to manage these risks effectively.

**Risks Related to Our Potential Expansion into New Fields of Operations**

**If we pursue the development of new technologies, we will be required to respond to rapidly changing technology and customer demands.**

In the event that the Company enters the business of developing "Smart Home" and similar technologies (an area which we are presently exploring), the future success of such operation will depend on our ability to adapt to technological advances, anticipate customer demands and develop new products. We may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of products. Also, we may not be able to adapt new or enhanced services to emerging industry standards, and our new products may not be favorably received.

**Risks Related to Our Common Stock**

**The shares of our common stock are currently not being traded and there can be no assurance that there will be an active market in the future.**

Our shares of common stock are not publicly traded, and if trading commences, the price may not reflect our value. There can be no assurance that there will be an active market for our shares of common stock in the future. As a result, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business.

**It is possible that we will not establish an active market unless our stock is listed for trading on an exchange, and we cannot assure shareholders that we will ever satisfy exchange listing requirements.**

It is possible that a significant trading market for our shares will not develop unless the shares are listed for trading on a national exchange. Exchange listing would require us to satisfy a number of tests as to corporate governance, public float, shareholders, equity, assets, market makers and other matters, some of which we do not currently meet. We cannot assure shareholders that we will ever satisfy listing requirements for a national exchange or that there ever will be significant liquidity in our shares.

**If we issue additional shares of our common stock, shareholders will experience dilution of their ownership interest.**

We may issue shares of our authorized but unissued equity securities in the future. Such shares may be issued in connection with raising capital, acquiring assets or firing or retaining employees or consultants. If we issue such shares, shareholders' ownership will be diluted.

**We do not intend to pay dividends in the foreseeable future, and investors should not purchase our stock expecting to receive dividends.**

We have not paid any dividends on our common stock in the past, and we do not anticipate that we will pay dividends in the foreseeable future. Accordingly, some investors may decline to invest in our common stock, and this may reduce the liquidity of our stock.

**The limitations on liability for officers, directors and employees under the laws of the State of Nevada and the existence of indemnification rights for our officers, directors and employees could result in substantial expenditures by the Company and could discourage lawsuits against our officers, directors and employees.**

Our Articles of Incorporation contain a specific provision that eliminates the liability of our officers and directors for monetary damages to our company and shareholders. Further, we intend to provide indemnification to our officers and directors to the fullest extent permitted by the laws of the State of Nevada. We may also enter into employment and other agreements in the future pursuant to which we will have indemnification obligations. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against officers and directors. These obligations may discourage the filing of derivative litigation by our shareholders against our officers and directors even where such litigation may be perceived as beneficial by our shareholders.

**Item 1B. Unresolved Staff Comments.**

Not Applicable.

**Item 2. Properties.**

**Black Oak**

The Black Oak property is located in Montgomery County in Magnolia, Texas. This property is located east of FM 2978 via Standard Road to Dry Creek Road and South of the Woodlands, one of the most successful, fastest growing master planned communities in Texas. This residential land development initially consisted of approximately 162 acres. On January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County. The Company's strategic acquisition contiguous to the Black Oak project is intended to provide additional lot yield, potential additional amenities and/or a solar farm to support the Company's sustainable, healthy living concept. Together with the additional tract of land there are approximately 550-600 lots to be platted for the Company's future endeavors. This does not include the 124 lots sold to Rausch Coleman in Phase 1. 150 CCM Black Oak Ltd is the primary developer responsible for all infrastructure development. This property is included in Harris County Improvement District #17.

**Planned Alset Villas Project in Texas**

In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas ("Alset Villas"). Alset EHome is targeting to develop approximately 63 homes at Alset Villas for rent and/or for sale. The Alset Villas project is currently in the engineering and design phase to achieve final record plat.

**Development of Properties**

At the present time, the Company is considering expanding its current policy of selling buildable lots to include a strategy of building housing for sale or rent, particularly at our Black Oak and Alset Villas properties.

**Rental Properties**

Recently, the Company expanded its real estate portfolio to single family rental houses. During 2021 and early 2022, the Company, through its subsidiaries, acquired 112 homes in Montgomery and Harris Counties, Texas.

In the first fifty three of the 112 rental homes that were acquired, as part of our commitment to advancing smart and healthy sustainable living, we installed Tesla PV solar panels and Powerwalls. In addition, we added technologies at many of the single family rental homes such as (i) smart solar, thermostat, and energy usage controls; (ii) smart lighting controls; (iii) smart locks and security; and (iv) smart home automation devices. We believe these and other technologies will be attractive to renters. We continue to build and pursue strategic, technological partnerships that will assist us in the future.

On December 9, 2022, Alset EHome entered into Stock Purchase Agreement with Alset International Limited and Alset Inc., pursuant to which Alset EHome agreed to sell all shares of American Home REIT Inc., the company holding all of the 112 rental properties, to Alset Inc. For further details on this transaction, refer to Note 5 to Company's Financial Statements – Related Party Transactions and Note 7 – Discontinued Operations.

**Office Space**

At the present time, the Company is renting offices in Houston, Texas and Bethesda, Maryland through Alset EHome. At the present time, our office space is sufficient for our operations as presently conducted, however, as we expand into new projects and into new areas of operations, we anticipate that we will require additional office space.

**Item 3. Legal Proceedings.**

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

There are no material proceedings to which any director, officer or affiliate of the Company, or any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

**Item 4. Mine Safety Disclosures**

Not applicable.

**PART II**

**Item 5. Market for Company's Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities**

**Market Information**

There is presently no established public trading market for our shares of common stock. We plan to reapply for quoting of our common stock on the OTC Bulletin Board. However, we can provide no assurance that our shares of common stock will be quoted on the Bulletin Board or, if traded, that a public market will materialize. In connection with the change of the Company's name from Homeownusa to SeD Intelligent Home Inc., the Company's symbol changed from HMUS to SEDH on December 13, 2017. On July 7, 2020 the Company changed its name to LiquidValue Development Inc., changing at the same time the symbol to LVDW.

**Holders**

As of March 28, 2023, the Company had 53 shareholders.

**Dividends**

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our board of directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our board of directors may deem relevant.

**Securities authorized for issuance under equity compensation plans.**

The Company does not have securities authorized for issuance under any equity compensation plans

**Performance graph**

Not applicable to smaller reporting companies.

**Recent sales of unregistered securities; use of proceeds from registered securities**

None.

**Purchases of Equity Securities by the issuer and affiliated purchasers**

The Company did not repurchase any shares of the Company's common stock during 2022.

**Item 6. [RESERVED]**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

This Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact, including, without limitation, statements under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

**Results of Operations**

**Results of Operations for the Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31, 2022** | **December 31, 2021** |
| Revenue | $665291 | $13886084 |
| Cost of Revenue | $476499 | $11339715 |
| General and Administrative Expenses | $1395415 | $1353062 |
| Other Expenses | $913092 | $149758 |
| Loss from Discontinued Operations | $367994 | $29280 |
| Net (Loss) Income | $(2487709) | $922353 |

---

**Revenue**

Revenue was $665,291 for the year ended December 31, 2022 as compared to $13,886,084 for the year ended December 31, 2021. The decrease in revenue is caused mainly by the decrease in property sales from the Ballenger project in 2021. In the year ended December 31, 2022 the last three homes in Ballenger Project were sold. In this project, builders were required to purchase a minimum number of lots based on their applicable sale agreements. We collected revenue only from the sale of lots to builders. We are not involved in the construction of homes at the present time.

Income from the sale of Front Foot Benefits ("FFBs"), assessed on Ballenger Run project lots, decreased from $289,375 in the year ended December 31, 2021 to $126,737 in year ended December 31, 2022. The decrease is a result of the decreased sale of properties to homebuyers in 2022.

**Operating Expenses**

All cost of revenue in the years ended on December 31, 2022 and 2021 came from our Ballenger project. The gross margin for Ballenger project in years ended December 31, 2022 and 2021 was approximately 31% and 18%, respectively.

**General and Administrative Expenses**

The general and administrative expenses increased from $1,353,062 for the year ended December 31, 2021 to $1,395,415 for the year ended December 31, 2022 due to increase in professional fees.

**Other Expenses**

In the year ended December 31, 2022, the Company had other expense of $913,092 compared to other expense of $149,758 in the year ended December 31, 2021. The increase in other expenses was caused by increase in interest expenses.

**Loss from Discontinued Operations**

In the years ended December 31, 2022 and 2021, the discontinued operation loss from American Home REIT Inc. was $367,994 and $29,280, respectively.

**Net Income (Loss)**

The Company had a net income of $922,353 for the year ended December 31, 2021 and a net loss of $2,487,709 for the year ended on December 31, 2022. The increase in net loss was caused by decrease in revenues and increase in interest expense. The Company expects the revenue to increase as we successfully sell lots to national and regional builders in our Black Oak project as well as expand to build houses for rent.

**Liquidity and Capital Resources**

Our real estate assets have increased to $23,970,911 as of December 31, 2022 from $15,214,680 as of December 31, 2021. This increase primarily reflects the capitalization of the costs related to construction in progress. Our liabilities increased from $23,278,817 at December 31, 2021 to $30,289,784 at December 31, 2022. Our total assets have increased to $52,703,365 as of December 31, 2022 from $48,180,107 as of December 31, 2021.

As of December 31, 2022, we had cash in the amount of $1,034,611, compared to $2,857,995 as of December 31, 2021.

Our Ballenger Run project has a revolver loan from M&T Bank in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. As of December 31, 2022 and 2021, the revolver loan balance was $0.

On June 18, 2020, Alset EHome Inc. (formerly known as SeD Home & REITs Inc. and Alset iHome Inc.) entered into a Loan Agreement with M&T Bank. Pursuant to this Loan Agreement, M&T Bank provided a non-revolving loan to Alset EHome Inc. in an aggregate amount of up to $2,990,000. As of December 31, 2020, the M&T loan balance was $679,268. The loan was paid off in May 2021.

On February 11, 2021, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program ("PPP Term Note") under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first sixteen months of principal and interest deferred or until we apply for the loan forgiveness. The PPP Term Note may be accelerated upon the occurrence of an event of default.

The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. The Company may apply to M&T Bank for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to at least 60% of payroll costs and other eligible payments incurred by the Company, calculated in accordance with the terms of the CARES Act. At this time, we are not in a position to quantify the portion of the PPP Term Note that will be forgiven.

During 2021 the Company signed multiple purchase agreements to acquire 109 homes in Montgomery and Harris Counties, Texas. By December 31, 2021, the acquisition of the 109 homes was completed with an aggregate purchase cost of $24,940,764. The Company borrowed $19,122,471 from SeD Intelligent Home Inc. to fund most of these acquisitions.

The future development timeline of Black Oak will be based on multiple conditions, including the amount of funds which may be raised from capital markets, the loans we may secure from third party financial institutions, and government reimbursements which may be received. The development will be step by step and expenses will be contingent on the amount of funding we will receive.

The management believes that the available cash in bank accounts, favorable cash revenue from real estate projects are sufficient to fund our operations for at least the next 12 months.

**Summary of Cash Flows**

A summary of cash flows from operating, investing and financing activities for the years ended December 31, 2022 and 2021 are as follows:

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Net Cash (Used in) Provided by Operating Activities | $(10082104) | $8346384 |
| Net Cash Used in Investing Activities | $(1493137) | $(25366119) |
| Net Cash Provided by Financing Activities | $6650000 | $16371217 |
| Net Change in Cash | $(4925241) | $(648518) |
| Cash and restricted cash at beginning of the year | $7455729 | $8104247 |
| Cash and restricted cash at end of the year | $2530488 | $7455729 |

---

**Cash Flows from Operating Activities**

Cash flows from operating activities include costs related to assets which we plan to sell, such as land purchased for development and resale, and costs related to construction, which are capitalized in the book. In 2022, cash used in operating activities was $10,082,104 compared to cash provided of $8,346,384 in 2021. The Company's development costs increased in 2022, contributing to increased cash used in operating activities in that period.

**Cash Flows from Investing Activities**

Cash flows used in investing activities in 2022 include the purchase of properties and building improvements for our rental business, which is now a part of discontinued operations, as well as small expenditures for purchases of office computer equipment.

**Cash Flows from Financing Activities**

In 2021 the Company borrowed $68,502 from PPP loan and $19,531,734 from related party. In the same period, SeD Maryland Development distributed $2,549,750 in cash to the minority shareholder and Alset EHome repaid $679,269 of M&T loan. In 2022 the Company borrowed $7,650,000 from related party and at the same time repaid $1,000,000 of related party loan.

**Going Concern** 

Our auditor has expressed substantial doubt as to whether we will be able to continue to operate as a going concern due to the fact that the Company has incurred net operating losses of $10,907,442 from inception though the year ended December 31, 2022 and has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining the adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

**Seasonality**

The real estate business is subject to seasonal shifts in costs as certain work in more likely to be performed at certain times of year. This may impact the expenses of Alset EHome from time to time. In addition, should we commence building homes, we are likely to experience periodic spikes in sales as we commence the sales process at a particular location.

**Off-Balance Sheet Arrangements**

As of December 31, 2022, we did not have any off-balance sheet arrangements, as defined under applicable SEC rules.

**Critical Accounting Policies and Estimates**

We have established various accounting policies under US GAAP. Some of these policies involve judgments, assumptions and estimates by management. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an ongoing basis. We are subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in our business environment. Accordingly, actual results could differ from these estimates. The accounting policies that we deem most critical are as follows:

**Revenue Recognition and Cost of Revenue**

*Land Development Revenue Recognition*

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The Company adopted this new standard on January 1, 2018 under the modified retrospective method. The adoption did not have a material effect on our financial statements.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. A detailed breakdown of the five-step process for the revenue recognition of our Ballenger project, which was most of the revenue of the Company in 2021, is as follows:

● Identify
 the contract with a customer.

The Company has signed agreements with the builders for developing the raw land to ready to build lots. The contract has agreed upon prices, timelines, and specifications for what is to be provided.

● Identify
 the performance obligations in the contract.

Performance obligations of the company include delivering developed lots to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects all lots prior to accepting title to ensure all specifications are met.

● Determine
 the transaction price.

The transaction price is specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties.

● Allocate
 the transaction price to performance obligations in the contract.

Each lot is considered to be a separate performance obligation, for which the specified price in the contract is allocated to.

● Recognize
 revenue when (or as) the entity satisfies a performance obligation.

The builders do the inspections to make sure all conditions/requirements are met before taking title of lots. The Company recognizes revenue when title is transferred. The Company does not have further performance obligations once title is transferred.

*Rental Revenue Recognition*

The Company leases real estate properties to its tenants under leases that are predominately classified as operating leases, in accordance with ASC 842, Leases ("ASC 842"). Real estate rental revenue is comprised of minimum base rent and revenue from the collection of lease termination fees.

Rent from tenants is recorded in accordance with the terms of each lease agreement on a straight-line basis over the initial term of the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Generally, at the end of the lease term, the Company provides the tenant with a one year renewal option, including mostly the same terms and conditions provided under the initial lease term, subject to rent increases.

The Company defers rental revenue related to lease payments received from tenants in advance of their due dates. These amounts are presented within deferred revenues and other payables on the Company's consolidated balance sheets.

Rental revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates that it is not probable that we will recover substantially all of the receivable, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis (as applicable) or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. For the years ended December 31, 2022 and 2021, the Company did not recognize any deferred revenue and collected all rents due.

 

*Sale of the Front Foot Benefit Assessments*

We have established a front foot benefit ("FFB") assessment on all of the NVR lots. This is a 30-year annual assessment allowed in Frederick County which requires homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments become effective as homes are settled, at which time we can sell the collection rights to investors who will pay an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices range from $3,000 to $4,500 per home depending the type of the home. Our total revenue from the front foot benefit assessment is approximately $1 million. To recognize revenue of FFB assessment, both our and NVR's performance obligation have to be satisfied. Our performance obligation is completed once we complete the construction of water and sewer facility and close the lot sales with NVR, which inspects these water and sewer facility prior to close lot sales to ensure all specifications are met. NVR's performance obligation is to sell homes they build to homeowners. Our FFB revenue is recognized on quarterly basis after NVR closes sales of homes to homeowners. The agreement with these FFB investors is not subject to amendment by regulatory agencies and thus our revenue from FFB assessment is not either. During the years ended December 31, 2022 and 2021, we recognized revenue of $126,737 and $289,375 from FFB assessment, respectively.

*Contract Assets and Contract Liabilities*

Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. We disclose receivables from contracts with customers separately on the balance sheets.

*Cost of Revenue*

● Cost of Real Estate Sale

All of the costs of real estate sales are from our land development business. Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project.

If allocation of development costs and capitalized interest based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot comparing to the total size of all lots in the project.

● Cost of Rental Revenue

Cost of rental revenue consists primarily of the costs associated with management and leasing fees to our management company, repairs and maintenance, depreciation and other related administrative costs. Utility expenses are paid directly by tenants.

**Real Estate Assets**

*Land Development Assets*

Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board ("FASB") ASC 805, "Business Combinations," which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold.

See following chart for details of the capitalized construction costs of Ballenger and Black Oak projects as of December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** |
|  | **Ballenger Run** | **Black Oak** | **Brandy Villas** | **Total** |
|  | **($)** | **($)** | **($)** | **($)** |
| Hard Construction Costs | 29253317 | 10960927 | - | 40214245 |
| Engineering | 3632588 | 3306281 | 194510 | 7133379 |
| Consultation | 340528 | 121698 | 16950 | 479176 |
| Project Management | 4335183 | 2702175 | - | 7037359 |
| Legal | 375672 | 256693 | - | 632365 |
| Taxes | 1325086 | 1204186 | 43770 | 2573042 |
| Other Services | 627487 | 47276 | - | 674763 |
| Impairment Reserve |  | (5920599) | - | (5920599) |
| Construction - Sold Lots | (39889863) | (1364805) | - | (41254668) |
| &nbsp;&nbsp;&nbsp;**Total** | $0 | $11313832 | $255230 | $11569062 |
| Capitalized Finance Costs |  |  |  | $4047195 |
| Construction in Progress |  |  |  | $15616257 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31, 2021** | **As of December 31, 2021** | **As of December 31, 2021** |
|  | **Ballenger Run** | **Black Oak** | **Total** |
|  | **($)** | **($)** | **($)** |
| Hard Construction Costs | 29244223 | 3126907 | 32371130 |
| Engineering | 3626928 | 2852710 | 6479638 |
| Consultation | 340528 | 109826 | 450354 |
| Project Management | 4285533 | 2597175 | 6882709 |
| Legal | 375585 | 237970 | 613554 |
| Taxes | 1326734 | 985440 | 2312174 |
| Other Services | 605657 | 33791 | 639448 |
| Impairment Reserve |  | (5920599) | (5920599) |
| Construction - Sold Lots | (39805188) | (1364805) | (41169993) |
| &nbsp;&nbsp;&nbsp;**Total** | $0 | $2658415 | $2658415 |
| Capitalized Finance Costs |  |  | $4066259 |
| Construction in Progress |  |  | $6724674 |

---

As of December 31, 2022 and 2021, total capitalized finance related costs were $4,047,195 and $4,066,259, respectively.

The Company anticipates that the estimated construction costs (not including land costs and financing costs) for the final phases of the Ballenger Run project will be $249,133. The expected completion date for the final phases of the Ballenger Run project is June of 2023.

The required time and expenses needed to complete the Black Oak and Alset Villas projects will be impacted by the strategy, or mix of strategies, we utilize at each project.

In addition to our annual assessment of potential triggering events in accordance with ASC 360, Impairment Testing: Long- Lived Assets classified as held and used, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. The Company did not record impairment on any of its projects during the years ended on December 31, 2022 and 2021.

*Investments in Single-Family Residential Properties*

The Company accounts for its investments in single-family residential properties as asset acquisitions and records these acquisitions at their purchase price. The purchase price is allocated between land, building, improvements and existing leases based upon their relative fair values at the date of acquisition. The purchase price for purposes of this allocation is inclusive of acquisition costs which typically include legal fees, title fees, property inspection and valuation fees, as well as other closing costs.

Building improvements and buildings are depreciated over estimated useful lives of approximately 10 to 27.5 years, respectively, using the straight-line method.

The Company assesses its investments in single-family residential properties for impairment whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset's carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company did not recognize any impairment losses during the years ended December 31, 2022 and 2021.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

Not applicable to smaller reporting companies.

**Item 8. Financial Statements and Supplementary Data**

**LiquidValue Development Inc. and Subsidiaries**

**CONSOLIDATED FINANCIAL STATEMENTS**

**December 31, 2022 and 2021**

---

| | |
|:---|:---|
| **Contents** | **Page(s)** |
| [Reports of Independent Registered Public Accounting Firm](#sj_004) (PCAOB ID: 606) | 29 |
| [Consolidated Balance Sheets at December 31, 2022 and 2021](#sj_005) | 32 |
| [Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021](#sj_006) | 33 |
| [Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2022 and 2021](#sj_007) | 34 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021](#sj_008) | 35 |
| [Notes to the Consolidated Financial Statements](#sj_009) | 36 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

![](report_001.jpg)

To the Board of Directors and Stockholders of

LiquidValue Development Inc. and Subsidiaries

Bethesda, Maryland

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of LiquidValue Development Inc. and Subsidiaries (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt Regarding the Company's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company's significant accumulated operating losses and working capital deficit raise substantial doubt about its ability to continue as a going concern. Management's evaluation of the events and conditions, and management's plans regarding those matters, are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

**Valuation of Real Estate Assets**

*Critical Audit Matter Description*

 

As discussed in Note 1 to the consolidated financial statements, the real estate assets as of December 31, 2022 and December 31, 2021, aggregated to $49.8 million and $40.0 million, respectively. Real estate assets consist of residential properties, which are included in assets held for sale – discontinued operations;, construction in progress; land held for development; and other properties. The Company reviews each real estate asset on an annual basis or whenever indicators of impairment exist. Indicators of impairment include, but are not limited to, significant decreases in local land and building market values and selling prices of comparable land and buildings, significant decreases in gross margins or sales absorption rates, costs significantly in excess of budget and actual or projected cash flow losses. If there are indicators of impairment, the Company will perform a fair value-based impairment analysis to determine if the asset is impaired.

We identified the assessment of real estate assets for impairment as a critical audit matter. Specifically, the Company's identification of potential impairment indicators required a high degree of subjective management judgment. In addition, where necessary, the significant assumptions used in management's impairment analyses required the application of greater management judgment. Changes to these estimates and assumptions could have a significant impact on the Company's impairment analyses.

*How the Critical Audit Matter Was Addressed in the Audit*

 

To test management's identification and assessment of the severity of indicators of impairment of the Company's real estate assets owned, our audit procedures included, among other things, evaluating management's qualitative analyses for reasonableness and completeness through inquiries with Company personnel outside the accounting function; considering external market data and interviewing external real estate specialists. Where necessary, we also evaluated management's quantitative analyses of fair value by evaluation of the reasonableness of methods and assumptions used by the Company's valuation specialist and testing the underlying data used by the Company in such analyses. Additionally, our procedures performed over land held for future development also included the consideration of contrary or corroborative evidence of management's assertions by obtaining other market data to evaluate against the Company's projected gross margin by project.

We involved a specialist to assist in assessing the reasonableness of the underlying methods and assumptions used by the Company in performing necessary fair-value estimates for the real estate assets, and assessing the reasonableness of the comparable sales data or other market data driving cash flow assumptions of real estate assets used in the Company's fair value analyses.

**Discontinued Operations and Assets and Liabilities Held for Sale**

*Critical Audit Matter Description*

 

As discussed in Note 7 to the consolidated financial statements, on December 9, 2022, Alset EHome Inc. (Alset EHome), a subsidiary of the Company, entered into a stock purchase agreement with related parties, Alset International Limited ("Alset International") and Alset Inc., pursuant to which Alset Inc. agreed to purchase all of the outstanding shares of American Home REIT Inc., a wholly owned subsidiary of Alset EHome. American Home REIT Inc. is the owner of 112 rental homes. Alset EHome is a majority-owned, indirect subsidiary of Alset International, while Alset International is a majority-owned, indirect subsidiary of Alset Inc. The sale closed in January 2023, subsequent to year-end.

We identified the classification, presentation, and disclosure of this transaction as a critical audit matter. Specifically, the Company's classification of the assets and liabilities owned by American Home REIT Inc. as assets and liabilities held for sale, as well as the classification of the operating activities of American Home REIT Inc. as discontinued operations.

 

*How the Critical Audit Matter Was Addressed in the Audit*

 

To test management's assertions with respect to held for sale and discontinued operations classification, we read the stock purchase agreement to gain an understanding of the transaction details. We then tested management's assertion that the disposal of American Home REIT Inc. was properly classified as a discontinued operation in accordance with ASC 205-20, *Discontinued Operations*.

A disposal of a component of an entity or a group of components of an entity should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when any of the following occurs:: 1) the component of an entity meets the initial criteria to be classified as held for sale, 2) the component of an entity is disposed of by sale or is disposed of other than by sale (for example, by abandonment or in distribution to owners in a spinoff), and 3) the disposal of a the component represents a strategic shift that has or will have a major effect on an entity's operations and financial results.

In evaluating the classification of the American Home REIT assets as held for sale and operating activities as discontinued operations we considered the three criteria listed above, by performing the following procedures:

1) Discussed the sale of the component with management and read the terms of the stock purchase agreement and agreed with management's determination that American Home REIT Inc. was properly classified as held for sale;

2) Obtained the stock purchase agreement and the closing documents noting that American Home REIT Inc. was sold in January 2023, subsequent to year-end; and

3) Discussed with management the strategic business purpose behind the transaction, noting that the sale of American Home REIT Inc. represents a significant strategic shift in the company's business practices and materially impacts the Company's operations and financial results.

---

| |
|:---|
| ![signature](report_003.jpg) |
| GRASSI & CO., CPAs, PC |
| We have served as the Company's auditor since 2022. |
| Jericho, New York<br> March 28, 2023 |

---

![](report_002.jpg)

**LiquidValue Development Inc. and Subsidiaries**

**Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 |
| Assets: |  |  |
| Real Estate |  |  |
| Construction in Progress | 15616257 | 6724674 |
| Land Held for Development | 7943126 | 8068624 |
| Other Properties | 411528 | 421382 |
|  | 23970911 | 15214680 |
| Cash | 1034611 | 2857995 |
| Restricted Cash | 309219 | 4399984 |
| Accounts Receivable |  | 37103 |
| Other Receivable | 143574 | 136350 |
| Related Party Receivable |  | 26565 |
| Prepaid Expenses | 8032 | 151659 |
| Fixed Assets, Net | 4629 | 4945 |
| Deposits | 23603 | 23603 |
| Operating Lease Right-Of-Use Asset | 108950 | 191979 |
| Assets held for sale - discontinued operations | 27099836 | 25135244 |
| Total Assets | $52703365 | $48180107 |
| Liabilities and Stockholders' Equity: |  |  |
| Liabilities: |  |  |
| Accounts Payable and Accrued Expenses | $1240347 | $2745719 |
| Accrued Interest - Related Parties | 1383019 | 228557 |
| Builder Deposits |  | 31553 |
| Operating Lease Liability | 110431 | 199483 |
| Note Payable, net of discount |  | 68502 |
| Note Payable - Related Parties | 26443055 | 19918382 |
| Liabilities held for sale - discontinued operations | 1112932 | 86621 |
| Total Liabilities | 30289784 | 23278817 |
| Stockholders' Equity: |  |  |
| Common Stock, at par $0.001, 1,000,000,000 shares authorized and 704,043,324 issued, and outstanding at December 31, 2022 and December 31, 2021 | 704043 | 704043 |
| Additional Paid in Capital | 32542720 | 32542720 |
| Accumulated Deficit | (10907442) | (8397009) |
| Total LiquidValue Development Inc. Stockholders' Equity | 22339321 | 24849754 |
| Non-controlling Interests | 74260 | 51536 |
| Total Stockholders' Equity | 22413581 | 24901290 |
| Total Liabilities and Stockholders' Equity | $52703365 | $48180107 |

---

See accompanying notes to consolidated financial statements.

**LiquidValue Development Inc. and Subsidiaries**

**Consolidated Statements of Operations**

**For the Years Ended December 31, 2022 and 2021**

---

| | | |
|:---|:---|:---|
|  | Year Ended December 31, | Year Ended December 31, |
|  | 2022 | 2021 |
| Revenue |  |  |
| Property | 665291 | 13886084 |
|  | 665291 | 13886084 |
| Operating Expenses |  |  |
| Cost of Revenue | 476499 | 11339715 |
| General and Administrative | 1395415 | 1353062 |
| Total Operating Expenses | 1871914 | 12692777 |
| Loss (Income) From Operations | (1206623) | 1193307 |
| Other Income & Expense |  |  |
| Interest Expense, net | (1028934) | (153900) |
| Other Income | 115842 | 4142 |
| Total Other Expense | (913092) | (149758) |
| Net (Loss) Income from Continuing Operations Before Income Taxes | (2119715) | 1043549 |
| Income Tax Expense | - | 91916 |
| Net (Loss) Income from Continuing Operations | (2119715) | 951633 |
| Loss from Discontinued Operations, Net of Tax | (367994) | (29280) |
| Net (Loss) Income | (2487709) | 922353 |
| Net Income Attributable to Non-controlling Interests | 22724 | 686495 |
| Net (Loss) Income Attributable to Common Stockholders | $(2510433) | $235858 |
| Net (Loss) Income Per Share - Basic and Diluted |  |  |
| Continuing Operations | $(0.00) | $0.00 |
| Discontinued Operations | $(0.00) | $(0.00) |
| Net (Loss) Income per Share | $(0.00) | $0.00 |
| Weighted Average Common Shares Outstanding - Basic and Diluted | 704043324 | 704043324 |

---

See accompanying notes to consolidated financial statements.

**LiquidValue Development Inc. and Subsidiaries**

**Consolidated Statements of Stockholders' Equity**

**for the Years Ended on December 31, 2022 and 2021**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Common Stock | Common Stock | | | | | |
|  | Shares | Par Value $0.001 |<br>Additional Paid in Capital |<br>Accumulated Deficit | Total LiquidValue<br>Development Inc. Stockholders' Equity |<br>Non-controlling Interests |<br>Total Stockholders' Equity |
| Balance at January 1, 2021 | 704043324 | $704043 | $32542720 | (8632867) | 24613896 | $1914791 | $26528687 |
| Distribution to Non-Controlling Stockholder |  | $- | $- |  |  | $(2549750) | $(2549750) |
| Net Income | - | - | - | 235858 | 235858 | 686495 | 922353 |
| Balance at December 31, 2021 | 704043324 | $704043 | $32542720 | (8397009) | 24849754 | $51536 | $24901290 |
| Net (Loss) Income | - | - | - | (2510433) | (2510433) | 22724 | (2487709) |
| Balance at December 31, 2022 | 704043324 | $704043 | $32542720 | (10907442) | 22339321 | $74260 | $22413581 |

---

See accompanying notes to consolidated financial statements.

**LiquidValue Development Inc. and Subsidiaries**

**Consolidated Statements of Cash Flows**

**For the Years Ended December 31, 2022 and 2021**

---

| | | |
|:---|:---|:---|
|  | 2022 | 2021 |
| Cash Flows from Operating Activities |  |  |
| &nbsp;&nbsp;&nbsp;Net (Loss) Income | $(2119715) | $951633 |
| &nbsp;&nbsp;&nbsp;Adjustments to Reconcile Net (Loss) Income to Net Cash (Used in) Provided by Operating Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 13643 | 2830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of Right - Of- Use Asset | 82541 | 62578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PPP Loan Forgiveness | (68502) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of Debt Discount |  | 42907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in Operating Assets and Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real Estate Development | (8766476) | 5822939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable | 37103 | 46922 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party Receivable | 26565 | (26565) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid Expenses | 144115 | (187239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Receivable | (7224) | 171531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts Payable and Accrued Expenses | (1505372) | 2181877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued Interest - Related Parties | 1029136 | 504588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Lease Liability | (89052) | (57445) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Builder Deposits | (31553) | (1230783) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash (Used in) Provided by Continuing Operating Activities | (11254791) | 8285773 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided by Discontinued Operating Activities | 1172687 | 60611 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash (Used in) Provided by Operating Activities | (10082104) | 8346384 |
| Cash Flows from Investing Activities |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of Fixed Assets | (3083) | (3973) |
| &nbsp;&nbsp;&nbsp;Purchase of Real Estate Properties | - | (421382) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used in Continuing Investing Activities | (3083) | (425355) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used in Discontinued Investing Activities | (1490054) | (24940764) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used in Investing Activities | (1493137) | (25366119) |
| Cash Flows from Financing Activities |  |  |
| &nbsp;&nbsp;&nbsp;Borrowing from PPP |  | 68502 |
| &nbsp;&nbsp;&nbsp;Repayment to Note Payable |  | (679269) |
| &nbsp;&nbsp;&nbsp;Distribution to Non-controlling Interest Shareholders |  | (2549750) |
| &nbsp;&nbsp;&nbsp;Borrowing from Notes Payable - Related Parties | 7650000 | 19531734 |
| &nbsp;&nbsp;&nbsp;Repayment to Notes Payable - Related Parties | (1000000) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided by Continuing Financing Activities | 6650000 | 16371217 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided by Discontinued Financing Activities | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided by Financing Activities | 6650000 | 16371217 |
| Net Decrease in Cash and Restricted Cash | (4925241) | (648518) |
| Cash and Restricted Cash - Beginning of Year | 7455729 | 8104247 |
| Cash and Restricted Cash - End of Year | $2530488 | $7455729 |
| Cash - Continuing Operation | 1034611 | 2857995 |
| Restricted Cash - Continuing Operation | 309219 | 4399984 |
| Cash - Discontinued Operations | $1186658 | $197750 |
| Total Cash and Restricted Cash | $2530488 | $7455729 |
| Supplementary Cash Flow Information |  |  |
| Cash Paid for Interest | $- | $10766 |
| Cash Paid for Taxes | $- | $- |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities |  |  |
| Initial Recognition of Operating Lease Right-Of-Use Asset and Liability | $- | $256928 |

---

See accompanying notes to consolidated financial statements.

**LiquidValue Development Inc. and Subsidiaries**

**Notes to Consolidated Financial Statements**

**December 31, 2022**

**1.** **NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

*Nature of Operations*

LiquidValue Development Inc. (the "Company"), formerly known as SeD Intelligent Home Inc. and Homeownusa, was incorporated in the State of Nevada on December 10, 2009. On December 29, 2017, the Company, acquired Alset EHome Inc. ("Alset EHome") by reverse merger. Alset EHome, a Delaware corporation, was formed on February 24, 2015 and named SeD Home USA, Inc. before changing its name to SeD Home, Inc. in May of 2015. On February 6, 2020, this name was changed to SeD Home & REITs Inc., on July 7, 2020 the name was changed to Alset iHome Inc. and on December 9, 2020 it was changed to Alset EHome Inc. Alset EHome is principally engaged in developing, selling, managing, and leasing residential properties in the United States in current stage and may expand from residential properties to other property types, including but not limited to commercial and retail properties. The Company is 99.99% owned by SeD Intelligent Home Inc., formerly known as SeD Home International, Inc., which is wholly-owned by Alset International Limited (formerly known as Singapore eDevelopment Limited "Alset International"), a multinational public company, listed on the Singapore Exchange Securities Trading Limited ("SGXST").

