Document:

Exhibit 10.7 

 

LOAN AGREEMENT

(Rosehill
Reserve – Harris County, Texas)

Loan #
9002

 

This Loan Agreement
(this “Agreement”) is made and entered into effective as of this the 5th day of December,
2014 (the “Effective Date”) by and among UNITED DEVELOPMENT FUNDING INCOME FUND V, a Maryland
real estate investment trust (together with its successors and assigns, “Lender”), ROSEHILL RESERVE,
LTD., a Texas limited partnership (“Borrower”), HARRIGAN DEVELOPMENT PARTNERS, LLC, a Texas
limited liability company, (“General Partner”) and THOMAS LLOYD HARGROVE, JR., a natural person
residing in Harris County, Texas (“Hargrove”).

 

RECITALS:

 

A.            Borrower has requested that Lender
extend credit to Borrower as described in this Agreement. Lender is willing to make such credit available to Borrower upon and
subject to the provisions, terms and conditions hereinafter set forth.

 

B.            Subject to and upon the terms
and conditions of this Agreement, Lender has agreed to lend to Borrower the amounts herein described for the purposes set forth
below.

 

AGREEMENT:

 

NOW, THEREFORE, in
consideration of the premises, the covenants, representations, warranties and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows:

 

1.            Certain Definitions. Certain
terms which are defined in the text of this Agreement shall have the respective meanings given to such terms herein, and the following
terms shall have the following meanings:

 

“Accrued
Interest Payments” means monthly interest payments equal to the amount of accrued interest on the outstanding principal
balance of the Loan, calculated at the applicable rate of interest provided herein, and payable on the last day of each calendar
month for interest accrued during that calendar month, as provided herein.

 

“Advance”
shall mean an advance of funds by Lender to or for the benefit of Borrower under this Agreement including, without limitation,
a Commitment Advance, a Discretionary Advance or Re-Advance.

 

“Advance Conditions”
has the meaning set forth in Section 8 of this Agreement.

 

“Advance
Request” shall mean Lender’s standard form of Advance Request in the form attached hereto as Exhibit “D.”

 

“Affiliate”
shall mean an individual or legal entity that directly or indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, another Person. The term “Control” as utilized herein means the
possession, directly or indirectly, of the power to direct or cause direction of the management and policies of a Person, whether
through management, ownership, by contract, or otherwise; provided, however, in no event shall any Lender be deemed
an Affiliate of Borrower or any Borrower-Related Party.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	1

    	 

    

 

“Approved
Budget” means a budget approved by Lender for the management and development of the Property in accordance with the
Development Plan, which specifies the cost by item of all labor, materials, and services necessary for the development of the Property
in accordance with the Development Plan, and all other expenses anticipated by Borrower incident to the Loan, the Property and
such development of the Property. The Approved Budget is attached hereto as Exhibit “F”.

 

“Approved
Builder” means, collectively, Ryland, M/I Homes, Highland, Drees, and Ashton Woods, and each other residential homebuilder
acquiring Lots from Borrower for the purpose of constructing single family residences thereon which is approved by Lender as evidenced
by Lender’s written consent.

 

“Approved
Purposes” means the use by Borrower of the Loan to partially fund the acquisition of the Property and the development
of Phase 1 of the Property into Finished Lots.

 

“Ashton
Woods” means Ashton Houston Residential, L.L.C., a Texas limited liability company.

 

“Ashton
Woods Indebtedness” means the Indebtedness of Borrower owed to Ashton Woods in accordance with the Ashton Woods Lot
Sale Contract, the Builders’ Deed of Trust, and the Subordination Agreement t.

 

“Ashton
Woods Lot Sale Contract” means that certain Agreement of Purchase and Sale (Rosehill Reserve, Phase 1 – Finished
Lots) by and between Borrower, as seller, and Ashton Woods, as purchaser, for the purchase of 28 Finished Lots, dated on or about
the Effective Date.

 

“Assignment
of Contract Rights” means, collectively, each Assignment of Contract Rights executed by Borrower in favor of Lender
assigning Lender all of the rights of Borrower under the Reimbursement Contracts.

 

“Assignment
of Lot Sale Contract” means, collectively, each Assignment of Lot Sale Contract executed by Borrower in favor of
Lender as each may be amended, modified, or supplemented from time to time.

 

“Base
Rate” means the lesser of (i) thirteen percent (13%) per annum, accrued on Lender’s books and records at least
monthly (on the last day of each calendar month) and compounded annually (on the last day of the calendar month in which the anniversary
occurred), or (ii) the Highest Lawful Rate.

 

“Borrower”
means Rosehill Reserve, Ltd., a Texas limited partnership.

 

“Borrower-Related
Party” means, collectively, the General Partner, the Guarantor, and any other Person who becomes the general partner
of Borrower or a guarantor.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
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“Builders’
Deed of Trust” shall mean that certain Deed of Trust to be recorded in the real property records of Harris County,
Texas, executed by Borrower and naming each initial Approved Builder as the beneficiary thereunder and granting Approved Builder
a security interest in and a second priority Lien on the Mortgaged Property in security for the payment and performance of Borrower’s
obligations with respect to the Subordinated Indebtedness and otherwise subject to the Subordination Agreement.

 

“Business
Day” means any day other than a Saturday, Sunday, or other day on which Lender is closed for business.

 

“Closing”
means the execution and delivery of the Loan Documents by Lender, Borrower and the Borrower-Related Parties.

 

“Closing
Deliveries” has the meaning given to such term in Section 7.

 

“Collateral”
means, collectively, all property, assets and rights and all proceeds in which a Lien, in favor of Lender is or has been granted
or arises or has arisen or may hereafter be granted or arise, under or in connection with any Loan Document or otherwise, to secure
payment or performance of all or any part of the Debt. Without limitation of the foregoing, the term “Collateral”
includes, without limitation, (i) all “Mortgaged Property” as such term is defined and used in the Deed of Trust, hereby
incorporated by reference, (ii) all Earnest Money (if any), and the proceeds therefrom, (iii) each Lot Sale Contract (if any) and
the proceeds therefrom, and (iv) each Reimbursement Contract (if any) and the proceeds therefrom.

 

“Commitment”
means the maximum dollar amount that Lender has committed to fund to or for the benefit of Borrower, subject to the Lender Conditions,
in the aggregate dollar amount of U.S. Thirty-Seven Million Four Hundred Seven Thousand Three Hundred Sixty-Two and No/100 Dollars
($37,407,362.00). The Commitment includes (and is not in addition to) the Initial Commitment Advance. The Commitment does not include
the Interest Reserve.

 

“Commitment
Advance” means any full or partial advance of the Commitment to or for the benefit of Borrower including, without
limitation, the Initial Commitment Advance.

 

“Company
Certificate” means a certificate certifying the existence, good standing, formation and organizational documents,
and authorizing resolutions, of a Person that is an entity.

 

“Construction
Contracts” has the meaning given to such term in Section 11(a).

 

“Contractor”
means each Person contracting with Borrower or an Affiliate thereof to provide labor or materials to or in connection with the
development of the Property.

 

“Contractor’s
Consent” means a written consent in a form acceptable to Lender executed by each Contactor that has entered into
a written Construction Contract with Borrower or its Affiliate for the provision or labor and/or materials to or for the Property.

 

“Debt”
means all Indebtedness (principal, interest or other) evidenced by this Agreement and all Indebtedness (principal, interest or
other) owing to Lender incurred under or evidenced by the other Loan Documents. The Debt includes interest and other obligations
accruing or arising after (i) commencement of any case under any bankruptcy or similar laws by or against Borrower or any Borrower-Related
Party or (ii) the obligations of Borrower or Borrower-Related Party shall cease to exist by operation of law or for any other reason.
The Debt also includes all reasonable attorneys’ fees and any other reasonable expenses incurred by Lender in enforcing any
of the Loan Documents.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	3

    	 

    

 

“Deed
of Trust” shall mean that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture
Filing to be recorded in the real property records of Harris County, Texas, naming Lender as the beneficiary thereunder and granting
Lender a security interest in and a first priority Lien on the Mortgaged Property in security for the payment and performance of
Borrower’s obligations under this Agreement and the other Loan Documents, subject only to Permitted Exceptions and being
superior in priority over all Liens, as it may be amended, modified, or supplemented from time to time.

 

“Default
Rate” means the lesser of (i) eighteen percent (18.0%) compounded annually (on the last day of the calendar month
in which the anniversary occurred), or (ii) the Highest Lawful Rate.

 

“Development
Plan” means the site plan and preliminary plat and engineering plans submitted to an appropriate Governmental Authority
involving planned Improvements and specifications for the development of the Property, as prepared by the Borrower’s engineer
and approved in writing by Lender, which materials shall later be supplemented with final plans and drawings approved by Lender.

 

“Discretionary
Advance” has the meaning given to such term in Section 3(c).

 

“Disposition”
means any sale, lease, transfer, assignment, exchange or conveyance in whole or in part.

 

“District”
means, any municipal district of Harris County, Texas having jurisdiction over the Property, being a political subdivision of the
State of Texas, a body politic and corporate, and a governmental agency of the State of Texas, organized pursuant to the provisions
of Article XVI, Section 59 of the Texas Constitution, including but not limited to, MUD 542.

 

“District
Consent” means a written consent and agreement executed by the District for the benefit of Lender, which, among other
things, provides that the District grants its consent to Lender’s Lien on and security interest in the Reimbursement Contracts.

 

“Drees”
means Drees Custom Homes, L.P., a Texas limited partnership.

 

“Drees
Indebtedness” means the Indebtedness of Borrower owed to Drees in accordance with the Drees Lot Sale Contract, the
Builders’ Deed of Trust, and the Subordination Agreement.

 

“Drees
Lot Sale Contract” means that certain Agreement of Purchase and Sale (Rosehill Reserve, Phase 1 – Finished
Lots) by and between Borrower, as seller, and Drees, as purchaser, for the purchase of 47 Finished Lots, dated on or about the
Effective Date.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
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“Earnest
Money” means any form of earnest money supporting a Lot Sale Contract including, without limitation, any cash on
deposit or letters of credit that may be deposited with a title company, released to Borrower, or held by any other Person.

 

“Effective
Date” means December 5, 2014.

 

“Environmental
Indemnity Agreement” shall mean that certain Environmental Indemnity Agreement to be executed by Borrower and the
Guarantor in favor of Lender, pursuant to which Borrower and the Guarantor agree to indemnify Lender from environmental liabilities
associated with the Property, as it may be amended, modified, or supplemented from time to time.

 

“Errors
Agreement” means that certain errors and omissions agreement executed by Borrower and the Borrower-Related Parties
in favor of Lender dated as of the Effective Date.

 

“Event
of Default” has the meaning given to such term in Section 12(a).

 

“Financial
Statement Certifications” means those certain certifications of Borrower and the Guarantor attesting to the accuracy
and completeness of the financial statements in the form attached hereto as Exhibit “E” and incorporated by
reference.

 

“Finished
Lot” means a fully developed finished single-family residential lot owned by Borrower which is deemed by Lender to
be a “finished” single-family residential lot and has been accepted by each of the city in which such Lot is located,
and each municipal district, municipality, water district, municipal utility district, public improvement district or other Governmental
Authority for Harris County, Texas.

 

“Good
Accounting Practice” shall mean such accounting practice as, in the opinion of independent certified public accountants
satisfactory to Lender, conforms at the time to generally accepted accounting principles or, with the prior written consent of
Lender, which may be given or withheld in Lender’s sole discretion, in any applicable case, cash basis of accounting or the
federal income tax basis of accounting, consistently applied. Each accounting term not defined in this Agreement shall have the
meaning given to it under Good Accounting Practice.

 

“Governmental
Authority” shall mean the United States, the State of Texas, the County where the Property, in whole or in part,
is located, the City, if any, where the Property, in whole or in part, is located, the District, any other district where the Property,
in whole or in part, is located, the Texas Commission for Environmental Quality, the Texas Water Development Board, the Texas Water
Quality Board, the Department of Housing and Urban Development, the Environmental Protection Agency, any political subdivision
of any of the foregoing and any agency, department, commission, board, bureau, court or instrumentality of any of them which now
or hereafter has jurisdiction over Lender, Borrower, any Borrower-Related Party, or any part of the Property.

 

“Guarantor”
means, collectively, Hargrove, and each other Person who executes a Guaranty Agreement as a Guarantor thereunder.

 

“Guaranty
Agreement” means each Guaranty executed by a Guarantor in favor of Lender, as each may be amended, modified, or supplemented
from time to time.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
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“Highest
Lawful Rate” means the maximum lawful rate of interest which may be contracted for, charged, taken, received or reserved
by Lender in accordance with the applicable laws of the State of Texas (or applicable United States federal law, to the extent
that it permits Lender to contract or charge, take, receive or reserve a greater amount of interest than under Texas law), taking
into account all fees and expenses contracted for, charged, received, taken or reserved by Lender in connection with the transaction
relating to this Agreement and the Debt evidenced hereby or by the other Loan Documents which are treated as interest under applicable
law.

 

“Highland”
means Highland Homes – Houston, Ltd., a Texas limited partnership.

 

“Highland
Indebtedness” means the Indebtedness of Borrower owed to Highland in accordance with the Highland Lot Sale Contract,
the Builders’ Deed of Trust, and the Subordination Agreement.

 

“Highland
Lot Sale Contract” means that certain Agreement of Purchase and Sale (Rosehill Reserve, Phase 1 – Finished
Lots) by and between Borrower, as seller, and Highland, as purchaser, for the purchase of 34 Finished Lots, dated on or about the
Effective Date.

 

“Improvements”
means all of the improvements, structures, equipment and amenities to be constructed and/or installed upon the Property in accordance
with the Development Plan and/or the Plans and Specifications.

 

“Indebtedness”
shall mean and include (a) all items which in accordance with Good Accounting Practice would be included on the liability
side of a balance sheet on the date as of which indebtedness is to be determined (excluding capital stock, surplus, surplus reserves
and deferred credits), (b) guaranties, endorsements and other contingent obligations in respect of indebtedness of others,
or any obligations to purchase or otherwise acquire any such indebtedness of others, and (c) indebtedness secured by any mortgage,
pledge, security interest or lien existing on property owned subject to or burdened by such mortgage, pledge, security interest
or lien whether or not the indebtedness secured thereby shall have been assumed.

 

“Initial
Commitment Advance” means the aggregate dollar amount reflected in the closing settlement statement to be advanced
to or for the benefit of Borrower at the Closing, not to exceed the Commitment; provided, however, that Lender’s records
of the amount of the Initial Commitment Advance shall be conclusive evidence of the actual amount funded.

 

“Interest
Reserve” means a reserve of accrued interest in the aggregate amount of U.S. Four Million Nine Hundred Sixty-Four
Thousand Eight Hundred Thirty-Eight and No/100 Dollars ($4,964,838.00) that (subject to the provisions of Sections 5(b)
and 5(c) of this Agreement), may be used by Lender to accrue monthly interest and to defer the Accrued Interest Payment
that would otherwise then be due and payable by Borrower pursuant to Sections 5(b) and 5(c)(i) of this Agreement.

 

“Interest
Reserve Accrual” means an accrual of Interest Reserve by Lender on its books and records.

 

“Lease”
has the meaning given to such term in Section 10(v).

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	6

    	 

    

 

“Lender”
means United Development Funding Income Fund V, a real estate trust organized under the laws of the State of Maryland, and its
successors and assigns.

 

“Lender
Conditions” means, collectively, Borrower’s and the Borrower-Related Parties’ strict compliance with
each of the requirements of the Closing Deliveries in Section 7 and each of the Advance Conditions in Section 8,
as determined by Lender in its sole discretion.

 

“Lender
Representatives” has the meaning given to such term in Section 10(m).

 

“Liabilities
and Costs” has the meaning given to such term in Section 14.

 

“Lien”
means any lien, security interest, charge, tax lien, pledge, encumbrance, collateral assignment, conditional sales or other title
retention arrangement or any other interest in property designed to secure the repayment of Indebtedness or the satisfaction of
any other obligation, whether arising by agreement or under any statute or law, or otherwise.

 

“Loan”
means the full amount of loan made to Borrower pursuant to this Agreement including all principal advanced and accrued interest
thereon and all other amounts owing to Lender under the Loan Documents.

 

“Loan
Documents” means, collectively, together with all exhibits and schedules thereto: this Agreement, the Note, the Deed
of Trust, the Environmental Indemnity Agreement, the Advance Requests, the Guaranty Agreements, the Financial Statement Certifications,
the Errors Agreement, the IRS tax disclosure forms, the Company Certificates, the Assignment of Lot Sale Contracts, the Assignment
of Contract Rights (if any), each Lot Purchaser Contract, each District Consent (if any), the Profits Interest Agreement, each
Subordination Agreement and all other documents, instruments, agreements, assignments and certificates relating thereto, including,
without limitation, any and all loan or credit agreements, promissory notes, deeds of trust, mortgages, pledge agreements, financing
statements, security agreements, assignments of rents, assignments of leases, assignments of contracts, environmental indemnities,
guaranties, contractor’s consent agreements, lender’s title insurance policies, opinions of counsel, evidences of authorization
or incumbency, escrow instructions, and architect’s and/or engineer’s consent agreements, letters of credit, each of
which is to be executed (and acknowledged where applicable) by the Borrower, Guarantor and/or Lender (as and where applicable)
in connection with Lender making the Loan to Borrower, as the same may be amended, modified, or supplemented from time to time.

 

“Loan
Expenses” has the meaning given to such term in Section 2(a).

 

“Lot”
shall mean any platted lots, including Finished Lots, which are or may become a part of the Property.

 

“Lot
Purchaser” means (i) an Approved Builder or (ii) any other Person acquiring Lots from Borrower, subject to approval
by Lender in its reasonable discretion.

 

“Lot
Purchaser Consent” means, collectively, each Consent to Assignment of Lot Sale Contract executed by a Lot Purchaser
in favor of Lender with respect to any Lot Sale Contract entered into with Borrower, as each may be amended, modified, renewed,
superseded, or replaced from time to time.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	7

    	 

    

 

“Lot
Sale Contract” means, collectively, the Ryland Lot Sale Contract, the M/I Homes Lot Sale Contract, the Highland Lot
Sale Contract, the Drees Lot Sale Contract, the Ashton Woods Lot Sale Contract, and each other contract or agreement entered into
by and between Borrower and a Lot Purchaser relating to the acquisition from Borrower of Lots, as each may be amended, modified
or supplemented from time to time; provided however, that Lender’s consent to any Lot Sale Contract shall not be inferred
from this reference.

 

“LTV
Ratio” means the ratio of (x) the outstanding principal balance of the Note, divided by (y) the value of the Lots,
as determined by Lender in its sole discretion.

 

“Management
Contracts” has the meaning given to such term in Section 11(a).

 

“Manager’s
Consent” means a written consent in a form acceptable to Lender executed by each manager that has entered into a
written Management Contract, if any, with Borrower or its Affiliate for the management, maintenance, administration, and marketing
of the Property.

 

“Maturity
Date” means December 5, 2016.

 

“M/I
Homes” means M/I Homes of Houston, LLC, a Delaware limited liability company.

 

“M/I
Homes Indebtedness” means the Indebtedness of Borrower owed to M/I Homes in accordance with the M/I Homes Lot Sale
Contract, the Builders’ Deed of Trust, and the Subordination Agreement.

 

“M/I
Homes Lot Sale Contract” means, collectively, the two (2) Agreements of Purchase and Sale (Rosehill Reserve, Phase
1 – Finished Lots) by and between Borrower, as seller, and M/I Homes, as purchaser, for the purchase of 83 Finished Lots,
dated on or about the Effective Date.

 

“Mortgaged
Property” has the meaning given to such term in the Deed of Trust. The Mortgaged Property includes, without limitation,
all of the Property.

 

“MUD
542” means Harris County Municipal Utility District No. 542 (which has not been created as of the Effective Date).

 

“Net
Proceeds” means the purchase price of the Lot stated in the Lot Sale Contract, less such expenses as are approved
by Lender, in its sole discretion.

 

“Note”
means the Secured Promissory Note in the original principal amount of U.S. Forty Two Million Three Hundred Seventy-Two Thousand
Two Hundred and NO/100 Dollars ($42,372,200.00) payable to the order of Lender and its assigns, issued, executed and delivered
by Borrower to Lender, as it may be amended, modified or supplemented from time to time, in the form attached hereto as Exhibit “B”
and incorporated herein by this reference.

 

“Obligations”
means any and all of the covenants, conditions, warranties, representations and other obligations (other than to repay the Debt)
made or undertaken by Borrower or any Borrower-Related Party to Lender as set forth in the Loan Documents.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	8

    	 

    

 

“Organizational
Agreement” shall mean (i) in respect of a corporation, the Articles of Incorporation certified to a current
date by the Secretary of State in which such corporation is incorporated and the Bylaws of a corporation certified to a current
date as true and correct by the secretary or assistant secretary of a corporation; (ii) in respect of a general partnership,
a partnership agreement; (iii) in respect of a joint venture, a joint venture agreement; (iv) in respect of a limited
partnership, a partnership agreement and the certificate of limited partnership certified to a current date by an appropriate Governmental
Authority of the state in which the limited partnership is organized; (v) in respect of a trust, a trust agreement; and (vi)
in respect of a limited liability company, the certificate of organization certified to a current date by the Secretary of State
in which such limited liability company is organized and the regulations of a limited liability company certified to a current
date as true and correct by the manager of a limited liability company; and any and all future modifications thereof which are
consented to by Lender.

 

“Origination
Fee” shall mean a fee in the amount of $529,652.50 payable from Borrower to Lender, charged by Lender in consideration
of its origination of the Loan.

 

“Other
Contracts” has the meaning assigned to such term in Section 11(b) hereof.

 

“Owner
Loans” means, collectively, loans from owners of Borrower made in accordance with the terms of the Organizational
Agreement of Borrower, which are unsecured or subordinate both in payment and priority of Liens to the Loan and the Loan Documents
pursuant to a subordination agreement executed by such Person in favor of Lender.

 

“Partial
Release Amount” means, (i) with respect to the Lots, the amount that must be paid to Lender for the release of Lender’s
Liens against a Lot, which amount must be equal to (a) in the event the Lot(s) being sold under a Lot Sale Contract which has been
approved by Lender (including any amendments, modifications or supplements), one hundred percent (100%) of the Net Proceeds of
the Lot, or (b) in the event of any Disposition of Lots, in whole or in part, other than pursuant to a Lot Sale Contract approved
by Lender (including any amendments, modifications or supplements), such amount as is determined by Lender, in its sole discretion,
or (ii) with respect to any Revenue Event, the amount that must be paid to Lender for the release of Lender’s Liens against
the Reimbursement Contract, (a) which amount must be equal to ninety percent (90%) of the proceeds from or relating to such Revenue
Event to be allocated to the outstanding principal balance of the Loan, and ten percent (10%) of the proceeds from or relating
to such Revenue Event to be allocated with respect to Borrower’s obligations under the Profits Interest Agreement; provided,
however, that upon the occurrence and during the continuation of an Event of Default, the proceeds from or relating to such Revenue
Event may be reallocated, at Lender’s option and at such percentages as Lender determines, to the outstanding principal balance
of the Loan and/or the Borrower’s obligations under the Profit Interest Agreement. Lender’s consent to any Lot Sale
Contract or any amendment, modification or supplement thereto shall not be inferred from the foregoing references.

 

“Permitted
Exceptions” has the meaning given to such term in the Deed of Trust.

 

“Person”
means a corporation, limited liability company, general partnership, limited partnership, trust, or other entity, or any individual.

 

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Harris County, Texas
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“Plans
and Specifications” means the plans and specifications for the construction of the Improvements prepared by the Engineer
and approved in writing by Borrower and Lender, as the same may have been or may be amended, modified or supplemented from time
to time.

 

“Principal
Officer” means Hargrove.

 

“Profits
Interest Agreement” means that certain Profits Interest Agreement by and between Borrower and Lender providing for
the participation by Lender in the profits derived from the Property.

 

“Pro
Forma” means Borrower’s schedule for the sale of the Lots and the projected proceeds from the sale of the Lots,
prepared by Borrower in good faith and in accordance with industry standards, attached hereto as Exhibit “C”.

 

“Property”
means, collectively, that certain real property located in Harris County, Texas, which is more particularly described on Exhibit
“A” attached hereto and incorporated herein by reference.

 

“Re-Advance” has
the meaning given to such term in Section 4.

 

“Reimbursement
Contract” means any existing or future contract or agreement with the District or any city, county, water district,
municipal utility district, public improvement district, or other Governmental Authority providing for the sharing, payment and/or
reimbursement of the costs of planning, development and/or construction with respect to the Property such as, but not limited to,
a municipal utility district or public improvement district reimbursement agreement.

 

“Released
Party” has the meaning given to such term in Section 10(q).

 

“Revenue
Event” means income, revenue, reimbursements, proceeds or other payment of any kind or nature under or pursuant to,
or in connection with, any Reimbursement Contract.

 

“Ryland”
means RH of Texas Limited Partnership, a Maryland limited partnership.

 

“Ryland
Indebtedness” means the Indebtedness of Borrower owed to Ryland in accordance with the Ryland Lot Sale Contract,
the Builders’ Deed of Trust, and the Subordination Agreement.

 

“Ryland
Lot Sale Contract” means, collectively, the two (2) Agreements of Purchase and Sale (Rosehill Reserve, Phase 1 –
Finished Lots) by and between Borrower, as seller, and Ryland, as purchaser, for the purchase of 89 Finished Lots, dated on or
about the Effective Date.

