Exhibit 10.

71
LOAN AGREEMENT
THIS LOAN AGREEMENT (as amended, modified or supplemented from time to time,
“Agreement”), dated as of the day of August, 2012, by and between (i) LENDER(the
“Lender”), and (ii) BORROWER, a Virginia limited liability company (the “Borrower”), recites
and provides:

RECITALS:
R-1. The Borrower has acquired a certain development site consisting of approximately 9.71
acres located at 6000 New Hampshire Avenue, N.E., Washington, D.C., as more particularly
described on Exhibit A attached hereto (the “Property”), on which the Borrower intends to
develop a total of at least 110 housing units (and possibly 111 if the internal lots of the Property
can be reconfigured to accommodate an additional lot in Phase II) in two phases, the first phase
of which (“Phase I”) will consist of 18 single family housing lots (singularly, a “Single Family
Lot” and if referring to more than one, the “Single Family Lots”) and 38 townhouse lots
(singularly a Townhouse Lot” and if referring to more than one, the “Townhouse Lots”), and the
second phase of which (“Phase II”) will consist of 19 Single Family Lots and 35 Townhouse
Lots which may include, in Phase II, three (3) Townhouse Lots with improvements intended to
qualify as affordable dwelling units (“ADU”). The delineation of Phase I and Phase II are as
shown on the marked Site Plan attached hereto as Exhibit A-1.
R-2. Subject to the terms of this Agreement, the Lender agrees to make a revolving development
loan (the “Development Loan”) to the Borrower, as more particularly described in Section 1.1
below, for the purpose of financing (i) the Development (as hereinafter defined) of Phase I and
(ii) subject to the Borrower meeting certain Phase I sales conditions as more particularly set forth
below, the Development of Phase II.
R-3. Subject to the terms of this Agreement, the Lender also agrees to make a revolving
construction loan (the “Construction Loan”) to the Borrower, as more particularly described in
Section Two below, for the purpose of financing the construction, at any one time, of up to six
(6) Single Family Lots (“Single Family Units”) and up to twelve (12) Townhouse Lots
(“Townhouse Units”) (Single Family Units and Townhouse Units, collectively, “Units” or if
referred to individually, a “Unit”).
R-4. The Lender and the Borrower agree that the Development Loan and the Construction Loan
(together, the “Loans”) will be made and advanced upon and subject to the terms, covenants and
conditions set forth in this Agreement.

AGREEMENT
ACCORDINGLY, for and in consideration of the foregoing Recitals which are a material part of
this Agreement and not mere prefatory language, and of the mutual covenants and conditions set
forth in this Agreement, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Lender and the Borrower agree as follows:
SECTION ONE
THE DEVELOPMENT LOAN
1.1 Amount. The maximum principal amount that may be advanced under the Development
Loan shall not exceed the lesser of (i) Ten Million Four Hundred Thousand and No/100 Dollars
($10,400,000.00), or (ii) seventy-five percent (75%) of total Development costs of Phase I and
Phase II, or (iii) fifty-two percent (52%) of the discounted (“When Developed”) value of the
Property pursuant to the Appraisal (hereinafter defined) and any
appraisals which may be engaged by the Lender from time to time subsequent to the date hereof.
The maximum principal amount that may be outstanding at any one time under the Development
Loan shall not exceed (i) for Phase I, Six Million and No/100 Dollars ($6,000,000.00) and for
Phase II, Four Million Four Hundred Thousand and No/100 Dollars ($4,400,000.00). The
Development Loan will be evidenced by a Revolving Development Loan Promissory Note made
by the Borrower payable to the order of the Lender (as the same may be amended, renewed,
restated, supplemented or substituted from time to time, the “Development Loan Note”) which
shall be governed by Maryland law.
1.2 Purpose. The Borrower will use the Development Loan proceeds for Development of Phase I
and Phase II in accordance with a budget therefor which shall have been approved by the Lender
in advance and in accordance with plans and specifications to be submitted to and approved by
the Lender, and with advances to be made as the work progresses, all as set forth in this
Agreement. For purposes of this Agreement, the term “Development” shall mean, generally,
(a) lot clearing and rough grading; (b) provision of storm drainage structures and facilities,
sediment control devices, base paving of streets, curbs and gutters; (c) providing sewer and water
distribution systems and erecting temporary street signs; (d) provision of underground electric
and gas utility lines, cable pedestals and vaults adjacent to Lot lines; (e) other subdivision
improvements as required by governmental authorities in order for use and occupancy permits to
issue; and (f) final site plan and subdivision approvals for each Phase. Certain other costs
normally considered part of development costs shall be deferred and paid for by the Borrower
out of its own funds, including by way of example and not limitation, final paving of streets, site
amenities, landscaping and erosion control (the “Deferred Development Costs”).
1.3 Conditions to Advances for Phase II. In addition to the other terms and conditions for making
advances of loan proceeds under this Agreement, until thirty-seven (37) Units in Phase I have
been completed and sold to third-party purchasers, and the release fees set forth in Section 3.8
have been paid to the Lender for each of those thirty-seven Units, and as a result thereof the
outstanding principal balance of the Development Loan has been reduced to zero (the foregoing,
the “Phase II Advance Conditions”), the Lender shall only be obligated to advance proceeds of
the Development Loan for Development of Phase I. After the Borrower has met all of the Phase
II Advance Conditions, then the Borrower thereafter may use the Development Loan proceeds
for Development of Phase II. The maximum amount that may be advanced for Development of
Phase I is Six Million and No/100 Dollars ($6,000,000.00), and the maximum amount that may
be advanced and/or re-advanced for Development of Phase II is Four Million Four Hundred
Thousand and No/100 Dollars ($4,400,000.00).
1.4 Development Loan Interest Reserve. From the proceeds of the Development Loan, Eight
Hundred Thousand and No/100 Dollars ($800,000.00) shall not be disbursed but shall be
reserved by the Lender for the payment of interest on the Development Loan (the “Interest
Reserve”) until such reserve is exhausted. Of the foregoing amount, Four Hundred Thousand and
No/100 Dollars ($400,000.00) is allocated to Phase I and the balance is allocated to Phase II.
Notwithstanding the foregoing or any provision of the Loan Documents to the contrary, the
Lender shall not be obligated to make any disbursements from the Interest Reserve if any Event
of Default shall have occurred (including without limitation any failure to meet the Sales and
Curtailment Schedule set forth below which failure is not cured by payment of the amount
necessary to satisfy the curtailment component thereof), and further, notwithstanding the
foregoing or any provision of any of the Loan Documents to the contrary, nothing contained
herein shall be deemed to release or in any way to relieve the Borrower from its obligation under
the Development Loan Note to pay interest as provided in the Development Loan Note. Each
disbursement from the Interest Reserve shall constitute a disbursement of principal of the
Development Loan and shall be added to the then outstanding principal balance of the
Development Loan.
1.5 Fees. The Borrower shall pay to the Lender a fee for the Development Loan in the amount of
One Hundred Four Thousand and No/100 Dollars ($104,000.00), payable upon closing of the
Loans. The Lender acknowledges receipt from the Borrower of Twenty-Five Thousand and
No/100 Dollars ($25,000.00), for application to the Lender’s third-party costs incurred in
connection with the Loans (including without limitation fees of appraisers, consultants and legal
counsel), any unused balance of which may be applied to the foregoing Development Loan fee.
SECTION TWO
THE CONSTRUCTION LOAN
2.1 Amount. The maximum principal amount that may be advanced under the Construction Loan
shall not exceed Four Million and No/100 Dollars ($4,000,000.00). The Construction Loan will
be evidenced by a Revolving Construction Loan Promissory Note made by the Borrower payable
to the order of the Lender (as the same may be amended, renewed, restated, supplemented or
substituted from time to time, the “Construction Loan Note”) which shall be governed by
Maryland law.
2.2 Purpose. The Borrower will use the Construction Loan proceeds for the purpose of building
(the “Construction”) Single Family Units and Townhouse Units in accordance with a budget
therefor which shall have been approved by the Lender in advance and in accordance with plans
and specifications to be submitted to and approved by the Lender, and with advances to be made
as the work progresses, all as set forth in this Agreement. The overall Construction budget shall
include and be consistent with the total costs per type of Unit that are to be set forth on Exhibit B
(the “Unit Costs Budget”), which shall be agreed by the parties and attached hereto prior to and
as a condition of the first advance of Construction Loan proceeds.