The Company's current operations concentrate around two types of projects, land development and house rental business. Both of them are included in our only reporting segment – real state. In determination of segments, the Company, together with its chief operating decision maker, who is also our CEO, considers factors that include the nature of business activities, allocation of resources and management structure.

On December 9, 2022, Alset EHome entered into Stock Purchase Agreement with Alset International Limited and Alset Inc., pursuant to which Alset EHome agreed to sell all shares of American Home REIT Inc., the company holding all of the 112 rental properties, to Alset Inc. For further details on this transaction, refer to Note 5 to Company's Financial Statements – Related Party Transactions and Note 7 – Discontinued Operations.

**Going concern**

To date, the Company has incurred operating losses since inception of $10,907,442. As a result, these conditions may raise substantial doubt regarding our ability to continue as a going concern twelve months from the date of issuance of our financial statements. The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations. The Company intends to continue to fund its business by its operations and advances from related parties as may be required. Funding the Company's operations is our first priority, before repaying related party debtors. Therefore, available cash will be used to fund the Company's operations before related party debtor repayments. At the same time management will concurrently work with the related party debtors on a plan to repay the related party loans, which are repayable on demand. The Company had obtained a letter of financial support from Alset Inc., an indirect owner of the Company. Alset Inc. committed to provide any additional funding required by the Company and would not demand repayment within the next twelve months from the date of issuance of our 2022 financial statements.

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

 

*Principles of Consolidation*

The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows:

SCHEDULE OF ACCOUNTS OF ENTITIES

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of consolidated** <br> **subsidiary** | **State or other** <br> **jurisdiction of** <br> **incorporation or** <br> **organization** | **Date of incorporation or formation** | **Attributable** <br> **interest as of**<br> **December 31,**<br> **2022** | **Attributable** <br> **interest as of**<br> **December 31,**<br> **2021** |
| Alset EHome Inc. | Delaware | February 24, 2015 | 100% | 100% |
| SeD USA, LLC | Delaware | August 20, 2014 | 100% | 100% |
| 150 Black Oak GP, Inc. | Texas | January 23, 2014 | 100% | 100% |
| SeD Development USA, Inc. | Delaware | March 13, 2014 | 100% | 100% |
| 150 CCM Black Oak Ltd. | Texas | January 23, 2014 | 100% | 100% |
| SeD Ballenger, LLC | Delaware | July 7, 2015 | 100% | 100% |
| SeD Maryland Development, LLC | Delaware | October 16, 2014 | 83.55% | 83.55% |
| SeD Development Management, LLC | Delaware | June 18, 2015 | 85% | 85% |
| SeD Builder, LLC | Delaware | October 21, 2015 | 100% | 100% |
| SeD Texas Home, LLC | Delaware | June 16, 2015 | 100% | 100% |
| SeD REIT Inc. | Maryland | August 20, 2019 | 100% | 100% |
| Alset Solar Inc. | Texas | September 21, 2020 | 80% | 80% |
| American Home REIT Inc. | Maryland | September 30, 2020 | 100% | n/a |
| AHR Texas Two, LLC | Delaware | September 28, 2021 | 100% | n/a |
| AHR Black Oak One, LLC | Delaware | September 29, 2021 | 100% | n/a |
| AHR Texas Three, LLC | Delaware | December 21, 2021 | 100% | n/a |

---

All intercompany balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company's subsidiaries, plus the minority investors' share of the net operating results and other components of equity relating to the non–controlling interests.

As of December 31, 2022 and 2021, the aggregate noncontrolling interest was $74,260 and $51,536, respectively, which are separately disclosed on the Consolidated Balance Sheets.

On December 29, 2017, the Company, SeD Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company (the "Merger Sub"), Alset EHome Inc., a Delaware corporation, and SeD Intelligent Home Inc., a Delaware corporation entered into an Acquisition Agreement and Plan of Merger (the "Agreement") pursuant to which the Merger Sub was merged with and into Alset EHome, with Alset EHome surviving as a wholly owned subsidiary of the Company. The closing of this transaction (the "Closing") also took place on December 29, 2017 (the "Closing Date"). Prior to the Closing, SeD Intelligent Home Inc. was the owner of 100% of the issued and outstanding common stock of Alset EHome and was also the owner of 99.96% of the Company's issued and outstanding common stock. The Company acquired all of the outstanding common stock of Alset EHome from SeD Intelligent Home Inc. in exchange for issuing to SeD Intelligent Home Inc. 630,000,000 shares of the Company's common stock. Accordingly, SeD Intelligent Home Inc. remains the Company's largest shareholder, and the Company is now the sole shareholder of Alset EHome. The Agreement and the transactions contemplated thereby were approved by the Board of Directors of each of the Company, the Merger Sub, SeD Intelligent Home Inc., and Alset EHome.

The Agreement is considered a business combination of companies under common control and therefore, the consolidated financial statements include the financial statements of both companies.

*Basis of Presentation*

The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").

*Use of Estimates*

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates.

When the Company purchases properties but does not receive the assessment information from the county, the Company allocates the values between land and building based on the data of similar properties. The Company makes appropriate adjustments once the assessment from the county is received. At the same time, any necessary adjustments to depreciation expense are made in the income statement. On December 31, 2022 and 2021 the Company adjusted $4,791,997 and $821,417 between building and land, respectively. During the year of 2022 and 2021, the Company adjusted depreciation expenses $197,609 and $0, respectively.

*Earnings (Loss) per Share*

Basic income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the periods ended December 31, 2022 or 2021.

*Fair Value of Financial Instruments*

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company's short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

*Cash and Cash Equivalents*

The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2022 and 2021.

*Restricted Cash*

As a condition to the loan agreement with the Manufacturers and Traders Trust Company ("M&T Bank"), the Company is required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loans. The fund is required to remain as collateral for the loan until the loan is paid off in full and the loan agreement terminated. The Company also has an escrow account with M&T Bank to deposit a portion of cash proceeds from lot sales. The fund in the escrow account is specifically used for the payment of the loan from M&T Bank. The fund is required to remain in the escrow account for the loan payment until the loan agreement terminates. As of December 31, 2022 and 2021, the total balance of these two accounts was $309,219 and $4,399,984, respectively.

*Accounts Receivable*

Accounts receivable include all receivables from buyers, contractors and all other parties. The Company records an allowance for doubtful accounts based on a review of the outstanding receivables, historical collection information and economic conditions. No allowance was necessary at December 31, 2022 and 2021.

 

*Property and Equipment and Depreciation*

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives, which are 3 years.

*Real Estate Assets*

● *Land Development Assets* 

Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board ("FASB") ASC 805, "Business Combinations," which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold.

In addition to our annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred.

The Company did not record impairment on any of its projects during the year ended on December 31, 2022, nor for the year ended December 31, 2021.

● *Investments in Single-Family Residential Properties* 

The Company accounts for its investments in single-family residential properties as asset acquisitions and records these acquisitions at their purchase price. The purchase price is allocated between land, building, improvements and existing leases based upon their relative fair values at the date of acquisition. The purchase price for purposes of this allocation is inclusive of acquisition costs which typically include legal fees, title fees, property inspection and valuation fees, as well as other closing costs.

Building improvements and buildings are depreciated over estimated useful lives of approximately 10 to 27.5 years, respectively, using the straight-line method.

The Company assesses its investments in single-family residential properties for impairment whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset's carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company did not recognize any impairment losses during the years ended on December 31, 2022 and 2021.

*Revenue Recognition*

● *Land Development Revenue Recognition* 

ASC 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The Company adopted this new standard on January 1, 2018 under the modified retrospective method. The adoption of this new standard did not have a material effect on our financial statements.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. A detailed breakdown of the five-step process for the revenue recognition of our Ballenger project, which earned majority of the revenue of the Company in 2021, is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Identify the contract with a customer.

The Company has signed agreements with the builders for developing the raw land to ready to build lots. The contract has agreed upon prices, timelines, and specifications for what is to be provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Identify the performance obligations in the contract.

Performance obligations of the company include delivering developed lots to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects all lots prior to accepting title to ensure all specifications are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Determine the transaction price.

The transaction price is specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Allocate the transaction price to performance obligations in the contract.

Each lot is considered to be a separate performance obligation, for which the specified price in the contract is allocated to.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) Recognize revenue when (or as) the entity satisfies a performance obligation.

The builders do the inspections to make sure all conditions/requirements are met before taking title of lots. The Company recognizes revenue when title is transferred. The Company does not have further performance obligations once title is transferred.

● *Rental Revenue Recognition* 

The Company leases real estate properties to its tenants under leases that are predominately classified as operating leases, in accordance with ASC 842, Leases ("ASC 842"). Real estate rental revenue is comprised of minimum base rent and revenue from the collection of lease termination fees.

Rent from tenants is recorded in accordance with the terms of each lease agreement on a straight-line basis over the initial term of the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Generally, at the end of the lease term, the Company provides the tenant with a one year renewal option, including mostly the same terms and conditions provided under the initial lease term, subject to rent increases.

The Company defers rental revenue related to lease payments received from tenants in advance of their due dates. These amounts are presented within deferred revenues and other payables on the Company's consolidated balance sheets.

Rental revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates that it is not probable that we will recover substantially all of the receivable, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis (as applicable) or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. For the year ended December 31, 2022 and 2021, the Company did not recognize any deferred revenue and collected all rents due.

*<u>Sale of the Front Foot Benefit Assessments</u>*

We have established a front foot benefit ("FFB") assessment on all of the NVR lots. This is a 30-year annual assessment allowed in Frederick County which requires homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments become effective as homes are settled, at which time we can sell the collection rights to investors who will pay an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices range from $3,000 to $4,500 per home depending the type of the home. Our total revenue from the front foot benefit assessment is approximately $1 million. To recognize revenue of FFB assessment, both our and NVR's performance obligation have to be satisfied. Our performance obligation is completed once we complete the construction of water and sewer facility and close the lot sales with NVR, which inspects these water and sewer facility prior to close lot sales to ensure all specifications are met. NVR's performance obligation is to sell homes they build to homeowners. Our FFB revenue is recognized on quarterly basis after NVR closes sales of homes to homeowners. The agreement with these FFB investors is not subject to amendment by regulatory agencies and thus our revenue from FFB assessment is not either. During the years ended on December 31, 2022 and 2021, we recognized revenue $126,737 and $289,375from FFB assessment, respectively.

*Contract Assets and Contract Liabilities*

Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. We disclose receivables from contracts with customers separately on the balance sheets.

Cost of Revenue

● *Cost of Real Estate Sale* 

All of the costs of real estate sales are from our land development business. Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project.

If allocation of development costs based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot comparing to the total size of all lots in the project.

● *Cost of Rental Revenue* 

Cost of rental revenue consists primarily of the costs associated with management and leasing fees to our management company, repairs and maintenance, depreciation and other related administrative costs. Utility expenses are paid directly by tenants.

*Income Taxes*

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The differences relate primarily to net operating loss carryforward from date of acquisition and to the use of the cash basis of accounting for income tax purposes. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits.

The Company's tax returns for 2021, 2020 and 2019 remain open to examination.

*Recent Accounting Pronouncements*

In March 2020, the FASB issued ASU 2020-04, *Reference Rate Reform (Topic 848): Facilitation of Reference Rate Reform on Financial Reporting*. The amendments in this Update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company's line of credit agreement provides procedures for determining a replacement or alternative rate in the event that LIBOR is unavailable. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company doesn't believe that ASU 2020-04 will have significant impact on its future consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, "Revenue from Contracts with Customers". At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value. The amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company plans to adopt these requirements prospectively, effective on the first day of year 2023.

**2. CONCENTRATION OF CREDIT RISK**

The Company maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. At times, these balances may exceed the federal insurance limits. On December 31, 2022 and 2021, uninsured cash balances were $1,354,302 and $6,137,775, respectively.

The Company had only two customers in the years ended December 31, 2022 and 2021 for its Ballenger project, NVR Inc. ("NVR"), a NYSE publicly listed US homebuilding and mortgage company, who is the only purchaser of 479 residential lots and Western Utility, the purchaser of the FFBs of Ballenger project. During the year ended December 31, 2022, the Company earned revenues from property sales from these two customers representing approximately 81% and 19%, respectively. During the year ended December 31, 2021, the Company earned revenues from property sales from these two customers representing approximately 97% and 3%, respectively.

**3. BUILDER DEPOSITS**

In November 2015, SeD Maryland Development, LLC ("Maryland") entered into lot purchase agreements with NVR, Inc. ("NVR") relating to the sale of single-family home and townhome lots to NVR in the Ballenger Run Project. The purchase agreements were amended two times thereafter. Based on the agreements, NVR is entitled to purchase 479 lots for a price of approximately $64 million, which escalates 3% annually after June 1, 2018.

As part of the agreements, NVR was required to give a deposit in the amount of $5,600,000. Upon the sale of lots to NVR, 9.9% of the purchase price is taken from the deposit. A violation of the agreements by NVR would cause NVR to forfeit the deposit. On January 3, 2019 and April 28, 2020, NVR gave SeD Maryland two more deposits in the amounts of $100,000 and $220,000, respectively, based on the 3rd Amendment to the Lot Purchase Agreement. On December 31, 2022 and 2021, there was $0 and $31,553 outstanding, respectively.

**4. NOTES PAYABLE**

*M&T Bank Loan*

On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company ("M&T Bank") in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. The line of credit bears interest rate on LIBOR plus 375 basis points. SeD Maryland Development LLC was also provided with a Letter of Credit ("L/C") Facility in an aggregate amount of up to $900,000. The L/C commission will be 1.5% per annum on the face amount of the L/C. Other standard lender fees will apply in the event L/C is drawn down. The loan is a revolving line of credit. The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Loan Agreement is secured by $2,600,000 collateral fund and a Deed of Trust issued to the Lender on the property owned by SeD Maryland. As of December 31, 2022 and 2021, the outstanding balance of the revolving loan was $0. On March 15, 2022 approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit.

On June 18, 2020, Alset EHome Inc. entered into a Loan Agreement with M&T Bank. Pursuant to the Loan Agreement, M&T Bank provided a non-revolving loan to Alset EHome Inc. in an aggregate amount of up to $2,990,000. The line of credit bears interest rate on LIBOR plus 375 basis points. Repayment of this loan is secured by a Deed of Trust issued to M&T Bank on the property owned by certain subsidiaries of Alset EHome Inc. The maturity date of this Loan is July 1, 2022. The Company together with one of its subsidiaries, SeD Maryland Development LLC, are both the guarantors of this Loan. The loan in the amount of $664,810, together with all accrued interests of $25,225, was paid off on May 28, 2021. The loan was closed in June 2021. Additionally, the debt discount of $42,907 was fully amortized during the first six months of 2021.

*Paycheck Protection Program Loan*

On February 11, 2021, the Company entered into a five year note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program ("PPP Term Note") under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first sixteen months of principal and interest deferred or until we apply for the loan forgiveness. The PPP Term Note may be accelerated upon the occurrence of an event of default.

The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. The Company may apply to M&T Bank for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to at least 60% of payroll costs and other eligible payments incurred by the Company, calculated in accordance with the terms of the CARES Act. In April, 2022 the Company received confirmation that the loan was fully forgiven.

**5. RELATED PARTY TRANSACTIONS**

*Loan from SeD Home Limited*

Alset EHome receives advances from SeD Home Limited (an affiliate of Alset International), to fund development and operation costs. The advances bear interest at 10% and are payable on demand. As of December 31, 2022 and 2021, Alset EHome had outstanding principal due of $0 and $0, respectively and accrued interest of $228,557 and $228,557, respectively.

*Loan to/from SeD Intelligent Home Inc. (f.k.a. SeD Home International)*

The Company receives advances from or loans funds to SeD Intelligent Home, the owner of 99.99% of the Company. The advances or the loans bore interest of 18% until August 30, 2017 when the interest rate was adjusted to 5% and have no set repayment terms. On December 31, 2022, the Company owed $26,443,055 of advance principal and $1,154,462 of accrued interest. On December 31, 2021, the Company owed $19,891,734 of advance principal and $144,588 of accrued interest.

 

*Management Fees*

MacKenzie Equity Partners, LLC, an entity owned by a Charles MacKenzie, a Director of the Company, has had a consulting agreement with a majority-owned subsidiary of the Company since 2015. Per the terms of the agreement, as amended on January 1, 2018, the Company's subsidiary paid a monthly fee of $20,000 for consulting services. Pursuant to an agreement entered into in June of 2022, the Company's subsidiary has paid $25,000 per month for consulting services, effective as of January, 2022.

In addition, MacKenzie Equity Partners will be paid certain bonuses, including (i) a sum of $50,000 on June 30, 2022; (ii) a sum of $50,000 upon the successful financing of 100 homes owned by American Housing REIT Inc. with an entity not affiliated with SeD Development Management LLC (a subsidiary of the Company); and (iii) a sum of $50,000 upon the successful leasing of 30 homes in the Alset of Black Oak development.

The Company incurred expenses of $350,000 and $360,000 in the years ended December 31, 2022 and 2021, respectively, which were capitalized as part of Real Estate on the balance sheet as the services relate to property and project management. In 2021, MacKenzie Equity Partners was paid a bonus payment of $120,000. In June, 2022, MacKenzie Equity Partners accrued an additional $50,000 bonus payment (as described above). On December 31, 2022 and 2021, the Company owed this related party $25,000 and $80,000, respectively.

On December 29, 2020, the Company entered into a Management Services Agreement (the "Management Services Agreement") with Alset International, pursuant to which the Company paid Alset International a one-time payment of $360,000 for the services of certain Alset International staff members the Company received in 2020, and agreed to pay Alset International $30,000 per month for services to be provided in 2021. This Management Services Agreement had a term that ended December 31, 2021. Alset International provided the Company with services related to the development of the Black Oak and Ballenger Run real estate projects near Houston, Texas and in Frederick, Maryland, respectively, and the potential development of future real estate projects. During the years ended December 31, 2022 and 2021 the Company incurred expense of $0 and $360,000, respectively, and owed this related party $720,000 as of December 31, 2022 and 2021. This balance due is included in the loan amount from SeD Intelligent Home Inc., which in turn owes the funds to Alset International.

*Advance to Alset Inc.*

The Company pays some operating expenses for Alset Inc., a related party under the common control of Mr. Chan Heng Fai, the CEO of the Company. The advances are interest free with no set repayment terms. On December 31, 2022 and December 31, 2021, the balance of these advances was $0 and $26,566, respectively.

**6. SHAREHOLDERS' EQUITY**

*Cash Dividend Distributions*

During the year ended December 31, 2021, the Board of Managers of SeD Maryland Development LLC (the 83.55% owned subsidiary of the Company which owns the Company's Ballenger Project) authorized the payment of distributions to its members in the amount of $15,500,000. Accordingly, the minority member of SeD Maryland Development LLC received a distribution in the amount of $2,549,750, with the remainder being distributed to a subsidiary of the Company, which was eliminated upon consolidation.

The Company did not authorize any distribution during the year ended December 31, 2022.

**7. DISCONTINUED OPERATIONS**

On December 9, 2022 Alset EHome Inc. (Alset EHome), a subsidiary of the Company, entered into stock purchase agreement with Alset International Limited ("Alset International") and Alset Inc., pursuant to which Alset Inc. agreed to purchase all of the outstanding shares of American Home REIT Inc., a wholly owned subsidiary of Alset EHome. American Home REIT Inc. is the owner of 112 rental homes. Alset EHome is a majority-owned, indirect subsidiary of Alset International, while Alset International is a majority-owned, indirect subsidiary of Alset Inc. The purchase price of the transaction was established at $26,250,933. Pursuant to the stock purchase agreement the purchase price should be satisfied by (i) a cash payment from Alset Inc. to Alset EHome of $1,000,000 in immediate available funds; (ii) the offset of amount owned by Alset International to Alset Inc. in the amount of $13,900,000, and simultaneously Alset International will offset the same amount owed by Alset EHome to Alset International in an the same amount; and (iii) the issuance of the Promissory Note by Alset Inc. to Alset EHome in the amount of $11,350,933. The closing of this sale is subject to the approval of shareholders of Alset International.

Under ASU 2014-08, a disposal transaction meets the definition of a discontinued operation if all of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;1. The
 disposal group constitutes a component of an entity or a group of components of an entity.

2. The
 component of an entity (or group of components of an entity) meets the held-for-sale classification criteria, is disposed of by sale,
 or is disposed of other than by sale (e.g., "by abandonment, in an exchange measured based on the recorded amount of the nonmonetary
 asset relinquished, or in a distribution to owners in a spinoff").

3. The
 disposal of a component of an entity (or group of components of an entity) "represents a strategic shift that has (or will
 have) a major effect on an entity's operations and financial results".

American Home REIT Inc., is the owner of all rental properties of the Company's rental business. The transaction described above is a disposal by sale and has a major effect on our financial results. Since it meets all of the test criteria set forth above, we have treated this disposal transaction as a discontinued operations in our financial statements.

The closing of this transaction was completed on January 13, 2023.

The composition of assets and liabilities included in discontinued operations are as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

---

| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
|  | **($)** | **($)** |
| **Assets:** |  |  |
| **Real Estate** |  |  |
| **Land** | $4908590 | $9470950 |
| **Building and Improvements** | 21933889 | 15469814 |
|  | 26842479 | 24940764 |
| **Less: Accumulated Depreciation** | (973257) | (120511) |
| **Total Real Estate** | 25869222 | 24820253 |
| **Cash** | 1186658 | 197750 |
| **Accounts Receivable** | 34744 | 10200 |
| **Related Party Receivable** | 4800 |  |
| **Prepaid Expenses** | 4413 | 107041 |
| **Total Assets** | $**27099037** | $**25135244** |
| **Liabilities:** |  |  |
| **Accounts Payable and Accrued Expenses** | $1112932 | $86621 |
| **Total Liabilities** | $**1112932** | $**86621** |

---

The aggregate financial results of discontinued operations were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| Rental Revenue | $1810011 | $327296 |
| Expenses |  |  |
| General and Administrative | 237665 | 64669 |
| Cost of Revenues | 1087471 | 171396 |
| Depreciation Expense | 852746 | 120511 |
| Total Operating Expenses | 2177882 | 356576 |
| **Loss From Operations** | **(367871)** | **(29280)** |
| Bank Charges | 123 | - |
| **Total Other Expense** | 123 |  |
| **Loss from Discontinued Operations** | $**(367994)** | $**(29280)** |

---

The cash flows attributable to the discontinued operations are as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31, 2022** | **Year Ended<br> December 31, 2021** |
| Operating | $1172688 | $60611 |
| Investing | (1490054) | (24940764) |
| Financing | - | - |
| Net Change in Cash | $(317366) | $(24880153) |

---

**8. COMMITMENTS AND CONTINGENCIES**

*Leases*

The Company leases office space in Texas and Maryland. The lease for the Company's Texas office is currently on a month-to-month basis, while lease of our Maryland expires on March 31, 2024. The monthly rental payments ranged between $2,335 and $8,143, respectively. Rent expense was $116,869 and $116,379 for the years ended December 31, 2022 and 2021, respectively. The below table summarizes future payments due under these leases as of December 31, 2022.

The balance of the operating lease right-of-use asset and operating lease liability as of December 31, 2022 was $108,950 and $110,431, respectively.

Supplemental Cash Flow and Other Information Related to Operating Leases are as follows:

SCHEDULE OF SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO OPERATING LEASES

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31, 2022** | **Year Ended<br> December 31, 2022** |
| Weighted Average Remaining Operating Lease Term (in years) |  | 1.25 |

---

The below table summarizes future payments due under these leases as of December 31, 2022.

For the Years Ended December 31:

SCHEDULE OF FUTURE PAYMENTS DUE UNDER LEASES

---

| | |
|:---|:---|
| 2023 | $95104 |
| 2024 | 24430 |
| Total Minimum Lease Payments | $119534 |
| Less: Effect of Discounting | (9102) |
| Present Value of Future Minimum Lease Payments | 110431 |
| Less: Current Obligation under Lease | 88032 |
| Long-term Lease Obligation | $22399 |

---

*Lot Sale Agreements*

On November 23, 2015, SeD Maryland Development LLC completed the $15,700,000 acquisition of Ballenger Run, a 197-acre land sub-division development located in Frederick County, Maryland. Previously, on May 28, 2014, the RBG Family, LLC entered into a $15,000,000 assignable real estate sales contract with NVR, by which RBG Family, LLC would facilitate the sale of the 197 acres of Ballenger Run to NVR. On December 10, 2015, NVR assigned this contract to SeD Maryland Development, LLC through execution of an assignment and assumption agreement and entered into a series of lot purchase agreements by which NVR would purchase 443 subdivided residential lots from SeD Maryland Development, LLC. During years ended December 31, 2022 and 2021, NVR has purchased 3 and 88 lots, respectively.

Certain arrangements for the sale of buildable lots to NVR require the Company to credit NVR with an amount equal to one year of the FFB assessment. Under ASC 606, the credits to NVR are not in exchange for a distinct good or service and accordingly, the amount of the credit was recognized as the reduction of revenue. As of December 31, 2022 and 2021, the accrued balance due to NVR was $189,475 and $188,125, respectively.

*Security Deposits*

Our rental-home lease agreements require tenants to provide a one-month security deposits. The property management company collects all security deposits and maintains them in a trust account. The Company also has obligation to refund these deposits to the renters at the time of lease termination. As of December 31, 2022, the security deposits held in the trust account were $271,480. Security deposits are part of rental business which is a discontinued operation as of December 31, 2022.

 

*Sale of lots*

On October 28, 2022, 150 CCM Black Oak Ltd. (the "Seller"), entered into a Contract for Purchase and Sale and Escrow Instructions (the "Agreement") with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the "Buyer"). Pursuant to the terms of the Agreement, the Seller agreed to sell approximately 242 single-family detached residential lots in a residential community in the city of Magnolia, Texas, known as the "Lakes at Black Oak." The parties agreed that the lots will be sold at a range of prices, and the Seller will also be entitled to receive a community enhancement fee for each lot sold. The Buyer was entitled to a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, the Buyer was entitled to decline to proceed with the closing of these transactions.

The aggregate purchase price and community enhancement fees were originally anticipated to be $12,881,000, with such purchase price to be adjusted accordingly, if the total number of lots increased or decreased prior to the closing of the transactions contemplated by the Agreement.

On November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement (the "Amendment"). Pursuant to the Amendment, the Buyer will now proceed with the purchase of approximately 131 single-family detached residential lots, instead of 242 lots, and the anticipated purchase price has been reduced.

The closing of the transactions described in the Agreement depends on the satisfaction of certain conditions set forth therein. There can be no assurance that such closings will be completed on the terms outlined herein or at all. The estimated closing date for such transaction is the second quarter of 2023.

The Seller shall be required to develop and improve the property at the Seller's cost pursuant to certain development plans and government regulations prior to the closings described above.

**9. INCOME TAXES**

The components of income tax expense and the effective tax rates for the years ended December 31, 2022 and 2021 are as follows:

SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| Current: |  |  |
| Federal | $- | $45736 |
| State | - | 46180 |
| Total Current |  | 91916 |
| Deferred: |  |  |
| Federal | (498408) | 65055 |
| State | (145288) | 27856 |
| Total Deferred | (643697) | 92911 |
| Valuation Allowance | 643697 | (92911) |
| Total Income Tax Expense | $- | $91916 |
| Pre-tax Income (Loss) from Continuing Operations | (2119715) | 1043549 |
| Pre-tax Income (Loss) from Discontinuing Operations | (367994) | (29280) |
| Pre-tax Income (Loss) | $(2487709) | $1014269 |
| Effective Income Tax Rate | 0.0% | 9.1% |

---

A reconciliation of our income tax expense at federal statutory income tax rate of 21.0% to our income tax expense at the effective tax rate is as follows:

SCHEDULE OF RECONCILIATION OF INCOME TAX EXPENSE

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| Tax at the Statutory Federal Rate | 21.0% | 21.0% |
| State Income Taxes, Net of Federal Income Taxes | 0.0% | 3.6% |
| Intercompany Management & Oversight Fees | 0.0% | 9.6% |
| Capitalized Construction Costs | 1.0% | -28.8% |
| Minority Interest in Partnerships | 0.2% | -7.2% |
| Deferred Finance Cost | -8.1% | 23.5% |
| Miscellaneous Permanent Items | 4.4% | -% |
| Valuation Allowance | -18.6% | -12.6% |
| Effective Income Tax Rate | 0.0% | 9.1% |

---

Deferred tax assets (liabilities) consist of the following at December 31, 2022 and 2021:

SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES)

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| Interest Income | $(6304175) | $(5660333) |
| Interest Expense | 5802873 | 5100076 |
| Depreciation and Amortization | (140886) | (10434) |
| Impairment | 2253228 | 2253228 |
| Accrued Expense | 8895 | 60662 |
| Partnership Gain (Loss) | 13175 | 13175 |
| Others | 83311 | 31173 |
| Net Operating Loss | 714822 | - |
| Total Deferred Tax Asset before Valuation Allowance | 2431244 | 1787547 |
| Valuation Allowance | (2431244) | (1787547) |
| Net Deferred Tax Asset | $- | $- |

---

As of December 31, 2022, the Company has Federal and Maryland State net operating loss carry-forwards of approximately $2,777,000 and $2,020,000, respectively. The full utilization of the deferred tax assets in the future is dependent upon the Company's ability to generate taxable income. Accordingly, a valuation allowance of an equal amount has been established. During the year ended December 31, 2022, the valuation allowance decreased by $643,697.

As of December 31, 2022, total tax receivable is $143,574, including federal income tax receivable $111,351, and Maryland state income tax receivable $32,223. As of December 31, 2021, total tax receivable is $151,211, including federal income tax receivable $77,390, and Maryland state income tax receivable $73,821.

We are subject to U.S. federal income tax as well as income tax of certain state jurisdictions. We have substantially concluded all U.S. federal income tax and state tax matters through 2018. However, our federal tax returns for the years 2019 through 2021 remain open to examination. State tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Consolidated Financial Statements.

**10. SUBSEQUENT EVENTS**

On December 9, 2022, Alset EHome Inc., a subsidiary of the Company, entered into an agreement with Alset International Limited and Alset Inc. pursuant to which Alset EHome Inc. agreed to sell its subsidiary American Home REIT Inc., which owns 112 single-family rental homes, to Alset Inc. The closing of the transaction contemplated by this agreement was completed on January 13, 2023.

**Recent Agreements to Sell Additional Lots**

**Agreement to Sell 110 Lots**

On March 16, 2023, the Seller entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") with Rausch Coleman Homes Houston, LLC, a Texas limited liability company ("Rausch Coleman"). Pursuant to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots which comprise a section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $6,586,250.

The closing of the sale of these 110 lots depends on the satisfaction of certain conditions set forth in the Purchase and Sale Agreement. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Commencing on March 16, 2023, Rausch Coleman has a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Rausch Coleman may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Agreement to Sell 189 Lots**

On March 17, 2023, the Seller entered into a Contract of Sale (the "Contract of Sale") with Davidson Homes, LLC, an Alabama limited liability company ("Davidson Homes"). Pursuant to the terms of the Contract of Sale, the Seller has agreed to sell approximately 189 single-family detached residential lots comprising an additional section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $10,022,500.

The closing of the transactions described in the Contract of Sale depends on the satisfaction of certain conditions set forth therein. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Davidson Homes has agreed to purchase the lots in stages, comprising an initial closing of 94 lots, the remaining lots to be purchase on or before December 29, 2023. Commencing on March 17, 2023, Davidson Homes shall have a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Davidson Homes may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

Not Applicable.

**Item 9A. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

In connection with the preparation of our Report on Form 10-K, an evaluation was carried out by management, with the participation of our Chief Executive Officers and Chief Financial Officers, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(b), 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act) as of December 31, 2022. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to management, including the Chief Executive Officers and Chief Financial Officers, to allow timely decisions regarding required disclosure.

During evaluation of disclosure controls and procedures as of December 31, 2022 conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were ineffective for those reasons set forth below.

**Management's Annual Report on Internal Control over Financial Reporting**

Management is responsible for the preparation and fair presentation of the financial statements included in this annual report. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and reflect management's judgment and estimates concerning effects of events and transactions that are accounted for or disclosed.

Management is also responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting includes those policies and procedures that pertain to our ability to record, process, summarize and report reliable data. Management recognizes that there are inherent limitations in the effectiveness of any internal control over financial reporting, including the possibility of human error and the circumvention or overriding of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

In order to ensure that our internal control over financial reporting is effective, management regularly assesses controls and did so most recently for its financial reporting as of December 31, 2022. This assessment was based on criteria for effective internal control over financial reporting described in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. In connection with management's evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2022, management determined that the Company did not maintain effective controls over financial reporting due to limited staff. This limited number of staff prevents us from segregating duties within our internal control system. Management determined that the ineffective controls over financial reporting constitute a material weakness.

This annual report filed on Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

**Changes in Internal Control over Financial Reporting**

We continue taking steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this Annual Report on Form 10-K, we have not been able to completely remediate the material weaknesses identified above. To remediate such weaknesses, we plan to appoint additional qualified personnel with financial accounting, GAAP, and SEC experience.

**Item 9B. Other Information.**

**Recent Agreements to Sell Additional Lots**

**Agreement to Sell 110 Lots**

On March 16, 2023, our subsidiary 150 CCM Black Oak Ltd. (the "Seller") entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") with Rausch Coleman Homes Houston, LLC, a Texas limited liability company ("Rausch Coleman"). Pursuant to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots which comprise a section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $6,586,250.

The closing of the sale of these 110 lots depends on the satisfaction of certain conditions set forth in the Purchase and Sale Agreement. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Commencing on March 16, 2023, Rausch Coleman has a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Rausch Coleman may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Agreement to Sell 189 Lots**

On March 17, 2023, the Seller entered into a Contract of Sale (the "Contract of Sale") with Davidson Homes, LLC, an Alabama limited liability company ("Davidson Homes"). Pursuant to the terms of the Contract of Sale, the Seller has agreed to sell approximately 189 single-family detached residential lots comprising an additional section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $10,022,500.

The closing of the transactions described in the Contract of Sale depends on the satisfaction of certain conditions set forth therein. There can be no assurance that such closings will be completed on the terms outlined herein or at all. Davidson Homes has agreed to purchase the lots in stages, comprising an initial closing of 94 lots, the remaining lots to be purchase on or before December 29, 2023. Commencing on March 17, 2023, Davidson Homes shall have a thirty (30) day inspection period in which to inspect the properties and determine their suitability; during such inspection period, Davidson Homes may decline to proceed with the closing of these transactions.