 

“Subordination
Agreement” shall mean that certain Subordination Agreement dated on or about the Effective Date, by and among Borrower,
Lender, Ryland, M/I Homes, Highland, Drees, and Ashton Woods as amended, restated or supplemented from time to time, which among
other things, subordinates the Subordinated Indebtedness and the Builders’ Deed of Trust to the Lender, the Indebtedness,
and Lender’s Lien.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	10

    	 

    

 

“Subordinated
Indebtedness” means, collectively, the Ryland Indebtedness, the M/I Homes Indebtedness, the Highland Indebtedness,
the Drees Indebtedness, and the Ashton Woods Indebtedness.

 

“Substantial
Completion” means that each Lot (i) has been fully developed into a finished single-family residential Lot and is
suitable for the construction of a single family residence thereon, (ii) has been accepted by the city in which such Lot is located,
and each municipal district, municipality, water district, municipal utility district, public improvement district or other Governmental
Authority for the county in which the Lot is located, (iii) has all utility services necessary for the construction of single family
residence, including water supply, storm and sanitary sewer facilities, gas and electricity, and (iv) would require only a building
permit from the applicable Governmental Authority for a builder to construct a single family residence thereon.

 

“Title
Company” means Alamo Title Insurance Company.

 

“Title
Policy” shall mean one or more policies of mortgagee title insurance and all endorsements thereto requested by Lender,
issued in favor of Lender and naming Lender and its assigns as insured mortgagee by the Title Company and insuring that title
to the Property covered by the Deed of Trust is vested in Borrower, free and clear of any Lien, objection, exception or requirement
other than the Permitted Exceptions, and that Lender has a Lien in the full amount of the Loan against the Property containing
such endorsements as Lender may require. 

 

2.            Loan
Expenses; Fees.

 

(a)          To
the extent not prohibited by applicable law, Borrower will pay all reasonable costs and expenses and reimburse Lender for any and
all reasonable expenditures of every character incurred or expended from time to time, regardless of whether an Event of Default
shall have occurred, in connection with any of the following (collectively, “Loan Expenses”):

 

(i)          the
preparation, negotiation, documentation, closing, renewal, revision, modification, increase, administrating, monitoring, review
or restructuring of any loan or credit facility represented by or secured by the Loan Documents, including legal, accounting, auditing,
architectural, engineering, due diligence, title company, and inspection services and disbursements, or in connection with collecting
or attempting to enforce or collect pursuant to any Loan Document;

 

(ii)         Lender’s
evaluating, monitoring, administering and protecting the Collateral or employing others to do so or to perform due diligence for
Lender with respect thereto; and

 

(iii)        Lender’s
creating, perfecting and realizing upon Lender’s security interest in, and the Liens on the Collateral, and all costs and
expenses relating to Lender’s exercising any of its rights and remedies under any Loan Document or at law, including all
appraisal fees, consulting fees, filing fees, taxes, brokerage fees and commissions, title review and abstract fees, litigation
report fees, UCC search fees, other fees and expenses incident to title searches, reports and security interests, investigations,
escrow fees, attorneys’ fees, legal expenses, court costs, other fees and expenses incurred in connection with any complete
or partial liquidation of the Collateral, and all fees and expenses for any professional services or any operations conducted in
connection therewith. Notwithstanding the foregoing, no right or option granted by Borrower to Lender or otherwise arising pursuant
to any provision of any Loan Document shall be deemed to impose or admit a duty on Lender to supervise, monitor or control any
aspect of the character or condition of the Collateral or any operations conducted in connection with it for the benefit of Borrower
or any other Person other than Lender.

 

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Harris County, Texas
	11

    	 

    

 

(b)          Usury
Savings Clause Applies. Borrower agrees that Lender has provided, and shall provide, separate and distinct consideration for
the fees and expenses described in the Loan Documents, and that such fees and expenses are necessary, bona fide fees and expenses
incurred in connection with the Loan. Borrower further agrees that such fees and expenses are not, are not intended to be, and
shall not be characterized as, interest or as compensation for the use, forbearance or detention of money. Despite the foregoing
and notwithstanding anything else in this Agreement and the other Loan Documents to the contrary, if any such fees or expenses
are determined to constitute interest and such fees or expenses, and when such fees and expenses are added to the interest charged
hereunder and any other items determined to constitute interest, it would cause the aggregate interest charged hereunder to exceed
the Highest Lawful Rate, then Section 13 of this Agreement shall automatically apply to reduce the interest charged hereunder
(taking into account all items determined to constitute interest) so as not to exceed the Highest Lawful Rate.

 

(c)          Origination
Fee. Borrower agrees to pay Lender an Origination Fee in the amount of $529,652.50. Borrower has requested, and Lender has
agreed, to fund the Origination Fee from the proceeds of the Initial Commitment Advance.

 

3.            Closing;
Commitment; Discretionary Advances.

 

(a)          Closing;
Commitment. Subject to the Lender Conditions, Lender agrees to fund the Initial Commitment Advance to Borrower at the Closing
and to fund the balance of the Commitment to the Borrower in accordance with the terms and conditions of this Agreement provided,
however, that all Advances shall be subject to, and made in accordance with, the terms and conditions of Section 3(b). Notwithstanding
anything else to the contrary contained herein, Lender shall have no obligation to make any Advance unless each of the Lender Conditions
has been satisfied.

 

(b)          Procedure
for Borrowing. Each Commitment Advance shall be made pursuant to Borrower’s delivery of an Advance Request to Lender,
accompanied by documentation supporting the Commitment Advance. Borrower agrees to provide all information, documents and agreements
as may be requested by Lender in connection with each such Advance Request. Notwithstanding anything else to the contrary contained
herein, Lender shall have no obligation to make any Advance unless each of the Lender Conditions is satisfied at the time of such
Advance.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	12

    	 

    

 

(c)          Discretionary
Advances. Lender is hereby authorized from time to time to make Advances without notice to Borrower that Lender, in its sole
discretion, deems necessary or desirable upon the occurrence of any of the following (such Advances made upon the occurrence of
the following events are referred to herein as the “Discretionary Advances”): (i) Lender determines,
in its sole discretion, that an Advance is be necessary or desirable for the purpose of paying any Loan Expense, cost, expense,
fee or other amount to or for the benefit of Borrower or chargeable to Borrower under the Loan Documents, (ii) any Event of Default
occurs, or (iii) upon request by Borrower for a Commitment Advance that would cause the aggregate amount of all Commitment Advances
made hereunder to exceed the Commitment. Each Discretionary Advance shall, upon disbursement, automatically constitute principal
outstanding hereunder and cause a corresponding increase in the aggregate amount of the Debt (even if such Discretionary Advance
causes the outstanding principal amount of the Note to exceed the Commitment or the face amount of the Note). Borrower agrees that
each Discretionary Advance may, in Lender’s discretion, reduce the amount of availability, if any, under the Commitment and
may, in Lender’s discretion, reduce the amount of available Interest Reserve, if any. The making by Lender of any Discretionary
Advance shall not cure or waive any Event of Default hereunder (except only for an Event of Default that has been cured to Lender’s
satisfaction as confirmed by Lender’s execution of a written agreement specifically acknowledging and describing the Event
of Default so cured, and for an Event of Default that has been waived by Lender as confirmed by Lender’s execution of a written
agreement specifically acknowledging and describing the Event of Default so waived).

 

4.            Revolving
Advances. In Lender’s sole and absolute discretion, Lender may re-advance the Commitment in whole or in part; provided,
that Lender is under no obligation to re-advance any part of the Commitment, and provided further, that if Lender decides to re-advance
any part of the Commitment, Lender shall have no obligation to fund such re-advance unless each of the Lender Conditions has been
satisfied (a re-advance made for the foregoing purposes are referred to herein as a “Re-Advance”). Each
Re-Advance made under the Note shall, upon disbursement, automatically constitute principal outstanding under the Note and shall
cause a corresponding increase in the aggregate outstanding principal amount of such Note and such Re-Advance shall not cause the
aggregate amount outstanding under the Note to exceed the face amount of such Note or causes the outstanding principal amount of
the Note to exceed the Commitment. Borrower agrees that each Re-Advance shall automatically reduce the amount of availability,
if any, under the Commitment. The making by Lender of any Re-Advance shall not cure or waive any Event of Default (except only
for an Event of Default that has been cured to Lender’s satisfaction as confirmed by Lender’s execution of a written
agreement specifically acknowledging and describing the Event of Default so cured, or for an Event of Default that has been waived
by Lender as confirmed by Lender’s execution of a written agreement specifically acknowledging and describing the Event of
Default so waived).

 

5.            Interest;
Payments.

 

(a)          Interest
Rate. The outstanding principal amount of the Note shall bear interest on each day outstanding at the Base Rate unless the
Default Rate shall apply. Upon the occurrence and during the continuation of an Event of Default, the outstanding principal amount
of the Note shall, at Lender’s option, automatically and without the necessity of notice, bear interest from the date of
such Event of Default at the Default Rate, until all such delinquent amounts are paid and such breach or Event of Default has been
cured to Lender’s satisfaction as confirmed by Lender’s execution of a written agreement specifically acknowledging
and describing the Event of Default so cured, and or waived by Lender as confirmed by Lender’s execution of a written agreement
specifically acknowledging and describing the Event of Default so waived.

 

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Harris County, Texas
	13

    	 

    

 

(b)          Interest
Payments; Interest Reserve Accruals. Borrower agrees to make Accrued Interest Payments to Lender on the last day of each calendar
month while the Loan is outstanding, in an amount equal to the interest accrued on the outstanding principal balance of the Note
during each such calendar month. Notwithstanding the foregoing sentence, on each date that an Accrued Interest Payment becomes
due and payable, provided that the Lender Conditions are then satisfied and that a sufficient amount of Interest Reserve is available,
Lender shall make an Interest Reserve Accrual in the amount of such Accrued Interest Payment and such Accrued Interest Payment
that would otherwise be then due and payable will be deferred. Lender may, but is not obligated to, make Interest Reserve Accruals
hereunder whether or not the Lender Conditions have been met, provided, however, that if the Lender Conditions are not then met,
any such Interest Reserve Accruals shall be made at Lender’s option and in its sole discretion. Upon each Interest Reserve
Accrual, irrespective of whether the Lender Conditions were met, the amount of remaining Interest Reserve (if any) shall be reduced
by the amount of such Interest Reserve Accrual. Notwithstanding anything else to the contrary contained herein, (i) if at any time
an Event of Default has occurred and is continuing under this Agreement, Lender shall not be obligated to make any further Interest
Reserve Accruals, and thereafter, shall do so only in its sole discretion, unless and until the Event of Default has been cured
to Lender’s satisfaction as confirmed by Lender’s execution of a written agreement specifically acknowledging and describing
the Event of Default so cured, or waived by Lender as confirmed by Lender’s execution of a written agreement specifically
acknowledging and describing the Event of Default so waived, and (ii) in no event shall Lender be obligated to make any Interest
Reserve Accrual that would cause the aggregate amount of Interest Reserve Accruals made hereunder to exceed the remaining Interest
Reserve.

 

(c)          Interest
and Principal Payments. Except earlier upon any acceleration of the Note:

 

(i)          Borrower
promises to pay to Lender monthly Accrued Interest Payments on the last day of each calendar month for interest accrued during
such calendar month, unless Lender makes an Interest Reserve Accrual to defer such Accrued Interest Payment, as provided in Section
5(b) of this Agreement;

 

(ii)         in
addition to the payments required by the provisions of the clause above, concurrently with each Disposition of the Mortgaged Property
in whole or in part or any Lot thereof, Borrower promises to pay Lender, the applicable Partial Release Amount for the portion
of the Mortgaged Property or Lot so released from Lender’s Lien, which is due and payable prior to Lender providing to Borrower
(or releasing from escrow with the Title Company) its partial release of Lien on such portion of the Mortgaged Property or Lot
so released; and

 

(iii)        in
addition to the payments required by the provisions of the clauses above, concurrently with the occurrence of any Revenue Event,
Borrower promises to pay to Lender the applicable Partial Release Amount of the proceeds from or relating to such Revenue Event
up to, but not exceeding the amount of the unpaid Debt; and

 

(iv)       
in addition to the payments required by the provisions of the clauses above, Borrower promises to pay to Lender the outstanding
principal balance of the Note, together with all accrued, unpaid interest thereon, unpaid Loan Expenses and other unpaid amounts
due under the Loan Documents, on or prior to the Maturity Date.

 

(d)          Collateral.
Notwithstanding anything to the contrary contained in the Loan Documents, upon the occurrence and during the continuation of an
Event of Default, Lender has no obligation to release any part of the Collateral.

 

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Harris County, Texas
	14

    	 

    

 

6.            Terms
and Conditions of Payment.

 

(a)          Application
of Payments. All payments and prepayments on the Loan shall be applied first, to unpaid accrued interest calculated through
the date of such payment (irrespective of whether such unpaid accrued interest has been accrued on Lender’s books and records),
next, to principal outstanding under the Note). Notwithstanding the foregoing sentence, if any Event of Default occurs and is continuing,
Lender shall have the right to apply payments toward amounts due under this Agreement as Lender determines in its sole discretion.

 

(b)          General.
All amounts are payable to Lender in lawful money of the United States of America at the address for Lender provided in this Agreement,
or at such other address as from time to time may be designated by Lender. Borrower shall make each payment which it owes under
this Agreement and the other Loan Documents to Lender in full and in lawful money of the United States, without set-off, deduction
or counterclaim. Under no circumstance may Borrower offset any amount owed by Borrower to Lender under this Agreement with an amount
owed by Lender to Borrower under any other arrangement. All payments shall be made by cashier's check or wire transfer of immediately
available funds. Should any such payment become due and payable on a day other than a business day, the date for such payment shall
be extended to the next succeeding business day, and, in the case of a required payment of principal, interest or Loan Expenses
or other amounts then due, interest shall accrue and be payable on such amount for the period of such extension. Each such payment
must be received by Lender not later than 3:00 p.m., Grapevine, Texas time on the date such payment becomes due and payable. Any
payment received by Lender after such time will be deemed to have been made on the next succeeding business day.

 

(c)          Prepayment.
Borrower may prepay the Loan in whole or in part at any time and from time to time without incurring any prepayment fee or penalty,
by giving Lender no less than ten (10) days prior written notice of such termination; provided, that interest shall accrue on the
portion of the Note so prepaid through the date of such prepayment.

 

7.            Loan
Deliveries. At or prior to the Closing, Borrower shall deliver or cause to be delivered to Lender, the following items, each
of which shall be satisfactory in form and substance to Lender (the “Closing Deliveries”):

 

(a)          originals
duly executed and notarized, as appropriate, by Borrower and the Borrower-Related Parties of the Loan Documents including, without
limitation, this Agreement, the Deed of Trust, the Note, the Environmental Indemnity Agreement, the Advance Request, the Guaranty
Agreement, the Financial Statement Certifications, the Errors Agreement, the Profits Interest Agreement, the IRS tax disclosure
forms, each Subordination Agreement, the Company Certificates, Assignment of Lot Sale Contract, and each Lot Purchaser Consent;

 

(b)          the
Organizational Agreements of Borrower and each Borrower-Related Party that is an entity;

 

(c)          certificates
of existence and good standing for Borrower and each Borrower-Related Party that is an entity issued by the appropriate state authorities;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	15

    	 

    

 

(d)          resolutions
of the general partner, manager or other governing body (as evidenced by the Organizational Agreements) of Borrower and each Borrower-Related
Party, authorizing the execution, delivery, and performance of this Agreement and the other Loan Documents, and the transactions
contemplated hereby and thereby;

 

(e)          copies
of the liability insurance and casualty insurance policies covering Borrower and the Property, evidence of payment of the premiums
therefor through at least one year and endorsements of such policies to Lender (in accordance with and meeting the requirements
of Sections 10(o) and (p) hereof);

 

(f)          all
written consents that are required with respect to or necessitated by this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby;

 

(g)         the
following due diligence and Closing documents and materials: (i) a current appraisal assessing the fair market value of the Property,
subject to Lender’s review and acceptance, completed by an appraiser acceptable to Lender, (ii) all environmental site assessments
and reports with respect to the Property, including, but not limited to, a wetlands assessment, (iii) all engineering reports and
studies, soil analysis, construction, structural and mechanical feasibility reports; all surveys, survey maps, plats and proposed
plats; all development plans, construction plans, and other plans and specifications; all topographic, drainage and contour maps
and all other reports, maps, studies and surveys of engineers, architects and others; (iv) certified copies of the deeds of conveyance
conveying the Property to Borrower, (v) the fully executed settlement statement prepared by the Title Company, which must be approved
by Lender prior to execution thereof, (vi) all sales and marketing plans for the Property, (vii) all contracts and agreements with
developers, engineers, contractors, subcontractors, consultants and others relating to supervision and maintenance of, and other
professional services relating to the Property, (viii) copies of all easements and encumbrances affecting the Property, including
land use, water use, mineral rights, surface rights, zoning, subdivision, grading, environmental restrictions, and neighborhood
association rights and restrictions and (ix) tax certificates for the Property covering taxes due for tax year(s) 2014 and earlier;

 

(h)          all
Lot Sale Contracts in existence on the Effective Date (or drafts thereof if unexecuted as of the Effective Date);

 

(i)          reserved;
and

 

(j)          such
other and further information, documents, agreements and certificates as are reasonably requested by Lender.

 

No waiver by Lender of the timely
delivery of any Closing Delivery will constitute a waiver of any condition precedent to any obligation of Lender to make any Advance
or to require delivery of any Closing Delivery prior to the funding of any Advance.

 

8.            Conditions
Precedent to Advances. Borrower agrees that, notwithstanding anything to the contrary contained herein or in the other Loan
Documents, Lender’s obligation to fund any Advance or to make any Interest Reserve Accrual shall be conditioned upon the
satisfaction by Borrower of each of the following conditions, on and as of the funding date for the Advance or the date of the
Interest Reserve Accrual, as applicable (the “Advance Conditions”):

 

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Harris County, Texas
	16

    	 

    

 

(a)          no
event constituting an Event of Default shall have occurred and be continuing;

 

(b)          the
Principal Officer shall have executed and delivered to Lender an Advance Request dated the funding date, all matters certified
in the Advance Request shall be true and correct in all respects, and Lender shall have approved the Advance Request, as determined
by Lender in its sole discretion;

 

(c)          all
statements contained in all Loan Documents and all other certificates, statements and data furnished to Lender by or on behalf
of Borrower or in connection with the transactions contemplated by this Agreement or any of the other Loan Documents (including
all of the documents and information required to be delivered to Lender by Section 7) shall be true and complete in all
material respects, and there are no facts or events actually known to Borrower that, if disclosed to Lender, would make such statements,
certificates or date untrue in any material respect (and Borrower agrees to inform Lender, prior to Lender making any such Advance,
of any such facts or events actually known to Borrower);

 

(d)        all of the Loan
Documents shall be valid and subsisting, enforceable and in full force and effect and in the priority Lien position stated therein;

 

(e)         all
Loan Expenses owing shall have been paid in full;

 

(f)          the
Title Company shall have delivered to Lender the Title Company’s unconditional commitment to issue the Title Policy for the
Deed of Trust pursuant to a commitment that is satisfactory to Lender in all respects in the full Note amount, with all endorsements
thereto required by Lender, at Borrower’s expense;

 

(g)          the
Title Company shall have executed Lender’s Closing instruction and title objection letter and have complied with all conditions
therein;

 

(h)         the
amount of the requested Advance, when added to the outstanding principal amount of all Loan then outstanding, would not exceed
the Commitment and would not cause the a violation of Section 10(aa) with respect to the LTV Ratio;

 

(i)          the
amount of the Advance has been approved by Lender and the proceeds from such Advance shall be used for Approved Purposes; and

 

(h)          Borrower
shall have complied with each other reasonable request of Lender made in connection with the Advance.

 

No waiver given in connection with any
Advance will constitute a waiver of any condition precedent with respect to future Advances.

 

9.            Representations
and Warranties. Borrower and each Borrower-Related Party represent and warrant to Lender as follows:

 

(a)          Due
Organization, Existence and Authority. Borrower and each Borrower-Related Party that is an entity (i) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization, and (ii) has full power and authority to own
its properties, carry on its business as presently conducted and as proposed to be conducted, and to enter into and perform its
obligations under this Agreement and the other Loan Documents to which it is a party.

 

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Harris County, Texas
	17

    	 

    

 

(b)          Loan
Documents Authorized. The execution and delivery by Borrower and each Borrower-Related Party of this Agreement and the other
Loan Documents and the full and timely performance of all obligations thereunder have been duly authorized by all necessary action
under the Organizational Agreement of Borrower and each Borrower-Related Party and otherwise.

 

(c)          Loan
Documents Valid, Binding and Enforceable. This Agreement and the other Loan Documents have been duly and validly executed,
issued and delivered by Borrower and each Borrower-Related Party, and constitutes the valid and legally binding obligations of
Borrower and each Borrower-Related Party enforceable in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting enforcement of creditor’s rights.

 

(d)          No
Violation. The execution, delivery and performance by Borrower and each Borrower-Related Party of the Loan Documents does not
and will not (i) contravene the Organizational Agreement of Borrower and each Borrower-Related Party, (ii) contravene
any law, rule or regulation, or any order, writ, judgment, injunction or decree or any contractual restriction binding on or affecting
Borrower or any Borrower-Related Party or the Collateral, (iii) require any approval or consent of any general partner, board,
manager, member, lender or any other Person, other than approvals or consents that have been previously obtained and disclosed
in writing to the Lender, (iv) result in a breach of or constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which Borrower or any Borrower-Related Party is a party or by which Borrower or any
Borrower-Related Party or the Collateral may be bound or affected, or (v) result in, or require the creation or imposition of,
any Lien (other than the Liens contemplated by the Loan Documents) with respect to the Collateral.

 

(e)          No
Other Defaults; No Consents Required. To Borrower’s knowledge, neither Borrower nor any Borrower-Related Party are in
default with respect to any order, writ, injunction, decree or demand of any court or of any Governmental Authority which would
have a material adverse effect on Borrower or any Borrower-Related Party, as applicable, or which affects the Property in any materially
adverse manner. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by Borrower of the Loan Documents, other than approvals or consents that
have been previously obtained and disclosed in writing to the Lender.

 

(f)          Government
Regulations. Neither Borrower nor any Borrower-Related Party is subject to regulation under the Investment Company Act of 1940,
the Federal Power Act or the Public Utility Holding Company Act of 1935, the Interstate Commerce Act, as the same may be amended
from time to time, or any federal or state statute or regulation limiting its ability to incur Indebtedness

 

(g)          Securities
Activities Neither Borrower nor any Borrower-Related Party is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System in effect from time to time) and not more than twenty five (25%) of the value
of the assets of said entities consists of such margin stock.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	18

    	 

    

 

(h)          Litigation
Matters. There are no actions, suits or proceedings pending, or to the knowledge of Borrower, threatened, against or affecting
Borrower, any Borrower-Related Party or the Collateral, or involving the validity or enforceability of the Loan Documents or the
priority of the Liens created or evidenced thereby, at law or in equity, or before or by any Governmental Authority.

 

(i)          Financial
Statements Complete and Accurate. All information supplied and statements made to Lender by or on behalf of Borrower or any
Borrower-Related Party is in any financial statement furnished or application for credit made prior to, contemporaneously with
or subsequent to the execution of this Agreement are and shall be true, correct, complete, valid and genuine; such financial statements
and applications for credit have been prepared in accordance with Good Accounting Practice and fully and accurately present the
financial condition of the subject thereof as of the date thereof and no material adverse change has occurred in the financial
condition reflected therein since the respective dates thereof; and no additional borrowings have been made by Borrower or any
Borrower-Related Party since the respective dates thereof other than (i) the borrowing contemplated hereby and (ii) other borrowings
approved by Lender’s prior written consent, which may be given or withheld in Lender’s sole discretion.

 

(j)          Environmental
Liability. To the knowledge of Borrower, no hazardous substances or solid wastes have been disposed of or otherwise released
on the Property in violation of Environmental Laws, nor is the Property including its soil, ground, water, air and other elements,
contaminated by hazardous substances or solid wastes in violation of Environmental Laws. The terms “hazardous substance”
and release” shall have the meanings specified in the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended (42 U.S.C. Section 9601 et. seq.) (“CERCLA”), and the terms “solid waste”
and “disposal” (or “disposed”) shall have the meanings specified in the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. Section 6901 et. seq.) (“RCRA”); provided, to the extent that
the laws of the State of Texas establish a meaning for “hazardous substance”, “release”, “solid waste”,
or “disposal” or “disposed”) that is broader than that specified in either CERCLA or RCRA, such broader
meaning shall apply.

 

(k)          Tax
Liabilities. Borrower has filed all tax returns required to be filed, or has obtained an extension which is currently valid
and in effect, for all federal, state, county, local, and foreign tax returns and reports required to be filed, including, without
limitation, taxes on the Collateral and all applicable income, payroll, personal property, real property, employee withholding,
social security, unemployment, franchise, excise, use and sales taxes. Borrower has paid in full all taxes that have become due
as reflected on all such returns and reports including any interest and penalties, expect for taxes being contested in good faith
and for which such taxpayer has set aside adequate reserves for the payment thereof. Borrower has established adequate reserves
for all taxes payable but not yet due. No governmental claim for additional taxes, interest, or penalties is pending or, to the
knowledge of Borrower, threatened against Borrower or the Collateral.