2.3 LTV Limitation. In addition to the limitation set forth in Section 2.1 above, the maximum
amount that may be disbursed under the Construction Loan per Unit shall be limited to seventy-
five percent (75%) of the loan-to-value ratio of each Unit based upon appraised value of each
Unit type and the Lot thereon pursuant to an appraisal of the “as complete” value of each Unit
type satisfactory to the Lender in all respects. For purposes of this Section 2.3, the loan-to-value
ratio of each Unit shall be calculated, expressed as a fraction, the numerator of which shall be
$107,145.00 (being the amount allocated per Lot from the Development Loan) plus the budgeted
cost for that type of Unit set forth in the Unit Costs Budget, and the denominator of which shall
be the appraised value thereof. The numerator of the aforesaid fraction shall be divided by the
denominator thereof in order to result in the loan-to-value being expressed as a percentage.
2.4 Construction Limitation. At no time shall the Borrower be permitted to have under
Construction more than (A) up to six (6) Single Family Units, of which at least three (3) must be
subject to sales contracts acceptable to the Lender, one (1) may be speculative and two (2) may
be model homes, and (B) up to twelve (12) Townhouse Units, of which at least five (5) must be
subject to sales contracts acceptable to the Lender, five (5) may be speculative and two (2) may
be model homes. Upon completion and sale of any one or more of the foregoing types of Units
from time to time, and payment of the Release Payment set forth in Section 3.8 below, funds
repaid pursuant to Section 3.8 below may be readvanced under the Construction Loan subject to
the foregoing limitation on the number and type of Units that may be under Construction at any
one time, which shall again apply.
2.5 No Interest Reserve. The Borrower shall be obligated to pay interest as provided in the
Construction Loan Note.
2.6 Fees. The Borrower shall pay to the Lender a fee for the Construction Loan in the amount of
$1,350.00 for each Single Family Unit and $1,025.00 for each Townhouse Unit. The fee will be
payable with the first advance of Construction Loan proceeds for each Unit.

SECTION THREE
PARTICULAR TERMS OF BOTH LOANS
3.1 Guarantor. Comstock Homebuilding Companies, Inc. (the “Guarantor”) shall guarantee the
payment and performance of the Borrower’s obligations, covenants and agreements under the
Loans, as evidenced by the Loan Documents, including completion of each Phase, and shall also
guarantee the Carve Out Obligations (defined on Exhibit C attached hereto), which guaranty
shall be evidenced by an instrument of unlimited and unconditional guaranty of payment,
performance and completion from the Guarantor for the benefit of the Lender, in form and
substance satisfactory to the Lender (the “Guaranty”).
3.2 Term. Each of the Development Loan Note and the Construction Loan Note (collectively, the
“Notes”) shall mature upon the earlier of (i) thirty-six (36) months after the date of closing on the
Loan or (ii) the occurrence of a Transfer (as defined in Section 7.15 hereof) (the “Maturity”). It
is acknowledged and agreed that notwithstanding any provisions herein, the Borrower has not
applied for, nor has the Lender made any commitment with respect to, any extension of such
Maturity. Upon any application for an extension, any approval of an extension on any terms
would be contingent upon the usual and customary underwriting procedures of EagleBank,
including without limitation, the approval of the loan committee of EagleBank.
3.3 Interest Rate. Commencing on the closing of the Loans, the unpaid balance of each of the
Notes outstanding from time to time shall bear interest and be payable at the floating rate per
annum equal to three percent (3%) above the thirty (30) day LIBOR Rate (hereinafter defined),
rounded upwards, if necessary, to the nearest one-eighth of one percent (0.125%). The LIBOR
rate means, for each calendar month, the annualized weighted average of the 30-day London
Interbank Offered Rates (at approximately 11:00 a.m. London time) for U.S. Dollar transactions
on the day that is two (2) business days prior to the first day of that calendar month, as reported
by Bloomberg Business News; if Bloomberg Business News is not available, the Lender shall
select a similar source for the LIBOR index and shall notify the Borrower of such selection.
Notwithstanding the above, in no event shall either of the Notes bear interest at a rate below the
floor interest rate of five and three-quarters percent (5.75%) per annum at any time (the “Interest
Rate Floor”).
3.4 Collateral. The Loans shall be secured by, among other things, the following:
(i) A first lien deed of trust, security agreement and fixture filing (as the same may be
amended, restated, supplemented or substituted, the “Deed of Trust”) on the
Property;
(ii) An assignment of Leases and Rents on the Property (as the same may be amended,
restated, supplemented or substituted, the “Leases Assignment”);
(iii) An assignment of sales contracts and deposits with respect to the Property (the
“Contracts Assignment”);
(iv) Assignments of all Development and Construction documents including, without
limitation, plans and specifications, permits, architect’s contracts, engineering
contracts, Development contracts, and Construction contracts (the “Documents
Assignment”);
(v) Consents to Assignment executed by each of the general contractor, architect and
project engineer for each of the Development and the Construction (the
“Consents”);
(vi) An Environmental Indemnity Agreement made by the Borrower and the Guarantor
for the benefit of the Lender (as the same may be amended, restated, supplemented
or substituted, the “Environmental Indemnity”);
(vii) Such UCC-1 Financing Statements as the Lender may determine to be necessary or
desirable.
3.5 Equity Requirement. As a condition of the Loans, as of the closing of the Loans the Borrower
shall have made an equity investment in the Property in an amount not less than Seven Million
Eight Hundred Eighty-Nine Thousand One Hundred Twenty and No/100 Dollars
($7,889,120.00), and shall have provided reasonable evidence of such investment to the Lender.
The components of such equity investment are:
Property Acquisition Price: $ 4,900,000.00
PUD Approval Costs 1,490,000.00
Deferred Development Fee 500,000.00
Deferred Development Costs 999,120.00
3.6 Deposit Relationship. As a condition of the Loans, the Borrower shall establish its primary
operating account with the Lender and shall maintain such account with the Lender throughout
the term of the Loan. In addition, the Borrower and/or Guarantor and/or any related entities shall
maintain a minimum monthly average
aggregate deposit balance with the Lender of ten percent (10%) of the aggregate outstanding
principal balance of the Loans, tested semi-annually, with the first test period being October 31,
2012 to March 31, 2013. Such deposits shall be held in demand deposits or money market
accounts. If at any time under any of the Loan Documents the Lender is collecting deposits for
the payment of insurance premiums and/or real estate taxes, the amount(s) on deposit, to the
extent unapplied as of the date of any such semi-annual test, shall be counted toward the
foregoing deposit balance requirements. The foregoing deposit balance requirement is in addition
to any deposit balance requirement under the terms of the loan documents for any other loan or
loans by the Lender to the Borrower, the Guarantor or any affiliate(s) of the Borrower or the
Guarantor. The failure to comply with the foregoing deposit balance requirements shall not
constitute a default under the Loans; however, interest shall accrue on all amounts outstanding
under the Loans at one-quarter of one percent (0.25%) plus the rate of interest then payable
under the Notes (and the Interest Rate Floor shall also increase by one-quarter of one percent
(0.25%)) from the date of such failure until such time as the deposit balance requirement is
satisfied at the next semi-annual test.
3.7. Lot Sales Requirement. (a) As a condition of the Loans, the Borrower shall diligently pursue
Development of the Lots and Construction and sale of the Units thereon. In addition, the
Borrower (i) shall enter into and close under sales contracts to third parties on the following
number of Lots with completed Units thereon, (ii) resulting in the cumulative curtailments of the
Development Loan set forth below, (iii) by each Milestone Date set forth below (the “Sales and
Curtailment Requirement”):
Number of
Lots Cumulative Curtailmen Lots Remaining a
(Cumulative ts s
) of Development Loan Collateral Milestone Date
Phase I: 20 December 31,
$ 3,220,000.00 Phase I : 36 2013
Phase I: 38 $ 6,118,000.00 Phase I : 18 March 31, 2014
Phases I and
II: 46 $ 7,098,000.00 Phase II: 64 June 30, 2014
Phases I and December 31, 201
II: 59 $ 8,690,500.00 Phase II: 51 4
Phases I and
II: 73 $ 10,405,500 Phase II: 37 June 30, 2015
(b) Such sales contracts shall be acceptable to the Lender in all respects, provided that the Lender
shall not unreasonably withhold its approval of any sales contract for a Lot with a completed
Unit that will result in a payment against principal under the Development Loan from sales
proceeds of at least One Hundred Sixty-One Thousand and No/100 Dollars ($161,000.00) per
Unit for Phase I and at least One Hundred Twenty-Two Thousand Five Hundred and No/100
Dollars ($122,500.00) per Unit for Phase II.