The Seller shall be required to complete certain improvements at the property at the Seller's cost prior to the closing.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.**

Not Applicable.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance.**

**Identification of directors and executive officers**

The name, age and position of our officers and directors are set forth below:

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
| Fai H. Chan | 78 | Co-Chief Executive Officer and Chairman of the Board of Directors |
| Moe T. Chan | 44 | Co-Chief Executive Officer and Member of the Board of Directors |
| Charles MacKenzie | 52 | Member of the Board of Directors |
| Rongguo (Ronald) Wei | 51 | Co-Chief Financial Officer |
| Alan W. L. Lui | 52 | Co-Chief Financial Officer |

---

The mailing address for each of the officers and directors named above is c/o of the Company at: 4800 Montgomery Lane, Suite 210, Bethesda, MD, 20814.

**Business Experience**

Fai H. Chan. Mr. Chan has served as a member of our Board of Directors since January 2017 and has served as Co-Chief Executive Officer of the Company since December 2017. Mr. Chan is an expert in banking and finance, with 45 years of experience in these industries. He has also restructured numerous companies in various industries and countries during the past 40 years. Mr. Chan has served as the Chief Executive Officer of Alset International Limited, a diversified holding company listed on the Catalist of the Singapore Exchange Securities Trading Limited, since April 2014, and has served as a director of that company since May of 2013. Since March, 2018, Mr. Chan has served as a Chairman of the Board and Chief Executive Officer of Alset Inc., a Nasdaq listed company. Mr. Chan has served as the Chairman and Chief Executive Officer of Alset Capital Acquisition Corp., a Nasdaq listed company, since October 2021. Additionally, Mr. Chan has served as a member of the Board of Directors of Hapi Metaverse Inc. (formerly known as GigWorld Inc.), a technology company since October of 2014, as Executive Chairman since December 2017 and served as the Acting Chief Executive Officer of Hapi Metaverse Inc. from August 2018 until September 2019, having previously served as Chief Executive Officer from December of 2014 until June of 2017. He has served as an Executive Chairman of the Board of Directors of DSS, Inc., an NYSE listed company, since January 2017 and as Chairman of the Board since March of 2019. Mr. Chan has also served as a non-executive director of Holista CollTech Ltd., an ASX listed company, since July 2013. Mr. Chan has served as a director of OptimumBank Holdings, Inc. and Optimum Bank since June 2018. Mr. Chan has served as a member of the Board of Directors of Sharing Services Global Corporation since April of 2020.

Mr. Chan's previous experiences include serving as Managing Chairman of Zensun Enterprises Limited (formerly known as ZH International Holdings Limited and Heng Fai Enterprises Limited), an investment holding company listed on the HKSE, from 1992 to 2015. Mr. Chan was formerly the Managing Director of SingHaiyi Group Ltd., a property development, investment and management company listed on the Singapore Exchange Mainboard, from March 2003 to September 2013, and the Executive Chairman of China Gas Holdings Limited, a Hong Kong listed investor and operator of city gas pipeline infrastructure in China from 1997 to 2002. Mr. Chan served on the Board of RSI International Systems, Inc., the developer of RoomKeyPMS, a web-based property management system, from June 2014 to February 2019.

Mr. Chan has also served as a director of Global Medical REIT Inc., a healthcare facility real estate company, from December 2013 to July 2015. He was a director of American Housing REIT Inc. from October of 2013 to July of 2015. He served as a director of Skywest Ltd., a public Australian airline company from 2005 to 2006. Mr. Chan was a director of Global Med Technologies, Inc., a medical company engaged in the design, development, marketing and support information for management software products for healthcare-related facilities, from May 1998 until December 2005.

Director Qualifications of Fai H. Chan:

The board of directors appointed Mr. Chan in recognition of his abilities to assist the Company in expanding its business and the contributions he can make to the Company's strategic direction.

Moe T. Chan. Moe Chan was appointed Co-Chief Executive Officer of our Company and a member of our Board of Directors in December 2017. Moe Chan also serves as the Co-Chief Executive Officer and Executive Director of Alset International. Moe Chan is responsible for Alset International's international property development business (including serving as Co-Chief Executive Officer and a member of the Board of Alset EHome). Moe Chan has served as a director of DSS, Inc., a NYSE listed company, since September 2020. From April 2014 to June 2015 Moe Chan was the Chief Operating Officer of HKSE listed ZH International Holdings Limited (formerly known as Heng Fai Enterprises Limited) and was responsible for that company's global business operations consisting of REIT ownership and management, property development, hotels and hospitality, as well as property and securities investment and trading. Prior to that, he was an executive director (from March 2006 to February 2014) and the Chief of Project Development (from April 2013 to February 2014) of Singapore Exchange Mainboard listed SingHaiyi Group Ltd, overseeing its property development projects. He was also a non-executive director of the Toronto Stock Exchange-listed RSI International Systems Inc., a hotel software company, from July 2007 to August 2016.

Moe T. Chan has a diverse background and experience in the fields of property, hospitality, investment, technology and consumer finance. He holds a Master's Degree in Business Administration with honors from the University of Western Ontario, a Master's Degree in Electro-Mechanical Engineering with honors and a Bachelor's Degree in Applied Science with honors from the University of British Columbia. Moe Chan is the son of Fai H. Chan.

Director Qualifications of Moe T. Chan:

The board of directors appointed Moe Chan in recognition of his extensive knowledge of real estate and ability to assist the Company in expanding its business.

Charles MacKenzie. Mr. MacKenzie has served as a member of the Company's Board of Directors since December 2017 and serves as the Chief Development Officer for SeD Development Management, a subsidiary of Alset EHome, since July of 2015. Mr. MacKenzie also has served as a member of the Board of Directors of Alset EHome since October of 2017 and as Chief Executive Officer – United States since April 2020. In December 2019 Mr. MacKenzie was appointed the Chief Development Officer of Alset Inc., a Nasdaq listed company. He was previously the Chief Development Officer for Inter- American Development (IAD), a subsidiary of Heng Fai Enterprises (now known as Zensun Enterprises Limited) from April of 2014 to June of 2015. Mr. MacKenzie was the Founder and President of MacKenzie Equity Partners, specializing in mixed-use real estate investments. Mr. MacKenzie focuses on acquisitions and development of residential and mixed-use projects within the United States. Mr. MacKenzie specializes in site selection, contract negotiations, marketing and feasibility analysis, construction and management oversight, building design and investor relations. Mr. MacKenzie has developed over 1,300 residential units inclusive of single-family homes, multi-family, and senior living dwellings totaling more than $110M and over 650,000 square feet of commercial valued at over $100M. Mr. MacKenzie received a BA and graduate degree from St. Lawrence University where he served on the Board of Trustees from 2003-2007.

Director Qualifications of Charles MacKenzie:

The board of directors appointed Charles MacKenzie in recognition of his extensive knowledge of real estate and ability to assist the Company in expanding its business.

Rongguo (Ronald) Wei. Mr. Wei has served as the Company's Chief Financial Officer since March 2017. Mr. Wei is a finance professional with more than 15 years of experience working in public and private corporations in the United States. Mr. Wei has also served as Co-Chief Financial Officer of Alset Inc., a Nasdaq listed company, since March 2018 and has served as Chief Financial Officer of Alset Capital Acquisition Corp., a Nasdaq listed company, since October of 2021. As the Chief Financial Officer of our subsidiary SeD Development Management LLC, Mr. Wei is responsible for oversight of all finance, accounting, reporting, and taxation activities for that company. Prior to joining SeD Development Management LLC in August of 2016, Mr. Wei worked for several different US multinational and private companies including serving as Controller at American Silk Mill, LLC, a textile manufacturing and distribution company, from August of 2014 to July of 2016, serving as a Senior Financial Analyst at Air Products & Chemicals, Inc., a manufacturing company, from January of 2013 to June of 2014 and serving as a Financial/Accounting Analyst at First Quality Enterprise, Inc., a personal products company, from 2011 to 2012. Mr. Wei also worked as an equity analyst in Hong Yuan Securities, an investment bank, in Beijing, China, concentrating on industrial and public company research and analysis. Mr. Wei is a certified public accountant and received his Master of Business Administration from the University of Maryland and a Master of Business Taxation from the University of Minnesota. Mr. Wei also holds a Master in Business degree from Tsinghua University and a Bachelor degree from Beihang University. Mr. Wei served as a member of the Board Directors of Amarantus Bioscience Holdings, Inc., a biotech company, from February 2017 until May 2017, and served as Chief Financial Officer of such company from February, 2017 to November, 2017.

Alan W. L. Lui. Mr. Lui has served as the Company's Co-Chief Financial Officer since December 2017 and has served as the Co-Chief Financial Officer of Alset EHome since October of 2017. Mr. Lui has served as Chief Financial Officer of Hapi Metaverse Inc. (formerly known as GigWorld Inc.), a technology company since May 2016 and has served as a director of one of Hapi Metaverse's subsidiaries since July of 2016. Mr. Lui has been Chief Financial Officer of Alset International, the Company's majority shareholder since November 2016 and served as its Acting Chief Financial Officer since June 2016. Mr. Lui has served as an Executive Director of Alset International since July 2020. Since October of 2016, Mr. Lui has also served as a director of BMI Capital Partners International Ltd, a Hong Kong investment consulting company. He has also served as a director of LiquidValue Asset Management Pte Limited (formerly known as Hengfai Asset Management Pte. Ltd.), a Singapore fund management company, since April, 2018. Mr. Lui has also served a Co-Chief Financial Officer of Alset Inc., a Nasdaq listed company, since March, 2018. From June of 1997 through March of 2016, Mr. Lui served in various executive roles at ZH International Holdings Ltd. (a Hong Kong-listed company formerly known as Heng Fai Enterprises Ltd), including as Financial Controller. Mr. Lui oversaw the financial and management reporting and focusing on its financing operations, treasury investment and management. He has extensive experience in financial reporting, taxation and financial consultancy and management in Hong Kong. He also managed all financial forecasts and planning. Mr. Lui is a Certified Practicing Accountant in Australia and received a Bachelor's Degree in Business Administration from the Hong Kong Baptist University in 1993.

The board of directors has no audit, nominating or compensation committees.

**Section 16(a) Beneficial Ownership Reporting Compliance**

To our knowledge, no director, officer or beneficial owner of more than ten percent of any class of our equity securities, failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the fiscal year ended December 31, 2022.

**Code of Ethics**

We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. We intend to adopt a code of ethics in the immediate future.

**Corporate Governance**

There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. We do not have a nominating committee, however we intend to appoint one in the immediate future.

**Family Relationships**

Fai H. Chan, our Co-Chief Executive Officer, Chairman of our Board and Chairman of the Board and Chief Executive Officer of our majority shareholder and its corporate parent is the father of Moe T. Chan, our other Co-Chief Executive Officer and a Member of our Board.

**Involvement in Certain Legal Proceedings**

None of our directors, executive officers and control persons has been involved in any of the following events during the past ten years:

● Any bankruptcy petition filed by or against any business
 of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to
 that time,

● Any conviction in a criminal proceeding or being subject
 to any pending criminal proceeding (excluding traffic violations and other minor offenses);

● Being subject to any order, judgment or decree, not
 subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring,
 suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or

● Being found by a court of competent jurisdiction (in
 a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities
 law, and the judgment has not been reversed, suspended, or vacated.

**Conflicts of Interest**

Except as provided for in Article XI of the Company's By-Laws: Board Director Compensation, no officer, director or security holder of the company may be involved in pecuniary interest in any investment acquired or disposed of by the registrant or in any transaction to which the registrant or any of its subsidiaries is party or has an interest.

None of the directors, officers, security holders or affiliates of the registrant may engage, for their own account, business activities of the types conducted by the registrant and its subsidiaries.

**Item 11. Executive Compensation.**

At the present time, neither LiquidValue Development Inc. nor Alset EHome and its subsidiaries is a party to any compensation arrangements with any officer or director of either entity and has made no provisions for paying cash or non-cash compensation to such officers and directors, except for Charles MacKenzie and Rongguo (Ronald) Wei. A subsidiary of Alset EHome is paying salaries to five employees at the present time, which includes Mr. Wei, and has consulting arrangements with certain individuals, including Mr. MacKenzie.

In 2022, Mr. Wei was compensated by SeD Development Management LLC for his services to Alset EHome at a rate of $156,184 per year, excluding bonus. Mr. Wei has been compensated by SeD Development Management LLC since 2016. Mr. Wei was not paid by LiquidValue Development Inc. prior to its acquisition of Alset EHome. SeD Development Management LLC will continue to compensate Mr. Wei at the same rate, and he will perform services for LiquidValue Development Inc. as well as its subsidiary Alset EHome.

A company controlled by Mr. MacKenzie was paid consulting fees of approximately $25,000 per month (and $50,000 additional bonus in 2022) in 2022, which includes payment for his services to Alset EHome and its subsidiaries.

Fai H. Chan is compensated by Alset International, where he serves as Chief Executive Officer. He is also compensated by Alset Inc., which owns the majority of Alset International. Alan Lui is employed and compensated by Alset International. Moe T. Chan is also employed and compensated by Alset International. Moe T. Chan is also compensated by Alset Inc. As part of their duties as officers or consultants of Alset International, each of these three individuals works on a number of matters for Alset International, including devoting various amounts of time to the management of Alset International's various subsidiaries and divisions, such as LiquidValue Development and Alset EHome. The amount of time each of these individuals spends on matters related to LiquidValue Development and Alset EHome has varied greatly based on the Company's needs, and no definite statement may be made as to what percentage of these three individuals' time has been spent or will be spent in the future on matters related to LiquidValue Development and Alset EHome. LiquidValue Development and Alset EHome and its subsidiaries do not compensate these three individuals for their services. On December 29, 2020, the Company entered into a Management Services Agreement with Alset International, pursuant to which the Company agreed to pay Alset International a one-time payment of $360,000 for the services of certain Alset International staff members the Company received in 2020, and agreed to pay Alset International $30,000 per month for services to be provided in 2021.

In connection with the acquisition of Alset EHome by LiquidValue Development Inc., LiquidValue Development Inc. and its subsidiaries intend to enter into revised compensation agreements with officers, directors and certain employees in the immediate future.

The table below summarizes all compensation awarded to, earned by, or paid to LiquidValue Development Inc.'s named executive officer for all services rendered in all capacities to us for the period from January 1, 2021 through December 31, 2022.

**<u>SUMMARY COMPENSATION TABLE</u>**

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position (1)** |<br>**Year** |<br>**Salary** |<br>**Bonus** |<br>**Stock**<br>**Awards** |<br>**Option**<br>**Awards** | **Non-Equity**<br>**Incentive Plan**<br> **Comp** | **Nonqualified**<br>**deferred Comp**<br>**Earnings** |<br>**All Other**<br>**Comp** |  |<br>**Total** |  |
| Fai H. Chan (2) | 2022 |  |  |  |  |  |  |  |  |  |  |
| Chairman of the Board and Co-Chief Executive Officer | 2021 |  |  |  |  |  |  |  |  |  |  |
| Moe T. Chan (2) | 2022 |  |  |  |  |  |  |  |  |  |  |
| Director and Co-Chief Executive Officer | 2021 |  |  |  |  |  |  |  |  |  |  |
| Rongguo (Ronald) Wei | 2022 | $156184 |  |  |  |  |  |  |  | $156184 |  |
| Co-Chief Financial Officer | 2021 | $136184 | 86092 |  |  |  |  |  |  | $222276 |  |
| Alan W. L. Lui (2) | 2022 |  |  |  |  |  |  |  |  |  |  |
| Co-Chief Financial Officer | 2021 |  |  |  |  |  |  |  |  |  |  |
| Charles MacKenzie | 2022 |  |  |  |  |  |  | $350000 | (3) | $350000 | (3) |
| Director | 2021 |  |  |  |  |  |  | $360000 | (3) | $360000 | (3) |

---

(1) Effective as of December 29, 2017, Fai H. Chan was
 appointed as our Chairman and Co-Chief Executive Officer; Moe T. Chan was appointed as a member of our Board and as Co-Chief Executive
 Officer; Rongguo (Ronald) Wei and Alan W. L. Lui were appointed as our Co-Chief Financial Officers; and Charles MacKenzie joined
 the Company's Board of Directors.

(2) Alset International compensates Fai H. Chan, Moe T.
 Chan and Alan W. L. Lui for their services to a number of divisions and subsidiaries of Alset International. Each of these three
 individuals works on a number of matters for Alset International, including devoting various amounts of time to matters related to
 LiquidValue Development Inc. LiquidValue Development Inc. does not compensate these individuals but on December 29, 2020, the Company
 entered into a Management Services Agreement with Alset International, pursuant to which the Company paid Alset International a one-time
 payment of $360,000 for the services of certain Alset International staff members the Company received in 2020, and paid Alset International
 $30,000 per month for services provided in 2021.

(3) A company controlled by Mr. MacKenzie was paid total
 consulting fees of $360,000 in 2021 and $350,000 in 2022 by Alset EHome.

As of the date of this Report, the Company does not have any stock option plans, retirement, pension, or profit-sharing plans for the benefit of any of our officers or directors.

**Outstanding Equity Awards at Fiscal Year-End**

There were no grants of stock options through the date of this report.

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

The board of directors of the Company has not adopted a stock option plan. The Company has no plans to adopt it but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board (the "Committee"). The Committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted. The Company may develop an incentive-based stock option plan for its officers and directors.

**Stock Awards Plan**

The company has not adopted a Stock Awards Plan but may do so in the future. The terms of any such plan have not been determined.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

**Security Ownership**

The following table sets forth, as of December 31, 2022, and as of March 28, 2023, the number and percentage of our outstanding shares of common stock owned by (i) each person known to us to beneficially own more than 5% of its outstanding common stock, (ii) each director, (iii) each named executive officer and significant employee, and (iv) all officers and directors as a group.

The number of shares listed below includes shares that each shareholder listed in the table has the right to acquire beneficial ownership of within 60 days.

---

| | | |
|:---|:---|:---|
| **Name and Address (2)** | **Number of Common Shares Beneficially Owned** | **Percentage of Outstanding Common Shares (1)** |
| Fai H. Chan (3) | 704015730 | 99.99% |
| Moe T. Chan | 0 | 0.00% |
| Charles MacKenzie | 0 | 0.00% |
| Rongguo (Ronald) Wei | 0 | 0.00% |
| Alan W. L. Lui | 0 | 0.00% |
| All Directors and Officers (6 individuals) | 704015730 | 99.99% |
| Alset International Limited (3) | 704015730 | 99.99% |
| SeD Intelligent Home, Inc. (3) | 704015730 | 99.99% |

---

(1) Based upon 704,043,324 outstanding common shares as
 of December 31, 2022 and March 28, 2023.

(2) The mailing address for each individual and entity
 set forth above is c/o LiquidValue Development Inc., 4800 Montgomery Lane, Suite 210, MD 20814.

(3) Fai H. Chan may be deemed to be the beneficial owner
 of those 704,015,730 shares held by Alset International Limited's wholly-owned subsidiary SeD Intelligent Home, Inc. Mr. Chan
 is the Chairman and Chief Executive Officer of Alset International Limited, a diversified holding company listed on the Catalist
 of the Singapore Exchange Securities Trading Limited and the Chairman and Chief Executive Officer of Alset Inc., a Nasdaq listed
 company. The majority of Alset International Limited is owned by a wholly-owned subsidiary of Alset Inc. Mr. Chan is the largest
 shareholder of Alset Inc. both directly and through HFE Holdings Limited, a holding company owned by Mr. Chan.

**Change of Control**

The Company is not aware of any arrangement which may at a subsequent date result in a change in control of the Company.

**Item 13. Certain Relationships and Related Transactions, and Director Independence.**

**Family Relationships**

Fai H. Chan, our Co-Chief Executive Officer, Chairman of our Board and Chairman of the Board and Chief Executive Officer of our majority shareholder and its corporate parent is the father of Moe T. Chan, our other Co-Chief Executive Officer and a Member of our Board.

**Policies and Procedures for Transactions with Related Persons**

Our board of directors intends to adopt a written related person transaction policy to set forth the policies and procedures for the review and approval or ratification of related person transactions. Related persons include any executive officer, director or a holder of more than 5% of our common stock, including any of their immediate family members and any entity owned or controlled by such persons. Related person transactions refer to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which (i) we were or are to be a participant, (ii) the amount involved exceeds $120,000, and (iii) a related person had or will have a direct or indirect material interest. Related person transactions include, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person, in each case subject to certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act.

We expect that the policy will provide that in any related person transaction, our audit committee and board of directors will consider all of the available material facts and circumstances of the transaction, including: the direct and indirect interests of the related persons; in the event the related person is a director (or immediate family member of a director or an entity with which a director is affiliated), the impact that the transaction will have on a director's independence; the risks, costs and benefits of the transaction to us; and whether any alternative transactions or sources for comparable services or products are available. After considering all such facts and circumstances, our audit committee and board of directors will determine whether approval or ratification of the related person transaction is in our best interests. For example, if our audit committee determines that the proposed terms of a related person transaction are reasonable and at least as favorable as could have been obtained from unrelated third parties, it will recommend to our board of directors that such transaction be approved or ratified. Our audit committee will recommend that our board of directors reject any transaction if it could affect our ability to comply with securities laws and regulations.

**Transactions with Related Persons, Promoters, and Certain Control Persons**

*Loan from SeD Home Limited*

Alset EHome receives advances from SeD Home Limited (an affiliate of Alset International), to fund development and operation costs. The advances bear interest at 10% and are payable on demand. As of December 31, 2022 and 2021, Alset EHome had outstanding principal due of $0 and $0, respectively and accrued interest of $228,557 and $228,557, respectively.

*Loan to/from SeD Intelligent Home Inc. (f.k.a. SeD Home International)*

The Company receives advances from or loans funds to SeD Intelligent Home, the owner of 99.99% of the Company. The advances or the loans bore interest of 18% until August 30, 2017 when the interest rate was adjusted to 5% and have no set repayment terms. On December 31, 2022, the Company owed $26,443,055 of advance principal and $1,154,462 of accrued interest. On December 31, 2021, the Company owed $19,891,734 of advance principal and $144,588 of accrued interest.

*Management Fees*

MacKenzie Equity Partners, LLC, an entity owned by a Charles MacKenzie, a Director of the Company, has had a consulting agreement with a majority-owned subsidiary of the Company since 2015. Per the terms of the agreement, as amended on January 1, 2018, the Company's subsidiary paid a monthly fee of $20,000 for consulting services. Pursuant to an agreement entered into in June of 2022, the Company's subsidiary has paid $25,000 per month for consulting services, effective as of January, 2022.

In addition, MacKenzie Equity Partners will be paid certain bonuses, including (i) a sum of $50,000 on June 30, 2022; (ii) a sum of $50,000 upon the successful financing of 100 homes owned by American Housing REIT Inc. with an entity not affiliated with SeD Development Management LLC (a subsidiary of the Company); and (iii) a sum of $50,000 upon the successful leasing of 30 homes in the Alset of Black Oak development.

The Company incurred expenses of $350,000 and $360,000 in the years ended December 31, 2022 and 2021, respectively, which were capitalized as part of Real Estate on the balance sheet as the services relate to property and project management. In 2021, MacKenzie Equity Partners was paid a bonus payment of $120,000. In June, 2022, MacKenzie Equity Partners accrued an additional $50,000 bonus payment (as described above). On December 31, 2022 and 2021, the Company owed this related party $25,000 and $80,000, respectively.

On December 29, 2020, the Company entered into a Management Services Agreement (the "Management Services Agreement") with Alset International, pursuant to which the Company paid Alset International a one-time payment of $360,000 for the services of certain Alset International staff members the Company received in 2020, and agreed to pay Alset International $30,000 per month for services to be provided in 2021. This Management Services Agreement had a term that ended December 31, 2021. Alset International provided the Company with services related to the development of the Black Oak and Ballenger Run real estate projects near Houston, Texas and in Frederick, Maryland, respectively, and the potential development of future real estate projects. During the years ended December 31, 2022 and 2021 the Company incurred expense of $0 and $360,000, respectively, and owed this related party $720,000 as of December 31, 2022 and 2021. This balance due is included in the loan amount from SeD Intelligent Home Inc., which in turn owes the funds to Alset International.

*Advance to Alset Inc.*

The Company pays some operating expenses for Alset Inc., a related party under the common control of Chan Heng Fai, the CEO of the Company. The advances are interest free with no set repayment terms. On December 31, 2022 and December 31, 2021, the balance of these advances was $0 and $26,566, respectively.

*Sale of American Home REIT Inc.*

On December 9, 2022, Alset EHome Inc., a subsidiary of the Company, entered into an agreement with Alset International Limited and Alset Inc. pursuant to which Alset EHome Inc. agreed to sell its subsidiary American Home REIT Inc. ("AHR"), which owns 112 single-family rental homes, to Alset Inc. The closing of the transaction contemplated by this agreement was completed on January 13, 2023.

Alset EHome Inc. sold AHR for a total consideration of $26,250,933, including the forgiveness of debt in the amount of $13,900,000, a promissory note in the amount of $11,350,933 and a cash payment of $1,000,000. This purchase price represents the book value of AHR as of November 30, 2022. The closing of this transaction was approved by the stockholders of Alset International Limited.

Alset Inc. owns 85.4% of Alset International Limited, and Alset International Limited indirectly owns approximately 99.9% of the Company. Certain members of the Company's Board of Directors and management are also members of the Board of Directors and management of each of Alset International Limited and Alset Inc. Chan Heng Fai, the Chairman, Chief Executive Officer and majority stockholder of Alset Inc., is also the Chairman and Chief Executive Officer of both the Company and Alset International Limited; Chan Tung Moe is the Co-Chief Executive Officer and a member of the Board of Directors of Alset Inc., Alset International Limited and the Company; and Charles MacKenzie, a director of the Company, is also an officer of Alset Inc.

**Item 14. Principal Accounting Fees and Services**

The following table indicates the fees paid by us for services performed for the years ended December 31, 2022 and December 31, 2021:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31, 2022** | **Year Ended<br> December 31, 2021** |
| Audit Fees | $100181 | $62858 |
| Audit-Related Fees | $0 | $0 |
| Tax Fees | $0 | $0 |
| All Other Fees | $0 | $0 |
| **Total** | $100181 | $62858 |

---

***Audit Fees****.* This category includes the aggregate fees billed for professional services rendered by the independent auditors during the years ended December 31, 2022 and December 31, 2021 for the audit of our financial statements and review of previous years' Form 10-Qs.

***Tax Fees****.* This category includes the aggregate fees billed for tax services rendered in the preparation of our federal and state income tax returns.

***All Other Fees****.* This category includes the aggregate fees billed for all other services, exclusive of the fees disclosed above, rendered during the year ended December 31, 2022 and December 31, 2021.

**PART IV**

**Item 15. Exhibit and Financial Statement Schedules**

(a)(1) List of Financial statements included in Part II hereof:

Balance Sheets as of December 31, 2022 and December 31, 2021

Statements of Operations for the twelve months ended December 31, 2022 and December 31, 2021

Statements of Stockholders' Equity (Deficit) for the period December 31, 2021 through December 31, 2022

Statements of Cash Flows for the twelve months ended December 31, 2022 and December 31, 2021

(a)(2) List of Financial Statement schedules included in Part IV hereof:

None.

(a)(3) Exhibits

The following exhibits are filed with this report or incorporated by reference:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 2.1 | [Acquisition Agreement and Plan of Merger dated December 29, 2017 by and among SeD Intelligent Home Inc., SeD Acquisition Corp., SeD Home International, Inc. and SeD Home Inc. incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2017.](https://www.sec.gov/Archives/edgar/data/1503658/000165495417011953/sed_ex2-1.htm) |
| 3.1 | [Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-11 filed with the Securities and Exchange Commission on October 20, 2010.](https://www.sec.gov/Archives/edgar/data/1503658/000147793210000776/hosa_ex31.htm) |
| 3.2 | [Bylaws of the Company, incorporated herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-11 filed with the Securities and Exchange Commission on October 20, 2010.](https://www.sec.gov/Archives/edgar/data/1503658/000147793210000776/hosa_ex32.htm) |
| 3.3 | [Amendment to the Company's Articles of Incorporation, incorporated herein by reference to Exhibit 3.3 to Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 2, 2017.](https://www.sec.gov/Archives/edgar/data/1503658/000165495417009951/hmus_ex33.htm) |
| 3.4 | [Certificate of Incorporation of SeD Home & REITs Inc. incorporated herein by reference to Exhibit 3.4 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2017.](https://www.sec.gov/Archives/edgar/data/1503658/000165495417011953/sed_ex34.htm) |
| 3.5 | [Bylaws of SeD Home & REITs Inc. incorporated herein by reference to Exhibit 3.5 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2017.](https://www.sec.gov/Archives/edgar/data/1503658/000165495417011953/sed_ex35.htm) |
| 3.6 | [Amendment to the Company's Articles of Incorporation, incorporated herein by reference to Exhibit 3.6 to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 11, 2020.](https://www.sec.gov/Archives/edgar/data/1503658/000165495420008875/sedh_ex3-6.htm) |
| 4.1 | [Description of Securities, incorporated herein by reference to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2022.](https://www.sec.gov/Archives/edgar/data/1503658/000165495422003116/lvdw_ex41.htm) |
| 10.1 | [Consulting Agreement dated June 23, 2022, by and between SeD Development Management LLC and MacKenzie Equity Partners, LLC, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 29, 2022.](https://www.sec.gov/Archives/edgar/data/1503658/000149315222020745/ex10-1.htm) |
| 10.2 | [Loan Agreement, dated as of June 18, 2020, by and between SeD Home & REITs Inc. and Manufacturers and Traders Trust Company, incorporated herein by reference to Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 11, 2020.](https://www.sec.gov/Archives/edgar/data/1503658/000165495420008875/sedh_ex1017.htm) |
| 10.3 | [Management Services Agreement between LiquidValue Development Inc. and Alset International Limited, dated December 29, 2020 incorporated herein by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2022](https://www.sec.gov/Archives/edgar/data/1503658/000165495421003068/lvdw_ex1018.htm) |
| 10.4\* | [Stock Purchase Agreement dated December 9, 2022, by and between Alset EHome Inc., Alset International Limited, and Alset Inc.](ex10-4.htm) |
| 10.5\* | [Promissory Note dated December 9, 2022, by and between Alset Inc. and Alset EHome Inc.](ex10-5.htm) |
| 10.6\*(1)(2) | [Contract for Purchase and Sale and Escrow Instructions, dated as of October 28, 2022, by and between 150 CCM Black Oak, LTD and Century Land Holdings of Texas, LLC](ex10-6.htm) |
| 10.7\*(2) | [First Amendment to Contract for Purchase and Sale and Escrow Instructions, dated as of November 28, 2022, by and between 150 CCM Black Oak, LTD and Century Land Holdings of Texas, LLC](ex10-7.htm) |
| 10.8\*(1)(2) | [Purchase and Sale Agreement, dated March 16, 2023, between 150 CCM Black Oak, LTD and Rausch Coleman Homes Houston, LLC.](ex10-8.htm) |
| 10.9\*(1)(2) | [Contract of Sale, dated March 17, 2023, between 150 CCM Black Oak, LTD and Davidson Homes, LLC](ex10-9.htm) |
| 21\* | [Subsidiaries of the Company.](ex21.htm) |
| 31.1a\* | [Certification of Co-Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-1a.htm) |
| 31.1b\* | [Certification of Co-Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-1b.htm) |
| 31.2a\* | [Certification of Co-Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-2a.htm) |
| 31.2b\* | [Certification of Co-Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-2b.htm) |
| 32.1\*\* | [Certification of Chief Executive Officers and Chief Financial Officers Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-1.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed herewith.

\*\* Furnished herewith.

(1) Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

(2) Portions of this exhibit (indicated by asterisks) have been omitted under rules of the SEC permitting the confidential treatment of select information. The Registrant agrees to furnish a copy of all omitted information to the SEC upon its request.

**Item 16. Form 10-K Summary**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **LiquidValue Development Inc.** | **LiquidValue Development Inc.** |
| Dated: March 28, 2023 | By: | /*s/ Rongguo (Ronald) Wei* |
|  | Name: | Rongguo (Ronald) Wei |
|  | Title: | Co-Chief Financial Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Fai H. Chan* | Co-Chief Executive Officer, Director | March 28, 2023 |
| Fai H. Chan | (Principal Executive Officer) |  |
| */s/ Moe T. Chan* | Co-Chief Executive Officer, Director | March 28, 2023 |
| Moe T. Chan | (Principal Executive Officer) |  |
| */s/ Charley MacKenzie* | Director | March 28, 2023 |
| Charley MacKenzie |  |  |
| */s/ Rongguo (Ronald) Wei* | Co-Chief Financial Officer | March 28, 2023 |
| Rongguo (Ronald) Wei | (Principal Financial Officer and<br> Principal Accounting Officer) |  |
| */s/ Alan W. L. Lui* | Co-Chief Financial Officer | March 28, 2023 |
| Alan W. L. Lui | (Principal Financial Officer and<br> Principal Accounting Officer) |  |

---

## Exhibit 10.4

**Exhibit 10.4**

**STOCK PURCHASE AGREEMENT** 

This agreement (this "<u>Agreement</u>") dated December 9, 2022, is made by and between Alset EHome Inc., a Delaware corporation with a principal place of business at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 ("<u>Seller</u>"), Alset International Limited, a Singapore limited company with a principal place of business at 7 Temasek Boulevard #29-01B, Suntec Tower One, Singapore 038987 ("<u>Alset International</u>") and Alset Inc., a Texas corporation with a principal place of business at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 ("<u>Buyer</u>"). The Buyer, Alset International and the Seller are sometimes hereinafter collectively referred to as the "<u>Parties</u>".