 

(l)          Compliance
With Legal Requirements. Borrower and each Borrower-Related Party are in compliance with all legal requirements in respect
of the conduct of its business and the ownership of its assets. No violation of any legal requirement exists with respect to the
Property; the anticipated use of the Property complies with all applicable legal requirements; and all legal requirements applicable
to the Property have been satisfied. Borrower and each Borrower-Related Party own or have the continuing right to use all permits,
licenses, patents, patent rights or licenses, trademarks, trademark rights, trade names, trade name rights and copyrights which
are required to conduct its business.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	19

    	 

    

 

(m)          Full
Disclosure. All statements contained in any Loan Document shall constitute representations and warranties. None of the representations,
warranties, covenants, agreements or statements contained in any Loan Document or any schedule, exhibit, report, statement or certificate
furnished to Lender by or on behalf of Borrower or any Borrower-Related Party in connection with the Loan contains or will contain
any untrue statement of a material fact, or omits or will omit any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they are made, not misleading.

 

(n)          No
Known Material Adverse Fact. Neither Borrower nor any Borrower-Related Party knows of any fact which materially and adversely
affects the Collateral, or the business, operations, prospects or condition, financial or otherwise, of Borrower.

 

(o)          Survival
of Representations and Warranties. All representations and warranties made by or on behalf of Borrower or any Borrower-Related
Party herein or in any other Loan Document shall survive the delivery of this Agreement and the making of the Loan and any investigation
at any time made by or on behalf of Lender shall not diminish its rights to rely thereon.

 

(p)          No
Usury. Without limiting the generality of any other representation or warranty set forth herein or in any other Loan Document,
the Loan is a commercial loan and not usurious under the laws of the State of Texas.

 

(q)          Advisement
by Lender. Prior to entering into this Agreement and the other Loan Documents, Borrower and each Borrower-Related Party have
been advised by Lender to seek the advice of an attorney and an accountant in connection with the Loan. Borrower and each Borrower-Related
Party have had the opportunity to seek the advice of an attorney and accountant of its choice in connection with the Loan.

 

(r)          Adequate
Consideration. Prior to entering into this Agreement and the other Loan Documents, Borrower and each Borrower-Related Party
have reviewed the benefits to be provided to it as a result of the Lender making the Loan and have concluded that (i) the Loan
and the terms and conditions of the Loan Documents are in the bests interests of Borrower and the Borrower-Related Parties, (ii)
the benefits of the Loan and the Loan Documents are reasonably equivalent in value to the Collateral to be pledged to secure the
Loan and the obligations assumed and to be assumed by them pursuant to the Loan Documents, and (ii) direct and indirect benefits
will flow to Borrower and the Borrower-Related Parties by virtue of Borrower and the Borrower-Related Parties providing guaranties
and Collateral to secure any present or future Indebtedness of Borrower or the Borrower-Related Parties to Lender.

 

(s)          No
Partnership, Joint Venture or Agency Intended. Nothing in this Agreement or the other Loan Documents is intended
or shall in any way be construed so as to create any form of partnership, joint venture or agency relationship between the
Borrower and each Borrower-Related Party, on the one hand, and the Lender on the other hand, the parties hereto having expressly
disclaimed any intention of any kind to create any partnership or agency relationship between them resulting from or arising out
of the Loan Documents.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	20

    	 

    

 

(t)          Reimbursement
Contracts. On the Effective Date, there are no Reimbursement Contracts in effect between any District and Borrower except as
assigned to Lender in the Assignment of Contract Rights.

 

(u)          Lot
Sale Contracts. No Lot Sale Contract exists covering any of the Property on the date of Closing, other than the Ryland Lot
Sale Contract, the M/I Homes Lot Sale Contract, the Highland Lot Sale Contract, the Drees Lot Sale Contract, and the Ashton Woods
Lot Sale Contract.

 

(v)         Ownership.
Borrower owns the Property and owns all of the improvements thereon (other than any off-site improvements and any public utilities
and roadways), and all “materials” (as defined in Section 53.001 of the Texas Property Code) are free and clear of
all Liens except those in favor of Lender.

 

(w)          Zoning.
The use of the Property as residential real property complies with all applicable zoning ordinances, regulations and restrictive
covenants affecting the Property.

 

(x)          No
Work Performed. No labor or services have been performed by on behalf of Borrower or otherwise, and no materials have been
furnished or delivered by on or behalf of Borrower or otherwise to, the Property prior to the recording the Deed of Trust, which
could give rise to a Lien on the Property with priority equal to or greater than the Liens and security interests of the Deed of
Trust or other Loan Documents. No party has any right to claim a mechanics or materialmens lien, whether statutory or constitutional,
against the Property.

 

10.         Covenants.
Borrower and each Borrower-Related Party covenant and agree as follows:

 

(a)          Payment;
Performance. Borrower shall promptly pay all amounts due and owing to Lender under this Agreement. Borrower and each Borrower-Related
Party shall timely perform and comply with each agreement and covenant made by them under this Agreement and the other Loan Documents.

 

(b)          Use
of Proceeds. Borrower shall use the proceeds of this Agreement solely for the acquisition of the Property, related closing
costs and expenses, and management of the Property, and other costs and expenses included in the Approved Budget. In no event shall
the proceeds of this Agreement be used, directly or indirectly, for personal, family, household or agricultural purposes or for
the purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or carrying any “margin stock” (as
such term is defined in Regulation U promulgated by the Board of Governors of the Federal Reserve System).

 

(c)          Indebtedness.
Except for Owner Loans, Borrower shall not incur any Indebtedness or guaranty or provide security for any Indebtedness of another
Person or enter into any agreement to do so without the prior written consent of Lender, which may be which may be given or withheld
in Lender’s sole discretion. As a condition of Lender granting such consent, Lender may require Borrower and the other lender
to enter into a subordination agreement in favor of Lender, which shall be satisfactory to Lender in all respects. Notwithstanding
the foregoing, Borrower may incur trade debt to vendors, and suppliers and providers of services in the ordinary course of business
without violation of this Section 10(c).

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	21

    	 

    

 

(d)          Restriction
on Fundamental Changes. Without the prior written consent of Lender, which may be given or withheld in Lender’s sole
discretion, Borrower will not: (i) engage in any business activities or operations substantially different from or unrelated
to those in which it was engaged on the Effective Date, (ii) merge into or consolidate with any Person or dissolve, terminate,
liquidate or wind-up (or suffer any liquidation or dissolution) in whole or in part, or transfer or otherwise dispose of all its
assets or change its legal structure, (iii) acquire, by purchase or otherwise, all or substantially all of the business or
property of, or stock or partnership interest in, or other evidence of beneficial ownership of any Person, (iv) maintain its
assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those
of any principal or Affiliate of Borrower or any other Person, (v) make any loans or advances to any third party, including any
principal or Affiliate of Borrower (vi) fail to maintain its records, books of account and bank accounts separate and apart from
those of the Affiliates of Borrower and any other Person or entity, (vii) change the management of Borrower from Hargrove and Brian
McGown, or (viii) modify or amend the Organizational Agreements of Borrower or any Borrower-Related Party.

 

(e)          Notice
of Certain Events. Borrower shall promptly notify Lender in writing of (i) the occurrence of any event or series of events
causing, or that could be expected to cause or has caused, a material adverse effect on the operations or financial condition of
Borrower, any Borrower-Related Party or the Collateral, (ii) the occurrence of any Event of Default, (iii) any default by Borrower
or the acceleration of the maturity of any Indebtedness owed by Borrower or any Borrower-Related Party under any loan agreement,
indenture, mortgage, promissory note, contract or instrument to which Borrower or any Borrower-Related Party is a party or by which
any material asset or property of Borrower or any Borrower-Related Party is bound, (iv) any litigation instituted against Borrower
or the Collateral, or any claim made by any Person against or affecting the Collateral, (v) notices of violation received from
any Governmental Authority that may adversely affect the Collateral, (vi) any audits of any federal or state tax returns of Borrower
or any Borrower-Related party and the results of any such audit, (vii) any condemnation or similar proceedings with respect to
the Property, (viii) any Lien affecting the Property other than the Liens in favor of Lender and Permitted Exceptions, (ix) any
other matters which could reasonably be expected to adversely affect Borrower’s ability to perform its obligations under
this Agreement, and (x) any termination of, or any default under, or any receipt of notice of termination or default, under any
Lot Sale Contract or Reimbursement Contract. Borrower shall notify Lender in writing at least thirty (30) days prior to the date
that it or any Borrower-Related Party changes its or his name, address, principal place of business, or the place that it maintains
its or his books and records.

 

(f)          Financial
Statements; Tax Returns. Borrower shall deliver or cause to be delivered to Lender, the following:

 

(i)          within
sixty (60) days after the end of each fiscal quarter, the unaudited financial statements of Borrower, prepared in accordance with
Good Accounting Practice, and combined or consolidated as appropriate, including all notes related thereto;

 

(ii)         within
one hundred twenty (120) days after the end of each fiscal year, the unaudited financial statements of Borrower, prepared in accordance
with Good Accounting Practice, and combined or consolidated as appropriate, including all notes related thereto;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	22

    	 

    

 

(iii)        copies
of all federal and state tax returns prepared with respect to Borrower within ten (10) days of such documents being filed with
the Internal Revenue Service or applicable state authority, along with an audit thereof upon request of Lender; and

 

(iv)        such
other information relating to the financial condition and affairs of Borrower, and the Collateral as Lender may from time to time
request.

 

All financial statements shall
be accompanied by duly executed Financial Statement Certifications.

 

(g)          Taxes.
Borrower shall pay or cause to be paid all federal, state and local taxes levied against it and its assets and the Collateral as
they become due and payable and before the same become delinquent. Borrower shall furnish to Lender evidence that all such taxes
are paid within ten (10) days following the date of payment. Notwithstanding the foregoing, Borrower shall have the right to pay
such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing
the collection of such taxes so contested and also of preventing the sale or forfeiture of any property subject thereto, (ii) they
have notified Lender of the intent to contest such taxes, and (iii) adequate reserves for the liability associated with such tax
have been established in accordance with Good Accounting Practice.

 

(h)          Liens.
Borrower and each Borrower-Related Party shall not create, incur, assume, permit or suffer to exist any Lien on or against the
Collateral except liens created in favor of Ryland, M/I Homes, Highland, Drees, and Ashton Woods as expressly permitted by the
respective Subordination Agreement, and Liens expressly permitted by the Loan Documents. Notwithstanding anything hereto to the
contrary, Lender hereby consents to the Builders’ Deed of Trust, the Subordinated Indebtedness, and the Subordination Agreement

 

(i)          Operation
of Business; Licenses and Permits. Borrower and each Borrower-Related Party shall operate its business, manage and maintain
the Property in compliance with all applicable federal, state and local laws, rules, regulations, and ordinances. Borrower and
each Borrower-Related Party shall maintain or engage sufficient qualified personnel for the operations of its business. Borrower
and each Borrower-Related Party shall maintain its existence and good standing in each state where it operates or does any business,
except in any jurisdictions where the failure to maintain such existence and good standing would not have a material adverse effect
individually or in the aggregate, on its financial condition or operations. Borrower and each Borrower-Related Party shall obtain,
maintain and keep current, all consents, licenses, permits, authorizations, permissions and certificates which may be required
or imposed by any Governmental Authority or which are required by applicable federal, state or local laws, regulations and ordinances,
including, without limitation, those required to manage and maintain the Property.

 

(j)          No
Defaults. Borrower will not permit any “default” or “event of default” to occur under (i) the Ryland
Indebtedness, the M/I Homes Indebtedness, the Highland Indebtedness, the Drees Indebtedness, or the Ashton Woods Indebtedness,
or (ii) any other documents evidencing any Indebtedness if the same may have a material adverse effect on Borrower, the Mortgaged
Property, or Borrower’s ability to repay the Loan.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	23

    	 

    

 

(k)          Borrower
and Property Documents. In addition to the information otherwise required to be provided to Lender pursuant to the Loan Documents,
Borrower shall, within five (5) days following Lender’s request, furnish to Lender, the following documents:

 

(i)          all
documents, certificates, agreements, contracts and other materials required by or designated in the Advance Conditions, including,
without limitation, all amendments, modifications, and supplements thereto, and all new and additional documents, certificates,
and agreements, contracts and other materials relating thereto;

 

(ii)         all
capital expenditure and expense reports, invoices and documentation of expenses and capital expenditures, bank account information
and records, and other material financial and operational information related to the Collateral, including, without limitation,
an itemized breakdown of all costs and expenses, and all contracts evidencing such costs and expenses;

 

(iii)        minutes
of the meetings and all written consents of the general partner, managers, members, board or other governing authority of Borrower
relating in any respect to the Collateral including, without limitation, the Property;

 

(iv)        promissory
notes, loan documents, contracts and agreements evidencing Indebtedness of Borrower and the Borrower-Related Parties and all amendments,
modifications and supplements thereto;

 

(v)         any
new documents or information, and any updates, supplements, or replacements for any documents or information, required to be delivered
to Lender pursuant to the Loan Documents;

 

(vi)        all
Reimbursement Contracts and each amendment, modification and supplement thereto (provided, that by this reference, Lender shall
not be deemed to have approved any Reimbursement Contract or such amendment, modification or supplement);

 

(vii)       all
Lot Sale Contracts and each amendment, modification and supplement thereto (provided, that by this reference, Lender shall not
be deemed to have approved any such Lot Sale Contract or amendment, modification or supplement);

 

(viii)      other
contracts and agreements relating to the Property, its maintenance, development, construction, and management and each amendment,
modification and supplement thereto (provided, that by this reference, Lender shall not be deemed to have approved any such contract
or agreement, or amendment, modification or supplement); and

 

(ix)         all
other information with respect to Borrower, each Borrower-Related Party or the Collateral that Lender may reasonably request from
time to time.

 

(l)          Transactions
with Affiliates. Borrower shall not enter into or be a party to any agreement or transaction with any Affiliate except in the
ordinary course of and pursuant to the reasonable requirements of Borrower’s business and upon fair and reasonable terms
that are no less favorable to Borrower than it would obtain in a comparable arms-length transaction with a Person not an Affiliate
of Borrower, and on terms consistent with the business relationship of Borrower and such Affiliate prior to the Effective Date,
and fully disclosed to Lender.

 

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Harris County, Texas
	24

    	 

    

 

(m)          Audit;
Inspections. Borrower and each Borrower-Related Party shall permit Lender and its employees, representatives, auditors, inspectors,
collateral verification agents, attorneys, accountants and agents (collectively, the “Lender Representatives”),
at any time and from time to time, at Borrower’s expense, to (i) audit all books and records related to Borrower, each
Borrower-Related Party and the Collateral, (ii) visit and inspect the offices of Borrower and each Borrower-Related party and to
inspect and make copies of all books and records, and to copy and record any information the Lender Representatives obtain, and
(iii) visit and inspect the Property. Borrower and each Borrower-Related Party agree to cooperate fully with Lender in connection
with such audits and inspections.

 

(n)          Agreements
related to the Property. Without the prior written consent of Lender, which may be given or withheld in Lender’s sole
discretion, neither Borrower nor any Borrower-Related Party shall enter into, amend, modify or terminate any agreement related
to the Collateral that reasonably would be expected to hinder, delay or impair the timely payment of the Debt or the performance
by Borrower or any Borrower-Related party of any obligations under the Loan Documents, or that could have a material adverse effect
on the value of the Collateral or Lender’s Liens against the Collateral.

 

(o)          General
Liability Insurance. Borrower shall at all times maintain or cause to be maintained general liability insurance with coverage
amounts that are normal and customary for similarly-situated entities engaged in similar businesses. Each such policy shall provide
that Lender be given at least thirty (30) days written notice as a condition precedent to any cancellation thereof or material
change therein. Borrower shall obtain an endorsement to each such policy naming Lender as an additional insured to each such policy,
and provide Lender annually with the insurance certificate, evidencing such coverage, the endorsement of each such policy to Lender,
and evidence of payment of the premium for each such policy.

 

(p)          Notice
of Casualty. Borrower shall notify Lender promptly if any part of the Mortgaged Property suffers material damage or destruction,
and Lender may, without liability, refuse to make further advances until Borrower makes arrangements satisfactory to Lender for
restoration or replacement of the damaged or destroyed portion of the Mortgaged Property.

 

(q)          Communications.
Borrower and each Borrower-Related Party hereby consent to and agrees that Lender and its representatives, employees, project managers,
and consultants may communicate with (verbally and in writing, in person and via electronic communications), and exchange information
among and between, all contractors, subcontractors, engineers, design professionals and all others who have performed or have contracted
to provide work and/or services for the Mortgaged Property or any portion thereof, together with their respective principals, employees
and agents. Borrower and each Borrower-Related Party hereby release and holds harmless, and agree to indemnify, Lender, its general
partner and their respective partners, officers, directors, shareholders, representatives, employees, and agents (each, a “Released
Party”), from and against any and all damages, claims, liabilities and expenses related to, associated with or in
respect of any such communications or exchanges of information, whether or not they shall be caused in whole or in part by the
negligence of a Released Party, excluding Lender’s intentional misconduct or gross negligence. 

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	25

    	 

    

 

(r)          Reimbursement
Contracts. Borrower shall obtain Lender’s written consent prior to entering into or permitting any Affiliate to enter
into any Reimbursement Contract, or prior to becoming an assignee of, or otherwise becoming entitled to receive proceeds under,
any such Reimbursement Contract. As a condition to giving its prior written consent, which may be given or withheld in Lender’s
reasonable discretion, Borrower agrees that Lender may require, in its reasonable discretion, that (i) the Reimbursement Contract
and the proceeds therefrom or related thereto be assigned to Lender pursuant to an Assignment of Contract Rights or other assignment
form satisfactory to Lender in form and substance and filed of record, and/or (ii) the proceeds therefrom or related thereto be
paid to Lender, which shall be applied by Lender to reduce Borrower’s obligations owed to Lender under this Agreement and
the other Loan Documents, until all such obligations have been paid in full. Notwithstanding anything else to the contrary contained
herein or in any other Loan Document, in no event shall any Reimbursement Contract require or result in a subordination of Lender’s
Lien against the Collateral. Borrower agrees to, and agrees to cause its Affiliates to, execute, enter into and deliver to Lender
an Assignment of Contract Rights or any additional agreements or assignments that Lender may request in order to facilitate the
obligations of Borrower under this Section. If despite an assignment to Lender, Borrower receives any reimbursement or other proceeds
resulting from a Reimbursement Contract, then Borrower agrees to immediately pay over to Lender the full amount of such proceeds,
which shall be applied by Lender to reduce Borrower’s obligations owed to Lender under this Agreement and the other Loan
Documents, until all such obligations have been paid in full. Borrower shall not amend, modify, or supplement any Reimbursement
Contract or permit or consent to any such amendment, modification or supplement without Lender’s prior written consent, which
may be given or withheld in Lender’s sole discretion.

 

(s)          Compliance
with Lot Sale Contracts. Borrower shall comply in all respects with its obligations under each Lot Sale Contract and shall
not take any action or inaction that creates a Borrower default under any such Lot Sale Contract. Borrower shall not terminate
any Lot Sale Contract except in accordance with its terms upon default thereunder by the Builder, in which case, Borrower shall
obtain the prior written consent of Lender, which may be given or withheld in Lender’ s reasonable discretion, to terminate
such Lot Sale Contract. Borrower shall obtain the prior written consent of Lender, which may be given or withheld in Lender’s
reasonable discretion, before entering into any agreement that amends, modifies or supplements any Lot Sale Contract. Lender shall
not unreasonably withhold or delay its consent to an amendment, modification or supplement of any Lot Sale Contract if Borrower
shall have consented to such amendment, modification or supplement; provided, however, that Lender may withhold its consent, as
determined by Lender in its sole discretion, to any amendment, modification or supplement to any Lot Sale Contract which (i) decreases
the purchase price payable for any Lots, (ii) delays the acquisition of any Lot beyond the schedule or date(s) agreed in such Lot
Sale Contract, (iii) could reasonably be expected to delay or impair the ability of Borrower to timely repay the Loan in accordance
with the terms and conditions or the Loan Documents, (iv) violates any of the Loan Documents, or (v) in Lender’s opinion,
materially and adversely affects Lender’s security for the Loan or the rights and benefits of Borrower under such Lot Sale
Contract.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	26

    	 

    

 

(t)          Additional
Covenants for Lot Sale Contracts. Except with respect to the Ryland Lot Sale Contract, the M/I Homes Lot Sale Contract, the
Highland Lot Sale Contract, the Drees Lot Sale Contract, and the Ashton Woods Lot Sale Contract, Borrower shall obtain Lender’s
prior written consent, which may be given or withheld in Lender’s reasonable discretion, before entering into any Lot Sale
Contract. Each Lot Purchaser must be either (i) an Approved Builder or (ii) another Person approved by Lender in its reasonable
discretion. For each Lot Sale Contract, the purchase price of the Lots, the timing of the take down schedule, if any, the other
terms and conditions of each Lot Sale Contract relating to the purchase price and timing of payment for the Lots must be satisfactory
to Lender in its reasonable discretion. Concurrently with entering into any Lot Sale Contract and as a condition to Lender approving
any Lot Sale Contract, Borrower shall execute and deliver to Lender, and shall cause the Lot Purchaser under the Lot Sale Contract,
together with any title company or other escrow agent holding earnest money (in the form of cash, a letter of credit or otherwise)
to execute and deliver to Lender, all of the following: (i) an Assignment of Lot Sale Contract, and (ii) if required by Lender,
a consent to the Assignment of Lot Sale Contract executed by the Lot Purchaser. Borrower further agrees to enter into such amendments,
modification or supplements to the Loan Documents in the form provided by Lender and to make such representations, warranties,
covenants, that Lender deems necessary or desirable in connection with each such Lot Sale Contract.

 

(u)          Certain
Approvals, Deliveries and Property Covenants.

 

(i)          Approved
Budget. The Approved Budget is attached hereto as Exhibit “F”. All Improvements to the Property shall be
constructed in accordance with the Approved Budget. Borrower shall not construct any Improvements on the Property, enter into
any Construction Contract, or order any supplies or materials, until Borrower as received notice that Lender has consented to
the Approved Budget. Borrower and the Borrower-Related Parties shall not make, consent to, approve, adopt or vote in favor of
any modification, amendment, supplement, or other change to the Approved Budget (except for changes in line items that do not
increase the overall budget amount) without Lender’s prior written consent, which may be given or withheld in Lender’s
sole discretion. Borrower and the Borrower-Related Parties shall construct the Improvements and manage the Property in strict
accordance with the Approved Budget.

 

(ii)         Pro
Forma. The Pro Forma is attached as Exhibit “C”. Borrower and the Borrower-Related Parties shall not make,
consent to, approve, adopt or vote in favor of any modification, amendment, supplement, or other change to the Pro Forma without
Lender’s prior written consent, which may be given or withheld in Lender’s sole discretion. Borrower shall cause aggregate
Lot sales to occur at least by the dates forth for Lot sales in the Pro Forma.

 

(iii)        Lot
Sales Report. Within ten (10) days after the end of each month, Borrower shall deliver to Lender, a sales report setting forth
the current sales status of all Lots, including pending and anticipated Lot sales, and naming the Approved Builder or other purchaser
thereof.

 

(iv)        Development
Plan. Borrower shall not construct any Improvements on the Property, enter into any Construction Contract, or order any supplies
or materials, until Borrower as received notice that Lender has consented to the Development Plan. Borrower and the Borrower-Related
Parties shall not make, consent to, approve, adopt or vote in favor of any modification, amendment, supplement, or other change
to the Development Plan without Lender’s prior written consent, which may be given or withheld in Lender’s reasonable
discretion. Borrower and the Borrower-Related Parties shall construct the Improvements and develop the Property in strict accordance
with the Development Plan and shall not permit any changes to the Property to occur, other than in accordance with the Development
Plan.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	27

    	 

    

 

(v)         Plans
and Specifications. Borrower shall not construct any Improvements on the Property, enter into any Construction Contract, or
order any supplies or materials, until Borrower as received notice that Lender has consented to the Plans and Specifications. Borrower
and the Borrower-Related Parties shall not make, consent to, approve, adopt or vote in favor of any modification, amendment, supplement,
or other change to the Plans and Specifications without Lender’s prior written consent, which may be given or withheld in
Lender’s sole discretion. Borrower and the Borrower-Related Parties shall construct the Improvements and develop the Property
in strict accordance with the Plans and Specifications.

 

(vi)        Limitation
on Transfer of Amenities. Borrower will not sell, lease, transfer or otherwise dispose of the existing or future common amenities,
except to the property owners association created for the benefit of the owners of the Lots and upon compliance with the applicable
provisions of the Deed of Trust.

 

(vii)       Lot
Sales. Borrower will not sell or lease, or offer to sell or lease, any portion of the Property unless such sale or lease transaction
is exempt from the requirements of the Interstate Land Sales Full Disclosure Act or Borrower complies with all of the provisions
thereof with respect to “Statements of Record” (as defined therein) and “Property Reports” (as defined
therein).

 

(viii)      Utilities.
Borrower shall secure utility services, including, without limitation, water and sewer taps for the Lots and shall not permit
any right to obtain utility services, including, without limitation, water and sewer taps, to expire.

 

(v)         Lease.
Borrower shall obtain Lender’s prior written consent, which may be given or withheld in Lender’s sole discretion, before
entering into any lease for the Property or any portion thereof (the “Lease”). Borrower further agrees
to amend, modify or supplement the Loan Documents to incorporate such representations, warranties, covenants, agreements and Events
of Default and other terms and conditions that Lender deems reasonably necessary in connection with such Lease.