(c) Failure of the Borrower to comply with the Sales and Curtailment Requirement shall, at the
Lender’s option, constitute an Event of Default under the Loan Documents; provided, however,
that the Lender agrees that it will not elect to call an Event of Default if the Borrower pays to the
Lender, by the applicable Milestone Date, the amount necessary for the required Cumulative
Curtailment of the Development Loan, as set forth in the foregoing chart on the same line as for
that Milestone Date, to be satisfied as of that Milestone Date (the “Substitute Curtailment
Payment”). Payment of the Substitute Curtailment Payment shall not, however, entitle the
Borrower to the release of any Lots from the lien of the Deed of Trust. No Lots or Units shall be
released except pursuant to settlement on a bona fide sale to a third party pursuant to Section 3.8
below.
(d) The Borrower shall provide to the Lender marketing and sales reports on a monthly basis
setting forth the status of marketing, sales contracts and closings or settlements in such detail as
the Lender may reasonably require.
3.8 Release Provisions. The Deed of Trust shall contain the following provision for release of
Lots and/or Units from the lien thereof:
“Provided that the Grantor requests the release of one of the Lots with a completed Unit thereon
from the lien of this Deed of Trust prior to the repayment in full of the Loans, and provided that
the sales contract with
respect to such Lot and/or Unit is in the form approved by the Beneficiary and at a minimum
price set forth in the Loan Agreement, or if not set forth then otherwise satisfactory to the
Beneficiary in its discretion, then the Beneficiary agrees to release the lien of this Deed of Trust
with respect to any one of the Lots and/or Units, upon Grantor’s written request, upon the
following terms and conditions:
(a) With respect to any Lot and completed Unit thereon in Phase I, payment of a Release
Payment for each Lot and Unit to be released equal to the greater of:
(i) $190,000.00 per Single Family Unit or $150,000.00 per Townhouse Unit plus one hundred
percent (100%) of the total hard and soft costs advanced from the Construction Loan for
Construction of the Unit, or
(ii) one hundred percent (100%) of the Net Settlement Proceeds (hereinafter defined), or
(iii) ninety percent (90%) of the sales price under the sales contract being settled.
The Release Payment will be applied by the Lender first to the costs advanced from the
Construction Loan for Construction of the Unit and the remainder will be applied to the
outstanding principal balance of the Development Loan. “Net Settlement Proceeds” means the
gross sales price of the Lot less customary and usual settlement charges and real estate
commissions approved by the Beneficiary, without payment of any sums to the Grantor or any
affiliated person or entity of the Grantor;
(b) With respect to any Lot and completed Unit thereon in Phase II, payment of a Release
Payment for each Lot and Unit to be released equal to the greater of:
(i) $122,500 per Unit plus one hundred percent (100%) of the total hard and soft costs advanced
from the Construction Loan for Construction of the Unit, or
(ii) one hundred percent (100%) of the Net Settlement Proceeds, or
(iii) ninety percent (90%) of the sales price under the sales contract being settled.
The Release Payment will be applied by the Lender first to the costs advanced from the
Construction Loan for Construction of the Unit and the remainder will be applied to the
outstanding principal balance under the Development Loan;
(c) No Event of Default shall then exist and be continuing;
(d) The Grantor pays all fees, costs, charges and expenses (including without limitation
reasonable attorneys’ fees) relating to the preparation, execution and recordation of any
document required in connection with any such partial release; and
(e) The Grantor pays a fee in the amount of One Hundred and No/100 Dollars ($100.00) for
processing the request for release (“Processing Fee”); provided, however, that the
Processing Fee will be waived in the event the purchaser under the sales contract
 acquires the Lot and/or Unit using Lenderas its mortgage lender for the purchase money
of the Lot and/or Unit.
Notwithstanding the foregoing, no release price shall be payable for the release of streets or
roadways, or storm water maintenance or other public facilities, that are to be dedicated to the
District of Columbia for public maintenance, provided the same are in accordance with a site
plan that shall have been approved by the Beneficiary.”
3.9 Intercreditor Agreement. It is understood that, contemporaneously herewith, the Borrower
has borrowed Three Million and No/100 Dollars ($3,000,000.00) (the “Subordinate Loan”) from
Rosalie K. Stahl Trust (“Subordinated Lender”). As a condition of closing the Loan,
Subordinated Lender shall enter into a Subordination and Standstill Agreement with the Lender,
in form and substance satisfactory to the Lender in all respects, pursuant to which Subordinated
Lender shall subordinate all of its rights in and to the Subordinate Loan to the Lender’s rights,
remedies and security under the Loan Documents.
3.10 Environmental Matters. It is understood that the Property contains fill material at varying
depths, the source of which is unknown, as the same is described in that certain Phase II
Environmental Evaluation (the “Phase II Report”) dated July 16, 2012 prepared by Geo-
Technology Associates, Inc. (the “Phase II Engineer”). The Borrower shall comply with all
recommendations contained in the Phase II Report and any supplemental recommendations of
the Phase II Engineer or of any environmental engineer retained by the Lender with respect to
testing, placement and/or removal of fill material from the Property. The Lender shall have the
right to retain environmental engineers and/or consultants from time to time for purposes of
testing and recommendations with respect to the fill material and its placement and/or removal
and disposal off-site, and the Borrower shall comply with any additional recommendations or
requirements with respect thereto (“Additional Recommendations”). The Borrower shall keep
appropriate records of the means and location of disposal of the fill material. It will be a
condition of disbursements of the Development Loan that the Phase II Engineer and any other
environmental engineer and/or consultant certify to the Lender that the Borrower has complied
with the recommendations contained in the Phase II Report and any such other Additional
Recommendations.
3.11 Home Owners Association. In the event the Borrower intends to establish a home owners
association for either or both of Phase I and/or Phase II, the organizational and governing
documents, and all rules and regulations related thereto, shall be subject to the Lender’s prior
written approval.

SECTION FOUR
PAYMENTS, COMPUTATIONS, FEES, CHARGES AND PROTECTIVE ADVANCES
4.1 Payments. All payments due with respect to this Agreement or the Loans shall be made in
immediately available funds to the Lender at such place as designated by the Lender from time to
time. The Lender is authorized, but shall be under no obligation, to charge any deposit account
maintained by the Borrower with the Lender or any affiliate of the Lender for any payments due
to the Lender with respect to this Agreement or the Loans. Payments shall be applied, at
Lender’s sole discretion: (i) first, to payment of accrued and unpaid interest, if any; (ii) second,
to payment of any principal then due, if any; (iii) third, to late charges, if any; (iv) fourth, to
reasonable attorneys’ fees and costs of collection; and (v) fifth, to reduce the outstanding
principal balance of the Note until such principal shall have been fully repaid. All payments
hereunder shall be made without offset, demand counterclaim, deduction, abatement, defense, or
recoupment, each of which the Borrower hereby waives.
4.2 Late Charges. If any payment due under either of the Notes is not made within ten (10) days
of its due date, the Borrower shall pay to the Lender upon demand (which may be in the form of
the usual monthly billing or invoice) a late charge equal to five percent (5%) of the amount of
such payment.
4.3. Default Rate. After an Event of Default (hereinafter defined), the interest which accrues on
the Notes shall be increased to the Default Rate (as defined in the Notes).
4.4 Computations. Interest and fees on the Loans shall be computed on the basis of a year of
three hundred sixty (360) days and actual days elapsed.
4.5 Prepayment. The Borrower may prepay either or both of the Notes in whole or in part
without premium or penalty at any time upon ten (10) days prior written notice to the Lender.
Partial prepayments shall be applied to installments of principal in their inverse order of
maturity, if applicable. Amounts prepaid under the Notes may be re-borrowed in accordance
with the terms and conditions of this Agreement.
4.6 Indebtedness. As used in this Agreement, the term “Indebtedness” means all present and
future indebtedness of the Borrower to the Lender arising out of or in connection with the Notes
or any of the other Loan Documents.
SECTION FIVE
CONDITIONS
5.1 Conditions Precedent to Closing. In addition to any other conditions stated in this
Agreement, the following conditions must be satisfied prior to Lender closing on the Loan.
(a) Loan Documents. Receipt by Lender of appropriately completed and duly executed originals
of this Agreement, the Notes, the Guaranty, the Deed of Trust, the Leases Assignment, the
Account Assignment, the Contracts Assignment, the Documents Assignment, the Consents, the
Environmental Indemnity and UCC-1 Financing Statements, all as Lender may require
(collectively, together with any other documents executed and delivered in connection with the
Indebtedness, the “Loan Documents”).