WHEREAS, Seller is the legal and beneficial owner of all the shares of the common stock, par value $0.001 per share (the "<u>Common Stock</u>"), of American Home REIT Inc., a Maryland corporation with a principal place of business at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 (the "<u>Company</u>");

WHEREAS, for good and valuable consideration, Seller desires to transfer and sell to Buyer, or its designated subsidiary, all right, title and interest in 2,567,358 shares of Common Stock (the "<u>Shares</u>"), which consist of all of the Company's issued and outstanding shares of Common Stock, and Buyer desires to purchase all right, title and interest in the Shares (the "<u>Sale</u>");

WHEREAS, the Seller is an indirect, majority-owned subsidiary of Alset International and both the Seller and Alset International are indirect, majority-owned subsidiaries of the Buyer; and

WHEREAS, the Seller is in debt to Alset International in an amount in excess of Thirteen Million Nine Hundred Thousand U.S. Dollars ($13,900,000);

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Sale of the Shares</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Shares to be Acquired</u>. At the Closing, and upon the terms and subject to the conditions of this Agreement, and upon the representations, warranties and covenants herein made, Seller shall transfer and sell to Buyer, and Buyer agrees to purchase from Seller, the Shares for the Purchase Price hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Purchase Price</u>. Upon the terms and subject to the conditions set forth in this Agreement, upon the representations, warranties and covenants made herein, and in exchange for the Shares, Buyer hereby agrees the consideration for the Shares shall be an amount equal to **Twenty Six Million Two Hundred and Fifty Thousand Nine Hundred and Thirty Three U.S. Dollars ($26,250,933)**. The Purchase Price will be satisfied by (i) A cash payment from Buyer to Seller of **One Million U.S. Dollars ($1,000,000)** in immediately available funds (the "<u>Payment</u>"); (ii) the offset of amount owed by Alset International to the Buyer in the amount of **Thirteen Million Nine Hundred Thousand U.S. Dollars ($13,900,000)** (the "<u>Offset</u>"), and simultaneously therewith, Alset International shall offset the same amount owed by the Seller to Alset International in an amount equal to the Offset; and (iii) the issuance of a Promissory Note by the Buyer to the Seller in the amount of **Eleven Million Three Hundred and Fifty Thousand Nine Hundred and Thirty Three U.S. Dollars ($11,350,933)** in the form attached hereto as <u>Exhibit A</u> (the "<u>Promissory Note</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Representations and Warranties of Seller</u>.** Seller hereby represents and warrants to Buyer, which representations and warranties shall survive the Closing, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Shares are wholly-owned by Seller free and clear of all liens, agreements, security interests, claims, charges and encumbrances of any kind and nature and no third party holds any right or interest (beneficial or otherwise) in the Shares. The Shares are not subject to any restrictions, directly or indirectly, with respect to their transferability or any other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Shares are the only issued and outstanding capital stock of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The financial information regarding the Company annexed as <u>Exhibit B</u> hereto (the "<u>Financial Information</u>") describing the Company's assets is, to the knowledge of the Seller, accurate and complete as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement is the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. Seller has full power and authority to enter into and consummate this Agreement and sell the Shares, the consent of no other party or entity is necessary for the consummation of the transactions contemplated herein. The execution, delivery and performance by Seller of this Agreement will not result in any willful violation of and will not conflict with, or result in a breach of, any of the terms of, or constitute a default under, any provision of state or federal law to which Seller is subject, any mortgage, indenture, agreement, document, instrument, judgment, decree, order, rule or regulation, or other restriction to which Seller is a party or by which Seller may be bound, or result in the creation of any lien upon any of the properties or assets of Seller pursuant to any such term, or result in the suspension, revocation, impairment, forfeiture or non-renewal of any permit, license, authorization or approval applicable to Seller or any of Seller's respective assets or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Representations and Warranties of Buyer</u>.** Buyer hereby represents and warrants to Seller, which representations and warranties shall survive the Closing, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has all requisite power and authority to execute, deliver and perform under this Agreement and the other agreements, certificates and instruments to be executed by Buyer in connection with or pursuant to this Agreement. Upon execution and delivery by Buyer at the Closing, this Agreement is a legal, valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors' rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer understands that no United States federal or state agency, or similar agency of any other country, has passed upon or made any recommendation or endorsement of the Company, Seller or the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In determining whether to make this sale, Buyer has relied solely on Buyer's own knowledge and understanding of the Company and its business based upon Buyer's own due diligence investigation. Buyer understand that no person has been authorized to give any information or to make any representations and Buyer has not relied on any other representations or information in making its decision, whether written or oral, relating to the Company, its operations and/or its prospects, other than the Financial information annexed hereto as <u>Exhibit B</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has substantial experience in evaluating and investing in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Buyer must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale. Buyer is able to bear the economic risks of an investment in the Shares and to afford a complete loss of Buyer's investment in the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer is (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of his investment in the Shares for an indefinite period of time because the Shares have not been registered under the Securities Act of 1933, as amended (the "<u>Securities Act</u>") and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Buyer did not learn of the investment in the Shares as a result of any public advertising or general solicitation, and is not aware of any public advertisement or general solicitation in respect of the Company or its securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Buyer acknowledges and understands the Shares are being offered in a transaction not involving a public offering within the meaning of the Securities Act. The Shares have not been registered under the Securities Act, and, if in the future, in accordance with the terms of this Agreement, Buyer decides to offer, resell, pledge or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only: (i) pursuant to an effective registration statement filed under the Securities Act, (ii) pursuant to an exemption from registration under Rule 144 promulgated thereunder ("<u>Rule 144</u>"), if available, or (iii) pursuant to any available other exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any other jurisdiction. Buyer agrees that if any assignment, disposition, transfer, pledge of or similar action with respect to the Shares or any interest therein is proposed to be made by Buyer or its affiliates, as a condition precedent to any such action, Buyer shall be required to deliver to the Company an opinion of counsel satisfactory to the Company that such action does not violate the Securities Act or the rules and regulations promulgated thereunder. Absent registration or an available exemption from registration, Buyer agrees that it will not take any such action with respect to the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Buyer acknowledges and agrees that it will not resell the Shares except pursuant to a registration under the Securities Act or pursuant to an available exemption from registration. Buyer is aware that the Shares will bear substantially the following legend:

"**THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.**"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In determining whether to make this investment, Buyer has relied solely on Buyer's own knowledge and understanding of the Company and its business based upon Buyer's own due diligence investigation. Buyer understands that no person has been authorized to give any information or to make any representations and Buyer has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The execution, delivery and performance of this Agreement by Buyer will not conflict with or result in the breach of any term or provision of, or violate or constitute a default under, any charter provision or bylaw or under any material agreement, to which Buyer is a party or by which Buyer is in any way bound or obligated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Buyer has carefully considered and has discussed with Buyer's professional legal, tax, accounting and financial advisors, to the extent Buyer has deemed necessary, the suitability of this investment and the transactions contemplated by this Agreement for Buyer's particular federal, state, local and foreign tax and financial situation and has determined that this investment and the transactions contemplated by this Agreement are a suitable investment for Buyer. Buyer relies solely on such advisors and not on any statements or representations of the Company, Seller or any of its agents. Buyer understands that Buyer (and not Seller) shall be responsible for Buyer's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) No governmental, administrative or other third party consents or approvals are required, necessary or appropriate on the part of Buyer in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Closing</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Time; Place; Outcome</u>. The closing of the Sale of the Shares (the "<u>Closing</u>") will take place on the date mutually agreed upon by the Parties, but in any event no later than Sixty (60) days from the date hereof, unless mutually agreed to a later date by the Parties. At the Closing, Seller shall transfer to Buyer clear and marketable title to the Shares, free and clear of any and all liens, claims, encumbrances and adverse interests of any kind (other than as provided in Section 3 above), by instructing the Company to register the Shares as instructed by Buyer and executing and delivering the instructions to the Company in the form approved by Buyer; Buyer shall (i) deliver the Payment, in readily available funds, to such account as the Seller shall direct; (ii) execute and deliver such documentation as shall be necessary and proper to record the Offset of Debt; and (iii) issue the Promissory Note; and Alset International shall execute and deliver such documentation as shall be necessary and proper to record the Offset of Debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Approval of the Shareholders of Alset International</u>. The obligations of the Parties hereto shall be subject to Alset International receiving the approval of its shareholders to proceed with this transaction in accordance with the laws of the Republic of Singapore.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Conditions Precedent to Buyer's Obligations</u>. The obligations of Buyer at the Closing shall be subject to the satisfaction on or prior to the Closing of the following conditions precedent, any one or more of which may be waived by Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Representations and Warranties</u>. The representations and warranties by Seller in Section 2 hereof shall be true and accurate on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Performance</u>. Seller and Alset International shall have performed and complied with all agreements and conditions contained herein or in other ancillary documents incident to the transactions contemplated by this Agreement required to be performed or complied with by them prior to or at the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Proceedings and Documents</u>. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be presented and delivered to Buyer, shall be satisfactory in substance and form to Buyer or its counsel, and Buyer or its counsel shall have received all such counterpart originals (or certified or other copies) of such documents as they may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Consents</u>. Save for the approval of the shareholders of Alset International, Seller shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the transaction and sale of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Conditions Precedent to Seller's Obligations</u>. The obligations of Seller at Closing shall be subject to the satisfaction, on or prior to the Closing, of the following conditions precedent, any one or more of which may be waived by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Representations and Warranties</u>. The representations and warranties of Buyer in Section 3 hereof shall be true and accurate on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Performance</u>. Buyer and Alset International shall have each performed and complied with all agreements and conditions contained herein or in other ancillary documents incident to the transactions contemplated by this Agreement required to be performed or complied with by it prior to or at the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Consents; Authorizations</u>. Buyer and Alset International shall have each secured all permits, consents and authorizations, if any, that shall be necessary or required lawfully to consummate this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Proceedings and Documents</u>. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory in substance and form to Seller or their counsel, and Seller or their counsel shall have received all such counterpart originals (or certified or other copies) of such documents as they may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) At any time and from time to time after the Closing, the Parties shall duly execute, acknowledge and deliver all such further assignments, conveyances, instruments and documents, and shall take such other action consistent with the terms of this Agreement to carry out the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Miscellaneous</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Entire Agreement</u>. This Agreement contains the entire understanding of the Parties and supersedes all previous verbal and written agreements. There are no other agreements, representations, or warranties set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notices</u>. All notices or other documents under this Agreement shall be in writing and delivered in person or mailed by certified mail, postage prepaid, addressed to the Parties at the addresses first above written, on any new address designated in like manner by any party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Waiver</u>. No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of such right, shall constitute a waiver of that or any other right, unless otherwise expressly provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Survival of Agreements</u>. All agreements, covenants, representations and warranties contained herein or made in writing in connection with the transactions contemplated hereby shall survive the execution and delivery of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Events of Termination</u>. Anything herein or elsewhere to contrary notwithstanding, this Agreement may be terminated by written notice of termination at any time before the purchase of the Shares by mutual written consent of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Governing Law</u>. This Agreement shall be construed in accordance with and governed by the laws of the State of Maryland. Each of the Parties submits to the jurisdiction of any state or federal court sitting in Montgomery County, Maryland, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each Party also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each Party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Successors and Assigns</u>. The provisions of this Agreement shall be binding upon and inure to the benefit of Parties and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Execution and Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Headings</u>. The descriptive headings of the Sections hereof are inserted for convenience only and do not constitute a part of this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement effective on the date and year first above written.

---

| | | |
|:---|:---|:---|
|  | **<u>SELLER</u>:** | **<u>SELLER</u>:** |
|  | Alset EHome Inc. | Alset EHome Inc. |
| | */s/ Chan Heng Fai* | */s/ Chan Heng Fai* |
|  | Name: | Chan Heng Fai |
|  | Title: | Chairman and Executive Director |
|  | **<u>BUYER</u>:** | **<u>BUYER</u>:** |
|  | Alset Inc. | Alset Inc. |
| | */s/ Danny Lim* | */s/ Danny Lim* |
|  | Name: | Danny Lim |
|  | Title: | Executive Director |
|  | Alset International Limited | Alset International Limited |
| | */s/ Alan Lui* | */s/ Alan Lui* |
|  | Name: | Alan Lui |
|  | Title: | Executive Director/CFO |

---

**<u>Exhibit A</u>**

Promissory Note

**<u>Exhibit B</u>**

Financial Information

## Exhibit 10.5

**Exhibit 10.5**

---

| | |
|:---|:---|
| **$11350933** | BETHESDA, MARYLAND<br> December 9, 2022 |

---

**PROMISSORY NOTE**

FOR VALUE RECEIVED, ALSET INC. having an address at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 ("**Debtor**"), hereby unconditionally promises to pay to the order of ALSET EHOME INC. having an address at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 (together with its successors and assigns, "**Holder**"), the principal amount of **Eleven Million Three Hundred and Fifty Thousand Nine Hundred and Thirty Three U.S. Dollars ($11,350,933) ($11,350,933)** (the "**Principal Amount**") at Holder's address, or at such other place as Holder may from time to time designate in writing, in lawful money of the United States and in immediately available funds, together with all accrued interest thereon as provided in this Promissory Note (this "**Note**"), and all other amounts due and payable under this Note, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Payment of Interest and Principal</u>. This Note is delivered pursuant to the terms of that certain Stock Purchase Agreement dated as of the hereof. Debtor promises to pay the Principal Amount, plus interest to the order of Holder in accordance with the terms and conditions set forth in this Note. The Principal Amount and interest under this Note shall be payable as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest</u>. The outstanding Principal Amount shall accrue interest and payable semi-annually at an annual rate equal to 7.2%) (the "**Interest Rate**") from the date of this Note until the entire Principal Amount is paid in full, whether at maturity, upon acceleration, by prepayment, or otherwise. All computations of interest shall be made on the basis of the actual number of days elapsed in a given year. The Interest Rate is the rate Debtor shall pay both before and after any default under the terms of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Default Interest Rate: To the extent permitted by applicable law, the unpaid principal balance shall bear interest after default of interest payment at the Default Interest Rate. The "Default Interest Rate" shall be fourteen percent (14%) per annum, but never more than the maximum lawful rate or at a rate that would cause the total interest contracted for, charged or received by Holder to exceed the applicable maximum lawful amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Term and Monthly Payment Dates</u>. Debtor shall pay the Principal Amount in full on the Maturity Date (defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Final Payment Date</u>. Debtor shall pay all amounts due and owing under this Note no later than December 9, 2027 (the "**Maturity Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Manner of Payment</u>. All payments of interest, principal, and all other sums due hereunder shall be made in lawful money of the United States of America on the date on which such payment is due by personal check, certified check, or cash. Payments may also be submitted by wire transfer of immediately available funds to Holder's account at a bank specified by Holder in writing to Debtor from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Application of Payments</u>. All payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder; second, to accrued interest at the Interest Rate; and third, to the payment of the principal amount outstanding under the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Prepayment of the Note</u>. Debtor shall be permitted to prepay all or any portion of the Principal Amount at any time and from time to time without the imposition of any prepayment penalty or charge by Holder. Unless Debtor pays the Principal Amount in full, the monthly payments shall remain the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Corporate Guarantees:</u> The Debtor shall provide an unconditional and irrevocable corporate guarantee in favor of the Holder, for securing the payment obligations of the Debtor to the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Share Charge</u>: All outstanding 2,567,358 shares of American Home REIT Inc. shares to be charged to Alset EHome Inc. and Alset EHome Inc. can only enforce the share charge or take possession of the aforementioned shares if Debtor defaults on the interest payment and/or principal payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Waivers</u>. Debtor hereby acknowledges giving up the right to require that Holder do any of the following: (a) demand payment; (b) notify Debtor of nonpayment; and (c) obtain an official certified statement showing nonpayment. Holder's failure or delay in exercising any right, remedy, power, or privilege under this Note or under any applicable law shall not operate as a waiver of any of Holder's rights, remedies, powers, or privileges provided under this Note or provided by law or available in equity. For example, Holder does not waive its right to declare Debtor in default by making payments or incurring expenses on Debtor's behalf. Notwithstanding the above, nothing in this Note shall be construed to constitute a waiver of Debtor's right to cure a default and Debtor specifically maintains the right to a cure period provided under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Amendments, Extensions, and Modifications</u>. No term of this Note may be amended, supplemented, or otherwise modified except by an instrument in writing signed by Debtor and Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Governing Law</u>. This Note and any claim, controversy, dispute, or cause of action (whether in contract, equity, tort, or otherwise) based upon, arising out of, or relating to this Note and the transactions contemplated hereby shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to principles of conflicts of law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Severability</u>. If any term or provision of this Note is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon any determination that any term or other provision hereof is invalid, illegal, or unenforceable, Debtor and Holder shall negotiate in good faith to modify this Note so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notices</u>. Debtor and Holder shall deliver all notices, demands, and other communications under this Note (each a "**Notice**") in writing and addressed to the other party at the addresses set forth on the introductory paragraph of this Note (or to such other address that either party may designate from time to time in writing). Debtor and Holder shall deliver all Notices by nationally recognized overnight courier (with all fees prepaid), facsimile, email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). A Notice is effective only (a) upon receipt by the receiving party and (b) if the party giving the Notice has complied with the requirements of this provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Headings</u>. The headings of the various articles, sections, and subsections in this Note are for reference only and shall not define, expand, or limit any of the terms or provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Signatures</u>. Debtor hereby understands and agrees to the terms of this Note.

[signature page follows]

IN WITNESS WHEREOF, Debtor has executed this Note as of the date set out above.

---

| | | |
|:---|:---|:---|
|  |  | **DEBTOR:** |
|  |  | ALSET INC., a Texas Corporation |
| Witnessed or Attested by: | By: | /s/ Alan Lui |
| Name: | Name: | Alan Lui |
|  | Title: | Co-Chief Financial Officer |
|  |  | **HOLDER:** |
|  |  | ALSET EHOME INC., a Delaware Corporation |
| Witnessed or Attested by: | By: | /s/ Chan Heng Fai, Ambrose |
| Name: | Name: | Chan Heng Fai, Ambrose |
|  | Title: | Chairman and Executive Director |

---

## Exhibit 10.6

**Exhibit 10.6**

**Certain confidential information contained in this document, marked by brackets and asterisk ([\*\*\*]), has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K, because the Company customarily and actually treats such information as private or confidential and the omitted information is not material.**

**CONTRACT FOR PURCHASE AND SALE**

**AND ESCROW INSTRUCTIONS**

THIS CONTRACT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS (the "**Agreement**") dated as of October 28, 2022 and effective as of the Effective Date (as defined below) is by and between 150 CCM BLACK OAK, LTD., a Texas limited partnership ("**Seller**"), and CENTURY LAND HOLDINGS OF TEXAS, LLC, a Colorado limited liability company ("**Buyer**"). Seller and Buyer are sometimes individually referred to herein as a "**Party**", and collectively as the "**Parties**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>PROPERTY</u>.** Seller is developing approximately 187 acres of land located in the extraterritorial jurisdiction or vicinity of the City of Magnolia (the "**City**"), Montgomery County (the "**County**"), Texas (the "**State**"), more particularly described in **<u>Exhibit A</u>** attached hereto (the "**Land**"), as a residential community known as the "Lakes at Black Oak" development (the "**Subdivision**"). For the consideration herein expressed and upon the terms and conditions herein contained, Seller agrees to sell, and Buyer agrees to purchase, all of the approximately 132 single-family detached residential lots in Section 3, each with at least dimensions of 40' x 100', except lots on a cul de sac (the "**Section 3 Lots**"), and approximately 110 single-family detached residential lots in Section 2, each with at least dimensions of 45' x 120', except lots on a cul de sac (the "**Section 2 Lots**"), to be developed by Seller within the Subdivision (the Section 3 Lots and Section 2 Lots, collectively, the "**Lots**" or the "**Property**"), which Lots are initially depicted by the red outlines in **<u>Exhibit A</u>**. The Property does not include and Seller expressly retains its right to receive reimbursement from a private utility company, a utility district or other governmental entity of costs incurred by Seller in constructing and installing infrastructure improvements for the Lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>PURCHASE PRICE</u>**. The "**Purchase Price**" (herein so called) shall be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) [\*\*\*].

The Purchase Price will be adjusted accordingly, if the total number of Lots on the Final Plat (as hereinafter defined) of a Section increases or decreases prior to the applicable Closing. The Purchase Price shall be payable at the applicable Closing in good, immediately available U.S. funds.

For the Purchase Price of the Section 2 Lots after Buyer's initial closing of the Section 2 Lots, in addition to the price per Lot set forth above, Buyer shall pay Seller a [\*\*\*] lot escalation with such escalation commencing to accrue on Buyer's first closing date for the Section 2 Lots at the Closing of the applicable Lots; provided, however, such escalation shall in no event accrue for more than one calendar year, and shall abate for any delay of the subsequent closings for Section 2 Lots caused by Seller after Buyer's initial closing of the Section 2 Lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>DEPOSIT</u>.** Within five (5) business days after the Effective Date (as hereinafter defined), Buyer shall deliver to First American Title Company (the "**Title Company**"), the amount of [\*\*\*] to be held by the Title Company as the earnest money deposit (the "**Initial Earnest Money**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Within five (5) business days after the expiration of the Inspection Period (as hereinafter defined), Buyer will deposit with the Title Company the additional sum of [\*\*\*] (the "**Additional Earnest Money**"). The term "**Earnest Money**" as used herein means the Initial Earnest Money and the Additional Earnest Money, if applicable. Until the date that a Party is entitled to receive the Earnest Money pursuant to the terms hereof, the Title Company will hold the Earnest Money in a federally insured interest-bearing account and the Earnest Money shall include all interest earned thereon. The Title Company shall immediately deliver [\*\*\*] of the Initial Earnest Money to the Seller as independent consideration for this Agreement (the "**Independent Consideration**").

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 **<u>Application of Earnest Money</u>**. At each Closing, a portion of the Earnest Money equal to [\*\*\*] of the Purchase Price of the Lots being purchased (exclusive of escalation), shall be applied as a credit against the Purchase Price of each Lot then being purchased. If this Agreement is terminated prior to the purchase of all of the Lots, the Earnest Money will be delivered to Seller or Buyer as provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>CLOSING</u>**. Provided the Inspection Period has expired and all of the Buyer's Conditions Precedent (as hereinafter defined) have been satisfied or, if not satisfied, waived by Buyer in writing, Buyer agrees to purchase the Lots according to the following schedule:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 **<u>Closing Date</u>**. Buyer agrees to purchase the Section 3 Lots on the later of (i) December 15, 2022 or (ii) ten (10) days after the Completion Date (as hereinafter defined) for the Section 3 Lots (the "**Initial Closing Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 **<u>Subsequent Closing Dates</u>**. Buyer agrees to purchase at least 35 of the Section 2 Lots within fifteen (15) days after the Completion Date for all Section 2 Lots (the "**Second Closing Date**"). Ninety (90) days after the Second Closing Date, Buyer shall purchase at least 35 additional Section 2 Lots (the "**Third Closing Date**"), and one hundred eighty (180) days after the Second Closing Date Buyer agrees to purchase the remaining approximately 40 Section 2 Lots (the "**Fourth Closing Date**"). Any Lots purchased by Buyer in excess of the minimum number of Lots at a Closing will count as a credit toward Buyer's next and subsequent minimum Lot purchase obligation(s). As used herein, "**Closing**" means the act of conveying title to one or more of the Lots to Buyer concurrently with the delivery of the Purchase Price for such Lots to Seller. Each Closing shall be held at the office of the Title Company, unless otherwise designated by Seller and Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 **<u>Adjustment of Closing Date</u>**. Notwithstanding anything herein to the contrary, in the event that any Closing Dates set forth herein (i) falls on a Friday or the last day of the month of the last week of a calendar quarter such Closing Date(s) will automatically be extended and rescheduled to the next business day, or (ii) falls after December 15<sup>th</sup> and before December 31<sup>st</sup>, such Closing Date(s) will automatically be extended and rescheduled to January 10<sup>th</sup> of the following year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>BUYER'S REVIEW OF PROPERTY</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 **<u>Information</u>**. Prior to the execution of this Agreement, Seller has provided to Buyer, at no cost to Buyer, copies of the following documentary materials to the extent the same are in the possession or control of Seller: (i) all existing surveys, plats, plans, studies, reports and permits for the Property including, but not limited to, environmental site assessments and studies, endangered species reports, geotechnical, soils, drainage, wetlands and floodplain reports, architectural and as-built plans and specifications for any existing buildings or utilities on the Property, engineering, landscaping, development, subdivision and other improvement plans and other construction documents and building, zoning and other permits (collectively, the "**Existing Reports**"); (ii) any leases or licenses or leasing or licensing agreements for the Property; (iii) information pertaining to any threatened, pending or current litigation involving any portion of the Property; (iv) any current or pending agreements that will be binding on Buyer after the applicable Closing; (v) all covenants, conditions, and restriction of any applicable homeowners' or other associations (each, an "**HOA**"), including any bylaws and rules and regulations of each such HOA (collectively, the "**HOA Documents**"); (vi) the Development Plans (defined below); and (vii) the Completion Documents (defined below) (collectively, "**Existing Documents**"). Subject to the qualification in the following paragraph, Seller hereby represents and warrants that (A) the Existing Documents delivered by Seller to Buyer hereunder are complete copies of the Existing Documents in Seller's possession or control, and (B) to Seller's knowledge, there are no material defects, deficiencies or inaccuracies contained therein. Seller also hereby grants to Buyer an exclusive right to use the Existing Reports at all times from and after the Effective Date until the earlier to occur of the applicable Closing, or the prior termination of this Agreement. If requested by Buyer, Seller shall use commercially reasonable efforts to cause any third party to the Existing Reports to provide a reliance letter to Buyer. Any Existing Documents relating to the Property that are created after the initial delivery of Existing Documents as set forth herein, Seller shall deliver a copy of the same to Buyer within five (5) days for Buyer's review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 **<u>Inspection Period</u>.** Buyer shall have the right during that period of time commencing on the Effective Date, and continuing through and until 11:59 p.m. (Houston time) on the date that is thirty (30) days after the Effective Date (the "**Inspection Period**") within which to inspect the Property, including, without limitation, conducting any feasibility, marketing or other studies, and any physical and environmental testing and any other inspections Buyer deems to be necessary or desirable, and reviewing any building and use restrictions, zoning, other governmental approvals, the Existing Documents and any other matters Buyer deems necessary or desirable to determine whether, in Buyer's sole and subjective judgment, the Property is suitable to Buyer. Notwithstanding anything herein to the contrary, in the event that the last day of the Inspection Period falls on a Friday, the Inspection Period shall automatically be extended to 11:59 p.m. Houston time, on the next business day. Buyer shall have the right, together with its employees, representatives, agents and vendors to enter upon the Property to conduct any and all such inspections, tests and investigations of the Property as Buyer may elect in its sole discretion. If Buyer determines prior to the expiration of the Inspection Period that the Property is suitable to Buyer, Buyer may send written notice of its approval (the "**Notice of Continuation**") to Seller on or before the expiration of the Inspection Period, in which case this Agreement shall continue in full force and effect. In the event that Buyer (A) fails to deliver the Notice of Continuation on or before the expiration of the Inspection Period this Agreement shall automatically terminate the day after expiration of the Inspection Period, or (B) after determining, in Buyer's sole and absolute, subjective judgment and discretion, that the Property is not suitable to Buyer, terminates this Agreement, as provided herein, by written notice to Seller delivered prior to the expiration of the Inspection Period, this Agreement shall terminate on the earlier of the date set forth in Buyer's termination notice or upon the expiration of the Inspection Period and, upon such termination, the Title Company shall immediately return the Earnest Money (except for the Independent Consideration) to Buyer, Buyer shall provide to Seller copies of any reports prepared by third parties for it concerning the Property, and, thereafter, the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination hereof. Seller acknowledges and agrees that a Notice of Continuation from Buyer will not be effective unless signed by any one of the following individuals: Liesel Cooper, Blake Roberts, Brian Fogarty or a licensed attorney representing Buyer. If the Property is materially altered or disturbed in any manner in connection with any of Buyer's inspection activities under this section, Buyer shall promptly return the Property to substantially the same condition existing immediately prior to Buyer's activities (provided, however, such obligation to restore the Property will be limited, as provided below, to only those items of damage or harm caused by Buyer or Buyer's agents). Buyer shall also promptly pay all persons and entities that perform work by or on behalf of Buyer in connection with Buyer's activities related to the Property and shall not permit any liens or other claims to be asserted against the Property as a result thereof, provided, however, if any liens are asserted against the Property (whether or not the same are meritorious), Buyer shall have the same removed or bonded over within no more than twenty (20) calendar days after receiving notice thereof. Buyer shall indemnify and hold harmless Seller and its respective shareholders, members, and partners, their respective officers, directors, employees, and agents, and all of their respective successors and assigns (collectively, "**Seller Parties**") from and against any and all claims, liabilities, losses, costs, damages or expenses of any kind, including, without limitation, reasonable attorneys' fees, incurred or suffered by the Seller Parties to the extent the same directly result from any of the Buyer's activities with respect to the Property under this section. Notwithstanding anything herein to the contrary, Buyer's restoration and/or indemnification obligations set forth herein shall not be deemed to apply to changes, claims, liabilities, losses, costs, damages or expenses to the extent arising from or relating to (1) the negligent acts, the omissions, or the willful misconduct of any of the Seller Parties or their invitees, or (2) the presence of any latent defects or Hazardous Substance (as defined below) discovered on, under or through the Property not created or negligently exacerbated by Buyer, and/or the disclosure of any such latent defects or Hazardous Substances. Buyer's obligations under this section shall survive the Closings and termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>TITLE AND SURVEY</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 **<u>Title Commitment and Title Policy</u>**. Within five (5) business days after the Effective Date, Seller shall, at Seller's expense, deliver or cause to be delivered to Buyer: (i) a title commitment showing the status of record title to the Property and naming Buyer as the proposed insured, in the amount of the Purchase Price (the "**Original Title Commitment**"); (ii) true, correct, and legible copies of any and all instruments referred to in Schedule B of the Original Title Commitment (collectively, the "**Title Instruments**"); and (iii) a copy of the most recent survey of the Property or of a larger tract of land that contains the Property (the "**Existing Survey**") (the Original Title Commitment, Title Instruments and Existing Survey, collectively, the "**Title Documents**"). Not later than five (5) days prior to the applicable Closing, Seller shall cause the Original Title Commitment to be updated for the portion of the Property being purchased (the "**<u>Closing Commitment</u>**") and delivered to Buyer. Seller shall cause the Title Company to irrevocably commit to issue to Buyer at the applicable Closing an owner's title insurance policy on the standard Texas form substantially in the form of the Closing Commitment but with all pre-printed, standard exceptions deleted that can be deleted under Texas title insurance regulations (including, without limitation, any parties in possession or tenants in possession exceptions), other than the exception for real property taxes for the year of Closing, a lien not yet due or payable, and subject only to the Permitted Exceptions (as defined below), insuring Buyer's title to the applicable portion of the Property in the amount of the Purchase Price (the "**<u>Owner's Title Policy</u>**"). Seller shall pay the base premium for the Owner's Title Policy, and Buyer shall pay the costs for any Buyer-requested endorsements, or request to modify the area and boundary exception listed as item 2 of Schedule B of the Title Commitment to read 'shortages in area'.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 **<u>Title Review and Objections</u>**. Buyer shall have until the date which is seven (7) days before the expiration of the Inspection Period to review the Title Documents and to deliver written notice to Seller ("**Notice of Defect**") of each matter set forth therein which is objectionable to Buyer (each, a "**Defect**"). Any such Defect to which Buyer does not timely object hereunder shall be deemed a "**Permitted Exception**" hereunder, provided, however, that in no event shall any of the following be deemed to be a Permitted Exception under this Agreement (whether or not Buyer expressly objects to the same in a timely-delivered Notice of Defect): (i) any deeds of trust, mortgages, and any other monetary liens encumbering the Property arising by, through or under Seller or its predecessors-in-title, and any mechanic's liens not caused by the actions of Buyer, all of which Seller agrees to satisfy and discharge at or before the applicable Closing, or (iii) any other exceptions to title arising from and after the delivery of the Title Documents, not caused by or expressly approved by Buyer in writing. If, however, a Defect not revealed in the Title Documents is shown in a subsequent update or endorsement to the Original Title Commitment, including, without limitation, the Closing Commitment, Buyer shall have until seven (7) business days after Buyer's receipt of such update or endorsement to provide Seller with a Notice of Defect with respect thereto; and, if necessary, the applicable Closing Date shall be extended to give effect to all applicable time periods set forth in this section. If a Notice of Defect is timely given, Seller may, within five (5) days of its receipt thereof, notify Buyer in writing of those Defects, if any, contained in Buyer's Notice of Defect which Seller agrees to cure ("**Seller's Response**"). If Seller fails to timely provide Seller's Response, Seller shall be deemed to have declined to cure any such Defects. If Seller does not agree to cure all such Defects contained in Buyer's Notice of Defect, Buyer may elect to terminate this Agreement by written notice delivered to Seller (1) by the expiration of the Inspection Period for any Defects contained in the Original Title Commitment (but not for any Defect not revealed in the Title Documents that is shown in a subsequent update or endorsement to the Original Title Commitment, including without limitation, the Closing Commitment), and (2) for any Defect not revealed in the Title Documents that is shown in a subsequent update or endorsement to the Original Title Commitment or updated survey, including without limitation, the Closing Commitment, the later of: (A) the date that is five (5) business days after receipt of Seller's Response or deemed response; and (B) if Seller fails to deliver Seller's Response, then within five (5) business days after the date on which Seller's Response was due under this section. Upon such termination, the Earnest Money (or uncredited portion) shall be immediately returned to Buyer and, thereafter, the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive termination. If Buyer does not give such notice of termination, Buyer shall be deemed to have waived those Defects noted in its Notice of Defect for which Seller has not agreed to cure and proceed to close as provided in this Agreement (in which event such Defects shall be deemed to be Permitted Exceptions). If Seller, however, in a Seller's Response, agrees to cure a Defect but then fails to cure the same by the applicable Closing or is otherwise unable to convey title to the Property to Buyer at such Closing in accordance with the provisions of this Agreement, then Seller shall be in default hereof and Buyer may, at its option either (a) waive such Defect(s) in writing and proceed to close as provided in this Agreement (in which event such Defect(s) shall be deemed to be Permitted Exception(s)), or (b) exercise its rights under Section 16. So long as this Agreement remains in full force and effect, Seller shall not cause or permit any additional exceptions to title to be recorded against the Property from and after the Effective Date without Buyer's prior written approval. Notwithstanding the foregoing, Seller shall be entitled to encumber the Property with easements within setback areas created in connection with the development of the Lots as depicted on the Plat approved by Buyer pursuant to Section 9 below that do not adversely impact the building pad on a Lot (and such easements shall be Permitted Exceptions), and purchase and/or construction loans without Buyer's consent, provided that liens securing loans to Seller are removed at Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 **<u>Title Conveyed</u>**. Seller represents and warrants to Buyer that, at as of the Effective Date and the applicable Closing, Seller has and will have good and indefeasible fee simple title to the Property. At the applicable Closing, title to the Property being purchased shall be conveyed by Seller to Buyer by special warranty deed on the form attached hereto as **<u>Exhibit D</u>** (the "**Deed**"), free and clear of all exceptions, liens, encumbrances, easements and restrictions except the Permitted Exceptions. Seller further represents and warrants to Buyer that prior to or concurrent with the applicable Closing, that Seller shall satisfy all requirements of the Title Company applicable to Seller as set forth in the Original Title Commitment and the Closing Commitment. Title to any personal property or fixtures shall be conveyed by a general assignment and bill of sale in substantially the same form attached hereto as **<u>Exhibit E</u>** (the "**Assignment**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 **<u>New Instruments</u>**. Seller shall not record or consent to the recording of new instruments affecting the Property which are not Permitted Exceptions, including the recording of restrictive covenants (other than documents required to annex the Lots into the jurisdiction of the HOA), without Buyer's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>HOA DOCUMENTS AND APPROVAL OF HOME PLANS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. **<u>HOA Declaration</u>**. During the Inspection Period, Buyer will review the HOA Documents, including, without limitation, the declaration of covenants, conditions and restrictions (the "**Declaration**"), bylaws and articles of incorporation for the HOA, and the budget for the HOA, and advise Seller of any objections to the HOA Documents during the Inspection Period. If not already annexed, the Lots shall be annexed and made subject to the Declaration prior to the applicable Closing and the same shall be a condition to closing for Buyer. Buyer shall have no liability whatsoever for or to the HOA except payment of the regular assessments applicable to the Lots owned by Buyer as set forth in the Declaration. The Declaration shall provide access for the owners purchasing homes from Buyer to all recreational and amenity facilities, if any, serving any portion of the Subdivision on the same basis and at the same cost, if any, to which all other users thereof are subject. If Buyer objects to any of the HOA Documents during the Inspection Period and Buyer and Seller are unable to agree upon an amendment to the Declaration or any other HOA Document, as applicable, prior to the expiration of the Inspection Period, then Buyer's sole remedy shall be to terminate this Agreement pursuant to Section 5 and the Earnest Money shall be returned to Buyer. As long as this Agreement is in force (and thereafter if Buyer purchases Lots pursuant to this Agreement), Seller shall not materially modify the HOA Documents without Buyer's prior written approval. Buyer and Seller shall make reasonable efforts to cooperate in making any amendments to the HOA Documents that otherwise become necessary in connection with the development of the Property. This paragraph shall survive closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 **<u>HOA Common Areas</u>**. At or prior to the Initial Closing or at such other times as mutually agreed by Buyer and Seller and/or required by the applicable Governmental Authorities, the areas depicted on the Final Plat and/or set forth in the Declaration as an area to be owned and maintained by the Association as common area (the "**Common Areas**") will be conveyed to the Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 **<u>Approval of Home Plans</u>**. Within fifteen (15) days after the Effective Date, Buyer shall deliver to Seller Buyer's home architectural plans for review and approval by the proper architectural review body under the Declaration. Within fifteen (15) days after Seller's receipt of the plans, Seller shall notify Buyer whether such plans have been approved or advise Buyer with reasonable specificity of any objections and proposed revisions to the plans that would cause such plans to be approved. The plans to be submitted by Buyer will be a master set of plans covering the different homes that Buyer intends to construct on the Lots and that, upon approval of those plans in accordance with this section, Buyer shall not be required to resubmit a particular approved plan prior to the time that a home substantially conforming to such plan is to be constructed. If Seller fails to notify Buyer within such fifteen (15) day period or if the plans are not approved, Buyer shall have the right to either proceed with the purchase of the Lots as set forth herein, or to terminate this Agreement at any time before approval of such rejected plans, in which event the Earnest Money shall be immediately returned to Buyer, and neither Party shall thereafter have any further obligations to the other hereunder. Seller shall use its good faith, diligent efforts to cooperate in all respects with Buyer, in Buyer's efforts to obtain prior to the expiration of the Inspection Period the approval of the plans by any person, entity or Governmental Authority whose approval, other than Seller, is required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>BUYER'S OPERATIONS</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 **<u>Signage</u>**. After the Completion Date of the applicable Section for Section 2 Lots or Section 3 Lots, Seller grants to Buyer the right, at Buyer's sole cost and expense, to place and maintain 1 or more sign(s) to advertise homes to be constructed on the applicable Lots by Century Homes (the "**Sign(s)**") on any Lot(s) that has not yet been purchased by Buyer; provided that the Sign(s) complies with the Declaration and all standards and specifications of the applicable Governmental Authorities. In addition, on or prior to the Initial Closing Date, Seller agrees to include advertising for homes to be built by Century Homes on all signs existing within the Subdivision which advertise builders within the Subdivision. In the event Buyer terminates this Agreement or otherwise does not close on the acquisition of the Property, Buyer shall, at its sole cost and expense, within ten (10) days of such termination remove any Signs from the Property and restore any disturbance to the Property caused by Buyer's installation or removal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 **<u>Construction and Sales Trailers</u>**. After expiration of the Inspection Period, Buyer shall have the right and license to place 1 construction trailer or temporary building ("**Construction Trailer**"), 1 sales trailer or temporary building ("**Sales Trailer**"), and a parking lot to serve the Sales Trailer at a location in the Subdivision which shall be reasonably agreed upon by Seller and Buyer prior to the expiration of the Inspection Period. Buyer shall obtain any necessary permits and comply with all applicable laws of the applicable Governmental Authorities governing the use of the Construction Trailer, Sales Trailer and/or parking lot. Buyer shall not allow any lien or encumbrance relating to Buyer's use or improvement to attach to any property which Buyer has not purchased. Buyer agrees to hold Seller harmless from and indemnify Seller against any and all claims, damages and liability occasioned by or resulting from Buyer's use of or activities on any such Lot. If this Agreement is terminated, Buyer, at Buyer's expense, shall remove the improvements installed by Buyer within ninety (90) days after such termination in such a manner and to such extent that the applicable property shall be returned to substantially the same condition as existed prior to improvement by Buyer. At Seller's request the parties shall enter into a separate license agreement on a reasonable form mutually agreeable to the parties for Buyer's placement of a Contraction Trailer or Sales Trailer on Seller's property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 **<u>Maintenance of Lots</u>**. Buyer agrees to mow and maintain all Lots purchased by Buyer in a neat and clean condition and the requirements of the Declaration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>DEVELOPMENT PLANS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 **<u>Site Plan and Recorded Plat</u>*.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Site Plan</u>. Unless already provided to Buyer under Section 5.1 of this Agreement, within five (5) business days after the Effective Date, Seller shall deliver to Buyer, for Buyer's review, comment, and approval Seller's proposed site plan of the Property (the "**Site Plan**"), which Site Plan shall show the configuration of the Lots, streets, parks, amenity centers, common areas and other significant features.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Preliminary Plat</u>. Unless already provided to Buyer under Section 5.1 of this Agreement, prior to submittal to the applicable Governmental Authorities, Seller shall deliver to Buyer, for Buyer's review, comment, and approval, Seller's proposed preliminary plat (the "**Preliminary Plat**") for each section of Lots (a "**Section**"), which Preliminary Plat shall be consistent with the Site Plan except for such changes as are required by Governmental Authorities (subject to the terms of this Section 9) or have been approved by Buyer in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Final Plat</u>. Unless already provided to Buyer under Section 5.1 of this Agreement, prior to submittal to the applicable Governmental Authorities, Seller shall deliver to Buyer, for Buyer's review, comment, and approval, a proposed final plat for each Section of Lots (the "**Final Plat**"), which Final Plat shall be consistent with the Preliminary Plat approved or deemed to be approved by Buyer, except for such changes as are required by Governmental Authorities (subject to the terms of this Section 9) or have been approved by Buyer in writing. Buyer shall have no right to object to any matters on the Final Plat that were depicted on and consistent with the Preliminary Plat, but Buyer may object to matters that were not on the Preliminary Plat and/or matters that were on the Preliminary Plat but omitted from the Final Plat.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 **<u>Construction Plans</u>*.*** Unless already provided to Buyer under Section 5.1 of this Agreement, prior to submittal to the applicable Governmental Authorities, Seller shall deliver to Buyer, for Buyer's review, comment, and approval, Seller's proposed construction and engineering plans for each Section, including without limitation, its plans for paving, grading, drainage, water, sewer and other public improvements (collectively, the "**Construction Plans**"), all of which plans shall be consistent with the Final Plat approved by Buyer pursuant to this Section 9. The Construction Plans shall include, without limitation, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Subdivision Hardscape and Landscape Plans</u>. Seller's proposed hardscape and landscape plans for the Section of Lots (the "**Hardscape and Landscape Plans**"), which plans shall include without limitation Seller's plans and design specifications for common area, open spaces, signage and entry feature monumentation for the Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Amenity Center Plans</u>. Seller's proposed plans and design specifications for the amenities, if any, located within the Section of Lots (the "**Amenity Plans**"). The amenity center for the Subdivision will consist generally of a playground, pavilion, splash pad and walking trails and will be completed (the playground, pavilion and splash pad will not be within Section 2 or Section 3) and will be conveyed to the Association prior to the Initial Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Lot Grading Plans</u>*.*** Seller's proposed lot grading plan for the Section (the **"Lot Grading Plans**"), which must satisfy the lot grading and other requirements set forth in the Development Scope and Specifications (as hereinafter defined).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Lot Utility Layout</u>. Seller's or the applicable utility provider's proposed plans for the location of telephone, cable television and electrical utilities on the Lots (the "**Lot Utility Layout**"). Seller will cause the telephone, cable television and electrical utilities on each Lot to be installed consistent with the Lot Utility Layout approved by Buyer and Seller pursuant to this Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 **<u>Development Plans</u>*.*** The term "**Development Plans**" as used herein means the Site Plan, Preliminary Plat, Final Plat, Construction Plans, Subdivision Hardscape and Landscape Plans, Amenity Plans, Lot Grading Plans, and Lot Utility Layout, in the forms approved by Buyer and Seller in accordance with this Agreement and approved by the applicable Governmental Authorities. All Development Plans for the Sections shall be prepared in accordance with the development specifications attached hereto as **<u>Exhibit B-1</u>** (the "**Development Scope and Specifications**") and all Governmental Requirements. Seller shall be responsible for all costs and expenses related to the preparation and submission of the Development Plans. The "Development Plans" shall include all obligations and requirements applicable to the Section contained within any instrument disclosed by the Title Commitment or Survey.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 **<u>Review and Approval of Development Plans</u>**. When Seller delivers any of the Development Plans as provided above, Seller shall deliver such Development Plan to Buyer in electronic CAD files (not "pdf" format), together with full-size printed copies of the Development Plan. Within the later of five (5) business days after Buyer's receipt of any of the Development Plans or 15 days after the Effective Date of this Agreement, Buyer shall notify Seller of any requested changes or modifications to same. If Buyer fails to so notify Seller within the specified period, Buyer shall be deemed to have approved the respective Development Plan; provided, however, Buyer shall not have the right to object to an item on a Development Plan that was previously approved by Buyer on a prior Development Plan or that is required by a Governmental Authority. If Buyer and Seller fail to reach an agreement on such Development Plan within ten (10) business days after Buyer's notice to Seller, Buyer may terminate this Agreement, whereupon the Earnest Money (or uncredited portion), less the Independent Consideration, shall be returned to Buyer and thereafter neither party shall have any further obligation hereunder, except as specifically set forth in this Agreement. After Buyer and Seller have approved such plans, Seller shall submit the approved Development Plans to the applicable Governmental Authorities for approval. Buyer's approval of the Development Plans shall not constitute a waiver of any non-compliance with the Development Scope and Specifications unless Seller discloses in writing such non-compliance with specificity and Buyer approves the applicable Development Plan.