 

(w)          Compliance
with Reimbursement Contracts. Borrower shall comply in all respects with its obligations under all Reimbursement Contracts
and shall not take any action or inaction that creates a default under the Reimbursement Contracts.

 

(x)          Sales
of Assets. Borrower will not sell, lease, transfer or otherwise dispose of the Collateral, except as permitted by the Loan
Documents.

 

(y)          Certain
Construction Matters.

 

(i)          The
Construction Contract. Borrower shall not become a party to any Construction Contract, or other contract for the performance
of any work on the Property or for the supplying of any labor, materials, or services for the development of any part of the Property,
except upon such terms and with such parties as shall be approved in advance in writing by Lender, such approval not to be unreasonably
withheld. Borrower shall cause each Contractor to execute a Contractor’s Consent, satisfactory to Lender in form and substance,
and shall contain a provision subordinating the Contractor’s and all subcontractor's Liens to the Lien of the Deed of Trust.
No approval by Lender of any Construction Contract or change order shall impose upon Lender any responsibility for the adequacy,
form, or content of such Construction Contract or any change orders.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	28

    	 

    

 

(ii)         Affidavit
of Commencement. If requested by Lender, within thirty (30) days after the date of commencement of construction of the Improvements,
Borrower shall execute and record in the appropriate records of Harris County, Texas, an affidavit of commencement in proper form
and in accordance with Texas Property Code Section 53.124, setting forth the date work actually commenced on the Improvements.

 

(iii)        Availability
of Utilities. All utility services necessary for the occupancy and proper operation of the Improvements for their intended
purpose, will be obtained by Borrower and accounted for in the Development Plan and the Approved Budget, including water supply,
storm and sanitary sewer facilities, gas, electricity and telephone facilities, and Borrower will supply evidence thereof satisfactory
to Lender.

 

(iv)        Construction
of the Improvements. Once development of the Property has commenced, the construction of the Improvements shall be pursued
with due diligence and continuity, in a good and workmanlike manner, and in accordance with sound building and engineering practices,
all applicable governmental requirements, and the Development Plan. Borrower shall not permit cessation of work for a period in
excess of thirty (30) days during any period of time during which development on the Property is scheduled to be performed without
the prior written consent of Lender, which may be given or withheld in Lender’s sole discretion, except for delays due to
strikes, riots, acts of God, war, unavailability of labor or materials, governmental laws, regulations or restrictions and Borrower
shall promptly notify Lender of any such delays; provided, however, that in no event shall work cease for a period in excess of
sixty (60) days regardless of the cause. Borrower shall cause all materials supplied for, or intended to be utilized in, the development
of any part of the Property, but not affixed to or incorporated into the Property, to be stored on the Property or at such other
location as may be approved by Lender in writing, with adequate safeguards, as required by Lender, to prevent loss, theft, damage,
or commingling with other materials or projects.

 

(v)         Correction
of Defects. Unless approved in writing by Lender, Borrower shall correct or cause to be corrected (i) any material defect in
any part of the Improvements, (ii) any material departure in the development of any part of the Property from the Development Plan
and governmental requirements, or (iii) any encroachment by any structure located on the Property upon any building line, easement,
property line, or restricted area.

 

(vi)        Substantial
Completion. Upon Substantial Completion, Borrower and the Borrower-Related Parties shall promptly notify Lender thereof and
shall provide an Affidavit of Substantial Completion on a form to be provided by Lender which states, among other things, that
each of the Lots has reached Substantial Completion (the “Substantial Completion Affidavit”). Upon execution
of the Substantial Completion Affidavit, the Approved Purpose of the Loan shall be solely to inventory the Lots during an interim
period prior to the sale of such Lots to an Approved Builder and vertical construction commencing thereon.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	29

    	 

    

 

(vii)       The
Management Contract. Borrower shall not become a party to any Management Contract, except upon such terms and with such parties
as shall be approved in advance in writing by Lender, such approval not to be unreasonably withheld. Borrower shall cause each
managing party thereto to execute a Manager’s Consent, satisfactory to Lender in form and substance, and shall contain a
provision subordinating the Management Agreement to the Lien of the Deed of Trust. No approval by Lender of any Management Contract
shall impose upon Lender any responsibility for the adequacy, form, or content of such Management Contract.

 

(z)          Consultants. Borrower
agrees that Lender may engage one or more consultants and whenever consent or approval by Lender is required under this Agreement,
the consent or approval may be conditioned upon consent or approval by such consultants. All reasonable costs of the consultants
shall be borne by Borrower. Borrower shall cooperate with the consultants and will use commercially reasonable efforts to cause
the design professionals, engineers, developers, contractors, project engineers and the employees of each of them to cooperate
with the consultants and, upon request, will furnish the consultants whatever they may consider reasonably necessary or useful
in connection with the performance of their duties. Borrower acknowledge and agree that the duties of the consultants run solely
to Lender and that the consultants shall have no obligations or responsibilities whatsoever to Borrower or to any other Person.

 

(aa)         LTV
Ratio. Borrower shall at all times maintain a LTV Ratio that does not exceed 85%. Lender’s calculation of LTV shall be
based upon Lender’s underwriting standards, as determined by Lender in its sole discretion. Lender shall be entitled to change
its underwriting standards, from time to time, and may alter its basis for calculating LTV as required thereby.

 

11.         Assignments

 

(a)          Assignment
of Contracts. As additional security for the payment of the Debt and the payment and performance of the obligations,
covenants and agreements under the Loan Documents, Borrower and each Borrower-Related Party hereby transfer and assign to Lender
for the benefit of Lender all rights and interest, but not its obligations, in, under and to all contracts, subcontracts and agreements,
written or oral, between Borrower and any other party, and between parties other than Borrower, in any way relating to (i) the
management, maintenance, administration, and marketing of the Property (collectively, the “Management Contracts”),
(ii) the development of the Mortgaged Property and/or the construction of Improvements on the Mortgaged Property, or the supplying
of material (specially fabricated or otherwise), labor, supplies, or other services therefor (collectively, the “Construction
Contracts”), and (iii) the Mortgaged Property in any other regard (the “Other Contracts”,
and collectively with the Management Contracts and the Construction Contracts, the “Contracts”) upon
the following terms and conditions:

 

(A)         Borrower
and each Borrower-Related Party represent and warrant to Lender that the copy of each Contract that Borrower has furnished or will
furnish to Lender is or will be a true and complete copy thereof, including all amendments thereto, if any, and that Borrower’s
interest therein is not subject to any claim, setoff or encumbrance;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	30

    	 

    

 

(ii)         Neither
this assignment nor any action by Lender shall constitute an assumption by Lender of any obligations under any Contract, and Borrower
shall continue to be liable for all obligations of Borrower thereunder; and Borrower hereby agrees to perform all of its obligations
under each Contract. Borrower and each Borrower-Related Party hereby agree to indemnify and hold Lender harmless against and from
any loss, cost, liability or expense (including, but not limited to, consultants’ fees and expenses and attorneys’
fees and expenses) incurred in connection with Borrower’s failure to perform any such Contract or any action taken by Lender,
except for matters arising as a result of the gross negligence or willful misconduct by Lender;

 

(iii)        Upon
the occurrence of an Event of Default, and during the continuance thereof, Lender shall have the right at any time (but shall have
no obligation) to take in its name or in the name of Borrower such action as Lender may at any time determine to be necessary or
advisable to cure any default under any Contract or to protect the rights of Borrower or Lender thereunder. Lender shall incur
no liability if any action so taken by it or on its behalf shall prove to be inadequate or invalid, and Borrower and each Borrower-Related
Party agree to indemnify and hold Lender harmless against and from any loss, cost, liability or expense (including but not limited
to reasonable attorneys’ fees) incurred in connection with any such action, except for matters arising as a result of the
gross negligence or willful misconduct of Lender;

 

(iv)        Borrower
hereby irrevocably constitutes and appoints Lender as Borrower’s attorney-in-fact, in Borrower’s or Lender’s
name, to enforce all rights of such Borrower under each Contract; provided, however, that Lender agrees not to exercise such appointment
until the occurrence of an Event of Default, and during the continuance thereof. Such appointment is coupled with an interest and
is therefore irrevocable;

 

(v)         Prior
to the occurrence of an Event of Default, Borrower shall have the right to exercise its rights as owner under each Contract; provided,
that Borrower shall not cancel or amend any Contract or do or suffer to be done any act which would impair the security constituted
by this assignment without the prior written consent of Lender, which may be given or withheld in Lender’s sole discretion;
and

 

(vi)        This
assignment shall inure to the benefit of Lender and its successors and assigns, any purchaser upon foreclosure of the Liens against
any Property, any receiver in possession of any Property or any portion thereof and any entity affiliated with Lender which assumes
Lender’s rights and obligations under this Agreement.

 

(b)          Without
limitation, the foregoing indemnities contained in this Section 11 shall apply to Lender with respect to matters which in
whole or in part are caused by or arise out of, or are claimed to be caused by or arise out of, the negligence (whether sole, comparative
or contributory) or strict liability of Lender. However, such indemnities shall not apply to Lender to the extent that the subject
of the indemnification is caused by or arises out of the gross negligence or willful misconduct of Lender. 

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	31

    	 

    

 

12.         Default.

 

(a)          For
purposes of this Agreement, the following events shall constitute an “Event of Default”:

 

(i)          except
for Accrued Interest Payments due during any period when Accrued Interest Payments are made by Lender pursuant to Section 5(b),
the failure of Borrower to make any payment required by this Agreement in full on or before the date such payment is due (or declared
due pursuant to the terms of this Agreement), and the same remains unremedied for three (3) days thereafter, whether on or prior
to the Maturity Date; or

 

(ii)         any
financial statement, representation, warranty, or certificate made or furnished by or with respect to Borrower or any Borrower-Related
Party contained in this Agreement or any other Loan Document or made in connection herewith or therewith, shall be materially false,
incorrect, or incomplete when made; or

 

(iii)        Borrower
or any Borrower-Related Party shall fail to perform or observe any covenant or agreement contained in this Agreement or any other
Loan Document that is not separately listed in this Section 12(a) as an Event of Default, and the same remains unremedied
for ten (10) days thereafter; or

 

(iv)        any
“event of default” or “default” occurs under any Loan Document other than this Agreement that is not separately
listed in this Section 12(a), and the same remains unremedied for ten (10) days thereafter; or

 

(v)         the
entry of a decree or order for relief by a court having jurisdiction in respect of Borrower or any Borrower-Related Party in an
involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, which is not vacated or dismissed within thirty (30) days, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of Borrower or any Borrower-Related Party for any substantial
part of their respective properties or the Property, or ordering the winding up or liquidation of such person’s affairs;
or

 

(vi)        the
commencement by Borrower or any Borrower-Related Party of a voluntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy, insolvency or other similar law, or the consent by it
to the appointment to or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Borrower or any Borrower-Related Party for any substantial part of their respective properties or the Property, or
the making by Borrower or any Borrower-Related Party of any assignment for the benefit of creditors, or the admission by Borrower
or any Borrower-Related Party in writing of its inability to pay its debts generally as they become due; or

 

(vii)       the
appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official
of all or a substantial part of the assets of Borrower or any Borrower-Related Party or the Collateral in a proceeding brought
against or initiated by Borrower or any Borrower-Related Party or the Collateral; or

 

(viii)      if
Borrower or any Borrower-Related Party that is an entity is liquidated or dissolved or winds up their affairs, or the sale or liquidation
of all or substantially all of the assets of Borrower or any Borrower-Related Party that is an entity; or

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	32

    	 

    

 

(ix)         any
Disposition of any Collateral occurs (except as expressly permitted by the Loan Documents) without the prior written consent of
Lender, which may be given or withheld in Lender’s sole discretion; or

 

(x)          any
“default” or “event of default” not cured within the grace period, if any, for such default or event of
default (the terms “default” and “event of default” have the meaning given to such terms in the agreements
and documents described below), shall occur under (A) the documents evidencing the Ryland Indebtedness, the M/I Homes Indebtedness,
the Highland Indebtedness, the Drees Indebtedness, or the Ashton Woods Indebtedness, (B) any credit agreement, loan agreement,
promissory note or other document evidencing Indebtedness for borrowed money to which Borrower or any Borrower-Related Party is
a party as a borrower, debtor, guarantor or other obligor, or (C) any security agreement, pledge agreement, guaranty, deed of trust,
or other agreement providing guaranty of or security or collateral for Indebtedness, executed by Borrower or any Borrower-Related
Party, or

 

(xi)         the
death or disability of the Principal Officer and Brian Joseph McGown; or

 

(xii)        any
Loan Document ceases to be valid and binding for any reason or Borrower or any Borrower-Related Party asserts so; or

 

(xiii)       Borrower
or any Borrower-Related Party suffers the entry against it of a final judgment for the payment of money in excess of $500,000 which
is not covered by insurance which is not paid in full within thirty (30) days thereafter; or

 

(xiv)      Borrower
or any Borrower-Related Party or any of their Affiliates suffers a writ or warrant of attachment or any similar process to be issued
by any tribunal against all or any substantial part of its properties, assets or the Collateral including, without limitation,
the Earnest Money, or the Property, and such writ or warrant of attachment or any similar process is not stayed or released within
thirty (30) days after the entry or levy thereof or after any stay is vacated or set aside; or

 

(xv)       in
Lender’s opinion, the prospect for payment or the prospect for performance with respect to this Agreement or any other agreement
that Borrower or any Borrower-Related Party may have with Lender is impaired, including any impairment caused by a material adverse
change in the financial condition or business of Borrower or any Borrower-Related Party, and Lender so notifies Borrower in writing;
or

 

(xvi)      Borrower
or any Borrower-Related Party fails to comply with any covenant or agreement in any of Sections 10(b), (c), (d),
(h), (j), (m), (n), (r), (s), (t) (w) or (x) in any respect.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	33

    	 

    

 

(b)          Upon
the occurrence of an Event of Default described in subsection (a)(v), (vi) or (vii) above, all obligations under
the Note, this Agreement and the other Loan Documents shall thereupon be immediately due and payable, without demand, presentment,
notice of demand or of dishonor and nonpayment, protest, notice of protest, notice of intention to accelerate, declaration or notice
of acceleration, or any other notice or declaration of any kind, all of which are hereby expressly waived by Borrower and each
Borrower-Related Party and any and all sureties, guarantors and endorsers of the Note. During the continuance of any other Event
of Default, then and in every such case Lender may do any or all of the following: (i) declare the principal of the Note together
with all accrued and unpaid interest on the unpaid principal balance, and Loan Expenses and other amounts due to Lender under this
Agreement or the other Loan Documents, to be due and payable immediately, and the same shall become and be due and payable, without
notices, demands for payment, presentations for payment, notices of payment default, notices of intention to accelerate maturity,
protest and notice of protest, and any other notices of any kind, all of which are expressly waived by Borrower and each Borrower-Related
Party and any and all sureties, guarantors and endorsers of the Note, and/or (ii) exercise any or all of its rights under
all or any of the Loan Documents, and/or (iii) refuse to advance any funds hereunder, including, without limitation, any Interest
Reserve, and/or (iv) refuse to release any part of the Collateral for an amount less than the entire amount of the Debt, even if
Lender had previously agreed to do so, and/or (v) exercise any or all other rights and remedies available to Lender at law and
at equity, including, without limitation, such rights existing under the Uniform Commercial Code. No delay on the part of Lender
in exercising any power under this Agreement shall operate as a waiver of such power or right nor shall any single or partial exercise
of any power or right preclude further exercise of that power or right.

 

(c)          If
the Note is placed in the hands of an attorney for collection after an Event of Default or failure to pay under the Note, or if
all or any part of the Debt represented hereby is proved, established or collected in any court or in any bankruptcy, receivership,
debtor relief, probate or other court proceedings, Borrower and each Borrower-Related Party and all endorsers, sureties and guarantors
of the Note, jointly and severally, agree to pay reasonable attorneys' fees and collection costs to Lender in addition to the principal
and interest payable under the Note.

 

13.         Usury
Laws. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document:

 

(a)          It
is expressly stipulated and agreed to be the intent of Borrower and each Borrower-Related Party and Lender at all times to comply
strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the Debt, or applicable United
States federal law to the extent that such law permits Lender to contract for, charge, take, reserve or receive a greater amount
of interest than under Texas law. If the applicable law is ever judicially interpreted so as to render usurious any amount contracted
for, charged, taken, reserved or received in respect of the Debt, including by reason of the acceleration of the maturity or the
prepayment thereof, then it is the express intent of Borrower and each Borrower-Related Party and Lender that all amounts charged
in excess of the Highest Lawful Rate shall be automatically canceled, ab initio, and all amounts in excess of the Highest
Lawful Rate theretofore collected by Lender shall be credited on the principal balance of the Debt (or, if the Debt has been or
would thereby be paid in full, refunded to Borrower), and the provisions of the Note and the other Loan Documents shall immediately
be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution
of any new document, so as to comply with the applicable laws, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder; provided, however, if the Note has been paid in full before the end of the stated term hereof,
then Borrower and each Borrower-Related Party and Lender agree that Lender shall, with reasonable promptness after Lender discovers
or is advised by Borrower that interest was received in an amount in excess of the Highest Lawful Rate, either credit such excess
interest against the Debt then owing by Borrower to Lender and/or refund such excess interest to Borrower. Borrower and each Borrower-Related
Party hereby agree that as a condition precedent to any claim seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature and amount of the violation, and Lender shall have sixty (60)
days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to
Borrower or crediting such excess interest against the Debt then owing by Borrower to Lender. All sums contracted for, charged,
taken, reserved or received by Lender for the use, forbearance or detention of the Debt shall, to the extent permitted by applicable
law, be amortized, prorated, allocated or spread, using the actuarial method, throughout the stated term of the Note (including
any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of the Debt
does not exceed the Highest Lawful Rate from time to time in effect and applicable to the Debt for so long as the Debt is outstanding.
In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts
and revolving triparty accounts) apply to the Note or any other part of the Debt. Notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. The terms and
provisions of this paragraph shall control and supersede every other term, covenant or provision contained herein, in any of the
other Loan Documents or in any other document or instrument pertaining to the Debt.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	34

    	 

    

 

(b)          To
the extent that Lender is relying on Chapter 303 of the Texas Finance Code to determine the Highest Lawful Rate payable on the
Note or any other part of the Debt, Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter
303, as amended. To the extent United States federal law permits Lender to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law, Lender will rely on United States federal law instead of such Chapter 303 for the purpose
of determining the Highest Lawful Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender
may, at its option and from time to time, utilize any other method of establishing the Highest Lawful Rate under such Chapter 303
or under other applicable law by giving notice, if required, to Borrower as provided by such applicable law now or hereafter in
effect.

 

14.         Indemnity;
Release. Borrower and each Borrower-Related Party jointly and severally agree to indemnify Lender, upon demand, from and against
any and all liabilities, obligations, claims, losses, damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable, documented fees of attorneys, accountants, experts and advisors) of any kind or
nature whatsoever, now existing (in this section, collectively called “Liabilities and Costs”) to the
extent actually imposed on, incurred by, or asserted against Lender in its capacity as lender hereunder growing out of, resulting
from or in any other way associated with (a) this Agreement and the other Loan Documents or any of the transactions and events
(including the enforcement or defense thereof) at any time associated therewith or contemplated therein, (b) any claim that the
Loan evidenced hereby is contractually usurious, and (c) any use, handling, storage, transportation, or disposal of hazardous or
toxic materials on or about the Property.

 

The foregoing indemnifications shall
apply whether or not such Liabilities and Costs are in any way or to any extent owned in whole or in part under any claim or theory
of strict liability, or are caused in whole or in part by any negligent act or omission of any kind by Lender;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	35

    	 

    

 

provided only that Lender shall not be
entitled under this section to receive indemnification for that portion, if any, of any Liabilities and Costs which is proximately
caused by its own individual gross negligence or willful misconduct, as determined in a final judgment. If any Person (including
Borrower and each Borrower-Related Party) ever alleges such gross negligence or willful misconduct by Lender, the indemnification
provided for in this section shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such time
as a court of competent jurisdiction enters a final judgment as to the extent and effect of the alleged gross negligence or willful
misconduct. As used in this section, the term “Lender” shall refer not only to the Person designated as such in this
Agreement but also to each partner, director, officer, attorney, employee, representative and Affiliate of such Person.

 

For good and valuable consideration
set forth herein, including the promises, agreements, covenants, representations and obligations set forth in this Agreement and
the other Loan Documents, Borrower and each Borrower-Related Party hereby release and forever discharge, and covenant not to sue
or file any charges or claims against Lender for any and all existing or future claims, demands and causes of action, in contract
or in tort, at law or in equity, known or unknown, pending or threatened, for all existing and future damages arising out of or
in any way associated with this Agreement and the other Loan Documents and the Loan made pursuant hereto and thereto.

 

15.         No
Presumption. Borrower and each Borrower-Related Party represent and warrant to Lender that they have read and fully understand
the terms and provisions hereof, have had an opportunity to review this Agreement and the other Loan Documents with legal counsel
and have executed this Agreement and the other Loan Documents based on their own judgment. If an ambiguity or question of intent
or interpretation arises, the Loan Documents will be construed as if drafted jointly by Borrower and each Borrower-Related Party
and Lender and no presumption or burden of proof will arise favoring or disfavoring any party because of authorship of any provision
of the Loan Documents.

 

16.         Set-Off.
Borrower hereby gives and confirms to Lender a right of set-off of all moneys, securities and other property of Borrower (whether
special, general or limited) and the proceeds thereof, now or hereafter delivered to remain with or in transit in any manner to
Lender, its correspondents or its agents from or for Borrower, whether for safekeeping, custody, pledge, transmission, collection
or otherwise or coming into possession of Lender in any way, and also, of all other liabilities and obligations now or hereafter
owed by Borrower to Lender, contracted with or acquired by Lender, whether joint, several, absolute, contingent, secured, unsecured,
matured or unmatured, hereby authorizing Lender at any time after an Event of Default has occurred and is continuing, without prior
notice, to apply such balances, credits of claims or any part thereof, to such liabilities in such amounts as it may select, whether
contingent, unmatured or otherwise, and whether any collateral security therefor is deemed adequate or not. The rights described
herein shall be in addition to any collateral security described in any separate agreement executed by Borrower.

 

17.           No Third Party Beneficiaries.
The benefits of this Agreement and the Loan Documents will not inure to any third party. Notwithstanding anything contained in
the Loan Documents or any conduct or course of conduct by Borrower or any Borrower-Related Party or Lender, before or after the
date of this Agreement, this Agreement will not be construed as creating any rights, claims, or causes of action against Lender,
or any of its officers, directors, agents or employees, in favor of any contractor, subcontractor, supplier of labor or materials,
or any of their respective creditors, or any other person or entity other than Borrower. Without limiting the generality of the
foregoing, Advances made to any Person other than Borrower (including, without limitation, any contractor, subcontractor or supplier
of labor or materials) will not be deemed recognition by Lender of any third-party beneficiary status claimed by any such person
or entity.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	36

    	 

    

 

18.         Cumulative
Remedies. All rights and remedies that Lender is afforded by reason of the Loan Documents are separate and cumulative with
respect to Borrower or any of them and otherwise and may be pursued separately, successively, or concurrently, as Lender deems
advisable. In addition, all such rights and remedies are non-exclusive and shall in no way limit or prejudice Lender’s ability
to pursue any other legal or equitable rights or remedies that may be available to Lender.

 

19.         Notice.
Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by any of the
following methods: (i) registered or certified mail, (ii) facsimile, (iii) delivered personally by courier service, or (iv)
delivered by nationally recognized overnight delivery service; in each case, addressed to the respective parties as follows:

 

	If to Borrower:	Rosehill Reserve, Ltd.
	 	11911 Bammel N. Houston Rd., Suite B2
	 	Houston, Texas 77066
	 	Facsimile No. ____________
	 	Attention:  Thomas Lloyd Hargrove, Jr.
	 	 
	If to a	 
	Borrower-Related Party:	Thomas Lloyd Hargrove, Jr.
	 	Harrigan Development Partners, LLC
	 	11911 Bammel N. Houston Rd., Suite B2
	 	Houston, Texas 77066
	 	Facsimile No. __________
	 	Attention:  Thomas Lloyd Hargrove, Jr.
	 	 
	If to Lender:	United Development Funding Income Fund V
	 	1301 Municipal Way, Suite 200
	 	Grapevine, Texas 76051
	 	Facsimile No. (817) 835-0383
	 	Attention:       UDFH Land Development
	 	                         Ben Wissink and Melissa Youngblood
	 	 
	With a Copy to:	 
	(which shall not constitute notice to)
	 	 
	 	Michael B. Franklin
	 	Hallett & Perrin, P.C.
	 	1445 Ross Avenue, Suite 2400
	 	Dallas, Texas 75202
	 	Facsimile No. (214) 922-4142

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	37

    	 

    

 

Each notice or other communication will
be treated as effective and as having been given and received (i) if sent by certified mail, or registered mail, three (3)
Business Days after deposit in a regularly maintained receptacle for deposit of United States mail, (ii) if sent by facsimile,
upon written or electronic confirmation of facsimile transfer, (iii) if delivered by courier, upon written or electronic confirmation
of delivery from such service, or (iv) if sent by nationally-recognized overnight delivery service, upon written or electronic
confirmation of delivery from such service. Borrower’s or any Borrower Related party’s address for notice may be changed
at any time and from time to time, but only after thirty (30) days’ advance written notice to Lender and shall be the most
recent such address furnished in writing by them to Lender. Lender’s address for notice may be changed at any time and from
time to time, but only after written notice to Borrower and shall be the most recent such address furnished in writing by Lender
to Borrower. Actual notice, however and from whomever given or received, shall always be effective when received.