(b) Organizational Documents. The Borrower and each entity comprising the Borrower shall
supply to the Lender: (i) a currently certified copy of its Articles of Organization and all
amendments thereto; (ii) evidence satisfactory to the Lender and its counsel that it is in good
standing in the jurisdiction where organized and qualified to do business in every jurisdiction in
which the nature of its businesses or its properties makes such qualification necessary;
(iii) resolutions authorizing the due execution and delivery of the Loan Documents to which it is
a party; and (iv) certified copies of its Operating Agreement and all amendments thereto. The
Articles of Organization and the Operating Agreement of Borrower and each entity comprising
the Borrower shall not be amended, changed or modified in any respect without prior written
consent of the Lender. In addition, the Guarantor shall supply, to the extent it has not previously
done so in any prior transaction with the Lender: (i) a currently certified copy of its Articles of
Incorporation and all amendments thereto; (ii) evidence satisfactory to Lender and its counsel
that it is in good standing in the jurisdiction where organized and qualified to do business in
every jurisdiction in which the nature of its businesses or its properties makes such qualification
necessary; (iii) resolutions authorizing the due execution and delivery of the Loan Documents to
which it is a party and a certificate of incumbency; and (iv) certified copies of its By-Laws and
all amendments thereto. The Articles of Incorporation and the Bylaws of the Guarantor shall not
be amended, changed or modified in any respect without the prior written consent of the Lender;
provided, however, that on the condition that the Lender is given thirty (30) days advance written
notice, the Lender hereby consents to the Guarantor’s change in corporate domicile from
Delaware to Virginia and all amendments to its organizational documents as are reasonably
required to effect such change in domicile subsequent to the closing of the Loan; provided
further that UCC-1 financing statements shall be filed in the changed domicile at the cost and
expense of the Borrower.
(c) Opinion. Receipt by the Lender of the opinion(s) of the counsel for Borrower and the
Guarantor, in form and content satisfactory to the Lender, in its sole, but reasonable, discretion.
(d) Insurance. Receipt by the Lender of certificate(s) of insurance to evidence a fully paid policy
or policies of comprehensive public liability insurance naming Lender as an additional insured
thereunder in an amount not less than Two Million and No/100 Dollars ($2,000,000.00) in the
aggregate with not less than One Million and No/100 Dollars ($1,000.000.00) per occurrence; in
any event, the amount of all insurance shall be sufficient to prevent any co-insurance
contribution on any loss, with each policy providing for a thirty (30) day prior written notice of
cancellation, amendment or alteration.
(e) Operating Account. The Borrower shall have established its primary operating account with
the Lender.
(f) Financing Statements. The financing statements necessary to perfect the Lender’s security
interest in the personal property subject to the Deed of Trust, and in any other collateral requiring
the filing of a financing statement for perfection of a lien thereon, shall be duly filed in all
appropriate offices and
jurisdictions, all other financing statements covering any of such personal property shall be
terminated or the Lender shall be reasonably satisfied that such terminations are forthcoming,
and filing and recording receipts evidencing such filings and terminations shall be delivered to
Lender, all in form and substance satisfactory to the Lender.
(g) Property Documents. The Lender shall have received and approved in its sole discretion, the
following:
(1) Appraisals. An appraisal of the Property, prepared by an appraiser acceptable to the Lender,
in form and content acceptable to the Lender, conforming to all regulatory and internal appraisal
guidelines applicable to or established by the Lender, in its sole, absolute, nonreviewable
discretion, reflecting a “when developed” discounted value satisfactory to the Lender (the
“Appraisal”);
(2) Title Insurance. A commitment for title insurance (the “Title Commitment”) insuring the first
priority lien of the Deed of Trust in the aggregate amount of the Notes, containing no exceptions
unacceptable to the Lender, issued in the name of the Lender by a title company acceptable to the
Lender and in an amount equal to the aggregate principal amount of the Notes. The Title
Commitment and the title policy issued pursuant thereto (the “Title Policy”) shall reflect that all
requirements for issuance of the Title Policy have been satisfied, and shall contain such other
endorsements or coverages as the Lender may require.
(3) Survey. A current survey and legal description of the Property satisfactory to the Lender from
a registered land surveyor of the District of Columbia, which survey shall show all easements,
rights of way and other matters of record, shall locate all existing improvements on the Property,
shall contain metes and bounds descriptions of each applicable constituent portion of the
Property acceptable to the Lender and its counsel, shall generally show a state of facts acceptable
to the Lender, and shall contain a surveyor’s certificate satisfactory to the Lender.
(4) Subdivision Plat. Recordation of a subdivision plat which plat shall have been approved by
the Lender and its construction consultant. The Lender acknowledges that it has received and
approved the Subdivision Plat that has been recorded to create 29 subdivided Single Family Lots
in both Phases that have frontage on a public street, which Subdivision Plat has been recorded on
June 25, 2012 in Book 206 at page 117 among the records of the Office of the Surveyor for the
District of Columbia (the “Subdivision Plat”). The Lender’s approval of the Subdivision Plat is
only for purposes of the Development Loan, subject to all of the other terms and conditions for
advances under the Development Loan for each of the Phases, and does not constitute an
approval for purposes of advances under the Construction Loan, the requirements for which are
set forth in Section 5.4 below.
(5) Environmental Audit. See Section 3.10 hereinabove.
(6) Flood Hazard. Evidence that no part of the Property is located in a special flood hazard area.
(7) Public Utilities. Evidence to the effect that sanitary sewer, water, electric, gas, telephone and
other public utilities are available and adequate to serve the Property.
(8) Licenses and Permits. Copies of all licenses and permits in connection with the Property,
including without limitation licenses, permits, proffers and other conditions to final subdivision
and site plan approval for Phase I and thereafter copies of all such items by the applicable
required date for Phase II.
(9) Consultant’s Review. Satisfactory review and analysis by the Lender’s construction
consultant of the Development and Construction plans, documents and budgets.
(10) PUD Order. Receipt and satisfactory review and analysis by the Lender and its counsel of
the Planned Unit Development Order constituting approval of development of the Property and
evidence that the Order remains in full force and effect.
(11) Zoning. Receipt by the Lender of a zoning endorsement to the Title Policy acceptable to the
Lender or such other written evidence as is acceptable to the Lender that the Property is zoned
consistent with the uses contemplated beyond any possibility of appeal and can be developed as
proposed as a matter of right, and to the effect, further, that there are no pending proceedings,
either administrative, legislative or judicial, which would in any manner adversely affect the
status of the zoning with respect to the Property or any part thereof.
(12) Genderson Agreement. Receipt and satisfactory review and analysis by the Lender of the
agreement between the Borrower and/or the Guarantor and/or 6000 New Hampshire Avenue,
LLC and Richard Genderson, with respect to any impact that agreement has on development of
the Property.
(13) Marketing Report. Receipt and satisfactory review and analysis by the Lender of a
marketing report prepared by Noell Consulting.
(h) No Default. No event shall have occurred and be continuing that constitutes an Event of
Default (as defined below).
(i) Representations. All representations and warranties contained in this Agreement shall be true
and correct in every material respect as of the date of closing of the Loans.
(j) Satisfactory Documents. All documents delivered pursuant to this Agreement must be in form
and substance satisfactory to the Lender and its counsel and all legal matters incident to this
Agreement must be satisfactory to Lender’s counsel.
(k) Identification. As required by federal regulation, closing the Loans is contingent upon
satisfactory verification of identity of the signatories and verification that none of the Borrower
or the Guarantor or any signers is restricted from conducting business in the United States.
5.2 Conditions Precedent to Advances of Development Loan. Except for the initial advance at
the closing of the Loans of up to Four Hundred Thousand and No/100 Dollars ($400,000.00) for
closing costs in accordance with the Development Budget (hereinafter defined) as approved by
the Lender, in addition to any other conditions stated in this Agreement, the following conditions
related to the Development must be satisfied prior to any disbursements under the Development
Loan and all of the following matters shall have been approved by the Lender.
(a) Permits. Copies of any and all building and similar permits required in connection with the
Development, together with such evidence as the Lender may require to the effect that all fees
for such permits have been paid. Satisfactory evidence shall be submitted to the Lender that all
governmental approvals necessary
for the Development have been obtained. The Lender shall also receive satisfactory evidence that
all applicable safety, ecological and environmental laws and any other codes or regulations
affecting the Development and/or proposed use of the Property have been complied with.