Seller represents and warrants that Seller has submitted the Development Plans for Sections 2 and 3 except for Final Plats, Hardscape and Landscape Plans, and Amenity Plans to the applicable Governmental Authorities for approval and the Applicable Governmental Authorities have approved the same and the same have been provided to Buyer prior to the execution of this Contract for Buyer's review and approval, which approval shall be deemed given by Buyer if Buyer delivers to Seller a Notice of Continuation as provided in this Agreement; provided, however, in the event a change to the Development Plans is required, after Seller has delivered the same to Buyer, Seller shall deliver the changed Development Plans to Buyer for Buyer's review and approval pursuant to the terms of this Section 9.4 and Section 9.5, whether before or after the Inspection Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 **<u>Changes to Development Plans</u>**. After Seller and Buyer have approved any of the Development Plans, Seller shall not make any material changes to such Development Plan without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Buyer shall not have the right to object to any change to a Development Plan required by a Governmental Authority; provided, however, if the required change has a material adverse effect on Buyer's ability to construct single-family homes on the Lots or Buyer's projected costs or revenues associated with its planned homebuilding operations, and Seller cannot cure the same to Buyer's satisfaction within sixty (60) days of Buyer's objection to the same (and any applicable Closing Date shall be extended if necessary to accommodate such cure period), Buyer may terminate this Agreement and the Earnest Money (or uncredited portion), less the Independent Consideration, shall be returned to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>DEVELOPMENT</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 **<u>Development Work</u>**. Seller, at Seller's sole cost, shall fully complete the Development Work in a good and workmanlike manner and in accordance with this Agreement. As used herein, the **"Development Work"** means all work necessary to fully develop and improve the Subdivision (to the extent required to serve the Lots) and the Lots in accordance with the Development Plans, the Development Scope and Specifications and all Governmental Requirements, with the Lots being "finished" building sites ready for the immediate issuance of building permits (subject only to Buyer's obligation to provide final grading of the Lots, Seller's Post Completion Work and Buyer to make payment of building permit fees and the submittal of the applicable building permit application and related documents) and, upon completion of construction of the residential dwellings, issuance of certificates of occupancy and consummation of closings of the Lots and residential dwellings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 **<u>Development Schedule; Completion</u>.** Seller shall perform the Development Work in accordance with the schedule (the "**Development Schedule**") attached hereto as **<u>Exhibit B-2</u>**. Seller shall meet on a regular basis (at least every 2 weeks) with Buyer to update Buyer regarding the status of the Development Work. Seller shall notify Buyer in writing when Seller has completed the Development Work for each of Section 2 and Section 3 in accordance with this Agreement ("**Seller's Completion Notice**") and shall then deliver to Buyer each of the items listed on **<u>Exhibit C</u>** attached hereto (the "**Completion Documents**") to the extent such items have not previously been delivered to Buyer. Seller's Completion Notice shall be deemed Seller's certification to Buyer that all Development Work for the applicable Section has been completed except for the Post Completion Work.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 **<u>Inspection by Buyer; Completion Date</u>**. Within five (5) business days after receipt of Seller's Completion Notice and the Completion Documents for the Section 3 Lots and Section 2 Lots respectively, which may not occur at the same time, Buyer shall review same, inspect the Lots and Section, and conduct such other investigations as it deems appropriate to confirm that all Development Work for such applicable Section has been completed as provided in this Agreement (except the Post Completion Work). If Buyer confirms that Seller has delivered the Completion Documents and the Development Work is complete for such applicable Section (except the Post Completion Work), or if Buyer fails to deliver written notice to Seller of any deficiencies in the Development Work for such Section during such five (5) business day period, the Development Work for such Section shall be deemed to have been completed and the "**Completion Date**" for such Section shall be deemed to have occurred on the expiration date of Buyer's five (5) business day inspection period for such Section. If Seller has not delivered all of the Completion Documents or Buyer's inspection reveals that the Development Work (except the Post Completion Work) is not complete as provided in this Agreement, then, within such five (5) business day period, Buyer shall deliver written notice to Seller stating with reasonable specificity the nature of the deficiencies. Seller shall then promptly correct, at its sole cost and expense, such deficiencies, and the notification and inspection procedures set forth above shall be repeated until Seller has delivered each of the Completion Documents and the Development Work (except the Post Completion Work) is complete for such Section. If Buyer delivers written notice to Seller stating that Seller has not delivered all of the Completion Documents or that the Development Work (except the Post Completion Work) is not complete as provided in this Agreement, then the "Completion Date" shall be deemed to have occurred on the date that Buyer and Seller have reasonably agreed that Seller has corrected or fulfilled all deficiencies. At Buyer's option, the inspection and Completion Date procedures set forth in this Section 10.3 shall also apply to each applicable takedown of Lots under this Agreement. Buyer shall also have the right to re-inspect the applicable Lots for each takedown before each Closing (even if inspected previously) and Seller shall cure any then-existing deficiencies and, at Buyer's option, the applicable Closing Date shall reasonably be extended as reasonably necessary for such purposes.

If a dispute arises between Seller and Buyer relating to any deficiencies in the Development Work, then Buyer's project engineer and Seller's project engineer shall, within ten (10) days of such dispute, select a disinterested third party civil engineer to inspect the deficiencies. The determination made by the third-party civil engineer shall be binding upon both Parties. Development Work determined to be deficient and not in conformance with this Agreement by the third-party civil engineer shall be corrected by Seller within twenty (20) days, if reasonably practicable to do so, of receipt of the third-party engineer's report. The third-party civil engineer shall then certify that any deficiency has been corrected and is in conformance with this Agreement. The costs of the third-party engineer shall be shared equally by both Parties.

Notwithstanding anything contained herein to the contrary and notwithstanding the fact that inspections and investigations could have been or were performed by or on behalf of Buyer or that the Completion Date was agreed to or deemed to have occurred, Buyer will rely on Seller's and Seller's engineer's agreements and certifications and the documentation provided by Seller to establish the completion of and compliance with the Development Work, and Buyer shall not be required to independently verify same or detect latent or inherent conditions or defects in the Lots or the Sections or the development of either. Accordingly, Seller will not be relieved from its obligations to complete the Development Work, and, whether a failure to do so is detected before or after a Closing, Seller will be required to remedy any such failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 **<u>Force Majeure</u>**. If Seller shall be delayed in the completion of the Development Work as a result of strikes, lock-outs, shortages of labor, fuel or materials, acts of God, fire or other casualty, or other cause reasonably beyond the control of Seller, the period for completion of the Development Work shall be extended by the number of days equivalent to the number of days of such delay, provided Seller gives Buyer written notice of such delay within ten (10) business days after the event causing the delay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 **<u>Failure to Timely Complete Development Work</u>.** If Seller has not completed the Development Work in accordance with the Development Schedule then Buyer shall have the rights and remedies set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 **<u>Defective Development Work</u>.** If at any time (before or after Closing) Buyer reasonably determines that any portion of the Development Work has not been completed properly in accordance with this Agreement or if Seller fails to complete any work to any portion of the Subdivision that results in Buyer being unable to obtain a certificate of occupancy for, or consummate a closing of, any dwelling Buyer constructs on a Lot as determined by any Governmental Authority ("**Defective Work**"), Buyer may notify Seller in writing of such Defective Work. Seller shall then correct such Defective Work within ten (10) days after Buyer's notice (or if the Defective Work is of a nature that it reasonably requires more than ten (10) days to cure, then such longer period of time as may be reasonably required up to 90 days provided Seller commences to cure such Defective Work within ten (10) days after Buyer's notice thereof and continues its cure with diligence until completion). If Seller fails to correct the Defective Work within such cure period, then Buyer may elect to correct any Defective Work. Seller shall reimburse Buyer for the reasonable out-of-pocket expenses incurred by Buyer to cure such Defective Work within thirty (30) days after receiving Buyer's invoice therefor and documentation of costs incurred. Any such reimbursement due Buyer and not paid by Seller within such thirty (30) day period shall accrue interest at the rate of [\*\*\*] (not to exceed the maximum rate permitted by law) from the expiration of such thirty (30) day period until paid. In addition to Buyer's rights and remedies set forth in Section 16, Buyer shall have the right to apply the amount of any such outstanding reimbursement, plus accrued interest, as a credit against the Purchase Price of the next and subsequent Lots to be purchased hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 **<u>Damage to Development Work*.*</u>** Buyer agrees to indemnify and hold Seller harmless from and against any and all damage to Seller's Development Work caused by Buyer, or Buyer's agents, employees, contractors, invitees, or other representatives. Seller agrees to indemnify and hold Buyer harmless from and against any and all damage to streets, roads, curbs, gutters, street lights and other improvements or infrastructure relating to the Lots purchased and acquired by Buyer, caused by Seller or Seller's agents, employees, contractors, invitees, or other representatives. Each Party shall provide the other with written notice which states with specificity the nature of the damage. The responsible Party will either correct the damage within ten (10) business days or reimburse the other Party for the expenses incurred by the other Party to correct such damage within ten (10) business days after receipt of documentation evidencing such expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 **<u>Storm Water and Erosion Control Requirements</u>**. With respect to the Sections and the Property, Seller shall comply with all Governmental Requirements relating to storm water and erosion control ("**Storm Water Rules**"), Seller's plans for controlling storm water or erosion ("**Storm Water Plans**"), and all permits and authorizations required by the Storm Water Rules ("**Storm Water Permits**"). As soon as same are available, but in any event at least thirty (30) days prior to the Initial Closing Date, Seller shall deliver to Buyer Seller's Storm Water Plans, Storm Water Permits, any notice received by Seller alleging a violation of the Storm Water Rules, and Seller's storm water inspection records for the most recent thirty (30) day period. If requested by Buyer, Seller shall again provide this information prior to each Closing. Prior to each Closing of a Lot, Seller shall ensure that perimeter storm water and erosion control measures (BMPs) are installed on the Lot and in good condition (and the Lots have been "stabilized" as required by the Storm Water Rules) so as to protect the Lot from discharging sediment onto neighboring land and streets. Buyer shall prepare its own Storm Water Plans and, from and after each Closing of a Lot hereunder, shall obtain its own Storm Water Permits for such Lot and comply with its Storm Water Permits, its Storm Water Plans and all Storm Water Rules with respect to such Lot. Alternatively, Buyer may choose to become a co-permittee or secondary permittee on Seller's Storm Water Permits for a purchased Lot, in which case, from and after each Closing of a Lot hereunder, Buyer shall comply with Seller's Storm Water Plans and Storm Water Permits with respect to such Lot. Prior to and following each Closing, Seller shall maintain all Subdivision streets free from sediment and prevent sediment-laden runoff from adjacent land (excluding any sediment or sediment-laden runoff caused by the operations of Buyer or its contractors) from entering Lots purchased by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10. **<u>Post Completion Work</u>**. Following the initial Closing of Lots in a Section, Seller shall complete the Development Work listed on **<u>Exhibit B-3</u>** ("**Post Completion Work**") for all the Lots in the applicable Section within the time period designated for each item.

This Section 10 shall survive Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>CONDITIONS TO CLOSING</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 **<u>Conditions to Closing</u>**. The following conditions are precedent to Buyer's obligation to proceed with the applicable Closing (collectively, the "**Buyer's Conditions Precedent**"). If any of Buyer's Conditions Precedent are not satisfied as and when described below then, unless the failure of such condition constitutes a Seller default, in which case the provisions of Section 16 shall control, Buyer may elect, by written notice to Seller, in Buyer's sole and absolute discretion, either to (i) waive that Buyer's Condition Precedent and proceed to the applicable Closing, (ii) extend the applicable Closing Date from time to time for items 11.1 (ii), (iv), and (ix) thru (xiv) (but for all other Buyer's Condition's Precedent only for a maximum of sixty (60) days or such longer period as may be approved by Seller) until Buyer's Conditions Precedent are satisfied (provided, however, the Initial Closing Date may not be extended for any period unless otherwise agreed by Seller), or (iii) terminate this Agreement, whereupon the Title Company shall immediately return to Buyer the Earnest Money (or uncredited portion) previously deposited by Buyer and, thereafter, the Parties shall have no further rights or obligations under this Agreement, except for those that expressly survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. On or prior to the expiration of the Inspection Period, Buyer shall have obtained the written approval of the Buyer's asset management committee, for Buyer's continued performance of this Agreement. Buyer's delivery of the properly executed Continuation Notice shall constitute satisfaction of this Buyer's Condition Precedent. Any Amendments to this Agreement that occur after a properly executed Continuation Notice has been delivered as described herein must be ratified by one of the following individuals before the Amendment is effective and enforceable against Buyer: Liesel Cooper, Jarrett Coleman or Chad Botkin.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The Final Plat approved by Buyer for the applicable Section of Lots shall have been recorded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. As of the applicable Closing Date, all of Seller's representations and warranties set forth in this Agreement shall be true and correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. On or prior to the applicable Closing Date, Seller shall not be in default of, and shall have performed and complied in all respects with all obligations and agreements required in this Agreement to be performed or complied with by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. As more particularly provided in Section 14 below, as of the applicable Closing Date no moratorium prohibition restricting or precluding the issuance of building permits or certificates of occupancy shall have been enacted by the City or any other Governmental Authorities, unless the same has been waived by Buyer as a Buyer's Condition Precedent as provided therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. As more particularly provided in Section 14 below, no casualty or other change in the Property has occurred and no condemnation action have been threatened, commenced or completed, unless the same has been waived by Buyer as a Buyer's Condition Precedent as provided therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. Subject to the development of the Lots in accordance with this Agreement and any changes described in Section 14 below, the Property is substantially in the same condition that existed as of the expiration of the Inspection Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. On or prior to the applicable Closing Date, (i) good and indefeasible title to the Property can be conveyed by Seller, subject only to the Permitted Exceptions, as more specifically provided in Section 6 above, and (ii) the Title Company shall be irrevocably committed to issue to Buyer the Owner's Title Policy for the Property to be conveyed at Closing as required under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ix. On or prior to the applicable Closing Date, Seller will have caused all tenants and occupants to vacate the Property and all leases and occupancy agreements shall be terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x. The Completion Date for the applicable Lots being purchased has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xi. Seller will have developed all of the applicable Lots as "finished" Lots, as defined in Section 10.1 (subject only to Buyer's obligation to provide final grading of the Lots and Seller's Post Completion Work).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xii. Seller shall have met the Development Scope and Specifications requirements of Buyer per **<u>Exhibit B-1</u>** except for the Post Completion Work, and delivered Seller's Completion Documents per **<u>Exhibit C</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xiii. If not already annexed, the Lots for such Closing shall be annexed and made subject to the Declaration prior to the applicable Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xiv. Approval of Buyer's home architectural plans for the lots has been provided by the proper architectural review body pursuant to Section 7.3, provided that Buyer submits the Plans for approval by the deadline in Section 7.3.

 

If any of Buyer's Conditions Precedent have not been satisfied by the Outside Completion Date, then Buyer shall have the right to (i) terminate this Agreement by written notice to Seller, whereupon the Earnest Money (or uncredited portion) shall be delivered to Buyer; (ii) waive in writing the unsatisfied condition(s) and proceed with the applicable Closing; or (iii) extend the Outside Completion Date one or more times until all of Buyer's Conditions Precedent are satisfied, such extension(s) not to exceed in the aggregate ninety (90) days after the original Outside Completion Date unless otherwise approved by Seller. If any of the Buyer's Conditions Precedent have not been satisfied by the date to which the Outside Completion Date is extended, then Buyer may exercise the rights set forth in clauses (i) or (ii) of the preceding sentence. The waiver of a Condition to Closing will not be deemed to be a waiver of any right to seek remedies as provided in this Agreement. If any of the Buyer's Conditions Precedent have not been satisfied by the Outside Completion Date or by a scheduled Closing date or Seller is otherwise in default under this Agreement, then until all of the Buyer's Conditions Precedent have been satisfied or Seller's default cured, as applicable, or the condition or default waived by Buyer in writing, Buyer's obligation to purchase Lots in accordance with the takedown requirements of Section 4.2 shall abate and the escalator for price per Lot provided for in Section 2 shall cease to accrue on any of the Lots that Closing is delayed.

Additionally, before Buyer exercises its right to terminate under the first paragraph of Section 11.1 for failure of the Buyer's Conditions Precedent listed in 11.1(ii), (x), (xi), or (xii), Buyer shall provide notice of termination to Seller and Seller shall have up to the earlier of (a) sixty (60) days after Buyer's delivery of the notice of termination or (b) the Outside Completion Date, to cure such failure, and if such failure is not cured within such time period, such termination shall take effect upon the expiration of such time period, unless Buyer withdraws such termination notice in writing prior to the expiration of such cure period. Before Buyer can exercise exercises its right to terminate under the first paragraph of Section 11.1 for failure of the Buyer's Conditions Precedent listed in 11.1(xiii) Buyer shall provide notice of termination to Seller and Seller shall have up to the earlier of (a) thirty (30) days after Buyer's delivery of the notice of termination or (b) the Outside Completion Date, to cure such failure, and if such failure is not cured within such time period, such termination shall take effect upon the expiration of such time period, unless Buyer withdraws such termination notice in writing prior to the expiration of such cure period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>CLOSING PROCEDURES</u>.** At each Closing, unless otherwise specified below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. **<u>Initial Closing</u>**. If not completed prior to the Initial Closing Date, Seller shall, prior to the Initial Closing Date only, execute and record (i) an HOA annexation instrument approved by Buyer and Seller with respect to the Section and (ii) a deed conveying the Common Areas in the Section, if any, to the Association (the "**Common Area Deed**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. **<u>Deed</u>**. Seller shall execute, acknowledge and deliver to the Title Company the Deed, conveying to Buyer title to applicable Lots, subject only to the Permitted Exceptions, which Deed shall be recorded in the official records of the County (the "**Records**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3. **<u>Payment of Purchase Price</u>**. Buyer shall deliver to the Title Company the Purchase Price for the applicable Lots being purchased (as adjusted pursuant to this Agreement, including a credit for the Earnest Money).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4. **<u>General Assignment</u>**. Seller shall execute and deliver to the Title Company the Assignment, conveying and assigning to Buyer all of Seller's rights, title and interests in and to the property relating to the such applicable Lots that is not conveyed under the Deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5. **<u>Assignment of Stormwater Permit</u>**. Upon Buyer's election, Seller shall execute an assignment of the Stormwater Permit for the applicable Section on a form acceptable to the applicable Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6. **<u>Non-Foreign Affidavit</u>**. Seller shall execute and deliver to the Title Company an affidavit prepared by the Title Company stating that Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7. **<u>Authorization Documents</u>**. Seller and Buyer each shall deliver to the other Party and the Title Company evidence reasonably satisfactory to the other Party authorizing the execution, delivery and performance by it of this Agreement and the documents required to be delivered under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8. **<u>Community Enhancement Fee</u>**. Buyer shall pay to Seller a Community Enhancement Fee equal to [\*\*\*] per Lot purchased at the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9. **<u>Other Documents</u>**. Seller and Buyer shall each deliver to the other and/or to the Title Company each of the following items prepared by the Title Company: a settlement statement, affidavits as to mechanic's liens, a transfer declaration and such other documents, agreements and certificates, either required by or otherwise not inconsistent with the provisions of this Agreement, as may be reasonably required or requested by the Title Company or the Parties pursuant to this Agreement or as may be necessary or customary to consummate the transactions contemplated in this Agreement and to issue the Owner's Title Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10. **<u>Owner's Title Policy</u>**. The Title Company shall commit to deliver to Buyer the Owner's Title Policy as provided for in Section 6 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11. **<u>Possession</u>**. Seller shall deliver to Buyer sole possession of the Lots purchased, subject only to the Permitted Exceptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12. **<u>Closing Costs and Adjustments</u>**. At Closing, the Parties, at their sole cost and expense, shall deliver to the Title Company the sums provided as follows, in immediately available funds:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Seller Costs</u>. Seller shall pay: (A) the base premium for the Owner's Title Policy for the Property, as provided in Section 6 above, (B) the recording and documentary fees due in connection with the release of any instruments or documents required to release or remove any encumbrances to title to the Property as required for Seller to convey title in the condition required in Section 4 above and for the Title Company to issue the Owner's Title Policy as provided in this Agreement, (C) any documentary transfer taxes, (D) any personal property, sales and use tax with respect to the transaction contemplated by this Agreement, (E) all taxes and assessments, HOA fees and assessments and all similar fees, assessments and charges levied against the Lots being purchased for years prior to the year of the applicable Closing, including any penalties, fees, interest, redemption amounts, and similar amounts, and a pro-rata portion of the same for the year of the applicable Closing, (F) any rollback or similar taxes assessed as a result of this transfer, and (G) one-half of the escrow fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Buyer Costs</u>. Buyer shall pay (A) the recording fees for the Deed, (B) the cost of any premiums for extended coverage or endorsements to the Owner's Title Policy requested by Buyer (and not a Seller obligation) pursuant to Section 6 above, (C) a pro-rata portion of all taxes and assessments, HOA fees and assessments and all similar fees, assessments and charges levied against the Lots being purchased for the year of the applicable Closing, and (D) one-half of the escrow fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Current Taxes and Assessments</u>. Taxes and assessments, HOA fees and assessments and all similar fees, assessments and charges levied against the Lots being purchased for the year of the applicable Closing shall be prorated and apportioned between Seller and Buyer as of 11:59 p.m. (Houston time) on the day before Closing, based upon the most recent assessment and mill levy and such prorations and assessments shall be deemed final, as between Seller and Buyer, as of the applicable Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Other Costs</u>. All other Closing costs not expressly provided for in this Agreement shall be paid in accordance with the customs of the county in which the Property is located. Except as otherwise expressly provided in this Agreement, Seller and Buyer shall each pay its own fees and expenses incurred in the preparation and performance of this Agreement, including, without limitation, the performance by Seller and Buyer of their respective Closing obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>REPRESENTATIONS AND WARRANTIES</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. **<u>Seller</u>**. Seller hereby represents and warrants to Buyer that the following are true and correct as of the Effective Date and shall be true and correct at the time of Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Seller is a limited partnership duly organized and validly existing under the laws of the State of Texas, is in good standing and authorized to transact business in the State of Texas, and has the requisite power and authority to enter into this Agreement and perform its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The execution and delivery of this Agreement by Seller and the performance by Seller of its obligations under this Agreement have been duly and validly authorized by all necessary action on the part of Seller, the person signing below on behalf of Seller is duly authorized to execute this Agreement and to bind the Seller; and this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. There are no attachments, executions, or assignments for the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy or under any other applicable debtor relief laws pending or, to Seller's knowledge, threatened against Seller or the Property, and Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the laws of the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against Seller within the last year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. There are no currently ongoing or, to Seller's knowledge, pending or threatened condemnation or similar proceedings affecting the Property, or any part thereof, and there are no currently ongoing or, to Seller's knowledge, pending litigation or other legal or administrative claims affecting Seller and/or the Property, and Seller has not received notice of any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. Seller has not received notice of any default under any note, deed of trust or other agreement or instrument related to or encumbering the Property that has not been cured, and to Seller's knowledge Seller is not in default under any note, deed of trust or other agreement or instrument related to or encumbering the Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. To Seller's knowledge, except as set forth in the Existing Documents, (A) Seller has not been notified of any special assessments, levies or taxes imposed or to be imposed affecting the Property and is not aware of any action regarding the potential formation of any district or authority impugned to so assess a tax or levy; and (B) the Property has not been, and is not being, taxed under any agricultural or special use valuation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. Seller has not received any notice of any violation of any ordinance, regulation, law, or statute of any Governmental Authorities, for which such violation has not been corrected in accordance with all applicable ordinances, regulations, laws and statutes, and to the best of Seller's knowledge neither Seller nor the Property is in violation of any ordinance, regulation, law, or statute of any Governmental Authorities,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ix. The execution and delivery of this Agreement, the consummation of the transaction herein contemplated, and the compliance with terms of this Agreement will not conflict with or, with or without notice or the passage of time or both, result in a breach of any of the terms or provisions of, or constitute a default under, any agreement, indenture, mortgage, loan agreement, or instrument to which Seller is a party or by which Seller or Seller's property is bound, any applicable regulation or any judgment, order, or decree of any court having jurisdiction over Seller or Seller's property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x. To Seller's knowledge, the Property contains no endangered species or endangered or protected habitats as defined by applicable state and federal laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xi. Except for Seller, and parties with rights expressly set forth in (1) the Original Title Commitment or disclosed in the Existing Documents (as of the Effective Date) or (2) the Permitted Exceptions (as of the applicable Closing Date), there are no parties with any interest whatsoever in the Property (marital, homestead, prescriptive or otherwise), and no other signatures are required to make this Agreement fully enforceable by Buyer against Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xii. Except as disclosed in the Original Title Commitment or disclosed by Seller to Buyer in the Existing Documents or otherwise disclosed by Seller to Buyer in writing at least thirty (30) days prior to the expiration of the Inspection Period, Seller has made no commitments or representations to any Governmental Authorities or any adjoining or surrounding property owner, which would in any way be binding on Buyer or would interfere with Buyer's ability to construct single family residences on the Property and no such commitment will be made prior to the applicable Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xiii. Buyer, by virtue of the purchase of the Property will not be required to satisfy any obligation of Seller other than those expressly assumed by Buyer pursuant to this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xiv. To Seller's knowledge, except as the same may be disclosed in the Existing Documents or in any environmental site assessment report obtained by Buyer during the Inspection Period in connection with its due diligence inspections of the Property, Seller has never used, generated, processed, stored, disposed of released, or discharged any Hazardous Substance on, under, about or in the vicinity of the Property or transported it to or from the Property; and no use by Seller or others has occurred which violates or has been alleged by any party to violate any applicable Environmental Law, and the Property is not on any "Superfund" list under any applicable Environmental Law, nor is it subject to any lien related to any environmental matter. As used in this Agreement, "Hazardous Material" shall mean, without limitation, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," "restricted hazardous waste," "hazardous substance," or "hazardous material" under the laws or regulations of the State of Texas, (ii) petroleum, (iii) asbestos, (iv) per- and polyfluoroalkyl substances (PFAS) which are a group of stable man-made chemicals that allow them to repel both water and oil including perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), (v) designated as a hazardous waste pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1317), (vi) defined as hazardous waste pursuant to Section 1004 of the Federal Resource Conservation Recovery Act (42 U.S.C. § 1601 et seq.) (42 U.S.C. § 6903), and (vii) defined as a hazardous substance pursuant to Section 101 of the Comprehensive Environmental Response Compensation Liability Act (42 U.S.C. § 9601 et seq.) and all environmental laws under the State of Texas (collectively, "**Environmental Laws**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xv. At the Closing, all Development Plans for the applicable Section have been prepared in accordance with all Governmental Requirements and matters of record and have been approved by all applicable Governmental Authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xvi. At the Closing, Seller has completed the Development Work except for the Post Completion Work in accordance with the Development Plans and all Governmental Requirements and matters of record, and the Lots are "finished" building sites ready for the immediate issuance of building permits and the construction of residential dwellings (subject only to Buyer's final grading of the Lots and payment of building permit fees and the submittal of the applicable building permit application and related documents) and, upon completion of construction of the residential dwellings, issuance of certificates of occupancy and consummation of closings of the Lots and residential dwellings.