 

20.         Enforcement
and Waiver by Lender. Lender shall have the right at all times to enforce the provisions of this Agreement and the other Loan
Documents in strict accordance with their respective terms, notwithstanding any conduct or custom on the part of Lender in refraining
from so doing at any time or times. The failure of Lender at any time or times to enforce its rights under such provisions, strictly
in accordance with the same, shall not be construed as having created a custom or in any way or manner modified or waived the same.

 

21.         Choice
of Law. Except to the extent that the validity or perfection of security interests or remedies in respect of any particular
collateral is governed by the laws of a jurisdiction other than the state of Texas, this Agreement and the other Loan Documents
shall be construed in accordance with and governed by the substantive laws of the state of Texas, without regard to its conflict
of laws provisions.

 

22.         Jurisdiction;
Venue. Borrower irrevocably agrees that any legal proceeding in respect of this Agreement and the other Loan Documents shall
be brought in the district courts of Tarrant County, Texas or the United States District Court for the Northern District of Texas,
Fort Worth Division (the “Specified Courts”). Borrower hereby irrevocably submits to the nonexclusive jurisdiction
of the Specified Courts. Borrower hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may
now or hereafter have that the laying of venue of any suit, action or proceeding brought in any such Specified Court has been brought
in an inconvenient forum. Borrower hereby irrevocably agrees to a transfer of all such proceedings to the Specified Courts. Nothing
herein shall affect the right of Lender to commence legal proceedings or otherwise proceed against Borrower in any jurisdiction
or to serve process in any manner permitted by applicable law. 

 

23.         Counterparts.
This Agreement and each other Loan Document may be executed in any number of counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute but one and the same instrument.

 

24.         Severability.
If any provision of this Agreement or any other Loan Document shall be held invalid under any applicable laws, then all other terms
and provisions of this Agreement and the Loan Documents shall nevertheless remain effective and shall be enforced to the fullest
extent permitted by applicable law.

 

25.         Amendments;
Waivers. No amendment or waiver of any provision of this Agreement nor consent to any departure herefrom, shall in any event
be effective unless the same shall be in writing and signed by Lender and the affected party, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for which given.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	38

    	 

    

 

26.         Binding
Effect; Assignment. This Agreement and the other Loan Documents shall be binding on Borrower and its successors and assigns,
including, without limitation, any receiver, trustee or debtor in possession of or for Borrower, and shall inure to the benefit
of Lender and its successors and assigns. Borrower shall not be entitled to transfer or assign their obligations under this Agreement
and the other Loan Documents in whole or in part without the prior written consent of Lender, which may be given or withheld in
Lender’s sole discretion. This Agreement and the other Loan Documents are freely assignable and transferable by Lender without
the consent of Borrower. Should the status, composition, structure or name of Borrower change, this Agreement and the other Loan
Documents shall continue to be binding upon such Person and also cover such Person under the new status composition, structure
or name according to the terms hereof and thereof.

 

27.         Time
of the Essence. Time is of the essence in this Agreement and the Loan Documents.

 

28.         Captions;
Number or Gender of Words. The captions in this Agreement are for the convenience of reference only and shall not limit or
otherwise affect any of the terms or provisions hereof. Except where the context indicates otherwise, words in the singular number
will include the plural and words in the masculine gender will include the feminine and neutral, and vice versa, when they should
so apply.

 

29.         Further
Assurances; Cooperation. Borrower and each Borrower-Related Party will at any time and from time to time upon request of the
Lender take or cause to be taken any action, will execute, acknowledge, deliver or record any further documents, opinions, mortgages,
security agreements, financing statements, amendments to the Loan Documents or other instruments as Lender in its reasonable discretion
deems necessary or appropriate to carry out the purposes of the Loan Documents and to preserve, protect and perfect the security
interest intended to be created and preserved in the Collateral.

 

30.         Joint
and Several Liability. “Borrower” shall mean each co-borrower hereunder, or any of them, if more than one. The
obligations of said Borrower hereunder if more than one, shall be joint and several. Suit may be brought against said Borrower,
jointly and severally, and against any one or more of them, or less than all, without impairing the rights of Lender against the
others of said Borrower; and Lender may compromise with any one of said Borrower for such sums or sum as it may see fit and release
such of said Borrower from all further liability to Lender for such Indebtedness without impairing the right of Lender to demand
and collect the balance of such Indebtedness from others of said Borrower not so released.

 

31.         Lender
Consent. Where any provision of this Loan Agreement or any other Loan Document requires Lender’s consent, or requires
Borrower to obtain Lender’s consent, in each such case, Lender’s consent shall not be inferred from any action or inaction
of Lender, but instead must be evidenced by a written agreement or consent executed by Lender.

 

32.         Waiver
of Jury Trial, Punitive Damages, etc. Borrower and each Borrower-Related Party hereby knowingly, voluntarily, intentionally
and irrevocably (a) waive, to the maximum extent not prohibited by law, any right Borrower and each Borrower-Related Party may
have to a trial by jury in respect of any litigation based hereon, or directly or indirectly at any time arising out of, under
or in connection with this Agreement or the Loan Documents or any transaction contemplated hereby or thereby or associated herewith
or therewith, (b) waive, to the maximum extent not prohibited by law, any right Borrower and each Borrower-Related Party may have
to claim or recover in any such litigation any “Special Damages”, as defined below, (c) certify that no party hereto
nor any representative of Lender or counsel for any party hereto has represented, expressly or otherwise, or implied that such
party would not, in the event of litigation, seek to enforce the foregoing waivers, and (d) acknowledges that Lender has been induced
to make the Loan to Borrower and to enter into the Loan Documents with Borrower and each Borrower-Related Party by, among other
things, the waivers and certifications contained in this Section. As used in this Section, the term “Special Damages”
means and includes special, consequential, exemplary or punitive damages (regardless of how named).

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	39

    	 

    

 

33.         Entire
Agreement. This Agreement and the other Loan Documents together constitute the entire agreement among the parties concerning
the subject matter hereof, and all prior discussions, agreements and statements, whether oral or written, are merged into this
Agreement and the other Loan Documents. There are no unwritten oral agreements among the parties and this Agreement and the other
Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.

 

[The remainder of this page is left blank
intentionally.]

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	40

    	 

    

 

This Agreement has
been executed on this the 5th day of December, 2014 by the undersigned Borrower, to be effective for all purposes as
of the Effective Date.

 

BORROWER: 

 

ROSEHILL RESERVE, LTD., 

a Texas limited partnership

 

	By:	Harrigan Development Partners, LLC,	 
	 	a Texas limited liability company,	 
	 	its general partner	 
	 	 	 
	 	/s/ Brian Joseph McGown	 
	 	Brian Joseph McGown	 
	 	Manager	 
	 	 	 
	 	/s/ Thomas Lloyd Hargrove, Jr.	 
	 	Thomas Lloyd Hargrove, Jr.	 
	 	Manager	 

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	41

    	 

    

 

This Agreement has
been executed on this the 5th day of December, 2014 by the undersigned Borrower-Related Parties, to be effective for
all purposes as of the Effective Date.

 

	BORROWER-RELATED PARTIES: 
	 
	HARRIGAN DEVELOPMENT PARTNERS, LLC,
	a Texas limited liability company
	 	 
	/s/ Brian Joseph McGown	 
	Brian Joseph McGown	 
	Manager	 
	 	 
	/s/ Thomas Lloyd Hargrove, Jr.	 
	Thomas Lloyd Hargrove, Jr.	 
	Manager	 
	 	 
	/s/ Thomas Lloyd Hargrove, Jr.	 
	THOMAS LLOYD HARGROVE, JR.	 

 

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	42

    	 

    

This Agreement has been executed on this the 3rd
day of December, 2014 by the undersigned Lender, to be effective for all purposes as of the Effective Date.

 

	LENDER:
	 
	UNITED DEVELOPMENT FUNDING INCOME FUND V,
	a real estate investment
    trust organized under the laws of the State of Maryland
	 	 
	/s/ David A. Hanson	 
	David. A. Hanson	 
	Chief Operating Officer and Chief Accounting Officer

 

 

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	43

    	 

    

 

EXHIBIT A

 

PROPERTY

TRACT I:

 

Being a 38.1599 acre tract of land located
in the Solomon Brown Survey, Abstract No. 7 in Harris County, Texas; said 38.1599 acre tract being all of the remainder of a called
50.695 acre tract of land (Tract I) recorded in the name of Erwin G. Froehlich in Harris County Clerk’s File (H.C.C.F.) No.
B876427 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 38.1599 acre tract being more particularly
described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983
(NAD 83), South Central Zone):

 

Beginning at a 1/2-inch iron pipe
found at the southeast corner of said 50.695 acre tract and the southwest corner of a called 74.788 acre tract of land (Tract III)
recorded in the name of Helen Froehlich Dehay in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C., and being on the northerly line of
a called 64.8171 acre tract of land recorded in the name of Brenda Gholson, et al, in H.C.C.F. No’s L487030, M912360, N474832,
P013798, and P633605 of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
50.695 acre tract and the northerly line of said 64.8171 acre tract, South 87 degrees 44 minutes 52 seconds West, a distance of
415.55 feet to a 3/4-inch iron rod found at the southeast corner of a called 10.000 acre tract of land recorded in the name of
Brenda Renea Froehlich Pennington in H.C.C.F. No. U319733 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
10.000 acre tract, North 01 degrees 19 minutes 59 seconds West, a distance of 1,623.97 feet to a 5/8-inch iron rod with cap found
at the northeast corner of said 10.000 acre tract;

 

Thence, with the northerly line of said
10.000 acre tract, South 86 degrees 09 minutes 29 seconds West, at a distance of 265.74 feet pass the easterly line of a called
46 acre tract of land recorded in the name of Jean Wailes in H.C.C.F. No. R748583 of the O.P.R.R.P.H.C., continuing a total distance
of 282.45 feet to a 3/4-inch iron rod found at the northwest corner of said 10.000 acre tract, being on the westerly line of said
50.695 acre tract;

 

Thence, with said westerly line of the
50.695 acre tract and across said 46 acre tract, North 02 degrees 15 minutes 26 seconds West, at a calculated distance of 1,477.29
pass the southerly line of a called 4.00 acre tract of land recorded in the name of Velma Lydia Froehlich in H.C.C.F. No. U366333
of the O.P.R.R.P.H.C., continuing a total distance of 1,769.65 feet to a 5/8-inch rod with cap stamped "COSTELLO INC"
set on the southerly right-of-way line of FM 2920 (100 feet wide);

 

Thence, with said southerly right-of-way
line of FM 2920, 23.88 feet along the arc of a curve to the right, said curve having a central angle of 00 degrees 51 minutes 43
seconds, a radius of 1,587.04 feet and a chord that bears South 81 degrees 33 minutes 29 seconds East, a distance of 23.88 feet
to a 5/8-inch rod with cap stamped "COSTELLO INC" set at the northwest corner of a called 1.216 acre tract of land recorded
in the name of Burke Froehlich in H.C.C.F. No. U319731 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
1.216 acre tract and the easterly line of said 4.00 acre tract, South 01 degrees 50 minutes 59 seconds East, a distance of 327.37
feet to a 5/8-inch rod with cap stamped "COSTELLO INC" set at the southwest corner of said 1.216 acre tract;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	44

    	 

    

 

Thence, with the southerly line of said
1.216 acre tract, South 79 degrees 46 minutes 57 seconds East, a distance of 109.10 feet to a 5/8-inch rod with cap stamped "COSTELLO
INC" set at the southeast corner of said 1.216 acre tract and the southwest corner of Froehlich Feed Mills Subdivision recorded
in Film Code No. 624190 of the Map Records of Harris County;

 

Thence, with the southerly line of said
Froehlich Feed Mills Subdivision, South 79 degrees 45 minutes 42 seconds East, a distance of 172.03 feet to a 5/8-inch rod with
cap stamped "COSTELLO INC" set at the southeast corner of said Froehlich Feed Mills Subdivision;

 

Thence, with the easterly line of said
Froehlich Feed Mills Subdivision, North 01 degrees 33 minutes 56 seconds West, a distance of 312.57 feet to the northeast corner
of said Froehlich Feed Mills Subdivision, being on the southerly right-of-way line of FM 2920, from which a found 5/8-inch iron
rod bears North 05 degrees 34 minutes 02 seconds East, a distance of 0.78 feet;

 

Thence, with said southerly right-of-way
line of FM 2920, South 75 degrees 16 minutes 49 seconds East, a distance of 286.05 feet to a 5/8-inch iron rod found at the northwest
corner of a called 0.6132 acre tract recorded in the name of Jose G. Ordonez in H.C.C.F. No. Z080530 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
0.6132 acre tract, South 07 degrees 10 minutes 36 seconds West, a distance of 227.08 feet to a 1-inch iron rod found at the southwest
corner of said 0.6132 acre tract;

 

Thence, with the southerly line of said
0.6132 acre tract, South 82 degrees 13 minutes 31 seconds East, a distance of 139.13 feet to a 1/2-inch iron rod found at the southeast
corner of said 0.6132 acre tract, being on the easterly line of aforesaid 50.695 acre tract and the westerly line of aforesaid
74.788 acre tract;

 

Thence, with said easterly line of the
50.695 acre tract and said westerly line of the 74.788 acre tract, South 02 degrees 14 minutes 13 seconds East, a distance of 2,973.83
feet to the Point of Beginning and containing 38.1599 acres of land.

 

TRACT II:

 

Being a 21.5486 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 21.5486 acre tract being out of a called 64.8171 acre
tract of land recorded in the name of Brenda Gholson, et al, in Harris County Clerk’s File (H.C.C.F.) No’s L487030,
M912360, N474832, P013798, and P633605 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said
21.5486 acre tract being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate
System, North American Datum 1983 (NAD 83), South Central Zone):

 

Commencing at an axle found at the
northwest corner of said 64.8171 acre tract and the northeast corner of a called 30.0710 acre tract of land recorded in the name
of William D. McChesney and wife, Anne McChesney in H.C.C.F. No. N896380 of the O.P.R.R.P.H.C., and being on the southerly line
of a called 46 acre tract of land recorded in the name of Jean Wailes in H.C.C.F. No. R748583 of the O.P.R.R.P.H.C., from which
a found axle bears South 86 degrees 19 minutes 52 seconds West, a distance of 24.33 feet;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	45

    	 

    

 

Thence, with the northerly line of said
64.8171 acre tract and the southerly line of said 46 acre tract, North 87 degrees 40 minutes 56 seconds East, a distance of 535.83
to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the Point of Beginning of the herein described tract;

 

Thence, continuing with said northerly
line of the 64.8171 acre tract, the southerly line of said 46 acre tract, and the southerly line of a called 10.000 acre tract
of land recorded in the name of Brenda Renea Froehlich Pennington in H.C.C.F. No. U319733 of the O.P.R.R.P.H.C, North 87 degrees
40 minutes 56 seconds East, at a distance of 84.24 feet pass a 2-inch iron pipe found 3.0 feet right of line, continuing a total
distance of 333.35 feet to a 5/8-inch iron rod found at the southeast corner of said 10.000 acre tract and the southwest corner
of a called 50.695 acre tract of land (Tract I) recorded in the name of Erwin G. Froehlich in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C.;

 

Thence, continuing with said northerly
line of the 64.8171 acre tract and the southerly line of said 50.695 acre tract, North 87 degrees 44 minutes 52 seconds East, a
distance of 201.83 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the northeast corner of the herein
described tract;

 

Thence, across said 64.8171 acre tract,
South 01 degrees 59 minutes 59 seconds East, a distance of 1,754.85 feet to a 5/8-inch iron rod with cap stamped "COSTELLO
INC" set on the southerly line of said 64.8171 acre tract and the northerly line of a called 356.5024 acre tract of land recorded
in the name of Moondream 2, LTD. in H.C.C.F. No. 20110450299 of the O.P.R.R.P.H.C.;

 

Thence, with said southerly line of the
64.8171 acre tract and said northerly line of the 356.5024 acre tract, South 87 degrees 54 minutes 58 seconds West, a distance
of 535.17 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the southwest corner of the herein described
tract;

 

Thence, across said 64.8171 acre tract,
North 01 degrees 59 minutes 59 seconds West, a distance of 1,752.90 feet to the Point of Beginning and containing 21.5486
acres of land.

 

TRACT III:

 

Being a 21.5486 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 21.5486 acre tract being out of a called 64.8171 acre
tract of land recorded in the name of Brenda Gholson, et al, in Harris County Clerk’s File (H.C.C.F.) No’s L487030,
M912360, N474832, P013798, and P633605 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said
21.5486 acre tract being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate
System, North American Datum 1983 (NAD 83), South Central Zone):

 

Commencing at an axle found at the
northwest corner of said 64.8171 acre tract and the northeast corner of a called 30.0710 acre tract of land recorded in the name
of William D. McChesney and wife, Anne McChesney in H.C.C.F. No. N896380 of the O.P.R.R.P.H.C., and being on the southerly line
of a called 46 acre tract of land recorded in the name of Jean Wailes in H.C.C.F. No. R748583 of the O.P.R.R.P.H.C., from which
a found axle bears South 86 degrees 19 minutes 52 seconds West, a distance of 24.33 feet;

 

Thence, with the northerly line of said
64.8171 acre tract, the southerly line of said 46 acre tract, and the southerly line of a called 10.000 acre tract of land recorded
in the name of Brenda Renea Froehlich Pennington in H.C.C.F. No. U319733 of the O.P.R.R.P.H.C., North 87 degrees 40 minutes 56
seconds East, at a distance of 620.09 feet pass a 2-inch iron pipe found 3.0 feet right of line, continuing a total distance of
869.18 feet to a 5/8-inch rod found at the southeast corner of said 10.000 acre tract and the most southerly southwest corner of
a called 50.695 acre tract of land (Tract I) recorded in the name of Erwin G. Froehlich in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C.;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	46

    	 

    

 

Thence, continuing with said northerly
line of the 64.8171 acre tract and the southerly line of said 50.695 acre tract, North 87 degrees 44 minutes 52 seconds East, a
distance of 201.83 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the Point of Beginning of
the herein described tract;

 

Thence, continuing with said northerly
line of the 64.8171 acre tract and said southerly line of the 50.695 acre tract, North 87 degrees 44 minutes 52 seconds East, a
distance of 213.73 feet to a 1/2-inch iron pipe found at the southeast corner of said 50.695 acre tract and the southwest corner
of a called 74.788 acre tract of land (Tract III) recorded in the name of Helen Froehlich Dehay in H.C.C.F. No. B876427 of the
O.P.R.R.P.H.C.;

 

Thence, continuing with said northerly
line of the 64.8171 acre tract and with the southerly line of said 74.788 acre tract, North 87 degrees 39 minutes 47 seconds East,
a distance of 322.78 feet to a 1/2-inch iron pipe found at the northeast corner of said 64.8171 acre tract and the northwest corner
of a called 37.224 acre tract of land recorded in the name of Donald E. Dehay, et al, in H.C.C.F. No’s K341036, K374999,
L172567, and L559673 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
64.8171 acre tract and the westerly line of said 37.224 acre tract, South 01 degrees 52 minutes 35 seconds East, a distance of
1,756.91 feet to 1-inch iron pipe found at the southeast corner of said 64.8171 acre tract and the southwest corner of said 37.224
acre tract, being on the northerly line of a called 356.5024 acre tract of land recorded in the name of Moondream 2, LTD. in H.C.C.F.
No. 20110450299 of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
64.8171 acre tract and the northerly line of said 356.5024 acre tract, South 87 degrees 54 minutes 58 seconds West, a distance
of 532.72 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the southwest corner of the herein described
tract;

 

Thence, across said 64.8171 acre tract,
North 01 degrees 59 minutes 59 seconds West, a distance of 1,754.85 feet to the Point of Beginning and containing 21.5486
acres of land.

 

TRACT IV:

 

Being a 10.0120 acre tract of land located
in the Solomon Brown Survey, Abstract No. 7 in Harris County, Texas; said 10.0120 acre tract being all of a called 10.000 acre
tract of land recorded in the name of Brenda Renea Froehlich Pennington in Harris County Clerk’s File (H.C.C.F.) No. U319733
of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 10.0120 acre tract being more particularly
described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983
(NAD 83), South Central Zone):

 

Commencing at an axle found at the northwest
corner of a called 64.8171 acre tract of land recorded in the name of Brenda Gholson, et al, in H.C.C.F. No’s L487030, M912360,
N474832, P013798, and P633605 of the O.P.R.R.P.H.C. and the northeast corner of a called 30.0710 acre tract of land recorded in
the name of William D. McChesney and wife, Anne McChesney in H.C.C.F. No. N896380 of the O.P.R.R.P.H.C., and being on the southerly
line of a called 46 acre tract of land recorded in the name of Jean Wailes in H.C.C.F. No. R748583 of the O.P.R.R.P.H.C., from
which a found axle bears South 86 degrees 19 minutes 52 seconds West, a distance of 24.33 feet;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	47

    	 

    

 

Thence, with the northerly line of said
64.8171 acre tract and the southerly line of said 46 acre tract, North 87 degrees 40 minutes 56 seconds East, a distance of 613.03
to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the southwest corner of said 10.000 acre tract and the
Point of Beginning of the herein described tract;

 

Thence, with the westerly line of said
10.00 acre tract and across said 46 acre tract, North 02 degrees 15 minutes 26 seconds West, a distance of 1,616.22 feet to a 3/4-inch
iron rod found at the northwest corner of said 10.000 acre tract;

 

Thence, with the northerly line of said
10.000 acre tract, North 86 degrees 09 minutes 29 seconds East, at a distance of 16.71 feet pass the easterly line of said 46 acre
tract, continuing a total distance of 282.45 feet to a 5/8-inch iron rod with cap found at the northeast corner of said 10.000
acre tract;

 

Thence, with the easterly line of said
10.000 acre tract, South 01 degrees 19 minutes 59 seconds East, a distance of 1,623.97 feet to a 5/8-inch iron rod found at the
southeast corner of said 10.000 acre tract, being on aforesaid northerly line of the 64.8171 acre tract;

 

Thence, with the southerly line of said
10.000 acre tract and the northerly line of said 64.8171 acre tract, South 87 degrees 40 minutes 56 seconds West, at a distance
of 249.10 feet, and 3.00 feet left of line, pass a 2-inch iron pipe found for the southeast corner of said 46 acre tract, continuing
a total distance of 256.15 feet to the Point of Beginning and containing 10.0120 acres of land.