(b) Plans and Specifications. Two (2) sets of complete copies of the final Plans and
Specifications of the Development, which Plans and Specifications shall be satisfactory to the
Lender in all respects. The Lender’s review of the Plans and Specifications is solely for the
benefit of the Lender, and the Lender’s approval thereof shall not be deemed in any respect to be
a representation or warranty, expressed or implied, that the Development will be sound, have a
value of any particular magnitude or otherwise satisfy a particular standard. Prior to any
advances for hard costs, the Borrower shall furnish the Lender with copies of the District-
approved stamped Plans, together with such evidence as the Lender may require to the effect that
such Plans and Specifications have been approved by all governmental and quasi-governmental
authorities having or claiming jurisdiction, and together with a final Development Budget which
must be satisfactory to the Lender in its discretion.
(c) Trade Payment Breakdown. A breakdown of total development costs, which shall include a
draw schedule (the “Development Budget”) containing reasonable details of amounts anticipated
to be payable for each category of work to be performed and materials to be supplied in
connection with the Development, and a projected schedule for the progress of the Development
in each Phase, all in such form and containing such details as the Lender shall require. Any
change orders shall be subject to the Lender’s prior approval. No hard costs shall be advanced
under the Development Loan until such time as the Development Budget has been approved by
the Lender in its sole discretion. The Borrower may, from time to time, request reallocation of
amounts in the Development Budget based upon such reasonable supporting documentation
justifying such reallocation as may be approved by the Lender; any such reallocation shall be
subject to the Lender’s approval in its sole discretion.
(d) Development Schedule. A projected Schedule (“Development Schedule”) for the progress of
the Development of each Phase and a projection of cash flow for the project, each in such form
and containing such details as the Lender shall require. The Borrower shall be required to
diligently pursue and proceed with the Development in accordance with the Development
Schedule to completion. Development of Phase I must be complete within one (1) year of closing
on the Development Loan. Development of Phase II may commence at such time as (i) the
subdivision plat for Phase II, which shall have been approved by the Lender and its Development
consultant, has been duly recorded, and (ii) the Borrower has completed Construction of and sold
and closed on thirty-seven (37) Units in Phase I and the Release Payment for such thirty-seven
(37) Units has been paid to the Lender (the “Phase II Development Start Date”); provided,
however, that the Phase II Development Start Date shall not occur later than December 31, 2013.
Development of Phase II must be complete within one (1) year of the Phase II Development Start
Date. The Development Schedule shall support completion of each Phase of Development in
accordance with the foregoing. Failure of the Borrower to meet the requirements of the
Development Schedule for completion of Development of Phase I and Phase II, respectively,
shall constitute an Event of Default under this Agreement.
(e) Subdivision Plats. Prior to advances of the Development Loan for Development of either
Phase I or Phase II, a subdivision plant, which shall have been approved by the Lender, for such
Phase shall have been duly recorded.
(f) General Contractor. All contracts for Development of each Phase shall be subject to the
Lender’s approval. Each Development contract shall be assigned to the Lender effective on a
default under any of the Loan Documents. Each Development contractor shall consent to such
assignment and agree, in the event of any
such default, to continue performance of the contract for the Lender, if the Lender so requests.
The Guarantor is hereby approved as the general contractor for Development. Prior to any
advances for Development costs, the Borrower shall furnish the Lender with a copy of the
contractor’s license for that portion of the Development. The Borrower shall also furnish the
Lender with copies of licenses for all major subcontractors.
(g) Architect’s and Engineer’s Certificate. The architect and the engineer for the Development
shall be subject to the Lender’s approval. In addition, the contracts with the architect and the
engineer shall be subject to the Lender’s approval. A certificate from the architect and/or project
engineer will be required to the effect that the Development, if completed in accordance with the
Plans and Specifications, will comply with all federal, state, District and local laws, statutes,
ordinances, codes, regulations, rules or other laws applicable to the Development of the
applicable Phase (“Applicable Laws”). Prior to any advances for Development costs, the
Borrower shall furnish the Lender with a copy of the engineer’s license and the architect’s
license.
(h) Lender’s Development Consultant. The Plans and Specifications, Development Budget,
Development Schedule and any and all other Development documents requested by the Lender
and/or its Development consultant (the “Lender’s Inspector”), shall be subject to approval by the
Lender and the Lender’s Inspector. All draw requests shall be submitted to the Lender and the
Lender’s Inspector for review and approval. The Borrower shall be responsible for payment of
all of the Lender’s Inspector’s fees.
5.3 Provisions Governing Disbursements of Development Loan. Disbursements of the
Development Loan shall be governed by the following provisions:
(a) The Development shall be performed by the Borrower in strict accordance with all applicable
(whether present or future) laws, ordinances, codes, rules, regulations, requirements and orders
of any governmental or regulatory authority having or claiming jurisdiction. The Development
shall be in strict accordance with all applicable use or other restrictions and the provisions of any
prior declarations, covenants, conditions, restrictions and zoning ordinances and regulations.
(b) The Borrower shall have submitted to the Lender and the Lender’s Inspector such
information as may be requested by the Lender or the Lender’s Inspector to verify the
Development costs which are to be incurred in connection with the Development. The Lender
shall not be obligated to authorize disbursement of Development Loan proceeds with respect to
the Development for an amount in excess of the Development costs to be incurred in connection
therewith as verified by the Lender or the Lender’s Inspector pursuant to the provisions of the
preceding sentence. The funding of each draw request is subject to an inspection and approval by
the Lender’s Inspector.
(c) The Development Loan proceeds will be advanced in installments as the Development
progresses in accordance with the terms of this Agreement to finance the Development in
accordance with the Plans and Specifications, but no more often than once monthly, provided
that the Lender is satisfied that the amounts available under the Development Loan will be
sufficient to complete the work and pay or provide for all reasonably anticipated Development
costs through the required Development completion date under the Development Schedule. In
the event the Lender determines that the amounts available under the Development Loan,
together with any additional cash provided by the Borrower to the Lender, if any, is insufficient
to complete the Development in such manner as the Lender may require, the Borrower shall
provide such funds necessary to complete the Development. Except for advances for materials
and supplies to be delivered to the Property, as to which no retainage will be required, advances
of the Development Loan shall be subject to withholding of retainage in the amount of ten
percent (10%) of direct Development costs approved by the Lender or the Lender’s Inspector,
and at the Lender’s discretion of labor and materials brought into the Development and eligible
for payment on a trade payable basis.
(d) Advances of the Development Loan shall be conditioned upon the Lender’s receipt of
(i) written certification by parties approved by the Lender that the work which is the basis of the
requested advance was completed in accordance with the approved Plans and Specifications and
within the cost estimates approved by the Lender (or such adjustments of cost estimates of line
items as shall be required and approved by the Lender, provided that sufficient funds to complete
the Development will be available under such adjusted estimates), to the satisfaction of the
Lender, and (ii) evidence that at that time all necessary certificates required to be obtained from
any board, agency or department (government or otherwise) have been obtained, and (iii) written
certification by the Phase II Engineer and any other environmental engineer or consultant
retained by the Lender that the work which is the basis of the requested advance has been
performed in compliance with the recommendations in the Phase II Report and any Additional
Recommendations. All documents required to be submitted to the Lender as a condition of each
disbursement shall be on standard AIA forms and shall be furnished to the Lender at the
Lender’s address set forth in this Agreement. The Lender shall have at least ten (10) business
days after receipt of the foregoing documentation prior to funding an approved advance.
(e) The Lender shall have received a notice of title continuation or an endorsement to the title
insurance policy with respect to the Property theretofore delivered to the Lender, showing that
since the last preceding advance, there has been no change in the status of title and no other
exception not theretofore approved by the Lender, which endorsement shall have the effect of
advancing the effective date of the policy to the date of the advance then being made and
increasing the coverage of the policy by an amount equal to the advance then being made, if the
policy does not by its terms provide automatically for such an increase.
(f) Before making the first advance of Development Loan Proceeds, the Borrower shall have
provided to the Lender satisfactory documentary evidence that (i) the general contractor has
obtained a Basic Business License from the District of Columbia and such license is in effect,
and (ii) the landfill facility at Lorton, Virginia or another appropriate facility has agreed to accept
for disposal all of the fill material identified in the Phase II Report as recommended to be
disposed of off-site.