If any of the Seller's representations or warranties contained herein are untrue or incorrect, Seller shall at all times before the applicable Closing use Seller's best efforts to take such necessary action to make such representations or warranties true and correct including, without limitation, the payment of money. The obligations of Buyer under this Agreement are contingent on the representations and warranties of Seller contained herein being true and correct. If any of the Seller's representations or warranties contained herein are untrue or incorrect on the applicable Closing Date, subject to the cure provisions in Section 16.1. below, Buyer shall be entitled, in addition to its other remedies in Section 16, to terminate this Agreement by written notice to Seller on the applicable Closing Date, upon which termination the Earnest Money previously deposited by Buyer (or uncredited portion) shall be immediately returned to Buyer, and thereafter the Parties shall have no further rights or obligations under this Agreement, except to the extent the same survive termination hereof. Seller understands and acknowledges that Buyer is relying on the accuracy and completeness of the representations and warranties contained in this Agreement. In the event Seller has breached any representations and/or warranties arising from and/or related to this Agreement, Seller shall indemnify and hold Buyer, its successors and assigns harmless for, from and against all fines, penalties, losses, damages and liabilities, and other damages, costs and losses, including reasonable attorney's fees, whether direct or indirect and in whole or in part arising out of or in any way attributable to such breach. Notwithstanding anything to the contrary contained herein, the representations and warranties arising from or related to this Agreement, shall be deemed remade as to the Property as of the applicable Closing, and such representations and warranties and the indemnification provisions contained herein shall survive the Closings for a period of one (1) year and shall not be merged therein. Representations made to "Seller's knowledge" shall mean the actual knowledge of Charley MacKenzie, in his capacity with Seller and not in his individual capacity, based on all information in such individual's possession, without further inquiry, and notwithstanding anything to the contrary set forth in this Agreement, such individual shall not have any personal liability with respect to any matters set forth in this Agreement or any of Seller's representations and/or warranties herein being or becoming untrue, inaccurate and incomplete.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. **<u>Buyer</u>**. Buyer hereby represents and warrants to Seller that the following are true and correct as of the Effective Date and shall be true and correct at the time of Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Buyer is a limited liability company duly organized and validly existing under the laws of the State of Colorado, is in good standing and authorized to transact business in the State of Texas, and has the requisite power and authority to enter into this Agreement and perform its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The execution and delivery of this Agreement by Buyer and the performance by Buyer of its obligations under this Agreement have been duly and validly authorized by all necessary action on the part of Buyer; the person signing below on behalf of Buyer is duly authorized to execute this Agreement and to bind the Buyer; and this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Seller in accordance with its terms; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. There are no attachments, executions, or assignments for the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy or under any other applicable debtor relief laws pending or, to Buyer's knowledge, threatened against Buyer, and Buyer has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the laws of the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against Buyer within the last year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Buyer is purchasing each Lot solely for the intended purpose of constructing a single family residence on the Lot to be offered for sale.

If any of the Buyer's representations or warranties contained herein are untrue or incorrect, Buyer shall at all times before the applicable Closing use Buyer's best efforts to take such necessary action to make such representations or warranties true and correct including, without limitation, the payment of money. The obligations of Seller under this Agreement are contingent on the representations and warranties of Buyer contained herein being true and correct. If any of the Buyer's representations or warranties contained herein are untrue or incorrect on the applicable Closing Date, subject to the cure provisions in Section 16.1. below, Seller shall be entitled to terminate this Agreement by written notice to Buyer on the applicable Closing Date, upon which termination the uncredited portion of the Earnest Money previously deposited by Buyer shall be disbursed to Seller, and thereafter the Parties shall have no further rights or obligations under this Agreement, except to the extent the same survive termination hereof. Buyer understands and acknowledges that Seller is relying on the accuracy and completeness of the representations and warranties contained in this Agreement. Notwithstanding anything to the contrary contained herein, the representations and warranties of Buyer made hereunder shall be deemed remade as of the applicable Closing, and such representations and warranties shall survive the Closings for a period of one (1) year and shall not be merged therein. Representations made to "Buyer's knowledge" shall mean the actual knowledge of Jack Casey in his capacity with Buyer and not in his individual capacity and such individual shall not have any personal liability, based on all information in such individual's possession, without further inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<u>PROPERTY ONGOING CONDITIONS.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. **<u>Seller Actions</u>**. During the period between the Effective Date and the applicable Closing Date, Seller shall continue to operate the Property in a manner consistent with Seller's current practices and, without limiting the generality of the foregoing, unless previously consented to by Buyer in writing, which consent may be withheld in Buyer's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. **<u>Agreements</u>**. Seller shall not, except as otherwise expressly permitted in and subject to the terms of this Agreement, (a) sell, convey, encumber or otherwise dispose of the Property or any interest therein, (b) enter into or modify or amend any contracts, leases or other agreements of any nature relating to any of the Property that will be binding on Buyer or any of the Property after the applicable Closing, including, but not limited to, the HOA Documents, (c) create, or vote in favor of the creation of, an assessment district which would serve the Property, and (d) agree in writing to any changes in the entitlements affecting any of the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3. **<u>Legal Requirements</u>**. Seller shall continue to operate its business and the Property in accordance with requirements of law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4. **<u>Waste</u>**. Seller shall maintain the Property, or cause the Property to be maintained, in substantially in the same condition it was in as of the expiration of the Inspection Period, and shall not commit or suffer to be committed any waste in or upon the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5. **<u>Marketing</u>**. During the pendency of the transactions contemplated hereunder, Seller shall not engage in an active marketing for the sale of the Property to any person other than Buyer.

If Seller breaches any of the provisions above, Buyer shall have all rights set forth in Section 16. In addition, Seller shall indemnify, defend and hold Buyer harmless for, from and against any and all claims, liability, loss, damage, cost and expense, including reasonable attorney's fees, that may be incurred by or asserted against Buyer as a result of any (i) breach by Seller of this section, and/or (ii) any mechanic's liens not appearing on the Original Title Commitment or the Closing Commitment that relate back to work performed on or with respect to the Property prior to the applicable Closing not caused by the actions of Buyer or those claiming by, through, or under Buyer, provided, however, that in the event a mechanic's lien is so filed from and after the applicable Closing and Seller fails to cause it to be released or discharged by bonding before the earlier of foreclosure or within sixty (60) days after notice from Buyer, Buyer shall have the option of discharging or bonding any such lien, charge, order or encumbrance, and Seller shall reimburse Buyer for all costs, expenses and other sums of money in connection therewith with interest at the rate of [\*\*\*] thereon promptly upon demand. The indemnification contained in this Section shall survive the Closings or termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 **<u>Change in Condition</u>**. The obligations of Buyer under this Agreement are expressly contingent upon there being no change after the expiration of the Inspection Period and prior to the applicable Closing, in the nature or condition of or circumstances affecting the Property (other than changes arising from the development of the Lots pursuant to the terms of this Agreement or related to governmental approvals) including, without limitation, any change in (i) the areas determined to be flood prone areas or designated wetland areas, if any; (ii) the availability of utilities; (iii) access; (iv) governmental zoning ordinances; (v) materially new costs or charges associated with governmental approvals for residential construction; or (vi) any new or changes to restrictions and requirements materially adversely affecting Buyer's ability to construct residences, except as the same may be approved by Buyer. If any such change occurs prior to the applicable Closing, then Buyer may elect to terminate this Agreement by written notification to Seller at any time prior to or at the applicable Closing and, notwithstanding any other provisions of this Agreement to the contrary, the uncredited portion of the Earnest Money previously deposited by Buyer shall be immediately returned to Buyer and, thereafter, the Parties shall have no further rights or obligations under this Agreement, except for any that expressly survive the termination hereof; provided, however, prior to terminating the Contract under this Section 14.6, Buyer shall provide notice of termination to Seller and Seller shall have up to the earlier of (a) sixty (60) days after Buyer's delivery of the notice of termination or (b) the Outside Completion Date, to cure such change (and the applicable Closing shall be extended, if necessary), and if such change is not cured to Buyer's reasonable satisfaction within such time period, such termination shall take effect upon the expiration of such time period, unless Buyer withdraws such termination notice in writing prior to the expiration of such cure period. If, however, Buyer has such right but fails to timely terminate this Agreement as provided herein, Buyer will be deemed to have waived its right to terminate under this section and also waive the existence of such change as a Buyer's Conditions Precedent as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 **<u>Moratorium</u>**. If the City, County or any other Governmental Authorities declares or effects any moratorium or limitation on the issuance of permits, utility service or other approvals, which moratorium or limitation is applicable to the Property or any portion thereof, and, as a result of such moratorium or limitation, the City, the County or any other Governmental Authorities will not issue permits, utility services or other approvals (collectively, a "**Moratorium**"), then, in such event, Buyer's obligation to close hereunder shall abate during the pendency of the Moratorium. Upon the discontinuation of any such Moratorium, the Buyer's obligation to close hereunder shall resume as of that date and continue as per the provisions of this Agreement, provided that the applicable Closing Date shall be adjusted by the number of days Buyer's obligations were abated hereunder. If, however, such Moratorium shall last longer than ninety (90) days, either Seller or Buyer shall have the right, but not the obligation, to terminate this Agreement by giving written notice thereof to the other Party within one hundred twenty (120) days after the commencement of the Moratorium (the "**Moratorium Termination Deadline**"). In the event Seller or Buyer has the right, and timely elects to terminate this Agreement as provided herein, then this Agreement shall terminate on the earlier of the Moratorium Termination Deadline or the termination date set forth in the termination notice, and thereafter the uncredited portion of the Earnest Money previously deposited by Buyer shall be immediately refunded to Buyer, and the Parties shall have no further rights or obligations under this Agreement, except for any that expressly survive the termination hereof. If, however, Buyer has such right but fails to timely terminate this Agreement as provided herein, Buyer will be deemed to have waived its right to terminate under this section and also waive the existence of a Moratorium as a Buyer's Conditions Precedent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 **<u>Casualty</u>**. If the Property is damaged by fire, flood, earthquake, or other casualty between the Effective Date and the applicable Closing, this Agreement may be terminated at the option of Buyer exercised by written notice to Seller delivered no later than the later to occur of thirty (30) days after the occurrence of such casualty or the applicable Closing Date, in which event the uncredited portion of the Earnest Money previously deposited by Buyer shall be immediately returned to Buyer, and thereafter the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive termination. In the event, however, that Buyer fails to timely terminate this Agreement as provided herein or agrees in writing to proceed to Closing notwithstanding damage resulting from such casualty, then (A) the right to receive any insurance proceeds payable to Seller, and any insurance proceeds paid to Seller, by reason of such damage shall be assigned and paid to Buyer at Closing (with no adjustment in the Purchase Price) or, at Buyer's election, Buyer shall receive a credit against the Purchase Price in the amount thereof, and (B) Buyer will be deemed to have waived the occurrence of such casualty as a Buyer's Conditions Precedent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 **<u>Condemnation</u>**. If prior to the applicable Closing, any portion of the Property is taken by any entity by condemnation or with the power of eminent domain, or if the access thereto is reduced or restricted thereby (or is the subject of a pending taking which has not yet been consummated), Seller, upon receiving notice thereof, shall immediately notify Buyer of such fact. In such event, Buyer shall have the right, in Buyer's sole discretion, to terminate this Agreement upon written notice to Seller and Title Company not later than seven (7) days after receipt of Seller's notice thereof. If this Agreement is so terminated, the uncredited portion of the Earnest Money, whether deposited into escrow or released to Seller, shall be immediately returned to Buyer, and thereafter the Parties shall have no further rights or obligations under this Agreement, except for any that expressly survive the termination hereof. Alternatively, Buyer, in its sole discretion, may proceed to consummate the transaction, in which event, at the sole option of Buyer, either (a) Seller shall assign and turn over, and Buyer shall be entitled to receive and keep, any and all awards made or to be made in connection with such condemnation or eminent domain, and the Parties shall proceed to the applicable Closing pursuant to the terms hereof, or (b) the Purchase Price shall be proportionately reduced in an amount equal to the portion of the Property taken as compared to the whole, with Seller being entitled to the entire award. In the event Buyer elects to proceed to consummate this transaction, Buyer will be deemed to have waived the occurrence of such condemnation as a Buyer's Conditions Precedent under as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **<u>NO REAL ESTATE BROKER</u>**. Buyer and Seller each hereby represent and warrant to the other that it has not dealt with any broker or finder in connection with this Agreement or the transaction contemplated hereby. Buyer hereby agrees to indemnify, defend and hold Seller harmless from and against any and all claims, losses, damages, costs or expenses of any kind or character arising out of or resulting from any agreement, arrangement or understanding made or alleged to have been made by Buyer or on its behalf with any broker or finder in connection with this Agreement or the transaction contemplated hereby. Seller hereby agrees to indemnify, defend and hold harmless Buyer from and against any and all claims, losses, damages, costs or expenses of any kind or character arising out of or resulting from any agreement, arrangement or understanding made or alleged to have been made by Seller or on its behalf with any broker or finder in connection with this Agreement or the transaction contemplated hereby. This provision shall survive termination or Closing(s) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **<u>DEFAULT AND REMEDIES</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1 **<u>Notice and Right to Cure</u>.** Except as otherwise expressly provided herein, each Party shall be entitled to written notice of any default and prior to the exercise of any remedy provided herein, such defaulting Party shall have thirty (30) days from receipt of such notice to cure any non-monetary default and ten (10) days from receipt of such notice to cure any monetary default. Both Parties agree to cooperate with the other in any and all reasonable attempts by the defaulting Party to cure any default within the default cure period. Notwithstanding the foregoing to the contrary, the notice of default or cure period for the failure of a party to close the sale or purchase of Lots on a date specified for Closing shall be three (3) business days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2 **<u>Seller's Failure to Close</u>**. Subject to the notice and cure provisions in Section 16.1. above, if Seller defaults in the performance of its obligation to close on the terms and conditions contained herein at or before Closing (each, a "**Seller Closing Default**"), Buyer shall have the right to elect as its sole remedies to either: (i) terminate this Agreement and receive immediate return of the uncredited portion of the Earnest Money previously deposited by Buyer; or (ii) maintain an action for specific performance provided, however, that if Buyer elects to pursue specific performance but such remedy is or becomes unavailable as a result of any action or inaction of Seller or any other Seller Parties occurring from and after the Effective Date and at any time thereafter during the effective period of this Agreement, then Buyer shall have the right to pursue a claim at law for actual damages. Buyer expressly waives all other rights or remedies for any Seller Closing Defaults. Upon termination of this Agreement pursuant to this paragraph, and the payment of all sums due hereunder, the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3 **<u>Buyer's Failure to Close</u>**. Subject to the notice and cure provisions in Section 16.1. above, if Buyer defaults in the performance of its obligations to close hereunder on the terms and conditions contained herein at or before Closing (each, a "**Buyer Closing Default**"), Seller shall have the right, as its sole and exclusive remedy, to terminate this Agreement and immediately receive the Earnest Money previously deposited by Buyer as liquidated damages and in lieu of all other remedies for said default by Buyer. BUYER AND SELLER EACH AGREE THAT IN THE EVENT OF A BUYER CLOSING DEFAULT, THE DAMAGES TO SELLER WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN, AND THAT THEREFORE, IN THE EVENT OF SUCH A BUYER CLOSING DEFAULT, THE EARNEST MONEY PREVIOUSLY DEPOSITED BY BUYER SHALL SERVE AS LIQUIDATED DAMAGES FOR SUCH DEFAULT BY BUYER, AS A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER, INCLUDING COSTS OF NEGOTIATING AND DRAFTING THIS AGREEMENT, COSTS OF COOPERATING IN SATISFYING CONDITIONS TO CLOSING, COSTS OF SEEKING ANOTHER BUYER, OPPORTUNITY COSTS IN KEEPING THE PROPERTY OUT OF THE MARKETPLACE, AND OTHER COSTS INCURRED IN CONNECTION HEREWITH. DELIVERY TO AND RETENTION BY SELLER OF THE Earnest Money previously deposited by Buyer SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF SUCH A MATERIAL DEFAULT BY BUYER, AND SELLER WAIVES ANY AND ALL RIGHT TO SEEK OTHER RIGHTS OR REMEDIES AGAINST BUYER, INCLUDING WITHOUT LIMITATION, SPECIFIC PERFORMANCE. Upon termination of this Agreement pursuant to this paragraph, and release of the sums hereunder, the parties shall have no further rights or obligations under this Agreement, except for those that expressly survive termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4 **<u>All Other Defaults</u>**. Subject to the notice and cure provisions in Section 16.1. above, if either Party defaults in the performance of any of its obligations under this Agreement other than the obligations to close as set forth in Sections 16.2 and 16.3 above, the non-defaulting Party shall have such rights and remedies as are available at law or in equity, but in no event shall either Party recover damages other than actual damages for such default (including, without limitation, reasonable attorneys' fees and costs), and each Party expressly waives its rights to receive consequential, incidental or punitive damages or damages for lost profits under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.5 **<u>No Limit on Indemnities</u>**. The provisions of this section shall not limit either Party's express obligations to indemnify the other as set forth in other sections of this Agreement, provided, however, that in the event a Party seeks damages, it shall recover only actual damages (but not any consequential, incidental or punitive damages or damages for lost profits), and each Party expressly waives its rights to receive consequential, incidental or punitive damages or damages for lost profits under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.6 **<u>Attorneys' Fees</u>**. Should any legal action be brought in relation to this Agreement, including, without limitation, actions based on contract, tort or statute, the prevailing Party in such action shall be awarded all of the reasonable costs and expenses (including reasonable attorneys' fees) incurred by such Party in connection with such action, including without limitation, any mediation, arbitration, appeal or other proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.7 **<u>Survival</u>**. The provisions of this Section 16 shall survive the Closings, expiration, and termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **<u>NOTICES</u>**. Any notice or other communication to be given or served upon any party hereto in connection with this Agreement must be in writing and delivered to the party (i) in person, (ii) by overnight delivery service (including FedEx), (iii) by certified mail, return receipt requested, or (iv) electronic mail (e-mail). If such notice is given in person, such notice will be deemed to have been given when received. If such notice is sent by overnight delivery service, such notice is deemed received at the time of first attempted delivery of such notice. If such notice is sent by certified mail, such notice will be deemed received three (3) days after a certified letter containing such notice, properly addressed with postage prepaid, is deposited in the United States mail. If such notice is given by electronic mail (e-mail), such notice will be deemed to have been given when sent, provided the sender does not receive a message of non-delivery. Any notice, however delivered, that is confirmed or acknowledged (excluding any automatically generated electronic acknowledgement) by a party below to have been received by such party is effective notice. Notices or other communication will be sent to the parties at the following addresses:

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| | |
|:---|:---|
| If to Seller: | 150 CCM Black Oak, LTD. |
|  | Attn: Charley MacKenzie |
|  | 4800 Montgomery Lane, Ste. 210 |
|  | Bethesda, MD 20814 |
|  | Telephone: |
|  | Email: |

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| | |
|:---|:---|
| With a copy to: | Richard L. Rose, Esquire |
|  | Coats Rose, P.C. |
|  | 9 Greenway Plaza, Suite 1000 |
|  | Houston, Texas 77046 |
|  | Telephone: |
|  | Email: |

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| | |
|:---|:---|
| If to Buyer: | Century Land Holdings of Texas, LLC |
|  | Attn: Jack Casey and Louis Trapolino |
|  | 333 Cypress Run, Suite 200 |
|  | Houston, Tx 77094 |
|  | Telephone: |
|  | Email: |
| With a copy to: | Century Communities, Inc. |
|  | Attn: Gavin Parker and Jill Voegtle |
|  | 333 Cypress Run, Suite 200 |
|  | Houston, Tx 77094 |
|  | Phone: |
|  | Email: |
| Title Company: | First American Title Company |
|  | Attn: Amanda Tidmore |
|  | 1846 North Loop 1604 West, Suite 101 |
|  | San Antonio, Texas 78248 |
|  | Telephone: |
|  | Email: |

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Any Party may change its address or telephone number for the purpose of this paragraph by giving written notice of such change to each of the other Parties in the manner herein provided. To be effective, such notice of change must expressly state that it is given for the purpose of changing the notice provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **<u>MISCELLANEOUS</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.1. **<u>Effective Date</u>.** This Agreement shall be deemed effective as of the date the Title Company executes the Acknowledgment attached to this Agreement, indicating its receipt of a fully-executed copy of this Agreement, and its agreement to disburse the Earnest Money deposited by Buyer in accordance with this Agreement (such date, the "**Effective Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.2. **<u>Binding Agreement; Entire Agreement</u>**. The terms and conditions of this Agreement are binding on the Parties hereto and their executors, heirs, administrators, successors and assigns. This Agreement embodies the entire agreement between the Parties regarding the subject matter hereof, supersedes all prior negotiations, understandings and agreements, written and oral, and may not be varied except by a written agreement executed by Buyer and Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.3. **<u>Assignment</u>*.*** Buyer will have the right to assign this Agreement and its rights and obligations hereunder to any entity (i) directly or indirectly owned or controlled by Buyer, (ii) directly or indirectly controlling Buyer, (iii) directly or indirectly controlling, controlled by, or under common control with Buyer or Buyer's members, or (iv) a third party who has entered into a land banking arrangement with Buyer pursuant to which Buyer has the right or option to purchase the Property from such third party, upon delivery of written notice to Seller, but without obtaining Seller's prior consent. For any other assignment of Buyer, Buyer shall not have the right to assign this Agreement without Seller's prior written consent. Seller shall have the right to collaterally assign this Agreement to secure financing but any other assignment by Seller shall require Buyer's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.4. **<u>Attorneys' Fees</u>**. If any Party obtains a judgment against any other Party by reason of breach of this Agreement, the judgment shall award the recovery of attorney's fees and costs to the Party obtaining such judgment. This provision shall survive termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.5. **<u>Dates</u>**. If the final day of a period or a date of performance under this Agreement falls on a Saturday, Sunday or legal holiday, then the final day of any such period or any such date of performance will be deemed to fall on the next day which is not a Saturday, Sunday or legal holiday.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.6. **<u>Exhibits</u>**. All exhibits referred to herein and attached hereto are incorporated into this Agreement as though fully set forth herein. To the extent of any conflict between the provisions in any exhibit or addenda attached to this Agreement and the provisions in the body of this Agreement, the provisions in the body of this Agreement shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.7. **<u>Counterparts</u>**. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one agreement. An electronic transmission or a .PDF of an executed counterpart shall be deemed to be an original.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.8. **<u>No Partnership</u>**. Nothing contained herein and no act by Buyer or Seller in the performance of, or in any way related to, this Agreement will be construed to create or evidence in any manner an employment, partnership, agency or joint venture relationship between the Parties hereto. Buyer and Seller agree that it is their mutual intention that the sole relationship created between them by this Agreement is that of vendor and buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.9. **<u>Obligations to Survive</u>**. All representations, warranties, obligations and other agreements shall survive Closing and the execution and delivery of a Deed and shall not be merged therein. With respect to a termination of this Agreement, all representations, warranties, obligations and other agreements shall not survive a termination, unless (i) otherwise provided herein, or (ii) a representation, warranty, obligation or other agreement herein is intended for the benefit of a Lot acquired by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.10. **<u>No Third-Party Beneficiaries</u>**. Nothing in this Agreement, expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the Parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any Party hereto or give any third person any right of subrogation or action over or against any Party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.11. **<u>No Waiver</u>**. No waiver by one Party of the other's default, or any failure of one Party to exercise any right granted to the Party hereunder, will constitute a subsequent waiver of any default or right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.12. **<u>Time of the Essence</u>*.*** Time is of the essence in the performance of all obligations by Buyer and Seller under this Agreement. In computing any period of time herein, the date of the act or event from which the designated period of time begins to run shall not be included. As used herein, the term "business day" shall mean Monday through Friday, but excluding any state or federal legal or bank holiday

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.13. **<u>Headings</u>**. The headings contained in this Agreement are for reference purposes only and will not be considered in interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.14. **<u>Construction of Contract</u>**. All of the Parties to this Agreement participated freely in the negotiation and preparation hereof. Accordingly, this Agreement shall not be more strictly construed against any one of the Parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.15. **<u>Governmental Authorities</u>**. The term **"Governmental Authority"** or **"Governmental Authorities,"** as the case may be, means the federal government, the Federal Housing Administration (**"FHA"**), the Department of Veteran's Affairs (**"VA"**), the Federal National Mortgage Association (**"FNMA"**) the state in which the Property is located, the County, the City, and any department, agency or instrumentality of any of them, and any board, authority, agency, district, utility provider, homeowners association or other organization, whether public or private, having jurisdiction over the Property or any portion thereof and whose approval is necessary for the development of the Property or the satisfaction of any of the conditions contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.16. **<u>Governmental Requirements</u>**. The term **"Governmental Requirements"** means all laws, rules, standards, specifications and requirements of all Governmental Authorities applicable to the development of the Subdivision or the Lots, including without limitation the FHA and VA standards and requirements for mortgage loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.17. **<u>Governing Law</u>**. This Agreement will be governed by and construed in accordance with the laws of the state in which the Property is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.18. **<u>Term Equality</u>**. At all times after the Effective Date and through and until the earlier of (a) the termination of this Contract and (b) six (6) months respectively after the each of the Closings under this Contract, Seller shall not sell, convey, or enter into a contract with a third party to sell or convey any similar-sized residential lots within the Subdivision with price or terms less favorable to Seller than those offered to Buyer under this Agreement and if Seller breaches the foregoing, Seller shall notify Buyer, and Seller and Buyer, at Buyer's option, shall enter into an amendment to this Agreement acceptable to Buyer, amending this Agreement so that this Agreement has as favorable of terms for the Buyer as Seller has offered to another builder in the Subdivision, including without limitation a reduction in the Purchase Price and if the same arises after the applicable Closing, Seller shall reimburse Buyer for the difference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.19. **<u>No Build for Rent Homes</u>**. Neither Buyer nor an affiliate of Buyer will construct a residence on a Lot and offer it for rent. In addition, unless otherwise approved by Seller (not to be unreasonably withheld), Buyer will not enter into a sales contract with any institutional entity investor that has notified Buyer that it intends to rent the residence purchased from Buyer and Buyer will not enter into a sales contract to sell more than four constructed residences to a single purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.20. **<u>Notice to Purchasers of Real Property</u>**. In accordance with the requirement of Texas law, Seller gives the following notice to Purchaser:

"The real property, described below, that you are about to purchase is located in the Southeast Regional Management District formerly named Harris-Montgomery Counties Management District. The district has taxing authority separate from any other taxing authority, and may, subject to voter approval, issue an unlimited amount of bonds and levy an unlimited rate of tax in payment of such bonds. As of this date, the rate of taxes levied by the district on real property located in the district is $1.25 on each $100 of assessed valuation. The total amount of bonds, excluding refunding bonds and any bonds or any portion of bonds issued that are payable solely from revenues received or expected to be received under a contract with a governmental entity, approved by the voters and which have been or may, at this date, be issued is $________ for water, sanitary sewer and drainage purposes and $_______ for road and park purposes, and the aggregate initial principal amounts of all bonds issued for one or more of the specified facilities of the district and payable in whole or in part from property taxes is $_________ for water, sanitary sewer and drainage purposes and $_______ for road and park purposes.

The district has the authority to adopt and impose a standby fee on property in the district that has water, sanitary sewer, or drainage facilities and services available but not connected and which does not have a house, building, or other improvement located thereon and does not substantially utilize the utility capacity available to the property. The district may exercise the authority without holding an election on the matter. As of this date, the most recent amount of the standby fee is $N/A because the District has not elected to impose a standby fee. An unpaid standby fee is a personal obligation of the person that owned the property at the time of imposition and is secured by a lien on the property. Any person may request a certificate from the district stating the amount, if any, of unpaid standby fees on a tract of property in the district.

The district is located in whole or in part within the extra-territorial jurisdiction of the Cities of Houston, Tomball and Magnolia. By law, a district located within the extra-territorial jurisdiction of a municipality may be annexed and dissolved by municipal ordinance without the consent of the district or the voters of the district.

The purpose of this district is to provide water, sewer, drainage, or flood control facilities and services and roads and parks within the district through the issuance of bonds payable in whole or in part from property taxes. The cost of these facilities is not included in the purchase price of your property, and these utility facilities are owned or to be owned by the district. The legal description of the property you are acquiring is as follows: See Exhibit A attached hereto and made a part hereof."

At the Closing, Seller and Purchaser will execute a Notice to Buyer instrument in the form required by law.

(Signature Page Follows)

IN WITNESS WHEREOF, the Parties hereto have executed this Contract for Purchase and Sale and Escrow Instructions, effective as of the Effective Date.

---

| | |
|:---|:---|
| **<u>SELLER</u>:** |  |
| 150 CCM Black Oak, LTD. | 150 CCM Black Oak, LTD. |
| a Texas limited partnership | a Texas limited partnership |
| By: | 150 Black Oak GP, Inc. |
|  | a Texas corporation |
|  | its general partner |
| By: |  |
| Name: |  |
| Title: |  |
| Date: | _______________________, 2022 |

---

**<u>BUYER</u>:**

Century Land Holdings of Texas, LLC

a Colorado limited liability company

---

| | |
|:---|:---|
| By: |  |
| Name: |  |
| Title: |  |
| Date: | __________________________, 2022 |

---

**ACKNOWLEDGEMENT OF THE TITLE COMPANY**

The undersigned Title Company hereby acknowledges receipt of counterparts of this Agreement duly executed by Seller and Buyer. In addition, the undersigned Title Company has read and agrees to be bound by the provisions of this Agreement with respect to the disbursement of the Earnest Money.

First American Title Company

Dated: By:   <br> Name:   <br> Title:  

**EXHIBIT A**

**<u>THE LAND / SUBDIVISION / LOTS</u>**

**EXHIBIT B-1**

**EXHIBIT B-2**

**<u>DEVELOPMENT SCHEDULE</u>**

**EXHIBIT B-3**

**<u>POST COMPLETION WORK</u>**

**EXHIBIT C**

**<u>COMPLETION DOCUMENTS</u>**

**EXHIBIT D**

**FORM OF SPECIAL WARRANTY DEED**

**SPECIAL WARRANTY DEED**

**EXHIBIT E**

**FORM OF GENERAL ASSIGNMENT AND BILL OF SALE**

**GENERAL ASSIGNMENT AND BILL OF SALE**

## Exhibit 10.7

**Exhibit 10.7**

**Certain confidential information contained in this document, marked by brackets and asterisk ([\*\*\*]), has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K, because the Company customarily and actually treats such information as private or confidential and the omitted information is not material.**

**FIRST AMENDMENT TO CONTRACT FOR PURCHASE**

**AND SALE AND ESCROW INSTRUCTIONS**

This FIRST Amendment to CONTRACT FOR PURCHASE AND SALE and escrow instructions (this "<u>Amendment</u>") is entered into effective as of the 28<sup>th</sup> day of November, 2022 (the "<u>Effective Date"</u>), by and between **150 CCM Black Oak, Ltd.**, a Texas limited partnership ("<u>Seller</u>"), and **Century Land Holdings of Texas, LLC**, a Colorado limited liability company ("<u>Buyer</u>").

**<u>WITNESSETH:</u>**

WHEREAS, Seller and Buyer are parties to that certain Contract for Purchase and Sale and Escrow Instructions dated as of October 28, 2022, for the purchase and sale of approximately 132 40'X100" single-family detached residential lots in Section 3 and 110 45'X120' single-family detached residential lots in Section 2 of the subdivision known as Lakes at Black Oak located in Montgomery County, Texas (the "<u>Agreement</u>"); and

WHEREAS, Buyer and Seller desire to modify the Agreement, and the parties have agreed to execute this Amendment to reflect such modification to the Agreement.