 

TRACT V:

 

Parcel 1: 

 

Being a 51.2543 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 51.2543 acre tract being all of a called 51.264 acre
tract of land recorded in the name of Shawn Edward Kuehn in Harris County Clerk's File (H.C.C.F.) No. 20120441374 of the Official
Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 51.2543 acre tract being more particularly described by
metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983 (NAD 83), South
Central Zone):

 

Beginning at a 5/8-inch iron rod
found at the most easterly southeast corner of said 51.264 acre tract and the northeast corner of a called 6.447 acre tract of
land recorded in the name of Sharon Louise Hill in H.C.C.F. No. 20070063643 of the O.P.R.R.P.H.C., and being on the westerly right-of-way
line of Rosehill Church Road (60.00 feet wide);

 

Thence, with a southerly line of said 51.264
acre tract and the northerly line of said 6.447 acre tract, South 88 degrees 27 minutes 52 seconds West, a distance of 911.35 feet
to a 5/8-inch iron rod found at an interior corner of said 51.264 acre tract and the northwest corner of said 6.447 acre tract;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	48

    	 

    

 

Thence, with the easterly line of said
51.264 acre tract, the westerly lines of said 6.447 acre tract, a called 5.500 acre tract of land recorded in the name of James
B. Davis and spouse, Nancy C. Davis in H.C.C.F. No. 20080120952 of the O.P.R.R.P.H.C., a called 1.956 acre tract of land recorded
in the name of James Bruce Davis in H.C.C.F. No. V752707 of the O.P.R.R.P.H.C., a called 1.9565 acre tract of land recorded in
the name of James Bruce Davis in H.C.C.F. No. W732249 of the O.P.R.R.P.H.C., a called 6.6650 acre tract of land recorded in the
name of Rosehill United Methodist Church in H.C.C.F. No. L479222 of the O.P.R.R.P.H.C., a called 2.405 acre tract of land recorded
in the name of Cindy Burkhardt Freeman in H.C.C.F. No. S014081 of the O.P.R.R.P.H.C., and a called 6.932 acre tract of land recorded
in the name of Gerald L. Falls and Ramona J. Falls, husband and wife in H.C.C.F. No. Y923238 of the O.P.R.R.P.H.C., South 02 degrees
36 minutes 50 seconds East a distance of 2,236.70 feet to a 3/4-inch iron pipe found at the southeast corner of said 51.264 acre
tract, the southwest corner of said 6.932 acre tract, and the most easterly northeast corner of a called 1.0419 acre tract of land
recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No. E169334 of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
51.264 acre tract and said northerly line of said 1.0419 acre tract, South 87 degrees 42 minutes 55 seconds West, a distance of
934.92 feet to a 3/4-inch iron pipe found at the southwest corner of said 51.264 acre tract and an interior corner of said 1.0419
acre tract;

 

Thence, with the westerly line of said
51.264 acre tract and the easterly line of said 1.0419 acre tract, North 02 degrees 03 minutes 43 seconds West, a distance of 548.57
feet to a 5/8-inch iron rod found at an interior corner of said 51.264 acre tract and the northeast corner of said 1.0419 acre
tract;

 

Thence, with a southerly line of said 51.264
acre tract and the northerly line of said 1.0419 acre tract, South 86 degrees 59 minutes 08 seconds West, a distance of 29.81 feet
to a 3/4-inch iron pipe found at an exterior corner of said 51.264 acre tract, the northwest corner of said 1.0419 acre tract,
being on the easterly line of a called 22.25 acre tract of land recorded in the name of William J. Meier and Carl Meier in H.C.C.F.
No. B829052 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
51.264 acre tract, said easterly line of the 22.25 acre tract, and the easterly line of a called 15.833 acre tract of land recorded
in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441375 of the O.P.R.R.P.H.C., North 02 degrees 06 minutes 34 seconds West,
a distance of 1,725.15 feet to a 3/4-inch iron pipe found at the northwest corner of said 51.264 acre tract and the northeast corner
of said 15.833 acre tract, being on the southerly line of a called 10.0023 acre tract of land recorded in the name of Amy Verret
in H.C.C.F. No. 20120275874 of the O.P.R.R.P.H.C.;

 

Thence, with the northerly line of said
51.264 acre tract, the southerly line of said 10.0023 acre tract, the southerly line of a called 1.00 acre tract of land recorded
in the name of Roger Hammons and wife, Rebecca Hammons in H.C.C.F. No. Y800358 of the O.P.R.R.P.H.C., and the southerly line of
a called 10.000 acre tract of land recorded in the name of Dean Krokosky and spouse, Cheryl McShan in H.C.C.F. No. 20070754178
of the O.P.R.R.P.H.C., North 85 degrees 41 minutes 37 seconds East, a distance of 944.69 feet to a 5/8-inch iron rod found;

 

Thence, continuing with said northerly
line of the 51.264 acre tract and said southerly line of the 10.000 acre tract, North 88 degrees 27 minutes 52 seconds East, a
distance of 911.46 feet to a 5/8-inch iron rod found at the northeast corner of said 51.264 acre tract and the southeast corner
of said 10.000 acre tract, being on aforesaid westerly right-of-way line of Rosehill Church Road;

 

Thence, with the easterly line of said
51.264 acre tract and said westerly right-of-way line of Rosehill Church Road, South 02 degrees 29 minutes 20 seconds East, a distance
of 70.00 feet to the Point of Beginning and containing 51.2543 acres of land.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	49

    	 

    

 

Parcel 2:

 

Being a 15.8395 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 15.8395 acre tract being all of a called 15.833 acre
tract of land recorded in the name of Shawn Edward Kuehn in Harris County Clerk's File (H.C.C.F.) No. 20120441375 of the Official
Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 15.8395 acre tract being more particularly described by
metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983 (NAD 83), South
Central Zone):

 

Beginning at a 3/4-inch iron pipe
found at the northeast corner of said 15.833 acre tract and the northwest corner of a called 51.264 acre tract of land recorded
in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441374 of the O.P.R.R.P.H.C., and being on the southerly line of a called
10.0023 acre tract of land recorded in the name of Amy Verret in H.C.C.F. No. 20120275874 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
15.833 acre tract and the westerly line of said 51.264 acre tract, South 02 degrees 06 minutes 34 seconds East, a distance of 752.79
feet to a 3/4-inch iron rod found at the southeast corner of said 15.833 acre;

 

Thence, with the southerly line of said
15.833 acre, South 87 degrees 54 minutes 43 seconds West, a distance of 918.63 feet to a 3/4-inch iron pipe found at the southwest
corner of said 15.833 acre tract and being on the easterly line of a called 37.224 acre tract of land recorded in the name of Donald
E. Dehay, et al, in H.C.C.F. No's K341036, K374999, L172567, and L559673 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
15.833 acre tract and said easterly line of the 37.224 acre tract, North 01 degrees 46 minutes 52 seconds West, a distance of 752.95
feet to a 3/4-inch iron pipe found at the northwest corner of said 15.833 acre tract and the northeast corner of said 37.224 acre
tract, being on the southerly line of a called 74.788 acre tract of land (Tract Ill) recorded in the name of Helen Froehlich Dehay
in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C.;

 

Thence, with the northerly line of said
15.833 acre tract, the southerly line of said 74.788 acre tract, and the southerly line of aforesaid 10.0023 acre tract, North
87 degrees 55 minutes 16 seconds East, a distance of 914.31 feet to the Point of Beginning and containing 15.8395 acres
of land.

 

The above described Parcels are more
particularly described as 67.0938 acres as follows:

 

Being a 67.0938 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 67.0938 acre tract being all of a called 51.264 acre
tract of land recorded in the name of Shawn Edward Kuehn in Harris County Clerk’s File (H.C.C.F.) No. 20120441374 of the
Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.) and all of a called 15.833 acre tract of land recorded
in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441375 of the O.P.R.R.P.H.C.; said 67.0938 acre tract being more particularly
described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983
(NAD 83), South Central Zone):

 

Beginning at a 5/8-inch iron rod
found at the most easterly southeast corner of said 51.264 acre tract and the northeast corner of a called 6.447 acre tract of
land recorded in the name of Sharon Louise Hill in H.C.C.F. No. 20070063643 of the O.P.R.R.P.H.C., and being on the westerly right-of-way
line of Rosehill Church Road (60.00 feet wide);

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	50

    	 

    

 

Thence, with a southerly line of said 51.264
acre tract and the northerly line of said 6.447 acre tract, South 88 degrees 27 minutes 52 seconds West, a distance of 911.35 feet
to a 5/8-inch iron rod found at an interior corner of said 51.264 acre tract and the northwest corner of said 6.447 acre tract;

 

Thence, with the easterly line of said
51.264 acre tract, the westerly lines of said 6.447 acre tract, a called 5.500 acre tract of land recorded in the name of James
B. Davis and spouse, Nancy C. Davis in H.C.C.F. No. 20080120952 of the O.P.R.R.P.H.C., a called 1.956 acre tract of land recorded
in the name of James Bruce Davis in H.C.C.F. No. V752707 of the O.P.R.R.P.H.C., a called 1.9565 acre tract of land recorded in
the name of James Bruce Davis in H.C.C.F. No. W732249 of the O.P.R.R.P.H.C., a called 6.6650 acre tract of land recorded in the
name of Rosehill United Methodist Church in H.C.C.F. No. L479222 of the O.P.R.R.P.H.C., a called 2.405 acre tract of land recorded
in the name of Cindy Burkhardt Freeman in H.C.C.F. No. S014081 of the O.P.R.R.P.H.C., and a called 6.932 acre tract of land recorded
in the name of Gerald L. Falls and Ramona J. Falls, husband and wife in H.C.C.F. No. Y923238 of the O.P.R.R.P.H.C., South 02 degrees
36 minutes 50 seconds East a distance of 2,236.70 feet to a 3/4-inch iron pipe found at the southeast corner of said 51.264 acre
tract, the southwest corner of said 6.932 acre tract, and the most easterly northeast corner of a called 1.0419 acre tract of land
recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No. E169334 of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
51.264 acre tract and said northerly line of said 1.0419 acre tract, South 87 degrees 42 minutes 55 seconds West, a distance of
934.92 feet to a 3/4-inch iron pipe found at the southwest corner of said 51.264 acre tract and an interior corner of said 1.0419
acre tract;

 

Thence, with the westerly line of said
51.264 acre tract and the easterly line of said 1.0419 acre tract, North 02 degrees 03 minutes 43 seconds West, a distance of 548.57
feet to a 5/8-inch iron rod found at an interior corner of said 51.264 acre tract and the northeast corner of said 1.0419 acre
tract;

 

Thence, with a southerly line of said 51.264
acre tract and the northerly line of said 1.0419 acre tract, South 86 degrees 59 minutes 08 seconds West, a distance of 29.81 feet
to a 3/4-inch iron pipe found at an exterior corner of said 51.264 acre tract, the northwest corner of said 1.0419 acre tract being
on the easterly line of a called 22.25 acre tract of land recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No.
B829052 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
51.264 acre tract and said easterly line of the 22.25 acre tract, North 02 degrees 06 minutes 34 seconds West, a distance of 972.36
feet to a 3/4-inch iron pipe found at the northeast corner of said 22.25 acre tract and the southeast corner of aforesaid 15.833
acre tract;

 

Thence, with the southerly line of said
15.833 acre tract and the northerly line of said 22.25 acre tract, South 87 degrees 54 minutes 43 seconds West, a distance of 918.63
feet to a 3/4-inch iron pipe found at the southwest corner of said 15.833 acre tract, the northwest corner of said 22.25 acre tract,
and being on the easterly line of a called 37.224 acre tract of land recorded in the name of Donald E. Dehay, et al, in H.C.C.F.
No’s K341036, K374999, L172567, and L559673 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
15.833 acre tract and said easterly line of the 37.224 acre tract, North 01 degrees 46 minutes 52 seconds West, a distance of 752.95
feet to a 3/4-inch iron pipe found at the northwest corner of said 15.833 acre tract and the northeast corner of said 37.224 acre
tract, being on the southerly line of a called 74.788 acre tract (Tract III) recorded in the name of Helen Froehlich Dehay in H.C.C.F.
No. B876427 of the O.P.R.R.P.H.C.;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	51

    	 

    

 

Thence, with the northerly line of said
15.833 acre tract, North 87 degrees 55 minutes 16 seconds East, at 380.60 feet pass a 5/8-inch iron rod found at the southeast
corner of said 74.788 acre tract, and the southwest corner of a called 10.0023 acre tract of land recorded in the name of Amy Verret
in H.C.C.F. No. 20120275874 of the O.P.R.R.P.H.C., continuing a total distance of 914.31 feet to a 3/4-inch iron rod found at the
northeast corner of said 15.833 acre tract and the northwest corner of aforesaid 51.264 acre tract;

 

Thence, with the northerly line of said
51.264 acre tract, the southerly line of said 10.0023 acre tract, the southerly line of a called 1.00 acre tract recorded in the
name of Roger Hammons and wife, Rebecca Hammons in H.C.C.F. No. Y800358 of the O.P.R.R.P.H.C., and the southerly line of a called
10.000 acre tract of land recorded in the name of Dean Krokosky and spouse, Cheryl McShan in H.C.C.F. No. 20070754178 of the O.P.R.R.P.H.C.,
North 85 degrees 41 minutes 37 seconds East, a distance of 944.69 feet to a 5/8-inch iron rod found;

 

Thence, continuing with said northerly
line of the 51.264 acre tract and said southerly line of the 10.000 acre tract, North 88 degrees 27 minutes 52 seconds East, a
distance of 911.46 feet to a 5/8-inch iron rod found at the northeast corner of said 51.264 acre tract and the southeast corner
of said 10.000 acre tract, being on aforesaid westerly right-of-way line of Rosehill Church Road;

 

Thence, with the easterly line of said
51.264 acre tract and said westerly right-of-way line of Rosehill Church Road, South 02 degrees 29 minutes 20 seconds East, a distance
of 70.00 feet to the Point of Beginning and containing 67.0938 acres of land.

 

TRACT VI:

 

Being a 69.9127 acre tract of land located
in the Solomon Brown Survey, Abstract No. 7 in Harris County, Texas; said 69.9127 acre tract out of a called 74.788 acre tract
of land (Tract III) recorded in the name of Helen Froehlich Dehay in Harris County Clerk’s File (H.C.C.F.) No. B876427 of
the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 69.9127 acre tract being more particularly
described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983
(NAD 83), South Central Zone):

 

Beginning at a 1/2-inch iron pipe
found at the southwest corner of said 74.788 acre tract and the southeast corner of a called 50.695 acre tract of land (Tract I)
recorded in the name of Erwin G. Froehlich in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C., and being on the northerly line of a
called 64.8171 acre tract of land recorded in the name of Brenda Gholson, et al, in H.C.C.F. No’s L487030, M912360, N474832,
P013798, and P633605 of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
74.788 acre tract and the easterly line of said 50.695 acre tract, North 02 degrees 14 minutes 13 seconds West, a distance of 2,877.95
feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

 

Thence, across said 74.788 acre tract,
the following six (6) courses:

 

South 75 degrees 16 minutes 49 seconds
East, a distance of 239.40 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

 

281.77 feet along the arc of a curve to
the right, said curve having a central angle of 12 degrees 32 minutes 37 seconds, a radius of 1,287.04 feet and a chord that bears
South 69 degrees 00 minutes 30 seconds East, a distance of 281.21 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC"
set;

 

35.13 feet along the arc of a curve to
the left, said curve having a central angle of 04 degrees 01 minutes 31 seconds, a radius of 500.00 feet and a chord that bears
North 20 degrees 56 minutes 39 seconds East, a distance of 35.12 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC"
set;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	52

    	 

    

 

North 18 degrees 55 minutes 54 seconds
East, a distance of 82.46 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

 

31.57 feet along the arc of a curve to
the left, said curve having a central angle of 02 degrees 09 minutes 59 seconds, a radius of 835.00 feet and a chord that bears
North 17 degrees 50 minutes 54 seconds East, a distance of 31.57 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC"
set;

 

North 16 degrees 45 minutes 55 seconds
East, a distance of 112.50 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set on the westerly line of a
called 0.457 acre tract of land recorded in the name of Rosehill Volunteer Fire Association in H.C.C.F. No. C756826 of the O.P.R.R.P.H.C.;

 

Thence, with said westerly line of the
0.457 acre tract and the westerly line of a called 0.104 acre tract of land recorded in the name of Rosehill Volunteer Fire Association
in H.C.C.F. No. D430207 of the O.P.R.R.P.H.C., South 06 degrees 36 minutes 17 seconds West, a distance of 203.41 feet to a 5/8-inch
rod with cap stamped "COSTELLO INC" set at the southwest corner of said 0.104 acre tract;

 

Thence, with the southerly line of said
0.104 acre tract, North 88 degrees 07 minutes 47 seconds East, a distance of 115.96 feet to a 1/2-inch iron pipe found at the southeast
corner of said 0.104 acre tract, and being on the easterly line od said 74.788 acre tract and the westerly line of a called 1.6838
acre tract of land recorded in the name of Rosehill Volunteer Fire Association in H.C.C.F. No. L150602 of the O.P.R.R.P.H.C.;

 

Thence, with said easterly line of the
74.788 acre tract, the westerly line of said 1.6838 acre tract, the westerly line of a called 4.7397 acre tract recorded in the
name of Edward David Krolczyk and wife, Darla Jean Krolczyk in H.C.C.F. No. T553863 of the O.P.R.R.P.H.C., the westerly line of
a called 4.7398 acre tract recorded in the name of Gary Keith Thaemar and wife, Lucille Francis Thaemar in H.C.C.F. No. T553864
of the O.P.R.R.P.H.C., South 01 degrees 52 minutes 13 seconds East, a distance of 1,490.55 feet to a 5/8-inch rod with cap stamped
"COSTELLO INC" set at an interior corner of said 74.788 acre tract and the southwest corner of said 4.7398 acre tract;

 

Thence, with a northerly line of said 74.788
acre tract and the southerly line of said 4.7398 acre tract, the southerly line of a called 3.3012 acre tract recorded in the name
of Gary K. Thaemar and wife, Lucille F. Thaemar in H.C.C.F. No. M056370 of the O.P.R.R.P.H.C., the southerly line of a called 31
acre tract of land recorded in the name of Steve A. Krolczyk, et al, in H.C.C.F. No. B511074 of the O.P.R.R.P.H.C., North 88 degrees
29 minutes 45 seconds East, a distance of 983.00 feet to a 1-inch iron pipe found at the most easterly northeast corner of said
74.788 acre tract and the southeast corner of said 31 acre tract, being on the westerly line of a called 3-1/2 acre tract recorded
in the name of Ponciano A. Ramirez in H.C.C.F. No. B862350 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
74.788 acre tract, the westerly line of said 3-1/2 acre tract, the westerly line of a called 15.0 acre tract recorded in the name
of Ponciano A. Ramirez in H.C.C.F. No. N481000 of the O.P.R.R.P.H.C., and the westerly line of a called 10.0023 acre tract recorded
in the name of Amy Verret in H.C.C.F. No. 20120275874 of the O.P.R.R.P.H.C., South 01 degrees 50 minutes 03 seconds East, a distance
of 1,236.52 feet to the southeast corner of said 74.788 acre tract and the southwest corner of said 10.0023 acre tract, being on
the northerly line of a called 15.833 acre tract of land recorded in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441375
of the O.P.R.R.P.H.C., from which a found 5/8-inch iron rod bears North 01 degrees 50 minutes 03 seconds West, 0.82 feet;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	53

    	 

    

 

Thence, with the southerly line of said
74.788 acre tract and the northerly line of said 15.833 acre tract, South 87 degrees 55 minutes 16 seconds West, a distance of
382.41 feet to a 3/4-inch pipe found at the northwest corner of said 15.833 acre tract;

 

Thence, continuing with said southerly
line of the 74.788 acre tract, the northerly line of a called 37.224 acre tract of land recorded in the name of Donald E. Dehay,
et al, in H.C.C.F. No’s K341036, K374999, L172567, and L559673 of the O.P.R.R.P.H.C., and the northerly line of aforesaid
64.8171 acre tract, South 87 degrees 39 minutes 47 seconds West, a distance of 1,245.45 feet to the Point of Beginning and
containing 69.9127 acres of land.

 

TRACT VII:

 

Being a 37.2193 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 37.2193 acre tract being all of a called 37.224 acre
tract of land recorded in the name of Donald E. Dehay, et al, in Harris County Clerk’s File (H.C.C.F.) No’s K341036,
K374999, L172567, and L559673 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 37.2193 acre
tract being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System,
North American Datum 1983 (NAD 83), South Central Zone):

 

Beginning at a 1-inch iron pipe
found at the southwest corner of said 37.224 acre tract and the southeast corner of a called 64.8171 acre tract of land recorded
in the name of Brenda Gholson, et al, in H.C.C.F. No’s L487030, M912360, N474832, P013798, and P633605 of the O.P.R.R.P.H.C.,
being on the northerly line of a called 356.5024 acre tract of land recorded in the name of Moondream 2, LTD. in H.C.C.F. No. 20110450299
of the O.P.R.R.P.H.C.;

 

Thence, with the westerly line of said
37.224 acre tract and the easterly line of said 64.8171 acre tract, North 01 degrees 52 minutes 35 seconds West, a distance of
1,756.91 feet to a 1/2-inch iron pipe found at the northwest corner of said 37.224 acre tract and the northeast corner of said
64.8171 acre tract, being on the southerly line of a called 74.788 acre tract of land (Tract III) recorded in the name of Helen
Froehlich Dehay in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C.;

 

Thence, with the northerly line of said
37.224 acre tract and the southerly line of said 74.788 acre tract, North 87 degrees 39 minutes 47 seconds East, a distance of
922.67 feet to the northeast corner of said 37.224 acre tract and the northwest corner of a called 15.833 acre tract of land recorded
in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441375 of the O.P.R.R.P.H.C., from which a found 3/4-inch iron pipe bears
South 07 degrees 31 minutes 45 seconds West, a distance of 1.34 feet;

 

Thence, with the easterly line of said
37.224 acre tract, the westerly line of said 15.833 acre tract, and the westerly line of a called 22.25 acre tract of land recorded
in the name of William J. Meier and Carl Meier in H.C.C.F. No. B829052 of the O.P.R.R.P.H.C., South 01 degrees 46 minutes 52 seconds
East, a distance of 1,763.11 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the southeast corner
of said 37.224 acre tract and the southwest corner of said 22.25 acre tract, being on the aforesaid northerly line of the 356.5024
acre tract;

 

Thence, with the southerly line of said
37.224 acre tract and said northerly line of the 356.5024 acre tract, South 88 degrees 02 minutes 51 seconds West, a distance of
919.70 feet to the Point of Beginning and containing 37.2193 acres of land.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	54

    	 

    

 

TRACT VIII:

 

Being a 22.4301 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 22.4301 acre tract being all of the remainder of a
called 22.25 acre tract of land recorded in the name of William J. Meier and Carl Meier in Harris County Clerk’s File (H.C.C.F.)
No. B829052 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.) and all of a called 1.0419 acre tract
of land recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No. E169334 of the O.P.R.R.P.H.C.; said 22.4301 acre
tract being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System,
North American Datum 1983 (NAD 83), South Central Zone):

 

Beginning at a 3/4-inch iron pipe
found at the southwest corner of a called 15.833 acre tract of land recorded in the name of Shawn Edward Kuehn in H.C.C.F. No.
20120441375 of the O.P.R.R.P.H.C., being on the westerly line of said 22.25 acre tract and the easterly line of a called 37.224
acre tract of land recorded in the name of Donald E. Dehay, et al, in H.C.C.F. No’s K341036, K374999, L172567, and L559673
of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
15.833 acre tract, North 87 degrees 54 minutes 43 seconds East, a distance of 918.63 feet to a 3/4-inch iron pipe found at the
southeast corner of said 15.833 acre tract, being on the easterly line of said 22.25 acre tract and the westerly line of a called
51.264 acre tract of land recorded in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441374 of the O.P.R.R.P.H.C.;

 

Thence, with said easterly line of the
22.25 acre tract and said westerly line of the 51.264 acre tract, South 02 degrees 06 minutes 34 seconds East, a distance of 972.36
feet to a 3/4-inch iron pipe found at an interior corner of said 51.264 acre tract and the northwesterly corner of aforesaid 1.0419
acre tract;

 

Thence, with a westerly line of said 51.264
acre tract and the most northerly line of said 1.0419 acre tract, North 86 degrees 59 minutes 08 seconds East, a distance of 29.81
feet to a 5/8-inch iron rod found at an interior corner of said 51.264 acre tract and the most northerly northeast corner of said
1.0419 acre tract;

 

Thence, with the westerly line of said
51.264 acre tract and the easterly line of said 1.0419 acre tract, South 02 degrees 03 minutes 43 seconds East, a distance of 548.57
feet to a 5/8-inch iron rod inside a 3/4-inch iron pipe found at the southwest corner of said 51.264 acre tract and an interior
corner of said 1.0419 acre tract;

 

Thence, with the southerly line of said
51.264 acre tract and the northerly line of said 1.0419 acre tract, North 87 degrees 42 minutes 55 seconds East, a distance of
934.92 feet to a 5/8-inch iron rod inside a 3/4-inch iron pipe found at the southeast corner of said 51.264 acre tract and the
most easterly northeast corner of said 1.0419 acre tract, being on the westerly line of a called 6.932 acre tract of land recorded
in the name of Gerald L. Falls and Ramona J. Falls, husband and wife in H.C.C.F. No. Y923238 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
1.0419 acre tract and the westerly line of said 6.932 acre tract, South 01 degrees 58 minutes 45 seconds East, a distance of 30.00
feet to a 3-inch iron pipe found at the southeast corner of said 1.0419 acre tract and the southwest corner of said 6.932 acre
tract, being on a northerly line of a called 356.5024 acre tract of land recorded in the name of Moondream 2, LTD. in H.C.C.F.
No. 20110450299 of the O.P.R.R.P.H.C.;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	55

    	 

    

 

Thence, with the southerly line of said
1.0419 acre tract and said northerly line of the 356.5024 acre tract, South 87 degrees 42 minutes 55 seconds West, a distance of
964.28 feet to an iron bar found at the southwest corner of said 1.0419 acre tract and an interior corner of said 356.5024 acre
tract;

 

Thence, with the westerly line of said
1.0419 acre tract and the easterly line of said 356.5024 acre tract, North 02 degrees 06 minutes 06 seconds West, a distance of
538.22 feet to a 5/8-inch iron rod with cap stamped “Clarkson” found at the southeast corner of aforesaid 22.25 acre
tract;

 

Thence, with the southerly line of said
22.25 acre tract and the northerly line of said 356.5024 acre tract, South 88 degrees 02 minutes 51 seconds West, a distance of
924.42 feet to a 5/8-inch rod with cap stamped "COSTELLO INC" set at the southwest corner of said 22.25 acre tract and
the southeast corner of aforesaid 37.224 acre tract;

 

Thence, with the westerly line of said
22.25 acre tract and the easterly line of said 37.224 acre tract, North 01 degrees 46 minutes 52 seconds West, a distance of 1,010.16
feet to the Point of Beginning and containing 22.4301 acres of land.