(g) Before making the first advance of Development Loan Proceeds for Development of Phase
II, the Borrower shall have acquired fee simple title to the following (the “Exchange Parcels”:
(i) the triangular parcel between lots 38 and 42 that would complete lot 42 as a rectangle, and
(ii) the triangular parcel between lots 23 and 45 that would complete lot 45 as a rectangle, as the
Exchange Parcels are shown on that certain ALTA/ACSM Land Title Survey of the Property
prepared by Dewberry (the “Dewberry Survey”). The Borrower shall provide the Lender with
thirty (30) days advance notice of its closing on the acquisition of the Exchange Parcels. In
connection with such closing, the Borrower shall execute and deliver such instruments of
modification to this Agreement and the Loan Documents as the Lender may require in order to
spread the Lender’s liens and security interests to include the Exchange Parcels, a revised survey
shall be delivered to the Lender, and the Lender’s loan policy of title insurance shall be endorsed
to include the Exchange Parcels. All provisions of the loan documents, including without
limitation the Environmental Indemnity and all insurance requirements, shall apply to the
Exchange Parcels immediately upon their acquisition by the Borrower.
(h) Before making any advance of Development Loan proceeds, the Lender may require the
Borrower to obtain from any contractor or materialmen it may engage in connection with the
Development, acknowledgements of payment and releases of liens and rights to claim liens, if
applicable, down to the date of the last preceding advance and concurrently with the final
advance. All such acknowledgements and releases shall be in form and substance satisfactory to
the Lender.
(i) The Lender shall not be obligated to make the final advance of Development Loan proceeds
hereunder with respect to each Phase, which shall include the retainage described above, unless
(i) the Lender’s Inspector has certified to the Lender on standard AIA forms that the work is
complete; (ii) the Lender has received evidence satisfactory to it that all work requiring
inspection by governmental or regulatory authorities having or claiming jurisdiction has been
duly inspected and approved by such authorities and by any rating or inspection organization,
bureau, association, or office having or claiming jurisdiction; (iii) that completion of the
Development for the applicable Phase has occurred free and clear of all mechanics’ or
materialmen’s liens and any bills or claims for labor, materials and services in connection with
the completion of the Development; and (iv) certificates from the Borrower’s architect, engineer
and/or contractor, and, if required, from the Lender’s Inspector, certifying that the Development
for the Phase has been completed in accordance with, and as completed comply with, the Plans
and Specifications and all laws and governmental requirements. All fees and costs of the
Lender’s Inspector shall be paid by the Borrower.
(j) The Lender shall not be obligated to make any advances of Development Loan proceeds
hereunder unless, in the reasonable judgment of the Lender, all work completed at the time of the
application for advance has been performed in a good and workmanlike manner, and all
materials and fixtures usually furnished and installed at that stage of the development have been
furnished and installed, and no default which has not been cured has occurred under this
Agreement or any of the documents evidencing, securing or guaranteeing the Development
Loan.
5.4 Conditions Precedent to Advances of Construction Loan. In addition to any other conditions
stated in this Agreement, the following conditions related to Construction of Units must be
satisfied prior to any disbursements under the Construction Loan and all of the following matters
shall have been approved by the Lender.
(a) Permits. Copies of any and all building and similar permits required in connection with the
Construction for each Single Family Lot or Townhouse Lot upon which a Unit is to be
constructed, together with such evidence as the Lender may require to the effect that all fees for
such permits have been paid. Satisfactory evidence shall be submitted to the Lender that all
governmental approvals necessary for the Construction have been obtained. The Lender shall
also receive satisfactory evidence that all applicable safety, ecological and environmental laws
and any other codes or regulations affecting the Construction and/or proposed use of the Property
have been complied with.
(b) Division of Lots. With respect to any interior lots that do not have frontage on a public street
and accordingly are not eligible for subdivision into record lots pursuant to applicable
subdivision laws and regulations of the District of Columbia, division of those lots into separate
tax lots in accordance with the requirements of the D.C. Office of Tax and Revenue (“OTR”)
pursuant to an Application for Division of Lots based upon metes and bounds descriptions. Prior
to any advance under the Construction Loan for any Unit that is not a record lot under the
Subdivision Plat, the Borrower shall have satisfied all applicable legal requirements to create
such lot as an individual lot that may lawfully be separately conveyed.
(c) Plans and Specifications. Two (2) sets of complete copies of the final Plans and
Specifications for the Construction, which Plans and Specifications shall be satisfactory to the
Lender in all respects. The Lender’s review of the Plans and Specifications is solely for the
benefit of the Lender, and the Lender’s approval thereof shall not be deemed in any respect to be
a representation or warranty, expressed or implied, that the Construction will be sound, have a
value of any particular magnitude or otherwise satisfy a particular standard. Prior to any
advances for hard costs, the Borrower shall furnish the Lender with copies of the District-
approved stamped Plans, together with such evidence as the Lender may require to the effect that
such Plans and Specifications have been approved by all governmental and quasi-governmental
authorities having or claiming jurisdiction, and together with a final Construction Budget which
must be satisfactory to the Lender in its discretion.
(d) Trade Payment Breakdown. A breakdown of total development costs, which shall include a
draw schedule (the “Construction Budget”) containing reasonable details of amounts anticipated
to be payable for each category of work to be performed and materials to be supplied in
connection with the Construction, and a projected schedule for the progress of the Construction
in each Phase, all in such form and containing such details as the Lender shall require. The
parties shall have agreed on the Unit Costs Budget and have attached the approved Unit Costs
Budget to this Agreement as Exhibit B. Any change orders shall be subject to the Lender’s prior
approval. No hard costs shall be advanced under the Construction Loan until such time as the
Construction Budget has been approved by the Lender in its sole discretion. The Borrower may,
from time to time, request reallocation of amounts in the Construction Budget based upon such
reasonable supporting documentation justifying such reallocation as may be approved by the
Lender; any such reallocation shall be subject to the Lender’s approval in its sole discretion.
(e) Construction Schedule. A projected Schedule (“Construction Schedule”) for the progress of
Construction of Units in each Phase and a projection of cash flow for each Phase, each in such
form and containing such details as the Lender shall require. The Borrower shall be required to
diligently pursue and proceed with Construction of Units in accordance with the Construction
Schedule to completion. No more than twelve (12) Townhouse Units and six (6) Single Family
Units may be under Construction at any one time. Any Unit as to which Construction has
commenced within the Loan term must be completed prior to Maturity, and commence of
construction of any Units within four (4) months prior to Maturity shall be prohibited. The
Construction Schedule shall be consistent with the foregoing. Failure of the Borrower to meet the
requirements of the Construction Schedule shall constitute an Event of Default under this
Agreement.
(f) General Contractor. All contracts for Construction of Units shall be subject to the Lender’s
approval. The Construction contract shall be assigned to the Lender effective on a default under
any of the Loan Documents. The general contractor shall consent to such assignment and agree,
in the event of any such default, to continue performance of the contract for the Lender, if the
Lender so requests. Comstock Homes of Washington, L.C., an affiliate of the Guarantor, is
hereby approved as the general contractor for Construction of Units. Prior to any advances for
Construction costs for any Unit, the Borrower shall furnish the Lender with a copy of the
contractor’s license for that portion of the Construction. The Borrower shall also furnish the
Lender with copies of licenses for all major subcontractors.
(g) Architect’s and Engineer’s Certificate. The architect and the engineer for the Construction
shall be subject to the Lender’s approval. In addition, the contracts with the architect and the
engineer shall be subject to the Lender’s approval. A certificate from the architect and/or project
engineer will be required to the effect that the Construction of the Units being built, if completed
in accordance with the Plans and Specifications, will comply with all federal, state, District and
local laws, statutes, ordinances, codes, regulations, rules or other laws applicable to the
Construction of the applicable Unit (“Applicable Laws”). Prior to any advances for Construction
costs, the Borrower shall furnish the Lender with a copy of the engineer’s license and the
architect’s license.
(h) Lender’s Construction Consultant. The Plans and Specifications, Construction Budget,
Construction Schedule and any and all other Construction documents requested by the Lender
and/or its Construction consultant (the “Lender’s Inspector”), shall be subject to approval by the
Lender and the Lender’s Inspector. All draw requests shall be submitted to the Lender and the
Lender’s Inspector for review and approval. The Borrower shall be responsible for payment of
all of the Lender’s Inspector’s fees.
5.5 Provisions Governing Disbursements of Construction Loan. Disbursements of the
Construction Loan shall be governed by the following provisions:
(a) The Construction of all Units shall be performed by the Borrower in strict accordance with all
applicable (whether present or future) laws, ordinances, codes, rules, regulations, requirements
and orders of any governmental or regulatory authority having or claiming jurisdiction.