NOW, FOR AND IN CONSIDERATION of the covenants, agreements and premises herein set forth, Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby expressly acknowledged by the parties hereto, the parties hereto intending to be legally bound hereby, do covenant and agree as follows:

**1.** <u>Section 1 – Property</u>. Notwithstanding anything stated to the contrary in the Agreement, the number of lots in Section 3 is hereby amended to be approximately 131 and the Property shall not include the Section 2 Lots. Any and all references to the Section 2 Lots in the Agreement are hereby deleted.

**2.** <u>Section 2 – Purchase Price</u>. Section 2(b) regarding the Purchase Price for the Section 2 Lots, and the last paragraph regarding the [\*\*\*] lot price escalation, are hereby deleted in their entirety.

**3.** <u>Section 3 – Deposit</u>. Section 3.2 is hereby deleted in its entirety. The Additional Earnest Money stated in Section 3.1 is hereby amended to be [\*\*\*] and to add the following as the last sentence:

"The Earnest Money shall be credited against the Purchase Price at Closing."

**4.** <u>Section 4 – Closing</u>. Notwithstanding anything stated to the contrary in the Agreement, the Closing Date in Section 4.1 is amended to be the later of (i) January 12, 2023 or (ii) ten days after the Completion Date for the Section 3 Lots. Section 4.2 is hereby deleted in its entirety. Any and all references in the Agreement to multiple or subsequent closings are hereby deleted. References to "initial" or "each" closing shall instead be to just one closing.

**5.** <u>Section 5.2 - Inspection Period</u>. The Inspection Period is hereby extended from November 28, 2022 to continue through and until 11:59 p.m. (Houston time) on December 6, 2022.

**6.** <u>Incorporation of Recitals.</u> The recitals set forth above are true and correct and are incorporated herein by reference as if set forth fully herein.

**7.** <u>Capitalized Terms</u>. All capitalized terms that are not otherwise defined herein shall be defined as set forth in the Agreement.

**8.** <u>Effect of Amendment</u>. Except as modified in this Amendment, there are no changes to the Agreement, and the Agreement as herein modified remains in full force and effect as of the date hereof and is hereby ratified by the parties in all respects. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of either party for any default under the Agreement, nor constitute a waiver of any provision of the Agreement. In the event of a conflict between the Agreement and this Amendment, the terms of this Amendment shall control.

**9.** <u>Multiple Counterparts</u>. This Amendment may be executed by the parties hereto individually or in combination or in one or more counterparts, each of which shall be an original, and all of which shall constitute one and the same instrument. Signatures given by facsimile or portable document format shall be binding and effective to the same extent as original signatures.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date.

---

| | |
|:---|:---|
| **<u>SELLER</u>:** | **<u>SELLER</u>:** |
| **150 CCM Black Oak, Ltd.** | **150 CCM Black Oak, Ltd.** |
| a Texas limited partnership | a Texas limited partnership |
| By: |  |
| Name: |  |
| Title: |  |
| **<u>BUYER</u>:** | **<u>BUYER</u>:** |
| **Century Land Holdings of Texas, LLC** | **Century Land Holdings of Texas, LLC** |
| a Colorado limited liability company | a Colorado limited liability company |
| By: |  |
| Name: |  |
| Title: | Authorized Signatory |

---

## Exhibit 10.8

**Exhibit 10.8**

**Certain confidential information contained in this document, marked by brackets and asterisk ([\*\*\*]), has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K, because the Company customarily and actually treats such information as private or confidential and the omitted information is not material.**

**PURCHASE AND SALE AGREEMENT**

**(DBO - BULK)**

This Purchase and Sale Agreement ("**Agreement**") is made between **150 CCM BLACK OAK, LTD.**, a Texas limited partnership (collectively "**Seller**" and/or "**Developer**", whether one or more) and **RAUSCH COLEMAN HOMES HOUSTON, LLC**, a Texas limited liability company, or permitted assigns ("**Buyer**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Sale of Property/Lots</u>**. Seller agrees to sell and Buyer agrees to purchase, subject to the terms and conditions of this Agreement, certain property more particularly described as follows:

110 single family residential lots located in the Black Oak Section 2 Subdivision, Magnolia, Montgomery County, Texas, as more particularly referenced and described on the "Preliminary Plat with Lot Identification" attached hereto as Exhibit "A", and specifically including all of the lots in Blocks 1 through 5 listed on Exhibit "A",

together with all improvements thereon and all appurtenant rights of Seller including, without limitation, any rights of ingress and egress through the adjacent streets, roads, infrastructure, alleys and right-of-ways and such other rights as may be specified in this Agreement (collectively the "**Property**" or the "**Lots**"). Buyer and Seller acknowledge and understand the location and description of the Property referenced and described herein, regardless of the sufficiency of any legal description. The Property does not include and Seller specifically retains the right to receive reimbursement of the costs of infrastructure improvements constructed to serve the Lots from the District (hereinafter defined), or any other governmental entity, or from a private utility company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Purchase Price</u>**. The Purchase Price for the Property shall be [\*\*\*] per Lot, for a total of [\*\*\*]. The Purchase Price shall be payable as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** Unless
 this Agreement is sooner terminated, within three (3) business days after expiration of the
 Inspection Period, Buyer shall deliver [\*\*\*] to First American Title Insurance Company, 23924
 Dorrington Estates Lane, Conroe, Texas 77385, attn: Gena Lopez, email: or Stephanie Hilliard,
 email: ()"**Escrow Agent** ", which may also serve as the Title Company as the
 context requires) as "**Earnest Money**" to be held in escrow and credited
 toward the Purchase Price at Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** The
 remaining balance of the Purchase Price shall be paid in cash or its equivalent at Closing
 as specified below, as adjusted for prorations and closing costs described below, and subject
 to conditions and exceptions contained herein.

The Purchase Price to be paid by Buyer for the Property is conditioned upon Seller's delivery of the Property in compliance with the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Effective Date</u>**. The Effective Date shall be the date when the last one of the Buyer or Seller executes this Agreement.

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 1 of 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Due Diligence Inspection Period</u>**. For the independent consideration of [\*\*\*], nonrefundable to Buyer but applicable to the Purchase Price, paid by Buyer upon execution hereof (via wire transfer to the Escrow Agent with instructions to disburse to Seller), Buyer shall have up to and until the date which is thirty (30) days after the Effective Date ("**Inspection Period**") in which the Buyer may perform inspections and non-invasive testing, at its sole expense, to determine if the Property and Lots located therein, in its sole discretion, is suitable for Buyer's proposed development, use and business purposes and that the lots within Property are in compliance with all standards, conditions and terms hereof and herein. Buyer and its representatives shall have access to the Property during this Inspection Period and up until Closing. Buyer agrees to restore the Property substantially to its original condition after completion of such inspection and testing as performed by Buyer, which obligation shall survive termination of this Agreement. Buyer may, at its option, cancel or terminate this Agreement at any time during the Inspection Period for any reason by delivering written notice of termination to Seller prior to the expiration of the Inspection Period and the parties shall be released from any further rights, obligations, and liabilities hereunder (except for those which expressly survive termination) and all earnest money on deposit shall be returned to the Buyer, less the [\*\*\*] independent consideration referenced above. Buyer shall indemnify, defend, and hold Seller and its employees, representatives, and agents harmless from and against all claims, liabilities, liens, costs, fees, and expenses, including, without limitation, court costs, litigation expenses, and attorneys' fees, related to or anyway arising from any of Buyer's inspections, tests, or entry on the Property. This obligation to indemnify and hold harmless shall survive the termination of this Agreement. This indemnification shall not extend or apply to any of Seller's continued work on the Property, or that of any third party.

Within ten (10) days after the Effective Date, Seller agrees to provide to Buyer copies of any third party materials that Seller identifies in its possession that relate to the Property and that Seller has not already provided, which may include (but Seller does not represent that it has all of these materials) a current survey, boundary and topographical surveys, plats, HOA documents, restrictive covenants and conditions, engineering reports by electronic format in PDF, CAD (including but not limited to .dwg and/or .dgn format) or other media, environmental reports, flood zone certifications, soils reports, easement agreements, encroachments or encumbrances, municipal zoning related documents, improvement/management district information & agreements, utility agreements, construction agreements, requirements and fees, mineral leases, oil/gas wells/lines, property line discrepancies, and homeowners or community association documents, but Seller is under no obligation to disclose or provide documents of record in the real property records. Buyer may perform Phase I (but not Phase II) environmental assessments on the Property during the Inspection Period at its own expense.

If Buyer does not terminate this Agreement prior to the expiration of the Inspection Period, then the Earnest Money shall become non-refundable, subject to Seller's ability to convey clear title and deliver the Property in compliance with the terms and conditions of this Agreement, and which shall be applied towards the Purchase Price at Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Title Commitment</u>**. Seller shall deliver to Buyer a title commitment for the Property within ten (10) days after the Effective Date, in the amount of the Purchase Price with copies of all documents which constitute exceptions to the title commitment. Buyer shall give Seller written notice within fifteen (15) business days following its receipt of the title commitment of any condition of title (exceptions or requirements) that is not satisfactory to Buyer. Seller may, but shall not be obligated, to resolve such matters; provided, Seller shall be obligated on or before Closing to: (i) satisfy all applicable Title Company requirements on Schedule C of the title commitment; and (ii) cure any matter which Seller agrees in writing to cure in response to Buyer's title objections (the "Mandatory Cure Matters"). If Seller fails to cure or agree to cure any of Buyer's obligations before the expiration of the Inspection Period as defined above, then Buyer may, at Buyer's sole option, either: (1) accept title subject to the objections raised by Buyer and such accepted objections together with title matters disclosed by Schedule B of the title commitment that were not objected to by Buyer shall become Permitted Exceptions ("**Permitted Exceptions**"), without any adjustment in the Purchase Price; or (2) terminate this Agreement prior to the expiration of the Inspection Period pursuant to Paragraph 4 above, whereupon the Earnest Monies shall be immediately returned to Buyer by Escrow Agent; or (3) work with Seller, if mutually agreeable, to satisfy unacceptable matters and postpone the end of the Inspection Period and/or Closing Date to satisfy these matters. At Closing, if requested by Buyer, Seller shall provide Buyer with an owner's policy of title insurance in the amount of the Purchase Price provided that Buyer pays the cost of the owner's policy of title insurance, and the cost for all endorsements, changes, and modifications to the owner's policy of title insurance requested by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Closing</u>**. Closing of the sale and purchase of the Lots shall occur on the later of thirty (30) days after expiration of the Inspection Period or fifteen (15) days after development of the Lots has been substantially completed by Seller in full compliance with the terms of this Agreement and Seller has given written notice thereof to Buyer ("**Closing Date**").

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 2 of 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Title & Deliveries</u>**. At or prior to Closing, Seller shall deliver to the Escrow Agent and/or Buyer the following items for the Property, duly executed and acknowledged where required:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A. <u>Conveyance Deed</u>**. A special warranty deed in customary form, specifically stating all Permitted Exceptions to title, if any, subject but not limited to, zoning or deed restrictions, easements and encumbrances of record by either Buyer or Seller, or future assessments if applicable, and being made subject to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Foreign Person Tax Withholding</u>**. Documentation or information required for compliance with Section 1445 of the Internal Revenue Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C. <u>Additional Documents</u>**. Such additional documents as might be reasonably required by the Buyer, Buyer's Lender, or the Escrow Agent to consummate the sale of the Property and convey indefeasible title to the Buyer with all appurtenant rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. <u>Insurance Policy and Costs</u>**. Seller will pay the costs of Seller's counsel, preparation of any deeds and one half of the escrow or closing fees. Buyer will pay the cost of Buyer's counsel, all loan costs required by Buyer's lender, owner's title policy premiums and costs of endorsements, one half of any escrow or closing fee, and recording fees for any deeds and mortgage, and any applicable mortgage tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E. <u>Tax Prorations</u>**. All taxes and assessments (including pending assessments if the related improvement is substantially completed as of the Closing Date), whether payable in installments or not, for the year of closing will be prorated to the Closing Date based on the latest available tax rate and assessment valuation (with the parties signing a proration agreement as to adjustments when actual taxes are known).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Obligations of Seller & Conditions Precedent to Closing</u>**. Seller shall complete and deliver the Property in compliance with all terms and requirements stated herein, if not already done so. Buyer's obligation to close on the Property or any Lots within same is subject to and conditioned upon the completion, compliance and satisfaction, as of the Closing Date, of each of the requirements described herein and below. Unless specifically stated otherwise, the satisfaction of these conditions shall be at Seller's expense. Buyer shall cooperate with Seller to satisfy these conditions as needed. These conditions are for Buyer's benefit and shall in no way relieve Seller of its obligation to deliver completed Lots at Closing and to satisfy the other terms and conditions contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A. <u>Correctness of Representations and Warranties</u>**. Seller represents and warrants that: (i) it holds good and indefeasible title in fee simple to the Property; (ii) all closing documents signed by Seller will be valid, authorized and binding upon Seller; (iii) no outstanding contracts, fees, debts or liens exist on the Property (except mortgage liens to be satisfied at closing); and (iv) there are no leases or third-party rights/interests on the Property and Seller is in sole possession. These representations and warranties of Seller shall be true as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Final Plat Recording & Addresses</u>**. Finalization and recording of the proposed plat and Seller's delivering a copy thereof to Buyer on or before the Closing Date. The plat shall be deemed finalized after all required governmental approvals have been obtained, said plat has been duly recorded in the real property records of the applicable County Clerk's office, and corresponding Lot addresses have been provided by the Seller to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C. <u>Covenants, Conditions, and Restrictions ("CC&Rs")</u>**. The Property shall have been annexed into the jurisdiction of The Lakes at Black Oak Community Association, Inc. (the "**HOA**") and made subject to the Amended and Restated Declaration of Covenants, Conditions and Restrictions and Easements for the Lakes at Black Oak residential development pursuant to the execution and recording by Seller of an Annexation instrument in form provided to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. <u>Completion of Development</u>**. Seller will use Seller's good faith efforts to achieve the Substantial Completion requirements for the Lots by the date which is ninety (90) days after the Effective Date. If Seller has not achieved Substantial Completion for the Lots by the date which is one hundred and fifty (150) days after the Effective Date, Purchaser will have the right, at Purchaser's sole discretion, to terminate the Contract or Purchaser may extend the date for Seller's achievement of Substantial Completion for one or more periods to the date that is not later than twelve (12) months after the Effective Date, after which Purchaser may, as its sole remedy, terminate this Contract. If Purchaser chooses to terminate the Contract, then Purchaser will be entitled to the immediate return of the Earnest Money and neither party shall have any further obligations hereunder except for the obligations which by their terms expressly survive the termination of this Contract

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 3 of 7

As used herein, "**Substantial Completion**" means that all of the following requirements have been met and all of the following materials have been delivered to Purchaser, with respect to the Lots:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Written certification from the project engineer that construction of all streets, water lines and sanitary sewer lines, and storm sewer lines serving the Lots has been completed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Copy of agreement between Seller and the electric service provider for the installation of underground electric lines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Written certification from the project engineer or utility provider that operable water and sewer taps are available to each of the Lots and that the Property has been graded in accordance with the drainage plan for the Subdivision provided to Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Copy of recorded plat;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Copy of the address plat;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) A set of "As Built" construction plans for the water, sewer and storm drainage facilities serving the Lots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) A copy of testing results for any fill placed on the Lots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Written certification from Seller's engineer that locations for the construction of residences on the Lots are not within the 100-year flood plain, it being understood that portions of a Lot may be within the 100-year flood plain;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Seller shall cause all final inspection "punch list items" required by the applicable agencies, governments, and other jurisdictions over the development of the Property to be completed within 90 days after the Closing, and Seller shall cause the paving and utility contractors to warrant all development infrastructure and other items inspected by or accepted by the applicable governing jurisdictions for a one (1) year warranty period after the completion of construction. This is not a requirement of Substantial Completion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) All boundaries of the Lots have been staked and pinned;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Evidence of Seller's purchase of cluster mailboxes to be installed within sixty (60) days after the Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Copy of agreement or other documentation for the installation of street lights once the electric service lines have been installed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E. <u>Specifications for Lots, Infrastructure, Building Pads and Compaction</u>.** Seller shall deliver at the Closing substantially completed individual Lots within the Property, with building pads in full compliance with the specifications on Exhibit "B" attached to this Agreement (all of which are considered material terms of this Agreement). If any Lot or building pad does not meet the requirements stated in this Agreement or on Exhibit "B", then Buyer shall have the option, but not the obligation, to require Seller to escrow the sum of [\*\*\*] per Lot for each Lot that does not meet said requirements and proceed with Closing. If Buyer exercises said option, then: (i) Seller shall have a limited license to access the applicable Lot or Lots bring the Lots and pads into compliance, and in such event, Seller shall continue to carry sufficient insurance for its operations on the Property and name Buyer as additional insured, and Seller shall indemnify, defend and hold Buyer harmless from any and all claims, losses or other such liabilities resulting from Seller's work on the Property, to the fullest extent permitted by law; and (ii) funds shall be released to Seller when Seller brings all Lot(s) and pad(s) into compliance and Buyer approves of Seller's work. Otherwise, Buyer shall not be required to purchase or close on any Lots or Property which are not delivered in specific compliance with this Paragraph and this Agreement in the time set forth above. Alternatively, Buyer may deem any Lots or Property which are not substantially completed and delivered in specific compliance with this Paragraph and the other provisions of this Agreement, in the times set forth in this Agreement as non-conforming and non-compliant and shall be entitled to exclude such Lots from this Agreement with a prorata reduction in the Purchase Price.

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 4 of 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F. <u>Permits and Environmental Concerns</u>**. Seller will obtain and complete all requirements related to Storm Water Pollution Prevention Plans ("**SWPPP**") as required by applicable local, state and federal authorities and maintain the same during the development of the lots within the Property. Upon Closing, Seller will close out its permits and Buyer shall be responsible for obtaining all permits required for construction of homes on the Lots. Seller's principals have no actual knowledge that the Property has been or is presently used for handling, storage, manufacturing, refining, transportation or disposal of "toxic material", "hazardous substances", or "hazardous waste". If "hazardous wastes", "hazardous substances", or "hazardous material" is located on the Property, as determined by a Phase I or permitted Phase II environmental assessment obtained by the Buyer, then Buyer shall have the right to terminate this Agreement during the Inspection Period pursuant to Paragraph 4 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G. <u>Trash, Trees, Brush & Debris</u>**. The Property is being sold "as-is" and Buyer shall be responsible for mowing, brush hogging, and removing, clearing, and disposing of all trees, trash and debris on the Property, except that Seller will remove any construction debris of which Buyer notifies Seller in writing prior to the expiration of the Inspection Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H. <u>Natural Gas</u>**. The contract Seller entered into with a natural gas utility company for the installation of natural gas mains to serve the Lots requires that all houses built on the Lots contain a minimum of two (2) natural gas appliances such as natural gas central heating and a natural gas water heater or that a non-utilization charge be paid to the natural gas company for each house without such appliances. Buyer agrees that all houses constructed on the Lots shall contain at least two (2) natural gas appliances or Buyer shall pay the non-utilization charge for each non-utilizing house.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Sales Reports</u>**. Purchaser agrees to furnish Seller with monthly sales reports which indicate the number of prospective homebuyers visiting Purchaser's houses, the number of home starts, the number of contracts signed by Builder with homebuyers, the number of houses sold by Purchaser and the sales price of such houses and other information as Seller may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Offsite Water Flow</u>**. Seller will deliver the Property at closing with proper offsite water flow on and to the Property and which will be managed through the appropriate infrastructure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Subsurface Rock</u>**. Prior to expiration of the Inspection Period, Buyer may terminate this Agreement pursuant to <u>Paragraph</u> 4 above and recover the Earnest Money upon the discovery of subsurface rock underlying the Property in any quantity deemed excessive by the Buyer, unless Seller has remedied the same to Buyer's satisfaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Assessments</u>**. Seller has disclosed to Buyer that the Deed Restrictions require payment of assessments to the HOA by homebuilders at 50% of the assessment amount payable by homeowners and payment of a transfer fee upon the conveyance of lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>Notice</u>**. All notices will be in writing and served by electronic transmission to the addresses shown below, until notification of a change of such addresses. All such notices shall be deemed delivered on the date initiated.

---

| | |
|:---|:---|
| For Buyer: | Methica Martin, Financial Coordinator |
| Scott A. Peters, Manager | For Seller: |
| Bren Kyte, Acquisitions Manager | Charley MacKenzie |
| Cameron Milstead | Moe Chan |
| Jared Payne | Shamar OBryant |
|  | Ronald Wei |

---

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 5 of 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>Disclosure by Buyer and Seller</u>**. One or more individuals representing the Buyer or Seller may hold real estate licenses from multiple states.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. <u>Default</u>**. If Seller has performed all of Seller's obligations and fulfilled the conditions under this Agreement and, if within five (5) days after the date specified for Closing, the Buyer fails to purchase the Lots as required herein, through no fault of Seller, then Seller may, as its sole and exclusive remedy, cancel and terminate this Agreement and receive the Earnest Money paid by the Buyer as liquidated damages. If Seller breaches this Agreement or fails to perform any of Seller's obligations hereunder, then Buyer may as its sole remedy, (i) terminate this Agreement and receive a refund of all of the Earnest Money, or (ii) seek specific performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16. <u>Binding Effect/Assignment</u>**. This Agreement will inure to the benefit of and bind the respective successors of the parties. Buyer may assign this Agreement and any and all rights and obligations hereunder at any time prior to closing to any person or entity controlling, controlled by, or under common control with Buyer. For purposes of this Paragraph a person or entity shall control an entity, if it, directly or indirectly, holds a majority interest in the entity to be controlled. Any other assignment of this Agreement by Buyer requires Seller's consent, which may be withheld in Seller's sole discretion. Buyer acknowledges that it is Seller's policy to sell lots only to homebuilders who intend to construct residences for sale who have been approved by Seller. To protect Seller in this regard, Buyer hereby grants to Seller the exclusive right and option to repurchase any Lot or Lots which Buyer intends to sell without constructing a residence for the per Lot purchase price paid to Seller by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17. <u>No Waiver</u>**. Failure of either party to exercise any rights under this Agreement shall not constitute a waiver of any right, nor excuse the other party's full performance. No express waiver of any matter shall affect any other matter under this Agreement. Express waivers are only effective if in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18. <u>Brokerage</u>**. Buyer represents that it has not contracted with any real estate broker in connection with the transaction contemplated by this Agreement. Each party shall indemnify and hold the other party harmless from all claims, losses, liabilities, costs, fees, and expenses (including, but not limited to, court costs, litigation expenses, and attorneys' fees) related to or incurred in connection with any claims for brokerage commissions arising by, through, or under the indemnifying party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19. <u>Entire Agreement</u>**. This document constitutes the entire agreement between the parties, incorporating all prior agreements, and may only be amended in writing executed by both parties. The exhibits attached to this Agreement are incorporated into this Agreement for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20. <u>Attorney's Fees</u>**. If either party prevails against the other in a legal action concerning any part of this Agreement, the successful party shall be entitled to its reasonable attorney's fees and costs connected with such action, through appellate and bankruptcy proceedings, in addition to all other recovery or relief. Costs shall include all deposition costs and expert fees, even if not used at trial.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21. <u>Governing Law</u>**. This Agreement shall be governed and enforced in accordance with the law of the state where the Property is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**22. <u>Time</u>**. Buyer and Seller understand that "Time is of the Essence" for this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**23. <u>No Build or Sale for Rent Homes</u>**. Neither Buyer nor an affiliate of Buyer will construct a residence on a Lot and offer it for rent. Unless otherwise approved by Seller, Buyer shall not intentionally sell to any homebuyer that has notified Buyer that it intends to rent the residence purchased from Buyer and Buyer shall not intentionally sell more than two (2) residences to the same purchaser. Seller has disclosed to Buyer that an affiliate of Seller may purchase or construct homes in the community for rental.

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 6 of 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**24. <u>Special Stipulations</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** In addition to the Purchase Price, at Closing Buyer shall pay to Seller a community enhancement fee in the amount of [\*\*\*] per Lot.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** During the Inspection Period, Buyer shall propose its signage to Seller for approval, as to type, size, appearance, and placement. Seller shall not unreasonably withhold its approval of the signage, so long as the signage meets all applicable governmental requirements and is limited so as not to clutter the Property. After approval by Seller, Buyer may place the signage in the agreed locations prior to closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** Seller's obligations under this <u>Paragraph 24</u> and any liabilities therefore shall survive Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** The terms of this Agreement shall be kept confidential by both parties except as otherwise required by legal process, and except that the terms may be disclosed to the parties' respective counselors, attorneys, accountants, brokers, and other persons with a need to know, except for as otherwise provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**25. <u>Statutory Notices</u>**. To the extent applicable, Seller gives Purchaser the notices set forth in Exhibit "D".

---

| | | | |
|:---|:---|:---|:---|
| **SELLER**: | **SELLER**: | **BUYER**: | **BUYER**: |
| **150 CCM BLACK OAK, LTD.,** | **150 CCM BLACK OAK, LTD.,** | **RAUSCH COLEMAN HOMES HOUSTON, LLC,** | **RAUSCH COLEMAN HOMES HOUSTON, LLC,** |
| a Texas limited partnership | a Texas limited partnership | a Texas limited liability company | a Texas limited liability company |
| By: | 150 Black Oak GP, Inc., | By: |  |
|  | a Texas corporation |  | Scott A. Peters, |
| Its: | General Partner |  | Manager |

---

By:   <br> Charley MacKenzie, Date:   <br> Vice President

Date:

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC Page 7 of 7

**<u>EXHIBIT "A"</u>**

**<u>PRELIMINARY PLAT WITH LOT IDENTIFICATION</u>**

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC

**<u>EXHIBIT "B"</u>**

**<u>LOT SPECIFICATIONS</u>**

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC

**<u>EXHIBIT "C"</u>**

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC

**<u>EXHIBIT "D"</u>**

**Notice of Utility or Other Statutorily Created District**

**(§49.452 and § 54.812 Texas Water Code)**

**NOTICE TO PURCHASER OF REAL ESTATE**

**SITUATED IN**

**SOUTHEAST REGIONAL MANAGEMENT DISTRICT**

Purchase and Sale Agreement 150 CCM Black Oak, Ltd. <br> Rausch Coleman Homes Houston, LLC

## Exhibit 10.9

**Exhibit 10.9**

**Certain confidential information contained in this document, marked by brackets and asterisk ([\*\*\*]), has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K, because the Company customarily and actually treats such information as private or confidential and the omitted information is not material.**

**<u>CONTRACT OF SALE</u>**

Lakes at Black Oak, Sec. 2 Montgomery County, Texas

THIS **CONTRACT OF SALE** (this "<u>Contract</u>") is made and entered into by and between **150 CCM BLACK OAK, LTD.**, a Texas limited partnership ("<u>Seller</u>"), and **DAVIDSON HOMES, LLC,** an Alabama limited liability company ("<u>Purchaser</u>"), effective as of the Effective Date (hereinafter defined). Seller and Purchaser may each be referred to herein individually as a "<u>Party</u>" and collectively as the "<u>Parties</u>."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>SALE AND PURCHASE OF PROPERTY.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.01** AGREEMENT OF SALE AND PURCHASE.