 

TRACT IX:

 

Being a 0.5092 acre tract of land located
in the Solomon Brown Survey, Abstract No. 7 in Harris County, Texas; said 0.5092 acre tract being out of a called 0.457 acre tract
of land recorded in the name of Rosehill Volunteer Fire Association in Harris County Clerk’s File (H.C.C.F.) No. C756826
of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.) and all of a called 0.104 acre tract of land
recorded in the name of Rosehill Volunteer Fire Association in H.C.C.F. No. D430207 of the O.P.R.R.P.H.C.; said 0.5092 acre tract
being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North
American Datum 1983 (NAD 83), South Central Zone):

 

Beginning at a 1/2-inch iron pipe
found at the southeast corner of said 0.104 acre tract, being on the easterly line of a called 50.695 acre tract of land (Tract
III) recorded in the name of Erwin G. Froehlich in H.C.C.F. No. B876427 of the O.P.R.R.P.H.C., also being on the westerly line
of a called 1.6838 acre tract of land recorded in the name of Rosehill Volunteer Fire Association, in H.C.C.F. No. L150602 of the
O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
0.104 acre tract, South 88 degrees 07 minutes 47 seconds West, a distance of 115.96 feet to a 5/8-inch iron rod with cap stamped
"COSTELLO INC" set at the southwest corner of said 0.104 acre tract;

 

Thence, with the westerly line of said
0.104 acre tract and the westerly line of said 0.457 acre tract, North 06 degrees 36 minutes 17 seconds East, a distance of 246.93
feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set on the southerly right-of-way line of F.M. 2920 (100
feet wide);

 

Thence, with said right-of-way line of
FM 2920, 90.74 feet along the arc of a curve to the right, said curve having a central angle of 03 degrees 16 minutes 34 seconds,
a radius of 1,587.04 feet and a chord that bears South 63 degrees 09 minutes 03 seconds East, a distance of 90.73 feet to a 5/8-inch
iron rod with cap stamped "COSTELLO INC" set;

 

Thence, with the westerly line of aforesaid
1.6838 acre tract, the easterly line of aforesaid 50.695 acre tract, the easterly line of said 0.457 acre tract, and the easterly
line of said 0.104 acre tract, South 01 degrees 52 minutes 13 seconds East, a distance of 200.63 feet to the Point of Beginning
and containing 0.5092 acres of land.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	56

    	 

    

 

TRACT X:

 

Being a 16.4074 acre tract of land located
in the William Hobby Survey, Abstract No. 344 in Harris County, Texas; said 16.4074 acre tract being a part of a called 356.5024
acre tract of land recorded in the name of Moondream 2, LTD. in Harris County Clerk’s File (H.C.C.F.) No. 20110450299 of
the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.); said 16.4074 acre tract being more particularly
described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate System, North American Datum 1983
(NAD 83), South Central Zone):

 

Beginning at a 5/8-inch iron rod
with cap stamped “Clarkson” found at the northeast corner of said 356.5024 acre tract and the southeast corner of a
called 22.25 acre tract of land recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No. B829052 of the O.P.R.R.P.H.C.,
and being on the westerly line of a called 1.0419 acre tract of land recorded in the name of William J. Meier and Carl Meier in
H.C.C.F. No. E169334 of the O.P.R.R.P.H.C.;

 

Thence, with the easterly line of said
356.5024 acre tract, said westerly line of the 1.0419 acre tract, the westerly line of a called 1.00 acre tract recorded in the
name of Russell Stavinoha and Mary Jo Wells in H.C.C.F. No. J343425 of the O.P.R.R.P.H.C., the westerly line of a called 29.1752
acre tract of land recorded in the name of Gary L. Franklin in H.C.C.F. No. T396661 of the O.P.R.R.P.H.C., the westerly line of
a called 46.5521 acre tract of land recorded in the name of William J. Gabriel and wife, Eleanor A. Gabriel in H.C.C.F. No. E547422
of the O.P.R.R.P.H.C., the westerly line of a tract of land recorded in the name of Delvin Schauer in H.C.C.F. No. P058728 of the
O.P.R.R.P.H.C., South 02 degrees 06 minutes 06 seconds East, a distance of 3,969.96 feet to a 1-inch bar found at the southeast
corner of said 356.5024 acre tract and the northeast corner of a called 25.348 acre tract of land recorded in the name of JK Cypress
Safari, LLC. in H.C.C.F. No. 20120406196 of the O.P.R.R.P.H.C.;

 

Thence, with the southerly line of said
356.5024 acre tract and the northerly line of said 25.348 acre tract, South 87 degrees 38 minutes 24 seconds West, a distance of
180.00 feet to a 5/8-inch rod with cap stamped "COSTELLO INC" set;

 

Thence, across said 356.5024 acre tract,
North 02 degrees 06 minutes 06 seconds West, a distance of 3,971.24 feet to a 5/8-inch rod with cap stamped "COSTELLO INC
RPLS 4416" set on the northerly line of said 356.5024 acre tract and the southerly line of aforesaid 22.25 acre tract;

 

Thence, with said northerly line of the
356.5024 acre tract and said southerly line of the 22.25 acre tract, North 88 degrees 02 minutes 51 seconds East, a distance of
180.00 feet to the Point of Beginning and containing 16.4074 acres of land.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	57

    	 

    

 

All of the above described Tracts are
more particularly described as 304.8426 acres as follows:

 

Being a 304.8426 acre tract of land located
in the William Hobby Survey, Abstract No. 344 and the Solomon Brown Survey, Abstract No. 7 in Harris County, Texas; said 304.8426
acre tract being a part of a called 50.695 acre tract of land (Tract I) recorded in the name of Erwin G. Froehlich in Harris County
Clerk’s File (H.C.C.F.) No. B876427 of the Official Public Records of Real Property of Harris County (O.P.R.R.P.H.C.), all
of a called 10.000 acre tract of land recorded in the name of Brenda Renea Froehlich Pennington in H.C.C.F. No. U319733 of the
O.P.R.R.P.H.C., a part of a called 74.788 acre tract of land (Tract III) recorded in the name of Helen Froehlich Dehay in H.C.C.F.
No. B876427 of the O.P.R.R.P.H.C., a part of a called 64.8171 acre tract of land recorded in the name of Brenda Gholson, et al,
in H.C.C.F. No’s L487030, M912360, N474832, P013798, and P633605 of the O.P.R.R.P.H.C., all of a called 37.224 acre tract
of land recorded in the name of Donald E. Dehay in H.C.C.F. No’s K341036, K374999, L172567, and L559673 of the O.P.R.R.P.H.C.,
all of a called 15.833 acre tract of land recorded in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441375 of the O.P.R.R.P.H.C.,
all of a called 51.264 acre tract of land recorded in the name of Shawn Edward Kuehn in H.C.C.F. No. 20120441374 of the O.P.R.R.P.H.C.,
all of the remainder of called 22.25 acre tract of land recorded in the name of William J. Meier and Carl Meier in H.C.C.F. No.
B829052 of the O.P.R.R.P.H.C., all of a called 1.0419 acre tract of land recorded in the name of William J. Meier and Carl Meier
in H.C.C.F. No. E169334 of the O.P.R.R.P.H.C., a part of a called 356.5024 acre tract of land recorded in the name of Moondream
2, LTD. in H.C.C.F. No. 20110450299 of the O.P.R.R.P.H.C., all of the remainder of a called 0.457 acre tract of land recorded in
the name of Rosehill Volunteer Fire Association in H.C.C.F. No. C756826 of the O.P.R.R.P.H.C., and all of a called 0.104 acre tract
of land recorded in the name of Rosehill Volunteer Fire Association in H.C.C.F. No. D430207 of the O.P.R.R.P.H.C.; said 304.8426
acre tract being more particularly described by metes and bounds as follows (all bearings are referenced to the Texas Coordinate
System, North American Datum 1983 (NAD 83), South Central Zone):

 

Commencing at an axle found at the
northwest corner of said 64.8171 acre tract and the northeast corner of a called 30.0710 acre tract recorded in the name of William
D. McChesney and wife, Anne McChesney in H.C.C.F. No. N896380 of the O.P.R.R.P.H.C., and being on the southerly line of a called
46 acre tract of land recorded in the name of Jean Wailes in H.C.C.F. No. R748583 of the O.P.R.R.P.H.C.;

 

Thence, with the northerly line of said
64.8171 acre tract and the southerly line of said 46 acre tract, North 87 degrees 40 minutes 56 seconds East, a distance of 535.83
to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set at the Point of Beginning of the herein described tract;

 

		1.	Thence, continuing with the northerly line of said 64.8171
acre tract and the southerly line of said 46 acre tract, North 87 degrees 40 minutes 56 seconds East, a distance of 77.20 feet
to the southwest corner of aforesaid 10.000 acre tract;

		 	 

		2.	Thence, with the westerly line of said 10.000 acre tract
and the westerly line of aforesaid 50.695 acre tract, North 02 degrees 15 minutes 26 seconds West, a distance of 3,385.87 feet
to the southerly right-of-way line of FM 2920 (100 feet wide);

		 	 

		3.	Thence, with said southerly right-of-way line of FM 2920,
23.88 feet along the arc of a curve to the right, said curve having a central angle of 00 degrees 51 minutes 43 seconds, a radius
of 1,587.04 feet and a chord that bears South 81 degrees 33 minutes 29 seconds East, a distance of 23.88 feet;

		 	 

		4.	Thence, with the westerly line of said 1.216 acre tract,
South 01 degrees 50 minutes 59 seconds East, a distance of 327.37 feet to a 5/8-inch iron rod with cap stamped "COSTELLO
INC" set at the southwest corner of said 1.216 acre tract;

		 	 

		5.	Thence, with the southerly line of said 1.216 acre tract,
South 79 degrees 46 minutes 57 seconds East, a distance of 109.10 feet to a 5/8-inch rod with cap stamped "COSTELLO INC"
set at the southeast corner of said 1.216 acre tract and the southwest corner of Froehlich Feed Mills Subdivision recorded in
Film Code No. 624190 of the Map Records of Harris County;

		 	 

		6.	Thence, with the southerly line of said Froehlich Feed
Mills Subdivision , South 79 degrees 45 minutes 42 seconds East, a distance of 172.03 feet to a 5/8-inch rod with cap stamped
"COSTELLO INC" set at the southeast corner of said Froehlich Feed Mills Subdivision;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	58

    	 

    

 

		7.	Thence, with the easterly line of said Froehlich Feed
Mills Subdivision, North 01 degrees 33 minutes 56 seconds West, a distance of 312.57 feet to the northeast corner of said Froehlich
Feed Mills Subdivision, being on the southerly right-of-way line of FM 2920 (100 feet wide), from which a found 5/8-inch iron
rod bears North 05 degrees 34 minutes 02 seconds East, a distance of 0.78 feet;

 

		8.	Thence, with said southerly right-of-way line of FM 2920,
South 75 degrees 16 minutes 49 seconds East, a distance of 286.05 feet to a 5/8-inch iron rod found at the northwest corner of
a called 0.6132 acre tract of land recorded in the name of Jose G. Ordonez in H.C.C.F. No. Z080530 of the O.P.R.R.P.H.C.;

 

		9.	Thence, with the westerly line of said 0.6132 acre tract,
South 07 degrees 10 minutes 36 seconds West, a distance of 227.08 feet to a 1-inch iron rod found at the southwest corner of said
0.6132 acre tract;

		 	 

		10.	Thence, with the southerly line of said 0.6132 acre tract,
South 82 degrees 13 minutes 31 seconds East, a distance of 139.13 feet to a 1/2-inch iron rod found at the southeast corner of
said 0.6132 acre tract, being on the easterly line of aforesaid 50.695 acre tract and the westerly line of aforesaid 74.788 acre
tract;

		 	 

		11.	Thence, with the easterly line of said 50.695 acre tract
and the westerly line of said 74.788 acre tract, South 02 degrees 14 minutes 13 seconds East, a distance of 95.88 feet to a 5/8-inch
iron rod with cap stamped "COSTELLO INC" set;

 

Thence, across said 74.788 acre tract the following six (6)
courses:

 

		12.	South 75 degrees 16 minutes 49 seconds East, a distance
of 239.40 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		13.	281.77 feet along the arc of a curve to the right, said
curve having a central angle of 12 degrees 32 minutes 37 seconds, a radius of 1,287.04 feet and a chord that bears South 69 degrees
00 minutes 30 seconds East, a distance of 281.21 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		14.	35.13 feet along the arc of a curve to the left, said
curve having a central angle of 04 degrees 01 minutes 31 seconds, a radius of 500.00 feet and a chord that bears North 20 degrees
56 minutes 39 seconds East, a distance of 35.12 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		15.	North 18 degrees 55 minutes 54 seconds East, a distance
of 82.46 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		16.	31.57 feet along the arc of a curve to the left, said
curve having a central angle of 02 degrees 09 minutes 59 seconds, a radius of 835.00 feet and a chord that bears North 17 degrees
50 minutes 54 seconds East, a distance of 31.57 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		17.	North 16 degrees 45 minutes 55 seconds East, a distance
of 112.50 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set on the westerly line of aforesaid 0.457 acre
tract;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	59

    	 

    

 

		18.	Thence, with said westerly line of the 0.457 acre tract,
North 06 degrees 36 minutes 17 seconds East, a distance of 43.52 feet to a 5/8-inch iron rod with cap stamped "COSTELLO INC"
set on aforesaid southerly right-of-way line of FM 2920;

		 	 

		19.	Thence, with said southerly right-of-way line of FM 2920,
90.74 feet along the arc of a curve to the right, said curve having a central angle of 03 degrees 16 minutes 34 seconds, a radius
of 1,587.04 feet and a chord that bears South 63 degrees 09 minutes 03 seconds East, a distance of 90.73 feet to a 5/8-inch iron
rod with cap stamped "COSTELLO INC" set at the northwest corner of a called 1.6838 acre tract of land recorded in the
name of Rosehill Volunteer Fire Association in H.C.C.F. No. L150602 of the O.P.R.R.P.H.C., being on the easterly line of aforesaid
0.457 acre tract and the easterly line of aforesaid 74.788 acre tract;

		 	 

		20.	Thence, with the easterly line of said 0.457 acre tract,
the easterly line of aforesaid 0.104 acre tract, the easterly line of said 74.788 acre tract, the westerly line of said 1.6838
acre tract, the westerly line of a called 4.7397 acre tract of land recorded in the name of Edward David Krolczyk and wife, Darla
Jean Krolczyk in H.C.C.F. No. T553863 of the O.P.R.R.P.H.C., and the westerly line of a called 4.7398 acre tract recorded in the
name of Gary Keith Thaemar and wife, Lucille Francis Thaemar in H.C.C.F. No. T553864 of the O.P.R.R.P.H.C., South 01 degrees 52
minutes 13 seconds East, a distance of 1,691.18 feet to a 5/8-inch rod with cap stamped "COSTELLO INC" set at an interior
corner of said 74.788 acre tract and the southwest corner of said 4.7398 acre tract;

		 	 

		21.	Thence, with a northerly line of said 74.788 acre tract
and the southerly line of said 4.7398 acre tract, the southerly line of a called 3.3012 acre tract of land recorded in the name
of Gary K. Thaemar and wife, Lucille F. Thaemar in H.C.C.F. No. M056370 of the O.P.R.R.P.H.C., the southerly line of a remainder
of a called 31 acre tract of land recorded in the name of Steve A. Krolczyk, et al, in H.C.C.F. No. B511074 of the O.P.R.R.P.H.C.,
North 88 degrees 29 minutes 45 seconds East, a distance of 983.00 feet to a 1-inch iron pipe found at the most easterly northeast
corner of said 74.788 acre tract and the southeast corner of said 31 acre tract, being on the westerly line of a called 3-1/2
acre tract recorded in the name of Ponciano A. Ramirez in H.C.C.F. No. B862350 of the O.P.R.R.P.H.C.;

		 	 

		22.	Thence, with the easterly line of said 74.788 acre tract,
the westerly line of said 3-1/2 acre tract, the westerly line of a called 15.0 acre tract of land recorded in the name of Ponciano
A. Ramirez in H.C.C.F. No. N 481000 of the O.P.R.R.P.H.C., and the westerly line of a called 10.0023 acre tract of land recorded
in the name of Amy Verret in H.C.C.F. No. 20120275874 of the O.P.R.R.P.H.C., South 01 degrees 50 minutes 03 seconds East, a distance
of 1,236.52 feet to the southeast corner of said 74.788 acre tract and the southwest corner of said 10.0023 acre tract, being
on the northerly line of aforesaid 15.833 acre tract, from which a found 5/8-inch iron rod bears North 01 degrees 50 minutes 03
seconds West, 0.82 feet;

		 	 

		23.	Thence, with said northerly line of the 15.833 acre tract
and the southerly line of said 10.0023 acre tract, North 87 degrees 55 minutes 16 seconds East, a distance of 531.90 feet to a
3/4-inch iron pipe found at the northeast corner of said 15.833 acre tract and the northwest corner of aforesaid 51.264 acre tract;

		 	 

		24.	Thence, with the northerly line of said 51.264 acre tract,
said southerly line of the 10.0023 acre tract, the southerly line of a called 1.00 acre tract of land recorded in the name of
Roger Hammons and wife, Rebecca Hammons in H.C.C.F. No. Y800358 of the O.P.R.R.P.H.C., and the southerly line of a called 10.000
acre tract of land recorded in the name of Dean Krokosky and spouse, Cheryl McShan in H.C.C.F. No. 20070754178 of the O.P.R.R.P.H.C.,
North 85 degrees 41 minutes 37 seconds East, a distance of 944.69 feet to a 5/8-inch iron rod found;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	60

    	 

    

 

		25.	Thence, continuing with said northerly line of the 51.264
acre tract and said southerly line of the 10.000 acre tract, North 88 degrees 27 minutes 52 seconds East, a distance of 911.46
feet to a 5/8-inch iron rod found at the northeast corner of said 51.264 acre tract and the southeast corner of said 10.000 acre
tract, being on the westerly right-of-way line of Rosehill Church Road (60.00 feet wide);

		 	 

		26.	Thence, with the easterly line of said 51.264 acre tract
and said westerly right-of-way line of Rosehill Church Road, South 02 degrees 29 minutes 20 seconds East, a distance of 70.00
feet to a 5/8-inch iron rod found at the most easterly southeast corner of said 51.264 acre tract and the northeast corner of
a called 6.447 acre tract of land recorded in the name of Sharon Louise Hill in H.C.C.F. No. 20070063643 of the O.P.R.R.P.H.C.;

		 	 

		27.	Thence, with a southerly line of said 51.264 acre tract
and the northerly line of said 6.447 acre tract, South 88 degrees 27 minutes 52 seconds West, a distance of 911.35 feet to a 5/8-inch
iron rod found at an interior corner of said 51.264 acre tract and the northwest corner of said 6.447 acre tract;

		 	 

		28.	Thence, with the easterly line of said 51.264 acre tract,
the westerly lines of said 6.447 acre tract, a called 5.500 acre tract of land recorded in the name of James B. Davis and spouse,
Nancy C. Davis in H.C.C.F. No. 20080120952 of the O.P.R.R.P.H.C., a called 1.956 acre tract of land recorded in the name of James
Bruce Davis in H.C.C.F. No. V752707 of the O.P.R.R.P.H.C., a called 1.9565 acre tract of land recorded in the name of James Bruce
Davis in H.C.C.F. No. W732249 of the O.P.R.R.P.H.C., a called 6.6650 acre tract of land recorded in the name of Rosehill United
Methodist Church in H.C.C.F. No. L479222 of the O.P.R.R.P.H.C., a called 2.405 acre tract of land recorded in the name of Cindy
Burkhardt Freeman in H.C.C.F. No. S014081 of the O.P.R.R.P.H.C., and a called 6.932 acre tract of land recorded in the name of
Gerald L. Falls and Ramona J. Falls, husband and wife in H.C.C.F. No. Y923238 of the O.P.R.R.P.H.C., South 02 degrees 36 minutes
50 seconds East a distance of 2,236.70 feet to a 3/4-inch iron pipe found at the southeast corner of said 51.264 acre tract and
the most easterly northeast corner of aforesaid 1.0419 acre tract;

		 	 

		29.	Thence, with the easterly line of said 1.0419 acre tract
and said westerly line of the 6.932 acre tract, South 01 degrees 58 minutes 45 seconds East, a distance of 30.00 feet to the southeast
corner of said 1.0419 acre tract and the southwest corner of said 6.932 acre tract, being on a northerly line of aforesaid 356.5024
acre tract;

		 	 

		30.	Thence, with the southerly line of said 1.0419 acre tract
and said northerly line of the 356.5024 acre tract, South 87 degrees 42 minutes 55 seconds West, a distance of 964.28 feet to
an iron bar found at the southwest corner of said 1.0419 acre tract and an interior corner of said 356.5024 acre tract;

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	61

    	 

    

 

		31.	Thence, with the easterly line of and across said 356.5024
acre tract, the westerly line of a called 1.00 acre tract of land recorded in the name of Russell Stavinoha and Mary Jo Wells
in H.C.C.F. No. J343425 of the O.P.R.R.P.H.C., the westerly line of a called 29.1752 acre tract of land recorded in the name of
Gary L. Franklin in H.C.C.F. No. T396661 of the O.P.R.R.P.H.C., the westerly line of a called 46.5521 acre tract of land recorded
in the name of William J. Gabriel and wife, Eleanor A. Gabriel in H.C.C.F. No. E547422 of the O.P.R.R.P.H.C., the westerly line
of a tract of land recorded in the name of Delvin Schauer in H.C.C.F. No. P058728 of the O.P.R.R.P.H.C., South 02 degrees 06 minutes
06 seconds East, a distance of 3,431.74 feet to a 1-inch square bar found at the southeast corner of said 356.5024 acre tract
and the northeast corner of a called 25.348 acre tract of land recorded in the name of JK Cypress Safari, LLC. in H.C.C.F. No.
20120406196 of the O.P.R.R.P.H.C.;

		 	 

		32.	Thence, with the southerly line of said 356.5024 acre
tract and the northerly line of said 25.348 acre tract, South 87 degrees 38 minutes 24 seconds West, a distance of 180.00 feet
to a 5/8-inch rod with cap stamped "COSTELLO INC" set;

		 	 

		33.	Thence, across said 356.5024 acre tract, North 02 degrees
06 minutes 06 seconds West, a distance of 3,971.24 feet to a 5/8-inch rod with cap stamped "COSTELLO INC" set on the
northerly line of said 356.5024 acre tract and the southerly line of aforesaid 22.25 acre tract;

		 	 

		34.	Thence, with said northerly line of the 356.5024 acre
tract, said southerly line of the 22.25 acre tract, and the southerly line of aforesaid 37.224 acre tract, South 88 degrees 02
minutes 51 seconds West, a distance of 1,664.13 feet to a 1-inch iron pipe found at the southwest corner of said 37.224 acre tract
and the southeast corner of aforesaid 64.8171 acre tract;

		 	 

		35.	Thence, with said northerly line of the 356.5024 acre
tract and the southerly line of said 64.8171 acre tract, South 87 degrees 54 minutes 58 seconds West, a distance of 1,067.89 feet
to a 5/8-inch iron rod with cap stamped "COSTELLO INC" set;

		 	 

		36.	Thence, across said 64.8171 acre tract, North 01 degrees
59 minutes 59 seconds West, a distance of 1,752.90 feet to the Point of Beginning and containing 304.8426 acres of land.

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	62

    	 

    

 

EXHIBIT B

 

FORM OF SECURED PROMISSORY NOTE

 

(See Attached)

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	63

    	 

    

 

EXHIBIT C

 

PRO FORMA

 

(See attached)

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	64

    	 

    

 

EXHIBIT D

 

FORM OF ADVANCE REQUEST

 

(See Attached)

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	65

    	 

    

 

EXHIBIT E

 

FORM OF FINANCIAL STATEMENT CERTIFICATIONS

 

(See Attached)

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	66

    	 

    

 

EXHIBIT F

 

APPROVED BUDGET

 

(See Attached)

 

    	Loan Agreement – Rosehill Reserve
Harris County, Texas
	67EX10.9 Employ Agreement Brown

EXHIBIT 10.9

EMPLOYMENT AGREEMENT
    

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 30th day of December, 2014, by and between RBC Life Sciences, Inc. (“Employer”), located at 2301 Crown Court, Irving, Texas 75038, and Steven E. Brown (“Employee”), residing at 2128 Tomahawk Dr., Plano, Texas 75023.

W I T N E S S E T H:

WHEREAS, Employer is engaged in, among other businesses, the international distribution of nutritional supplements and personal care products through the network marketing distribution model, and the distribution of wound care and oncology care products; and 

WHEREAS, Employer desires to employ Employee, and Employee desires to accept employment with Employer, on the terms and conditions set forth in this Agreement; 

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Agreement, Employer and Employee hereby agree as follows:

		
	Section 1.  
	Effective Date and Purpose.  The effective date of this Agreement shall be January 1, 2015 (the “Effective Date”).  This Agreement sets forth the terms and conditions of Employee’s employment with Employer on and after the Effective Date during the term hereof.

Section 2.  Employment Title and Duties.  Employer shall employ Employee in the capacity of Chief Executive Officer and President.  In this capacity, Employee shall have the responsibility to perform all duties that are customarily performed by one holding that position in other, same, or similar businesses or enterprises as that engaged in by Employer.  Employee accepts this employment, subject to the general supervision and pursuant to the orders and direction of Employer’s Board of Directors (the “Board”).  Employee shall also render such other services and duties, consistent with such capacity, as may be assigned from time to time by the Board.
Section 3.  Compensation of Employee.  Employer shall pay Employee, in full payment for Employee’s services and covenants under this Agreement, the following compensation:
		
	(a)
	Salary.  During his employment pursuant to this Agreement, Employee’s annual base salary shall be $304,990.40 payable bi-weekly in equal payments of $11,730.40 in accordance with Employer’s customary payroll practices. Employee’s annual base salary may be increased during the term of this Agreement subject to business conditions and Employee’s performance by the Compensation Committee (the “Compensation Committee”) of the Board. The Compensation Committee shall review and make a joint decision in accordance with the Compensation Committee Charter.  

		
	(b)
	Incentive Bonus.  The Compensation Committee will maintain a discretionary annual cash incentive bonus program each year during the Term.  The Compensation Committee shall determine in its sole discretion whether any annual incentive bonus will be payable for any year to Employee based on business-related factors deemed appropriate by the Compensation Committee for a particular year.  Any annual incentive bonus payable to Employee will be paid in a lump sum payment between January 1 and April 30 of the calendar year immediately following the calendar year to which the bonus relates pursuant to the terms of the bonus plan adopted by the Compensation Committee provided that Employee remains continuously employed by Employer until the date the bonus is paid.