Construction of Units shall be completed in a manner so as not to encroach upon any easement
or right-of-way, or upon the land of others. Construction of each Unit shall be wholly within all
applicable building restriction lines and set-backs, however established, and shall be in strict
accordance with all applicable use or other restrictions and the provisions of any prior
declarations, covenants, conditions, restrictions and zoning ordinances and regulations.
(b) The Borrower shall have submitted to the Lender and the Lender’s Inspector such
information as may be requested by the Lender or the Lender’s Inspector to verify the
Construction costs which are to be incurred in connection with Construction. The Lender shall
not be obligated to authorize disbursement of Construction Loan proceeds with respect to
Construction of any Unit for an amount in excess of the Construction costs to be incurred in
connection therewith as verified by the Lender or the Lender’s Inspector pursuant to the
provisions of the preceding sentence. The funding of each draw request is subject to an
inspection and approval by the Lender’s Inspector.
(c) The Construction Loan proceeds will be advanced in installments as the Construction
progresses in accordance with the terms of this Agreement to finance the Construction of Units
in accordance with the Plans and Specifications, but no more often than once monthly, provided
that the Lender is satisfied that the amounts available under the Construction Loan will be
sufficient to complete the work and pay or provide for all reasonably anticipated Construction
costs through the required Construction completion date under the Construction Schedule. In the
event the Lender determines that the amounts available under the Construction Loan, together
with any additional cash provided by the Borrower to the Lender, if any, is insufficient to
complete the Construction in such manner as the Lender may require, the Borrower shall provide
such funds necessary to complete Construction. Advances shall be subject to withholding of
retainage in the amount of ten percent (10%) of direct Construction costs approved by the Lender
or the Lender’s Inspector, and at the Lender’s discretion of labor and materials brought into the
Construction site and eligible for payment on a trade payable basis.
(d) Each advance shall be conditioned upon the Lender’s receipt of (i) written certification by
parties approved by the Lender that the work which is the basis of the requested advance was
completed in accordance with the approved Plans and Specifications and within the cost
estimates approved by the Lender (or such adjustments of cost estimates of line items as shall be
required and approved by the Lender, provided that sufficient funds to complete the Construction
will be available under such adjusted estimates), to the satisfaction of the Lender, and (ii) that at
that time all necessary certificates required to be obtained from any board, agency or department
(government or otherwise) have been obtained. All documents required to be submitted to the
Lender as a condition of each disbursement shall be on standard AIA forms and shall be
furnished to the Lender at the Lender’s address set forth in this Agreement. The Lender shall
have at least ten (10) business days after receipt of the foregoing documentation prior to funding
an approved advance.
(e) With respect to Townhouse Lots, at such time as the footings for the foundation of each
“Stick” (hereinafter defined) have been installed, the Lender shall have received a “wall check”
or “foundation” survey of that stick that meets the Lender’s survey requirements and that shows
that (i) all new construction is
within the boundary lines of the applicable Townhouse Lot and is in compliance with all
applicable setback, location and area requirements of all applicable governmental approvals, and
(ii) there is no change in condition which could adversely affect the applicable Unit. For
purposes of this Agreement, a “Stick” means a building containing contiguous Townhouse Units
constructed on a single, shared foundation.
(f) With respect to Single Family Lots, at such time as the footings for the foundation of the Unit
have been installed, the Lender shall have received a ‘wall check” or “foundation” survey of that
Unit that meets the Lender’s survey requirements and that shows that (i) all new construction is
within the boundary lines of the applicable Single Family Lot and is in compliance with all
applicable setback, location and area requirements of all applicable governmental approvals, and
(ii) there is no change in condition which could adversely affect the applicable Unit.
(g) The Lender shall have received a notice of title continuation or an endorsement to the title
insurance policy with respect to the Property theretofore delivered to the Lender, showing that
since the last preceding advance, there has been no change in the status of title and no other
exception not theretofore approved by the Lender, which endorsement shall have the effect of
advancing the effective date of the policy to the date of the advance then being made and
increasing the coverage of the policy by an amount equal to the advance then being made, if the
policy does not by its terms provide automatically for such an increase.
(h) Before making any advance of Construction Loan proceeds, the Lender may require the
Borrower to obtain from any contractor or materialmen it may engage in connection with the
Construction of any Unit, acknowledgements of payment and releases of liens and rights to claim
liens, if applicable, down to the date of the last preceding advance and concurrently with the final
advance. All such acknowledgements and releases shall be in form and substance satisfactory to
the Lender.
(i) No advances will be made for building materials or furnishings that have not yet been
incorporated into the Unit(s) (“Stored Materials”) unless (a) the Borrower has good title to the
Stored Materials and has furnished satisfactory evidence of such title to the Lender, (b) the
Stored Materials are components in a form ready for incorporation into the applicable Unit(s)
and will be so incorporated within a period of forty-five (45) days from the date of the advance
for the Stored Materials, (c) the Stored Materials are in the Borrower’s possession and are
satisfactorily stored on the Property or at such other location as the Lender may approve, in each
case with adequate safeguards to prevent commingling with materials for other projects, (d) the
Stored Materials are protected and insured against loss, theft and damage in a manner and
amount satisfactory to the Lender and the Lender has received Certificates of Insurance
reflecting Borrower as an additional insured and owner of the Stored Materials, (e) the Stored
Materials have been paid for in full or will be paid for in full from the funds to be advanced,
(f) the lender has or will have upon the payment for the Stored Materials from the advanced
funds a perfected, first priority security interest in the Stored Materials, (g) all lien rights and
claims of the supplier have been released or will be released upon payment with the advanced
funds, and (h) following the advance for the Stored Materials, the aggregate amount of advances
for Stored Materials that have not yet been incorporated into the Construction will not exceed
Ten Thousand Dollars ($10,000.00) per Unit that is then under Construction.
(j) The Lender shall not be obligated to make the final advance of Construction Loan proceeds
hereunder with respect to any Unit, which shall include the retainage described above, unless
(i) the Lender’s Inspector has certified to the Lender on standard AIA forms that the work is
complete (except for punch list items which the Lender may approve and for which Lender may
retain 150% of the cost of correction) in accordance with the Plans and Specifications; (ii) the
Lender has received evidence satisfactory to it that all work requiring inspection by
governmental or regulatory authorities having or claiming jurisdiction has been duly
inspected and approved by such authorities and by any rating or inspection organization, bureau,
association, or office having or claiming jurisdiction; (iii) that completion of Construction of the
Unit has occurred free and clear of all mechanics’ or materialmen’s liens and any bills or claims
for labor, materials and services; (iv) certificates from the Borrower’s architect, engineer and/or
contractor, and, if required, from the Lender’s Inspector, certifying that Construction of the Unit
has been completed in accordance with, and as completed comply with, the Plans and
Specifications and all laws and governmental requirements; and (v) a certificate of occupancy or
residential use permit shall have been validly issued by the District of Columbia to allow lawful
residential occupancy of the completed Unit. All fees and costs of the Lender’s Inspector shall be
paid by the Borrower.
(k) The Lender shall not be obligated to make any advances of Construction Loan proceeds
hereunder unless, in the reasonable judgment of the Lender, all work completed at the time of the
application for advance has been performed in a good and workmanlike manner, and all
materials and fixtures usually furnished and installed at that stage of the development have been
furnished and installed, and no default which has not been cured has occurred under this
Agreement or any of the documents evidencing, securing or guaranteeing the Construction Loan.
(l) During default after expiration of any applicable cure period hereunder, the Lender, at its
option, may make any and all advances, or any part thereof, directly to the general contractor or
subcontractors against requisitions for payment under the general contractor’s contract or the
respective contracts or subcontracts, as the case may be; the execution of this Agreement by the
Borrower shall and does constitute an irrevocable direction and authorization to so advance
funds, and such funds shall be added to the principal balance of the Construction Loan, shall bear
interest as set forth in the Construction Loan Note and shall be secured by the Deed of Trust. All
payments made pursuant to the foregoing shall be made within the scope of the respective
contracts.
SECTION SIX
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to extend credit to the Borrower, the Borrower and the Guarantor
each make the following representations and warranties as to itself:
6.1 Organization. The Borrower and each entity comprising the Borrower is a limited liability
company duly organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia and is duly qualified as a foreign limited liability company and in
good standing under the laws of each other jurisdiction in which such qualification is required.
The Guarantor represents and warrants that it is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in which such
qualification is required.