For and in consideration of the sum of $10.00 and of the premises, undertakings, and mutual covenants of the Parties set forth herein, Seller hereby agrees to sell and convey unto Purchaser, and Purchaser hereby agrees to purchase and take from Seller, all of the approximately 189 single-family residential lots (each, a "<u>Lot</u>" and collectively, the "<u>Lots</u>") having an approximate width of forty feet (40') being developed by Seller within Black Oak, Section 2, a subdivision containing approximately 50.561 acres of land (the "<u>Subdivision</u>") in Magnolia (the "<u>City</u>"), Montgomery County (the "<u>County</u>"), Texas, according to the preliminary plat of the Subdivision attached hereto as **<u>Exhibit A</u>**, such Lots to be conveyed together with all and singular the rights, privileges, hereditaments and appurtenances pertaining to such real property, including, but not limited to, all right, title, and interest of Seller in and to any strips and gores, if any, between the Lots and any abutting properties (all of such real property, rights and appurtenances being hereinafter referred to collectively as the "<u>Property</u>"). The Property does not include and Seller retains the right to receive reimbursement of the costs of infrastructure improvements serving the Lots constructed or paid for by Seller from the District (hereinafter defined) or any other governmental entity or from a private utility company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.02** PURCHASE PRICE. The base purchase price for the Lots is [\*\*\*] per Lot (the "<u>Purchase Price</u>"). In addition to the Purchase Price, a premium in the amount of [\*\*\*] shall be payable to Seller for each of the twenty (20) Lots located on a cul-de-sac or adjacent to a landscaping or open space reserve. At the Closing of the sale and purchase of Lots, Purchaser will pay to Seller the Purchase Price of the Lots being purchased at such Closing, plus premium, if applicable. In addition to the Purchase Price, Purchaser shall pay a community enhancement fee to Seller in the amount of [\*\*\*] for each Lot purchased at each Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.03** EARNEST MONEY AND OPTION PRICE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** In consideration for the right to purchase the Lots granted herein by Seller to Purchaser, Purchaser will, within 5 days after the Effective Date, deposit with First American Title Company, 23924 Dorrington Estates Lane, Conroe, Texas 77385, Attn: Gena Lopez or Stephanie Hilliard (the "<u>Title Company</u>") the sum of [\*\*\*] as earnest money (the "<u>Initial Earnest Money</u>") and unless this Contract is sooner terminated, within five (5) days after the expiration of the Feasibility Period (hereinafter defined), Purchaser will deposit with the Title Company the additional sum of [\*\*\*] (the "<u>Additional Earnest Money</u>" and collectively with the Initial Earnest Money, the "<u>Earnest Money</u>") in the form of cash or other immediately available funds. The Earnest Money is [\*\*\*] of the Purchase Price of the Lots. At each Closing hereunder, a prorata portion of the Earnest Money ([\*\*\*]) will be credited against the Purchase Price of the Lots being purchased at such Closing. If this Contract is terminated prior to the Closing of all of the Lots, the Earnest Money then on deposit will be delivered to Seller or returned to Purchaser, as elsewhere provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** If Purchaser fails to deposit any portion of the Earnest Money as required herein, then Seller may terminate this Contract by written notice to Purchaser at any time prior to the deposit of the Earnest Money. If this Contract is so terminated, this Contract will be deemed to have terminated as of the date that the Earnest Money was originally to have been deposited by Purchaser, and there will be no remedy hereunder to either Seller or Purchaser other than the termination of this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>TITLE REVIEW.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.01** EXISTING SURVEY. Within 5 days after the Effective Date, Seller will deliver to Purchaser and the Title Company a copy of the most recent survey of the Subdivision or a larger tract that includes the Subdivision in Seller's possession or available to Seller (the "<u>Existing Survey</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>PROVISIONS WITH RESPECT TO CLOSINGS.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.01** CLOSINGS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** The Lots will be purchased in multiple closings (each, a "<u>Closing</u>"). The initial Closing (the "<u>Initial Closing</u>") of the purchase and sale of the Initial Lots (hereinafter defined) will take place on the later of (i) 15 days after the expiration of the Feasibility Period or (ii) 15 days after the date of Substantial Completion (hereinafter defined) of the Lots. Each Closing of Lots will take place in the offices of the Title Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Purchaser will purchase from Seller at the Initial Closing 94 Lots (collectively, the "<u>Initial Lots</u>"). Purchaser will purchase from Seller all remaining Lots on or before December 29, 2023. The Lots purchased at the Initial Closing may be selected by Purchaser, subject to Seller's approval which shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.02** SELLER'S OBLIGATIONS AT EACH CLOSING. At each Closing, Seller will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Execute and deliver to Purchaser a special warranty deed in the form attached hereto as **<u>Exhibit B</u>** and incorporated herein (the "<u>Deed</u>"), duly executed and acknowledged, conveying to Purchaser good and indefeasible fee simple title to all of the Lots purchased at such Closing, free and clear of all liens, claims, and encumbrances except the Permitted Exceptions in accordance with **Section 2.02**;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Deliver tax certificates evidencing that all ad valorem or other taxes for the applicable Lots have been paid for the years prior to the year of the Closing, and pay or escrow with the Title Company Seller's prorated share of all taxes for such Lots for the current year up to the date of Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** Deliver possession of the Lots purchased at the applicable Closing to Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** Pay Seller's closing costs as hereinafter specified;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** Cause to be secured from Seller's lender, or other holder of any note or lien on said Lots, a properly-executed and recordable release or partial release of lien for execution and delivery simultaneously with the Deed for such Lots to Purchaser, or as soon thereafter as is reasonably possible;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** At Purchaser's option and provided that Purchaser pays the title premiums, cause the Title Company to issue an owner's policy of title insurance (the "<u>Title Policy</u>") in the amount of the Purchase Price for the Lots purchased at the Closing, insuring fee simple, good and indefeasible title to such Lots and right of access thereto in Purchaser, containing no exceptions other than the Permitted Exceptions, and without exception for rights of parties in possession, visible and apparent easements and portions of the Property lying within public or private roads; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)** Execute and deliver such other instruments and affidavits as Purchaser and the Title Company may reasonably require; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.03** PURCHASER'S OBLIGATIONS AT EACH CLOSING. At each Closing, Purchaser will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Pay to Seller the Purchase Price in cash for the Lots purchased at the Closing, plus premium if applicable, with a prorata portion of the Earnest Money being applied thereto as provided herein; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Execute and deliver such other instruments and affidavits as Seller and the Title Company may reasonably require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.04** CLOSING COSTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Seller will pay the following costs and expenses in connection with each Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** Seller's portion of the prorated taxes and assessments (as provided below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(ii)** Seller's own attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iii)** The cost of tax certificates mentioned above and the cost of certificates, if any, from the HOA (hereinafter defined) regarding assessments for the Lots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iv)** One-half of the cost of any Title Company escrow fee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(v)** Such other incidental costs and fees customarily paid by sellers in land transactions of this nature in the county in which the Property is situated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Purchaser will pay the following costs and expenses in connection with each Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** Purchaser's portion of the prorated taxes and assessments (as provided below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(ii)** Purchaser's own attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iii)** The cost of recording the Deed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iv)** One-half of the cost of any Title Company escrow fee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(v)** The premiums for the Title Policy; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(vi)** Such other incidental costs and fees customarily paid by purchasers in land transactions of this nature in the county in which the Property is situated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.05** PRORATION OF TAXES AND ASSESSMENTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Current ad valorem taxes and Assessments under the Deed Restrictions, will be prorated on each Lot as of the date of the applicable Closing. Seller will pay any rollback taxes attributable to the Lots having been assessed at special use valuations or under any agricultural or open-space exemption. If the Subdivision or the Lots to be closed at a particular Closing are taxed as a part of a larger parcel, Seller will, at such Closing, deposit in escrow with the Title Company sufficient funds to pay all of the taxes for the current period and any prior periods on the larger tax parcel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** If, for any reason, Seller is unable to cause the rollback taxes to be assessed and paid prior to the Initial Closing, Seller will escrow with the Title Company at the Initial Closing the amount of the rollback taxes (including any penalties and interest), as estimated by the Title Company. In such event, such amount will be escrowed by Seller with the Title Company pursuant to an escrow agreement which will obligate Seller to cause such rollback taxes to be assessed as soon thereafter as reasonably possible, and will obligate the Title Company to disburse the escrowed funds to pay rollback taxes when determined, will require Seller to pay any deficiency and will provide that any surplus will be refunded to Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** If the actual amount of ad valorem taxes for the applicable Lots is not known as of the applicable Closing, such ad valorem taxes will be estimated and prorated at such Closing on the basis of the most recent tax rates and assessed valuations. At any time after such Closing, upon determination of the actual ad valorem taxes for the applicable Lots as documented by bills from the applicable tax authorities, if such actual ad valorem taxes are different from the estimated amount used for proration at such Closing, such proration will be adjusted between Purchaser and Seller to reflect such actual ad valorem taxes. Purchaser or Seller (as applicable) will pay the amount of such adjustment within 30 days after delivery by one party to the other party of a written calculation of such adjustment, with copies of the actual ad valorem tax bills. The provisions of this **Section 3.05** will survive each Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>FEASIBILITY PERIOD.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.01** SUBMISSION ITEMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Within 5 days after the Effective Date, Seller will make available to Purchaser (to the extent in Seller's possession or control), for Purchaser's review and approval, the following items for the Subdivision (collectively, the "<u>Submission Items</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** the preliminary plat for the Subdivision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(ii)** Geotechnical and soil reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iii)** Existing Environmental Reports (hereinafter defined); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iv)** evidence of the availability of water and sanitary sewer service to the Subdivision in sufficient capacity to serve all the Lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(v)** construction plans for the Subdivision (including, without limitation, the utility plans, drainage plans, detention plans and street plans);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(vi)** Drainage Plan for the Subdivision; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(vii)** if applicable, the plans (collectively, the "<u>Common Area Plans</u>") for fencing, screening, entryway, signage and amenities (collectively, the "<u>Common Area Improvements</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.02** PURCHASER'S FEASIBILITY PERIOD. Commencing on the later of (i) the date this Contract is executed by Seller and (ii) the date this Contract is executed by Purchaser and continuing until thirty (30) days after the Effective Date (the "<u>Feasibility Period</u>"), Purchaser, at its expense, may conduct a feasibility study of the Property (including, without limitation, architectural, geotechnical, environmental, marketing, engineering and financial feasibility studies) to determine whether or not the Property is suitable to Purchaser, provided that such operations are conducted in such a manner as to not permanently damage the Property, and if damage is done, Purchaser will repair and restore the same to its former condition at Purchaser's expense. This obligation shall survive the termination of this Contract. In the event the feasibility study indicates, in Purchaser's sole judgment and discretion, that the Property is suitable to Purchaser, Purchaser will send written notice (the "<u>Notice to Proceed</u>") to Seller on or before the expiration of the Feasibility Period evidencing Purchaser's election not to terminate this Contract. If (a) Purchaser fails to send Seller the Notice to Proceed on or before the last day of the Feasibility Period, or (b) if Purchaser sends to Seller a notice terminating this Contract prior to the expiration of the Feasibility Period, this Contract will terminate. In the event of such termination, a [\*\*\*] portion of the Initial Earnest Money will be disbursed to Seller as independent consideration for the execution of this Contract (the "<u>Independent Consideration</u>"), the balance of the Initial Earnest Money will be returned to Purchaser, and Seller and Purchaser will have no further obligation to each other except as otherwise expressly stated herein. Additionally, in the event of an automatic termination because Purchaser does not send a Notice to Proceed, Seller will within 2 business days after such automatic termination send written instructions to the Title Company to release the Initial Earnest Money (except for the Independent Consideration) to Purchaser. In the event Seller fails to timely send such written instructions to the Title Company, Seller will indemnify Purchaser for any legal fees incurred by Purchaser to cause the Initial Earnest Money (except for the Independent Consideration) to be released to Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.03** CONDITION PRECEDENT TO CLOSING. Purchaser's obligation to close the purchase of the Lots is expressly conditioned upon Substantial Completion of the Lots. However, Purchaser may continue with the Closing on any Lot or Lots prior to Substantial Completion of the Lots, and Seller agrees that any such Closing will not be deemed a waiver of the Substantial Completion requirements for the applicable Lots. Seller agrees to sell any Lots prior to Substantial Completion upon request of Purchaser. Seller will continue to have the full responsibility to perform Substantial Completion with respect to Lots which have and have not been closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.04** PURCHASER'S SIGNAGE. Seller hereby agrees to provide Purchaser the right to erect signage that complies with the Deed Restrictions on the Lots and in the common areas of the Subdivision for Purchaser's use in connection with the marketing of its residences on the Lots effective as of the Effective Date. During the Feasibility Period, Purchaser and Seller will reasonably agree upon the actual locations within the common areas of the Subdivision on which Purchaser may erect its signage. To the extent that approval of signage is required under the Deed Restrictions for Purchaser to erect any such signage on any of the common areas within the Subdivision, Seller agrees to cause such approvals to be provided prior to the expiration of the Feasibility Period. Any such signage contemplated by this **Section 4.04** will be subject to Purchaser obtaining approval by any governmental authority with jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>REMEDIES.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.01** SELLER'S REMEDIES. If Purchaser fails to perform its obligations under this Contract for any reason other than Seller's default, which default is not cured within 10 days after Seller's delivery of written notice to Purchaser specifying the nature of the default, Seller will be entitled, as Seller's sole and exclusive remedies, to (i) waive the contractual obligations of Purchaser in writing; (ii) extend the time for performance by such period of time as may be mutually agreed upon in writing by the Parties hereto; or (iii) terminate this Contract as to all unpurchased Lots and receive the Earnest Money then on deposit as liquidated damages for such default and not as a penalty, in which event the Parties will be released herefrom and have no further rights, obligations, or responsibilities hereunder. Seller's extension of the time for Purchaser's performance pursuant to clause (ii) above will not constitute an election of remedies and will not prohibit Seller's exercise of Seller's other remedies set forth above in the event Purchaser fails to cure such breach prior to the expiration of such extension period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.02** PURCHASER'S REMEDIES. If Seller fails to perform its obligations under this Contract for any reason other than Purchaser's default, which default is not cured within 10 days after Purchaser's delivery of written notice to Seller specifying the nature of the default, Purchaser will be entitled, as Purchaser's sole and exclusive remedies, to (i) waive the contractual obligations of Seller in writing; (ii) extend the time for performance by such period of time as may be mutually agreed upon in writing by the Parties hereto; (iii) terminate this Contract and receive a return of the Earnest Money then on deposit; or (iv) enforce specific performance of this Contract by Seller. Purchaser's extension of the time for Seller's performance pursuant to clause (ii) above will not constitute an election of remedies and will not prohibit Purchaser's exercise of Purchaser's other remedies set forth above in the event Seller fails to cure such breach prior to the expiration of such extension period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.03** POST-CLOSING REMEDIES. It is the intent of Seller and Purchaser that no suit for damages may be brought with respect to any aspect of the transaction contemplated herein and the sole remedies of Seller and Purchaser are set out in **Section 5.01** and **Section 5.02**, except however, that from and after each Closing, each party will have the right to pursue its actual damages against the other party (i) for a breach of any covenant or agreement contained herein that is performable after or that survives a particular Closing (including the indemnification obligations of the Parties contained this Contract, but excluding a failure to close Lots in accordance with **Section 3.01**), and (ii) for a breach of any representation or warranty made by the other party in this Contract. If no Closing occurs, each party will have its respective rights and remedies under **Section 5.01** and **Section 5.02**, as applicable. In addition, if this Contract is terminated, each party will have all available remedies against the other party for a breach of the other party's obligations contained in this Contract that are expressly provided herein as surviving the termination of this Contract. However, in no event will either party be liable for (and the Parties hereby waive all rights to) any speculative, consequential or punitive damages. In no event will this paragraph apply to the obligation to close any of the Lots, it being the Parties' intent that only **Section 5.01** and **Section 5.02** apply to the failure to close any of the Lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>COMMISSION.</u>** Seller and Purchaser each hereby agree to indemnify, defend and hold the other harmless from and against all liability, loss, cost, damage, or expense (including but not limited to attorneys' fees and costs of litigation) which the other party suffers or incurs because of any claim by a broker, agent, or finder claiming by, through, or under such indemnifying party, whether or not such claim is meritorious, for any compensation with respect to the entering into of this Contract, the sale and purchase of the Property, or the consummation of the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>SUBSTANTIAL COMPLETION.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.01** "<u>Substantial Completion</u>," with respect to the Lots means the date that each and all of the requirements listed on **<u>Exhibit C</u>** attached hereto have been met and/or delivered, as applicable, to Purchaser, with respect to each of the Lots. Upon satisfying all requirements of this paragraph and **<u>Exhibit C</u>**, Seller will send written notice of the Substantial Completion of the Lots to Purchaser. Subject to the further provisions hereof, the date of Substantial Completion of the Lots will be the date of Seller's written notice, accompanied by evidence of completion of each of the above items, provided that all requirements of **<u>Exhibit C</u>** have been met. The development of the Model Home Lot was completed by Seller in connection with the development of Lakes of Black Oak Section 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.02** Seller will use Seller's good faith efforts to achieve the Substantial Completion of the Lots by the date which is ninety (90) days after the Effective Date. If Seller has not achieved Substantial Completion for the Lots by the date which is One Hundred and Fifty (150) days after the Effective Date, Purchaser will have the right, at Purchaser's sole discretion, to terminate this Contract or Purchaser may extend the date for Seller's achievement of Substantial Completion for one or more periods to the date that is not later than twelve (12) months after the Effective Date, after which Purchaser may, as its sole remedy, terminate this Contract. If Purchaser chooses to terminate the Contract, then Purchaser will be entitled to the immediate return of the Earnest Money and neither party shall have any further obligations hereunder except for the obligations which by their terms expressly survive the termination of this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.03** Purchaser shall inspect the Lots within ten (10) days after its receipt of Seller's notice of the Substantial Completion of the Lots. In the event Purchaser believes that any matters required for Substantial Completion have not been completed, Purchaser shall notify Seller of such belief and Seller shall promptly satisfy Purchaser's legitimate objections to cause Substantial Completion of the Lots in compliance with the provisions hereof. In such event, the Lots shall be Substantially Complete and Substantial Completion shall have occurred when Seller satisfies Purchaser's legitimate objections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>MORATORIUM.</u>** If any state, county, city, public school district, or governmental agency declares or effects any moratorium on the issuance of building permits for the construction of houses, or Certificates of Occupancy for those houses, or the purchase of sewer and/or water taps and/or public school attendance rights, which moratorium is applicable to the Property or any portion hereof, and, as a result of such moratorium, the state, county, school district, or any other governmental agency will not issue permits for the construction and/or purchase of sewer and/or water taps for houses to be erected upon the Property or Certificates of Occupancy for those houses, or will not permit attendance in the school district attendance zone in effect as of the Effective Date, then, in such event, Purchaser's obligations to purchase Lots in accordance with the periods of **Article 3** will abate. Upon the discontinuation of any such moratorium, the accrual of the closing periods will resume as of that date and continue as per the provisions of this Contract. If, however, such moratorium lasts longer than 90 days, Seller or Purchaser will each have the right, but not the obligation, to terminate this Contract. In the event of such termination by either Seller or Purchaser, the Earnest Money then on deposit will be refunded to Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>REPRESENTATIONS AND WARRANTIES OF SELLER.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.01** In addition to the environmental representations in Section 14 hereof, Seller hereby makes the following representations and warranties, which will be true as of the Effective Date and also as of each Closing date, and which will survive each Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Seller has complied with, and has no knowledge of, any violation, condition, or any action which with the passing of time or giving of notice would be deemed a violation of any and all applicable laws, ordinances, regulations, statutes, codes, rules, orders, decrees, determinations, covenants, and restrictions relating to the Lots and every part thereof (hereinafter collectively referred to as the "<u>Applicable Laws</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** There are no parties in possession of any portion of the Lots as lessees, tenants at sufferance, or trespassers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** There is no pending or threatened litigation or condemnation proceeding affecting the Lots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** There are no unpaid charges, debts, liabilities, claims, or obligations arising from the construction, occupancy, ownership, use, or operation of the Lots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** Seller is not a "foreign person," as defined in recent amendments to the Internal Revenue Code and, at or prior to each Closing contemplated under this Contract, agrees to provide to Purchaser an affidavit to that effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** At the time of each Closing, no developer-related charges or assessments for public improvements or otherwise which would have been made against the Lots will remain unpaid, including, without limitation, those for construction of sewer lines, water lines, storm drainage systems, electric lines, natural gas lines, streets (including perimeter streets), roads and curbs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)** Seller is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Texas;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(h)** Seller has good and indefeasible fee simple title to the Lots, free and clear of all liens, encumbrances and other matters except those set forth in the Title Commitment, and the Deed Restrictions. There are no parties other than Seller with any interest in the Property (marital, homestead, option, right of first refusal, leasehold or otherwise). No other signatures are required to make this Contract fully enforceable by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** Seller has full authority to execute this Contract and convey the Lots to Purchaser and execute and deliver the deed and such other documents, instruments, affidavits and certificates as are necessary or desirable to effectuate this transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(j)** Each Lot will be developed by Seller in compliance with all governmental ordinances, codes, development orders and regulations, including, but not limited to those relating to zoning, platting and subdivision regulations in effect as of each Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(k)** The Property has access for pedestrian and vehicular traffic for ingress and egress from and to public roads as presented;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(l)** To the best of Seller's knowledge, the Property has not been used as a dumpsite or landfill and no construction debris or other debris (including, without limitations, rocks, stumps, or concrete) are buried upon the Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(m)** To the best of Seller's knowledge, there are no buried fuel tanks or underground storage tanks located on the Property, and no portion of the Property has ever been used for a service station or other business selling petroleum or petroleum products; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(n)** During the term of this Contract, Seller will not cause an amendment to the Deed Restrictions which would have a material adverse effect of Purchaser or the Lots without Purchaser's prior written consent. Seller has disclosed to Purchaser that the Deed Restrictions require payment of assessments to the HOA by homebuilders at 50% of the assessment amount payable by homeowners and payment of a transfer fee upon the conveyance of lots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.02** If any of the representations or warranties contained in this Contract are untrue or incorrect, Seller will at all times before each Closing use Seller's good faith best efforts to take such necessary action to make such representations or warranties true and correct. If any of the representations or warranties contained in this Contract are untrue or incorrect as of any Closing, Purchaser will be entitled, in addition to its other remedies hereunder, to either (i) terminate this Contract with respect to all of the Lots or, at Purchaser's option, only the Lot(s) so affected, by written notice to Seller on or before the Closing date or (ii) elect to close under this Contract notwithstanding the failure of such representation or warranty, in which event the Closing will not be deemed a waiver by Purchaser of the failure of such representation or warranty, and Purchaser may recover from Seller any actual damages sustained by Purchaser in accordance with **Section 5.03**. If this Contract is terminated as to all of the Lots, the Earnest Money will be returned to Purchaser. Seller's representations and warranties set forth in this Contract will survive each Closing, will not merge into the Deed to be delivered at each Closing and are deemed to be material to Purchaser's execution of this Contract and Purchaser's performance of its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>REPRESENTATIONS AND WARRANTIES OF PURCHASER.</u>** Purchaser represents and warrants to Seller that Purchaser has the full right, power, and authority to purchase the Lots from Seller as provided in this Contract and to carry out its obligations hereunder; and all required action necessary to authorize Purchaser to enter into this Contract and to carry out its obligations hereunder has been or will have been taken prior to the Initial Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>NATURAL GAS.</u>** The contract Seller entered into with a natural gas utility company for the installation of natural gas mains to serve the Lots requires that all houses built on the Lots contain a minimum of two (2) natural gas appliances such as natural gas central heating and a natural gas water heater or that a non-utilization charge be paid to the natural gas company for each house without such appliances. Purchaser agrees that all houses constructed on the Lots shall contain at least two (2) natural gas appliances or Purchaser shall pay the non-utilization charge for each non-utilizing house.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>PLAN APPROVAL.</u>** During the Feasibility Period, Purchaser may submit to Seller, acting on behalf of the architectural control committee (the "<u>ACC</u>") for the Subdivision established under the Deed Restrictions as permitted by the Deed Restrictions, the master plans for each house design Purchaser intends to build in the Subdivision. Such plans shall be approved or disapproved by Seller during the Feasibility Period. If any plans are disapproved, Seller will specify in writing the modifications that would be required in order to obtain approval of the plans. Additional approvals of detailed plan and specifications by Seller or the ACC will be required later.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>NOTICE.</u>** Any notice authorized, required, or permitted to be given hereunder will be deemed to have been given upon the depositing of such notice in the United States mail, postage prepaid, certified mail or registered mail, return receipt requested, and properly addressed to the party to be notified at the following address:

---

| | |
|:---|:---|
| <u>If to Seller</u>: | 150 CCM Black Oak, Ltd. |
|  | 340 N. Sam Houston Pkwy E |
|  | Houston, Texas 77060 |
|  | Attn: Shamar O'Bryant |
|  | Email: |

---

---

| | |
|:---|:---|
| With a copy to: | 150 CCM Black Oak, Ltd. |
|  | 4800 Montgomery Lane, Suite 210 |
|  | Bethesda, Maryland 20814 |
|  | Attn: Charles MacKenzie |

---

and to: Moe Chan <br> Ronald Wei

---

| | |
|:---|:---|
| <u>If</u> <u>to Purchaser</u>: | <u>Davidson Homes, LLC</u> |
|  | 336 James Record Road |
|  | Huntsville, Alabama 55824 |
|  | Attn: Chris Chew |
|  | Email: |
|  | Email: |

---

---

| | |
|:---|:---|
| *With* a copy to: | Davidson Homes, LLC |
|  | 336 James Record Road |
|  | Huntsville, Alabama 55824 |
|  | Attn: Deanna L. Dixon, VP Corporate Counsel |
|  | Email: |

---

Any notice delivered by hand delivery or sent by overnight courier will be deemed received on the date of actual receipt. Notice given by facsimile will be effective upon transmission with machine generated confirmation of transmission. Any address for notice may be changed by 10 days' prior written notice to the other party of such address change in the manner provided above. The Parties expressly acknowledge and agree that the Notice to Proceed may be transmitted by Purchaser to Seller by electronic scanning and e-mail or by facsimile. Delivery of the Notice to Proceed by any methods described above will also be valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>ENVIRONMENTAL.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.01** REPRESENTATION AND WARRANTY. Seller hereby represents and warrants to Purchaser that: (i) neither Seller nor, to Seller's actual knowledge, any previous owner of the Property or any other person or entity has ever used, generated, processed, stored, disposed of, released or discharged any Hazardous Substance on, under, or about the Property or transported it to or from the Property, nor, to Seller's actual knowledge, has any party ever alleged that any such activities have occurred; and (ii) to Seller's actual knowledge, no use by Seller, any prior owner of the Property, or any other person, has occurred which violates or has been alleged by any party to violate any applicable Environmental Law, and the Property is not on any "Superfund" list under any applicable Environmental Law, nor is it subject to any lien related to any environmental matter. As used in this Contract, "<u>Hazardous Substance</u>" means all hazardous or toxic substances, wastes or materials, any pollutants or contaminates (including, without limitation, asbestos and raw materials which include hazardous constituents, radon and urea formaldehyde), and any other similar substances or materials which are included or regulated by any local, state, or Federal law, rule, or regulation pertaining to environmental regulation, contamination, clean-up or disclosure, including, without limitation, the Comprehensive Environmental Response Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, as amended (collectively, "<u>Environmental Laws</u>"). In the event Seller has breached the representations and warranties in this paragraph, Seller will indemnify, defend and hold Purchaser, its successors and assigns, harmless from and against all fines and penalties and liabilities, including all foreseeable and unforeseeable consequential damages, any other damages, costs and losses, including reasonable attorneys' fees, directly or indirectly and in whole or in part arising out of or attributable to Hazardous Substances existing beneath or on the surface of the Property on or prior to any Closing or the migration thereof within or from the Property at any time, whether before or after any Closing, including without limitation the cost of any remedial, removal, response, abatement, clean-up, investigative and monitoring costs, and any other related costs and expenses. Notwithstanding anything to the contrary contained herein, the representations and warranties in this paragraph will be deemed remade as to each Lot as of the Closing on each such Lot, and such representations and warranties and the indemnification provisions in this paragraph will survive Closing and will not be merged therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.02** EXISTING ENVIRONMENTAL REPORTS. Seller will, within 5 days after the Effective Date, provide to Purchaser copies of all reports, studies, and other materials which Seller possesses or controls which pertain to the environmental condition of the Property and the property Seller owns in the vicinity of the Property (collectively, the "<u>Existing Environmental Reports</u>") in accordance with **Section 4.01**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.03** SUBSEQUENT ENVIRONMENTAL REPORTS. Purchaser's obligation to close each Lot hereunder is expressly conditioned upon: (i) Purchaser's receipt, at Purchaser's expense, of an environmental engineering report (or reports), addressed to Purchaser, the form and content of which and the individual or firm preparing the report(s) being acceptable to Purchaser, presenting the results of an investigation of the Property, and such property in the vicinity of the Property, as may be appropriate in Purchaser's discretion in light of the intended use of the Property, with regard to the existence, generation, processing, storing, disposal, release or discharge of any Hazardous Substances, from, on, under, about, or in the vicinity of the Property and Environmental Laws relating to Hazardous Substances affecting the Property, which investigation is commonly referred to as a "Category I," "Phase I," or "Level I" environmental audit ("<u>Phase 1</u>"), which report(s) have been prepared or updated to no more than 6 months prior to the later of (i) the date of Substantial Completion for the Lots to be closed at the Initial Closing or (ii) the Effective Date, and such further investigations and/or reports as Purchaser may require due to the results obtained in the Phase 1 (collectively, the "<u>Subsequent Environmental Reports</u>"); and (ii) Purchaser's satisfaction with the results of the foregoing investigations(s) and report(s). In the event Purchaser is not satisfied with the results of such investigation(s) and report(s), Purchaser may terminate this Contract as to any or all of the Lots prior to the expiration of the Feasibility Period and, if terminated as to all the Lots, the Earnest Money will be returned to Purchaser. Purchaser's obligation to close each Lot hereunder is expressly conditioned upon there having been no change in the condition of the Property or the property in the vicinity of the Property as such condition was reflected in such investigation(s) and report(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. <u>MISCELLANEOUS PROVISIONS.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.01** Any covenant or agreement herein which contemplates performance after the time of Closing of the sale of any Lot pursuant hereto will not be deemed to be merged into or waived by the instruments of the respective Closing, but will expressly survive such Closing and be binding upon the Parties obligated thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.02** The terms, provisions, warranties, representations, covenants, and agreements contained in this Contract will apply to, be binding upon, and inure to the benefit of, the Parties hereto and their respective legal representatives, successors, and permitted assigns. Purchaser may assign this Contract and any and all rights and obligations hereunder at any time to any person or entity controlling, controlled by, or under common control with Purchaser. For purposes of this Paragraph a person or entity shall control an entity, if it, directly or indirectly, holds a majority interest in the entity to be controlled. Any other assignment of this Contract by Purchaser requires Seller's consent, which may be withheld in Seller's sole discretion. Purchaser acknowledges that it is Seller's policy to sell lots only to homebuilders who intend to construct residences for sale and who have been approved by Seller. To protect Seller in this regard, Purchaser hereby grants to Seller the exclusive right and option to repurchase any Lot or Lots which Purchaser intends to sell without constructing a residence for the per Lot purchase price paid to Seller by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.03** Time is of the essence in the performance of this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.04** The Parties will each cooperate with each other, their employees, and agents to facilitate the purchase of Lots by Purchaser under the terms and conditions herein set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.05** This Contract will be governed and interpreted under the laws of the State of Texas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.06** The paragraph headings used in this Contract are for convenience purposes only, and will not be used in the interpretation of this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.07** All exhibits attached hereto are incorporated herein by reference and made a part of this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.08** Failure of Purchaser or Seller to insist in any one or more instances upon the performance of any of the covenants, agreements, and/or conditions of this Contract, or to exercise any right or privilege herein conferred will not be construed as a waiver of any such covenant or condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.09** This Contract contains the entire agreement between the Parties relating to the Property, and neither party will be bound by any verbal statement or agreement made heretofore. Except as otherwise expressly provided in this paragraph, this Contract may only be amended, modified or changed by a traditional written document properly executed by Seller and Purchaser. Such amendment may be transmitted by e-mail, facsimile, or other method permitted by the provisions for giving notice in this Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.10** If any items, terms, or provisions contained in this instrument are in conflict with any applicable federal, state, or local laws, this Contract will be affected only as to its application to such items, terms, or provisions, and will in all other respects remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.11** In the event Seller or Purchaser breaches any of the terms, provisions, warranties, representations, covenants, or agreements contained in this Contract and Seller and Purchaser become involved in litigation with regard to breach hereof, the prevailing party will be entitled to be paid its reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.12** Nothing contained herein is intended to create, nor will it ever be construed to make, Seller and Purchaser partners or joint venturers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.13** This Contract may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Additionally, (i) the signature pages taken from separate individually executed counterparts of this Contract may be combined to form multiple fully-executed counterparts; and (ii) a facsimile signature or an electronically-scanned signature will be deemed to be an original signature for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.14** The provisions of this Contract are severable, and if any provision or part hereof or the application thereof to any person or circumstances will ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Contract and the application of such provisions or part hereof to other persons or circumstances will not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.15** The term "<u>Effective Date</u>" as used herein means the last date upon which this Contract is fully executed by Seller and Purchaser. Upon its receipt of this Contract fully executed, the Title Company will sign and date the Acknowledgement of Title Company's Receipt attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.16** Should the date for the giving of any notice, the performance of any act, or the beginning or end of any period provided for herein fall on a Saturday, Sunday or other legal holiday, such date will be extended to the next succeeding business day which is not a Saturday, Sunday or legal holiday.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.17** <u>Management District</u>. Purchaser acknowledges that Seller has notified Purchaser that the Property is located within the boundaries of a municipal management district. Seller gives the following notice to Purchaser in accordance with Texas law:

"The real property, described herein, that you are about to purchase is located in the Southeast Regional Management District formerly named Harris-Montgomery Counties Management District (the "<u>District</u>"). The District has taxing authority separate from any other taxing authority, and may, subject to voter approval, issue an unlimited amount of bonds and levy an unlimited rate of tax in payment of such bonds. As of this date, the rate of taxes levied by the District on real property located in the District is $1.25 on each $100 of assessed valuation. The total amount of bonds, excluding refunding bonds and any bonds or any portion of bonds issued that are payable solely from revenues received or expected to be received under a contract with a governmental entity, approved by the voters and which have been or may, at this date, be issued is $200,000,000 for water, sanitary sewer and drainage purposes, $670,000,000 for road purposes, and $80,000,000 for parks and recreational facilities, and the aggregate initial principal amounts of all bonds issued for one or more of the specified facilities of the district and payable in whole or in part from property taxes is $13,375,000.00.

The District has the authority to adopt and impose a standby fee on property in the district that has water, sanitary sewer, or drainage facilities and services available but not connected and which does not have a house, building, or other improvement located thereon and does not substantially utilize the utility capacity available to the property. The District may exercise the authority without holding an election on the matter. As of this date, the most recent amount of the standby fee is $N/A because the District has not elected to impose a standby fee. An unpaid standby fee is a personal obligation of the person that owned the property at the time of imposition and is secured by a lien on the property. Any person may request a certificate from the district stating the amount, if any, of unpaid standby fees on a tract of property in the District.

The District is located in whole or in part within the extra-territorial jurisdiction of the Cities of Houston, Tomball, Conroe and Cut and Shoot. By law, a district located within the extra-territorial jurisdiction of a municipality may be annexed if the municipality complies with the procedures and requirements of Chapter 43, Texas Local Government Code, as amended. When a district is annexed for full purposes, the district is dissolved.

The purpose of this District is to provide water, sewer, drainage, or flood control facilities and services and roads and parks within the District through the issuance of bonds payable in whole or in part from property taxes. The cost of these facilities is not included in the purchase price of your property, and these facilities are owned or to be owned by the District. The legal description of the property you are acquiring is as follows: See Exhibit A attached hereto and made a part hereof."

At the Closing, Seller and Purchaser will execute a Notice to Purchaser instrument in the form required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.18 <u>No Build for Rent Homes</u>**. Neither Purchaser nor an affiliate of Purchaser will construct a residence on a Lot and offer it for rent. In addition, unless otherwise approved by Seller, Purchaser will not enter into a sales contract with any buyer that has notified Purchaser that it is in the business of renting homes and intends to rent the residence purchased from Purchaser and Purchaser will not sell more than three (3) residences to a single purchaser. Seller has disclosed to Purchaser that an affiliate of Seller may purchase or construct homes for rental in the community in which the Lots are located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.19 <u>Model Home</u>**. Purchaser will construct a Model Home to be used by Purchaser for marketing purposes on Lot 13 in Block 1 of Section 1 of Lakes of Black Oak Section 1 which is owned by Seller (the "<u>Model Home Lot</u>") provided that Purchaser and Seller agree to a form of a fee build agreement for the construction of the Model Home by Purchaser during the Feasibility Period. At the time the residence on the Model Home Lot is complete, Seller and Purchaser shall agree on the terms of a lease of the Model Home by Seller to Purchaser and Seller shall lease the Model Home to Purchaser pursuant to the mutually agreed upon model home lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.20 <u>Sales Reports</u>.** Purchaser agrees to furnish Seller with monthly sales reports which indicate the number of prospective homebuyers visiting Purchaser's houses, the number of home starts, the number of contracts signed by Purchaser with homebuyers, the number of houses sold by Purchaser and the sales price of such houses and other information as Seller may reasonably request.

[Signature Pages Immediately Follow]

EXECUTED by the Parties hereto in multiple copies, each of which will be deemed to be an original, on the dates set forth below.

---

| | |
|:---|:---|
| **SELLER:** | **150 CCM BLACK OAK, LTD.**, |
|  | a Texas limited partnership |

---

By: 150 Black Oak GP, Inc., <br> a Texas corporation <br> its general partner

By:   <br> Name:   <br> Title:  

Date of Execution:  

---

| | |
|:---|:---|
| **PURCHASER:** | **DAVIDSON HOMES, LLC**, |
|  | an Alabama limited liability company |

---

By:   <br> Name:   <br> Title:  

Date of Execution:  

**ACKNOWLEDGMENT OF TITLE COMPANY'S RECEIPT:**

**FIRST AMERICAN TITLE COMPANY**

---

| |
|:---|
| By: |
| Name: |
| Title: |

---

Date of Receipt:  

<u>Exhibits</u>:

---

| | |
|:---|:---|
| **Exhibit A:** | Preliminary Plat |
| **Exhibit B:** | Form of Special Warranty Deed |
| **Exhibit C:** | Substantial Completion Obligations and Materials |

---

**EXHIBIT B**

**<u>Form of Special Warranty Deed</u>**

Exhibit B 1

**EXHIBIT C**

**<u>Substantial Completion Obligations and Materials</u>**

Exhibit C 1

## Ex-21

**Exhibit 21**

**Subsidiaries**

---

| | |
|:---|:---|
| **Name of Subsidiary** | **State or Other Jurisdiction of Incorporation or Organization** |
| Alset EHome Inc. | Delaware |
| SeD USA, LLC | Delaware |
| 150 Black Oak GP, Inc. | Texas |
| SeD Development USA, Inc. | Delaware |
| 150 CCM Black Oak Ltd. | Texas |
| SeD Ballenger, LLC | Delaware |
| SeD Maryland Development, LLC | Delaware |
| SeD Development Management, LLC | Delaware |
| SeD Builder, LLC | Delaware |
| SeD REIT Inc. | Maryland |
| Alset Solar Inc. | Texas |
| AHR Black Oak One, LLC | Delaware |

---

## Exhibit 31.1

**Exhibit 31.1a**

**Certification of Chief Executive Officer** 

**Pursuant to** 

**Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934** 

**as Adopted Pursuant to** 

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Fai H. Chan, certify that:

1. I
 have reviewed this annual report on Form 10-K of LiquidValue Development Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's fourth fiscal quarter that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over
 financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal controls
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 28, 2023 | By: | */s/ Fai H. Chan* |
|  |  | Fai H. Chan<br> Co-Chief Executive Officer |

---

## Exhibit 31.1

**Exhibit 31.1b**

**Certification of Chief Executive Officer** 

**Pursuant to** 

**Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934** 

**as Adopted Pursuant to** 

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Moe T. Chan, certify that:

1. I
 have reviewed this annual report on Form 10-K of LiquidValue Development Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's fourth fiscal quarter that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over
 financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal controls
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 28, 2023 | By: | */s/ Moe T. Chan*<br>|
|  |  | Moe T. Chan<br> Co-Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2a**

**Certification of Chief Financial Officer**

**Pursuant to**

**Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934**

**as Adopted Pursuant to**

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Rongguo Wei, certify that:

1. I have reviewed
 this annual report on Form 10-K of LiquidValue Development Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's fourth fiscal quarter that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over
 financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal controls
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Date: March 28, 2023 | By: | */s/ Rongguo (Ronald) Wei* |
|  |  | Rongguo (Ronald) Wei<br> Co-Chief Financial Officer |

---

## Exhibit 31.2

**Exhibit 31.2b**

**Certification of Chief Financial Officer**

**Pursuant to**

**Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934**

**as Adopted Pursuant to**

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Alan W. L. Lui, certify that:

1. I have reviewed this annual
 report on Form 10-K of LiquidValue Development Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's fourth fiscal quarter that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over
 financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal controls
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Date: March 28, 2023 | By: | */s/ Alan W.L. Lui* |
|  |  | Alan W. L. Lui<br> Co-Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K of LiquidValue Development Inc. (the "Company") for the twelve month period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officers hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of his or her knowledge:

1. The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | | |
|:---|:---|:---|
| <br> Date: March 28, 2023 | By: | */s/ Fai H. Chan*<br>|
|  |  | Fai H. Chan |
|  |  | Co-Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| Date: March 28, 2023 | By: | */s/ Moe T. Chan* |
|  |  | Moe T. Chan |
|  |  | Co-Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| Date: March 28, 2023 | By: | */s/ Rongguo (Ronald) Wei* |
|  |  | Rongguo (Ronald) Wei |
|  |  | Co-Chief Financial Officer |

---

---

| | | |
|:---|:---|:---|
| Date: March 28, 2023 | By: | */s/ Alan W.L. Lui* |
|  |  | Alan W. L. Lui<br> Co-Chief Financial Officer |

---