		
	(c)
	Health and Welfare Benefits.  During his employment, Employee shall be eligible to participate in the health and welfare benefit plans and programs offered from time to time by Employer for its similarly situated employees, upon the terms and subject to conditions of such plans and programs.

		
	(d)
	Automobile Allowance.  Employer shall pay to Employee an automobile allowance in an amount equal to $1,000 per month, payable in accordance with Employer’s customary payroll practices. 

		
	(e)
	Club Dues.  Subject to approval by the Compensation Committee, Employer shall pay the cost of Employee’s membership at a local club for business use by Employee in the performance of duties contemplated by this Agreement. 

Section 4.  Best Efforts of Employee.  Employee agrees to perform all of the duties and responsibilities pursuant to the express and implicit terms of this Agreement to the reasonable satisfaction of Employer.  Employee further agrees to perform such duties and responsibilities faithfully and to the best of his ability, talent, and experience. 

Section 5.  Place of Employment.  Employee shall render such duties and responsibilities at 2301 Crown Court, Irving, Texas 75038 and at such other places as Employer shall in good faith require or as the interest, needs, business, or opportunity of Employer shall require.
Section 6.  Non-Competition with Employer during Employment.  Employee shall devote all his time, attention, knowledge, and skills solely to the business and interest of Employer, and Employer shall be entitled to all of the benefits and profits arising from the work of Employee.  Employee shall not, during his employment under this Agreement, perform services for or be interested directly or indirectly, in any manner, as partner, officer, director, shareholder, advisor, consultant, employee, or in any other capacity in any other business similar to Employer’s business, any allied trade, or any business offering a competing or alternative product or service. However, nothing contained in this section shall prevent or limit Employee from continuing to receive the benefits of relationships previously disclosed and approved by the Chair of the Audit Committee of the Board in writing or investing in the capital stock or other securities of any corporation whose stock or securities are publicly owned and traded on any public exchange, nor shall anything contained in this Section 6.   prevent or limit Employee from investing in real estate.
Section 7.  Confidentiality and Nondisclosure.  Employer shall disclose to Employee, and Employee acknowledges that in and as a result of his employment by Employer, he will receive, be making use of, acquiring, and/or adding to, confidential information of a special and unique nature and value relating to such matters as Employer’s trade secrets and proprietary and confidential business information, including but not limited to, its unique business methods and strategies, processes, product and design development, programs and programming codes, pricing methods, operating techniques and practices, operating and production costs, corporate financial information, customer requirements, customer and supplier information, potential customer lists and marketing techniques, systems, procedures, manuals, confidential reports, the equipment and methods used and preferred by its customers and the fees paid by them, and compilations of information, records, and specifications (all of which are referred to collectively herein as “Confidential Matters”).  Employee further agrees that if a third party (e.g., vendors, customers and manufacturers) contracts with Employer, the information obtained or received from a third party including, but not limited to, its patents, copyrights, proprietary information, trade secrets, systems, product development, procedures, manuals, and confidential reports will be treated in the same manner and subject to the same protection as other Confidential Matters.
Employee acknowledges that Employer does not voluntarily disclose Confidential Matters, but rather takes precautions to prevent their dissemination except pursuant to suitable confidentiality safeguards.  Employee further acknowledges that Confidential Matters (i) are secret and not known in Employer’s industry; (ii) have been and will be entrusted to Employee because Employee is a fiduciary of Employer; (iii) have been and will be developed by Employer and/or Employee for and on behalf of Employer through substantial expenditures of time, effort, and money and are and will be used in Employer’s business; (iv) give Employer an opportunity to obtain an advantage over competitors who do not know or use the Confidential Matters; and (v) are of such value and nature as to make it reasonable and necessary for Employee and Employer to protect and preserve the confidentiality and secrecy of the Confidential Matters.
Employee acknowledges and agrees that the Confidential Matters are valuable, special, and unique assets of Employer, the disclosure of which could cause substantial injury and loss of profits and goodwill to Employer.  The Confidential Matters to be prepared or compiled by Employee and/or Employer or furnished to Employee prior to or during Employee’s employment with Employer shall be the sole and exclusive property of Employer.  Upon the termination of Employee’s employment with Employer, all documents and materials related to Confidential Matters shall be returned to Employer upon termination of employment, and none shall be retained by Employee, including any copies.
As a condition of employment and continued employment, Employee shall keep confidential all Confidential Matters that Employee learns or acquires as a result of his employment with Employer, and shall not at any time, except as necessary to conduct the business of Employer, directly or indirectly make known, divulge, use, furnish, or reveal to any person, firm, company, corporation, or anyone else any of the Confidential Matters or any knowledge or information with respect thereto, or otherwise use such information for any purpose whatsoever.  Employee shall take all steps necessary to safeguard all Confidential Matters and to prevent their use, disclosure, or dissemination to any other person or entity except as necessary to conduct the business of Employer.
If Employee is subpoenaed, served with any legal process or notice, or otherwise requested to produce or divulge, directly or indirectly, any Confidential Matters by any entity, agency, or person in any formal or informal proceeding, including, but not limited to, any interview, deposition, administrative or judicial hearing, and/or trial, upon Employee’s receipt of such subpoena, process, notice, or request, Employee shall immediately notify and deliver a copy of the subpoena, process, notice, or request to the Board.  Employee further irrevocably nominates, constitutes, and appoints Employer (specifically including any attorney retained by Employer) as Employee’s true and lawful attorney-in-fact, to act in Employee’s name, place, and stead to do and perform any act which Employee might perform, including to institute, prosecute, defend, quash, compromise, settle, arbitrate, release, and dispose of any and all legal, equitable, or administrative hearings, actions, suits, attachments, subpoenas, claims, levies, or other proceedings, or otherwise engage in or defend any and all litigation in connection with or relating to any request to disclose, directly or indirectly, any Confidential Matters; provided, however, that Employer shall be under no obligation to act as Employee’s attorney-in-fact and may decline to do so upon written notice to Employee.

		
	Section 8.  
	Term.  The term of this Agreement (the “Term”) shall be effective for a period of one (1) year beginning on January 1, 2015 and ending on December 31, 2015.  This agreement will be automatically renewed for an additional one-year period upon expiration of its initial term and each subsequent term thereafter, unless either Employer or Employee gives written notice to the other party at least sixty (60) days prior to the last day of the then current term of the Agreement.  

Section 9.  Termination of Employment. 
		
	(a)
	Termination by Employer for Cause.  Employer may immediately terminate the employment of Employee under this Agreement for Cause (as defined below) at any time by giving written notice of termination to Employee without prejudice to any other remedy to which Employer may be entitled either at law, in equity, or under this Agreement.  In the event Employee’s employment under this Agreement is terminated for Cause pursuant to this Section 9(a), Employer shall pay to Employee his monthly base salary up to the date of his termination of employment (the “Termination Date”) in a single lump sum payment on the first regularly scheduled payroll date of Employer following the Termination Date and Employee shall not be entitled to any other compensation or benefits under this Agreement.  

For purposes of this Agreement, “Cause” shall mean, in each case, as reasonably determined by the Board:  (i) indictment for, conviction of, or entry of a pleading of guilty or no contest by, Employee with respect to a felony or any lesser crime of which fraud or dishonesty is a material element, (ii) Employee’s willful and continued failure to perform his duties with Employer, or a failure to follow the lawful direction of the Board after the Board delivers a written demand for performance and Employee neglects to cure such a failure to the reasonable satisfaction of the Board within 15 days after receipt of the demand, (iii) Employee’s failure to comply with applicable laws with respect to the execution of Employer’s business operations or his material breach of Sections 6 or 7 of this Agreement, (iv) Employee’s theft, fraud, embezzlement, dishonesty, or similar conduct which has resulted or is reasonably likely to result in damage to the business or reputation of Employer or any of its affiliates or subsidiaries, or (v) Employee’s habitual intoxication or continued abuse of illegal drugs which interferes with Employee’s ability to perform his assigned duties and responsibilities.
		
	(b)
	Termination by Employee for Good Reason or Termination by Employer Without Cause.  Employee may terminate his employment under this Agreement for “Good Reason” (as defined below) at any time by giving written notice of termination to Employer without prejudice to any other remedy to which Employee may be entitled either at law or in equity under this Agreement, and Employer may terminate Employee’s employment under this Agreement at any time for any reason other than Cause by giving written notice of such termination to Employee.  In the event Employee’s employment under this Agreement is terminated by Employee for Good Reason or by Employer for a reason other than Cause pursuant to this Section 9(b), Employer shall pay to Employee (i) his monthly base salary up to the Termination Date plus an amount equal to his accrued, unused vacation and personal time off (“PTO”), not to exceed 520 hours, paid in a single lump sum payment on the first regularly scheduled payroll date of Employer following the Termination Date and (ii) an amount equal to the greater of (A) his monthly base salary through the last day of the Term or (B) his monthly base salary for a period of six (6) months as severance pay following the Termination Date, payable, in each case, for a period of twelve (12) months in substantially equal payments in accordance with Employer’s normal payroll practices measured from the Termination Date, but commencing, subject to the payment timing provisions of Section 10(b), on the 60th day following the Termination Date (the “Payment Commencement Date”), provided that on or before the Payment Commencement Date, Employee shall have executed a general release of employment-related claims in a form reasonably satisfactory to Employer (the “Release”) (the form of such Release shall be provided to Employee by Employer within five (5) days following the Termination Date) and the revocation period applicable to the Release shall have expired; and provided further, that the first payment will include an amount equal to all payments that would have been made between the Termination Date and the Payment Commencement Date if the payments had commenced on the Termination Date.  The amounts paid pursuant to this Section 9(b) shall be reduced by all amounts withheld and deducted pursuant to Section 18.  No benefits, bonuses, PTO, or other forms of compensation, except for the severance payments and accrued PTO described in this Section 9(b), will be paid to Employee or accrued for the severance payment period.  Payments under this Section 9(b) shall immediately cease if at any time during which such payments are being made Employee violates the provisions of Section 7 or Section 11.  

For purposes of this Agreement, “Good Reason” shall mean: (i) a material breach by Employer of this Agreement; or (ii) a material diminution of Employee’s authority, duties, or responsibilities as in effect immediately after the Effective Date; provided, however that Employee must provide written notice to Employer of the condition described in clause (i) or (ii) above, as applicable, within ninety (90) days of the initial existence of the condition, and Employer shall have a thirty (30) day period following its receipt of Employee’s notice during which it may remedy the condition.

		
	(c)
	Death of Employee.  This Agreement shall be deemed terminated as of the date of Employee’s death.  In the event of Employee’s death, Employer shall pay to employee’s estate Employee’s monthly base salary up to the Termination Date, plus an amount equal to Employee’s accrued, unused PTO, not to exceed 520 hours, paid in a single sum payment on the first regularly scheduled payroll date of Employer following the Termination Date, and Employee (and Employee’s estate) shall not be entitled to any other compensation or benefits under this Agreement.  The amounts paid pursuant to this Section 9(c) shall be reduced by all amounts withheld and deducted pursuant to Section 18.

		
	(d)
	Disability of Employee.   Should Employee be unable to perform his duties under this Agreement by reason of Employee’s inability to perform the essential functions of the position for a period of six (6) months, as determined by the Board in its sole discretion, Employer shall have the right to terminate this Agreement upon written notice to Employee.  During the six (6) month period that Employee fails to perform his duties as a result of his inability to perform the essential functions of the position, Employer will continue to pay Employee Employee’s monthly base salary based on its customary payroll practices, reduced by any disability payments received by Employee from a disability program made available by Employer, and Employee shall be treated as on a bona fide leave of absence.  In the event Employee’s employment under this Agreement is terminated by reason of Employee’s disability pursuant to this Section 9(d), Employer shall pay to Employee his monthly base salary up to the termination Date, plus an amount equal to Employee’s accrued, unused PTO, not to exceed 520 hours paid in a single sum payment on the first regularly scheduled payroll date of Employer following the Termination Date, and Employee shall not be entitled to any other compensation or benefits under this Agreement.  The amounts paid pursuant to this Section 9(d) shall be reduced by all amounts withheld and deducted pursuant to Section 18.  

		
	(e)
	Early Termination by Employee.  In the event Employee terminates his employment prior to the end of the Term, other than for Good Reason, death or disability, Employer shall pay to Employee shall his monthly base salary up to the Termination Date, plus an amount equal to Employee’s unused, accrued PTO, not to exceed 520 hours paid in a single sum payment on the first regularly scheduled payroll date of Employer following the Termination Date, and Employee shall not be entitled to any other compensation or benefits under this Agreement.  The amounts paid pursuant to this Section 9(e) shall be reduced by all amounts withheld and deducted pursuant to Section 18. 

		
	(f)
	Non-renewal of Agreement by Employer.  If Employer elects not to renew employment under this Agreement pursuant to the terms of Section 8, Employee, unless otherwise requested by Employer, shall continue to render services, and Employer shall pay to Employee his monthly base salary up to the Termination Date, plus an amount equal to Employee’s unused, accrued PTO, not to exceed 520 hours paid in a single sum payment on the first regularly scheduled payroll date of Employer following the Termination Date.  Employee shall also be paid any incentive bonus awarded pursuant to Section 3(b) that he would have been entitled to receive if he was employed by Employer through the date such incentive bonus would have been paid.  In addition, Employer shall pay to Employee an amount equal to his monthly base salary for a period of six (6) months as severance pay following the Termination Date, payable for a period of twelve (12) months in substantially equal payments in accordance with Employer’s normal payroll practices measured from the Termination Date, but commencing, subject to the payment timing provisions of Section 10(b), on the Payment Commencement Date, provided that on or before the Payment Commencement Date, Employee shall have executed a Release (the form of such Release shall be provided to Employee by Employer within five (5) days following the Termination Date) and the revocation period applicable to the Release shall have expired; and provided further, that the first payment will include an amount equal to all payments that would have been made between the Termination Date and the Payment Commencement Date if the payments had commenced on the Termination Date.  The amounts paid pursuant to this Section 9(f) shall be reduced by all amounts withheld and deducted pursuant to Section 18.  No benefits, bonuses, PTO, or other forms of compensation, except for the severance payments and accrued PTO described in this Section 9(f), will be paid to Employee or accrued for the severance payment period.  Payments under this Section 9(f) shall immediately cease if at any time during which such payments are being made Employee violates the provisions of Section 7 or Section 11. If Employer offers to continue Employee’s employment on a non-contractual basis following the Employer’s non-renewal of this Agreement and Employee elects to continue his employment on that basis, Employee will not be entitled to the severance pay referred to in this Section 9.f. 

		
	(g)
	Non-renewal of Agreement by Employee.  If Employee elects not to renew employment under this Agreement pursuant to the terms of Section 8, Employee, unless otherwise requested by Employer, shall continue to render services through the last day of the then current term of the Agreement, and Employer shall pay to Employee his monthly base salary up to the Termination Date, plus an amount equal to Employee’s unused, accrued PTO, not to exceed 520 hours paid in a single sum payment on the first regularly scheduled payroll date of Employer following the Termination Date.  

Section 10.  Section 409A.

		
	(a)
	Separation from Service.  Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Employee under this Agreement in connection with a termination of Employee’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in no event shall a termination of employment be considered to have occurred under this Agreement for purposes of the time of payment of such amounts unless such termination constitutes Employee’s “separation from service” with Employer as such term is defined in Treasury Regulation Section 1.409A-1(h), and any successor provision thereto (“Separation from Service”).

		
	(b)
	Section 409A Compliance; Payment Delays.  Notwithstanding anything contained in this Agreement to the Contrary, to the maximum extent permitted by applicable law, the severance payments payable to Employee pursuant to Section 9 shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay plans) and/or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-term deferrals).  However, to the extent any such payments are treated as “non-qualified deferred compensation” subject to Section 409A of the Code, and if Employee is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Employee is entitled under this Agreement is required in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of the Code, such portion of Employee’s termination benefits shall not be provided to Employee prior to the earlier of (i) the expiration of the six-month period measured from the date of Employee’s Separation from Service or (ii) the date of Employee’s death.  Upon the earlier of such dates, all payments deferred pursuant to this Section 10(b) shall be paid in a lump sum to Employee.  The determination of whether Employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall made by Employer in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including, without limitation, the default provisions Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

		
	(c)
	Construction and Interpretation; Separate Payments.  This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (i) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (ii) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties.  Notwithstanding the foregoing, no particular tax result for Employee with respect to any income recognized by Employee in connection with this Agreement is guaranteed and in no event shall Employer be required to provide a tax gross-up payment to Employee or otherwise reimburse Employee with respect to any Section 409A Penalties.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Employee may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.  

		
	(d)
	In-kind Benefits and Reimbursements.  Notwithstanding anything to the contrary in this Agreement or in any Employer policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Employee shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Employee and are not subject to liquidation or exchange for another benefit.  Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Employee and, if timely submitted, reimbursement payments shall be made to Employee as soon as administratively practicable following such submission in accordance with Employer’s policies regarding reimbursements, but in no event later than the last day of Employee’s taxable year following the taxable year in which the expense was incurred.  This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Employee.  

Section 11.  Post Employment Non-Compete.  As a material inducement for receiving the trade secrets and confidential and proprietary information described in Section 7 and other good and valuable consideration, Employee agrees that during the term of his employment and for a period of twelve (12) months after the termination of Employee’s employment with Employer, for whatever reason:
		
	(a)
	Employee shall not, directly or indirectly, without written approval of the Chair of the Audit Committee, solicit or induce, or attempt to solicit or induce, any employee of Employer or other person providing services to Employer to alter, leave or cease his employment or other service relationship with Employer, for any reason whatsoever;

		
	(b)
	In an executive, financial, sales, or operational capacity, Employee shall not, directly or indirectly, without written approval of the Chair of the Audit Committee, accept employment from or provide competitive services or assistance to any current customer of Employer with whom Employee has had any contact during his employment with Employer; and

		
	(c)
	Employee shall not solicit or attempt to solicit Employer’s current customers (defined as all customers of Employer within the 12 months preceding Employee’s termination of employment) with respect to which 

Employee had confidential information or with whom Employee had any contact during his employment with Employer to purchase services or products that are competitive with those marketed, offered for sale and/or under any stage of development by Employer as of the date of Employee’s termination of employment with Employer.
Notwithstanding the foregoing provisions, Employer shall not unreasonably restrict Employee’s ability to serve on boards of directors of other companies.

		
	Section 12.  
	Indemnity.  Employer shall indemnify Employee and hold Employee harmless for any acts or decisions made by Employee in good faith and that were reasonably believed to be in the best interest of Employer while performing services for Employer.  Employer will use its reasonable best efforts to maintain Director and Officer insurance coverage in the amount of not less than $1,000,000 for Employee under an insurance policy covering the officers and directors of Employer against lawsuits.  Employer shall pay all reasonable expenses, including attorney’s fees, actually and necessarily incurred by Employee in connection with any appeal thereon, including the cost of court settlements.  Notwithstanding the preceding sentence, (i) the obligations of Employer shall be subject to the condition that the Board shall not have determined based on advice from its legal counsel that Employee would not be permitted to be indemnified under applicable law, and (ii) the obligation of Employer to make an expense or fee advance pursuant to this Section 12 shall be subject to the condition that, if, when and to the extent that the Board determines that Employee would not be permitted to be so indemnified under applicable law, Employer shall be entitled to be reimbursed by Employee (who hereby agrees to reimburse Employer) for all such amounts theretofore paid (it being understood and agreed that the foregoing agreement by Employee shall be deemed to satisfy any requirement that Employee provide Employer with an undertaking to repay any advancement of fees or expenses if it is ultimately determined that Employee is not entitled to indemnification under applicable law); provided, however, that if Employee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Employee should be indemnified under applicable law, any determination made by the Board that Employee would not be permitted to be indemnified under applicable law shall not be binding and Employee shall not be required to reimburse Employer for any expense advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed).  This undertaking by Employee to repay such expense advance shall be unsecured and interest-free.

Section 13.  Effect of Partial Invalidity.  The invalidity of any portion of this Agreement shall not affect the validity of any other provision.  In the event that any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall remain in full force and effect.
Section 14.  Entire Agreement.  This Agreement contains the complete agreement between the parties and shall supersede all other agreements, either oral or written, between the parties, including, without limitation, the Prior Agreement.  The parties stipulate that neither of them has made any representations except as are specifically set forth in this Agreement, and each of the parties acknowledges that they have relied on their own judgment in entering into this Agreement.
Section 15.  Successors and Assigns; Survival of Rights and Obligations.  
		
	(a)
	Binding Agreement; Employee’s Personal Agreement.  This Agreement shall be binding upon and inure to the benefit of Employee and Employee’s heirs and legal representatives and Employer and its successors and assigns.  Employee’s rights and obligations under this Agreement are personal and may not be assigned or transferred in whole or in part by Employee (except that his rights may be transferred upon his death by will, trust, or the laws of intestacy).  

		
	(b)
	Employer’s Successor.  Employer will require any successor to all or substantially all of the business and assets of Employer (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place; except that no such assumption and agreement will be required if the successor is bound by operation of law to perform this Agreement.  In this Agreement, “Employer” shall include any successor to Employer’s business and assets that assumes and agrees to perform this Agreement (either by agreement or by operation of law).

		
	(c)
	Survival.  The respective rights and obligations of Employer and Employee under this Agreement (including Sections 7, 9, 10, 11, 12, 15 and 17) shall survive the expiration or termination of the Term to the extent necessary to give full effect to those rights and obligations.

Section 16.  Notices.  All notices, requests, demands, and other communications shall be in writing and shall be given by registered or certified mail, postage prepaid, to the addresses shown on the first page of this Agreement, or to such subsequent addresses as the parties shall so designate in writing.
Section 17.  Dispute Resolution.  
		
	(a)
	Arbitration.  The exclusive remedy or method of resolving all disputes or questions arising out of or relating to this Agreement (including its expiration or termination) or the expiration or termination of Employee’s employment hereunder (“Disputes”) shall be arbitration held in Dallas, Texas.  Nevertheless, although disputes or questions arising out of or relating to Sections 6, 7 and 11 shall be subject to arbitration, Employer shall not be precluded from also seeking and obtaining injunctive relief from any court of proper jurisdiction to enforce 

or protect its rights under Sections 6, 7 and 11. Any arbitration may be requested or initiated by a party to the Dispute by written notice to the other party or parties to the Dispute specifying the subject of the requested arbitration and preparing the name of an arbitrator (“Arbitration Notice”).  
		
	(b)
	Arbitrators.  Arbitration shall be before a single arbitrator agreed upon by Employer and Employee (collectively, the “Parties”).  If the Parties are unable to agree upon the selection of an arbitrator, then the Parties shall request that the American Arbitration Association in Dallas, Texas appoint an arbitrator.

		
	(c)
	Award and Costs.  The arbitration proceeding shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association.  The costs of arbitration (exclusive of the expense of a party to the Dispute in obtaining and presenting evidence and attending the arbitration and of the fees and expenses of legal counsel to a party to the dispute, all of which shall be borne by that party to the Dispute) shall be borne by Employer if Employee receives substantially the relief sought by him in the arbitration, whether by settlement, award, or judgment; otherwise, the costs shall be borne one-half by Employer and one-half by Employee.  The arbitration determination or award shall be final and conclusive on the parties to the Dispute, and judgment upon such award may be entered and enforced in any court of competent jurisdiction.

Section 18.  Tax Withholding.  Employer shall be entitled to deduct and withhold from payments made under this Agreement all amounts required to satisfy its withholding obligations with respect to income, employment and any other applicable taxes.  
Section 19.  Limitation on Payments.  Notwithstanding anything in this Agreement to the contrary, if the total of the payments and benefits under this Agreement, together with any other payments or benefits received by Employee from Employer, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Code (the “Parachute Payment Amount”), then such payments under this Agreement shall be reduced so that the total amount thereof is $1 less than the Parachute Payment Amount.
Section 20.  Attorney’s Fees.  If any arbitration proceeding or any action for injunctive or declaratory relief is brought to enforce or interpret the provisions of this Agreement, attorney’s fees shall be borne by Employer if Employee is the prevailing party (or receives substantially the relief sought by Employee), otherwise each party will be responsible for its own attorney’s fees.
Section 21.  Additional Obligations.  During and after the Term, Employee shall, upon reasonable notice from Employer, furnish Employer with such information as may be in Employee’s possession, and cooperate with Employer as may reasonably be requested by Employer, in connection with any legal or governmental proceedings in which Employer or any of its affiliates is or may become a party.  Employer shall reimburse Employee for his reasonable expenses in fulfilling his obligations under this Section 21 promptly, but in no event later than the last day of the calendar year following the calendar year in which Employee incurs the expense.
Section 22.  Amendment.  Any modification, amendment or change of this Agreement will be effective only if it is in a writing signed by both parties.
Section 23.  Governing Law; Interpretation.  This Agreement, and all transactions contemplated by this Agreement, shall be governed by, construed, and enforced in accordance with the laws of the State of Texas.  This Agreement shall be construed and interpreted by the Board and such determination shall be final, binding and conclusive on all parties.
Section 24.  Interpretive Matters.  Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa.  The terms “include” and “including” do not denote or imply any limitation.  The captions and headings used in this Agreement are inserted for convenience of the parties and shall not be deemed a part of this Agreement for construction or interpretation purposes.

IN WITNESS WHEREOF, the parties have executed this Agreement on this 30th day of December, 2014.

EMPLOYEE:                        EMPLOYER:

RBC LIFE SCIENCES, INC.

/s/ Steven E. Brown                    By: /s/ Daley L. Seeker
Steven E. Brown                               Daley L. Seeker
 Chief Financial Officer and Vice
 President-Finance

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