6.2 Execution and Delivery. The Borrower and each entity comprising the Borrower has the
power, and has taken all of the necessary actions, to execute and deliver and perform its
obligations under the Loan Documents, and the Loan Documents, when executed and delivered,
will be binding obligations of each such entity enforceable in accordance with their respective
terms.
6.3 Power. Each of the Borrower and each entity comprising the Borrower has the power and
authority to own its properties and to carry on its business as now being conducted.
6.4 Financial Statements. Al financial statements and information delivered to the Lender are
correct and complete in all material respects and present fairly the financial conditions, and
reflect all known liabilities, contingent and otherwise, of the Borrower and the Guarantor as of
the dates of such statements and information, and since such dates no material adverse change in
the assets, liabilities, financial condition, business or operations of the Borrower or the Guarantor
has occurred.
6.5 Taxes. All tax returns and reports of the Borrower and the Guarantor required by law to be
filed have been duly filed, and all taxes, assessments, other governmental charges or levies (other
than those presently payable without penalty or interest and those that are being contested in
good faith in appropriate proceedings) upon the Borrower and/or the Guarantor and upon any of
their respective properties, assets, income or franchises, that are due and payable have been paid.
6.6 Litigation. There is no action, suit or proceeding pending or, to the knowledge of the
Borrower or the Guarantor, threatened against or affecting the Borrower or the Guarantor that,
either in any case or in the aggregate, may result in any material adverse change in the business,
properties or assets or in the condition, financial or otherwise, of the Borrower or the Guarantor,
or that may result in any material liability on the part of the Borrower or the Guarantor that
would materially and adversely affect the ability of the Borrower or the Guarantor to perform its
and/or their obligations under the Loan Documents, or that questions the validity of any of the
Loan Documents or any action taken or to be taken in connection with the Loan Documents.
6.7 No Breach. The execution and delivery of the Loan Documents, and compliance with the
provisions of the Loan Documents, will not conflict with or violate any provisions of law or
conflict with, result in a breach of, or constitute a default under, the organizational documents of
the Borrower, or any judgment, order or decree binding on the Borrower, or any other
agreements to which the Borrower is a party.
6.8 No Defaults. To the best of the Borrower’s knowledge, the Borrower is not in default with
respect to any debt, direct or indirect, upon or as to which the Borrower has any liability or
obligation.
6.9 Compliance. The Borrower is in compliance in all material respects with all applicable laws
and regulations, including, without limitation, the Employee Retirement Income Security Act of
1974, as amended (“ERISA”).
6.10 Approvals. No authorizations, approvals or consents of, and no filings and registrations
with, any governmental or regulatory authority or agency, are necessary for the execution,
delivery or performance of the Loan Documents by the Borrower.
6.11 Title to Assets. The Borrower has good and marketable title to all of its assets, subject only
to the liens and security interests permitted by this Agreement.
6.12 Use of Proceeds. The proceeds of the Loans shall be used only for the purposes described in
this Agreement. The proceeds of the Loans shall not be used to purchase or carry any margin
stock, as such term is define din Regulation U of the Board of Governors of the Federal Reserve
System.

SECTION SEVEN
COVENANTS OF BORROWER AND GUARANTOR
In consideration of credit extended or to be extended by the Lender, the Borrower covenants and
agrees as follows:
7.1 Financial Information. The Borrower and the Guarantor shall each deliver to the Lender:
(i) with respect to the Borrower, each year within ninety (90) days after the close of its fiscal
year, financial statements prepared in accordance with standard accounting principles
consistently applied, certified as true and correct by an officer of each such entity; (ii) with
respect to the Guarantor, each year within ninety (90) days after the close of its fiscal year,
audited financial statements; (iii) each year within thirty (30) days after filing, a copy of each
such entity’s federal income tax return and all schedules thereto, provided that in the event of
such extension such entity shall provide the Lender with a copy of the federal income tax return
and all schedules thereto within thirty (30) days of the filing of same with the Internal Revenue
Services, and (iv) promptly upon the Lender’s request, such
financial and other information as the Lender reasonably may require from time to time. All
financial statements shall be in such reasonable detail and shall be accompanied by such
certificates of the Borrower or the Guarantor, as applicable, as may reasonably be required by the
Lender.
7.2 Taxes. All tax returns and reports of the Borrower required by law to be filed have been duly
filed, and all taxes, assessments, other governmental charges or levies (other than those presently
payable without penalty or interest and those that are being contested in good faith in appropriate
proceedings) upon the Borrower and upon the Borrower’s properties, assets, income or
franchises, that are due and payable, have been paid.
7.3 Compliance with Laws. The Borrower shall comply with all applicable laws and regulations
including, without limitation, ERISA.
7.4 Maintain Existence. The Borrower and each entity comprising the Borrower, and the
Guarantor, shall maintain its existence in good standing, maintain and keep its properties in good
condition (ordinary wear and tear excepted), maintain adequate insurance for all of its properties
with financially sound and reputable insurers. The Borrower shall remain in the same line of
business as it is on the date of this Agreement and shall not enter into any new lines of business
without the prior written consent of the Lender.
7.5 Notices. As soon as it has actual knowledge, the Borrower shall notify the Lender of the
institution or threat of any material litigation or condemnation or administrative proceeding of
any nature involving the Borrower.
7.6 Books and Records. The Borrower shall maintain complete and accurate books of account
and records. The principal books of account and records shall be kept and maintained at 1886
Metro Center Drive, 4th Floor, Reston, VA 10190. The Borrower shall not remove such books of
account and records without giving the Lender at least thirty (30) days prior written notice. The
Borrower, upon reasonable notice from the Lender, shall permit the Lender, or any officer,
employee or agent designated by the Lender, to examine the books of account and records
maintained by the Borrower, and agree that the Lender or such officer, employee or agent may
audit and verify the books and records. The Borrower shall reimburse the Lender for any
reasonable expenses incurred by the Lender in connection with any such audits. All accounting
records and financial reports furnished to the Lender by the Borrower and the Guarantor pursuant
to this Agreement shall be maintained and prepared in accordance with GAAP.
7.7 Liens. The Borrower shall not create, incur, assume or permit to exist any mortgage, deed of
trust, assignment, pledge, lien, security interest, charge or encumbrance, including, without
limitation, the right of a vendor or under a conditional sale contract or the lessor under a
capitalized lease (collectively, (“Liens”) of any kind or nature in or upon any of the asset of the
Borrower except:
(a) Liens created or deposits made that are incidental to the conduct of the business of
the Borrower, that are not incurred in connection with any borrowing or the
obtaining of any credit and that do not and will not interfere with the use by the
Borrower of any of its assets in the normal course of its business or materially
impair the value of such assets for the purpose of such business; and
(b) Liens securing the Indebtedness.
7.8 Debt. Except as provided above in Section 3.9, without the prior written consent of the
Lender, the Borrower shall not incur or permit to exist any debt for borrowed funds, the deferred
purchase price of goods or services or capitalized lease obligations, except for (a) trade debt
incurred in the ordinary course of business, and (b) the Indebtedness.
7.9 Contingent Liabilities. Without the prior written consent of the Lender, neither the Borrower
nor the Guarantor shall guarantee, endorse, become contingently liable upon or assume the
obligation of any person, or permit any such contingent liability to exist, except by the
endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
7.10 Sale of Assets. Without the prior written consent of the Lender, the Borrower shall not sell,
lease, assign or otherwise dispose of any of its assets except for (a) sales in the ordinary course
of business including sales of Lots and Units as approved by the Lender from time to time,
(b) the disposition of assets that are no longer needed or useful in its business, and (c) assets
which have been removed and replaced.
7.11 Mergers and Acquisitions. Without the prior written consent of the Lender, the Borrower
shall not merge or consolidate with, or acquire all or substantially all of the assets, stock,
partnership interests or other ownership interests of, any other person.
7.12 Loans and Advances. Without the prior written consent of the Lender, the Borrower shall
not make any loan or advance to any affiliate, director, member, manager, officer or employee of
the Borrower, or any other person, except for the creation of accounts receivable in the ordinary
course of business on terms that are no less favorable than would apply in an arms-length
transaction.
7.13 Subsidiaries and Joint Ventures. Without the prior written consent of the Lender, the
Borrower shall not form any subsidiary, become a general or limited partner in any partnership
or become a party to a joint venture. If the Lender grants its consent to the formation or
acquisition of a subsidiary Borrower, such entity shall cause each subsidiary to perform and
observe all of the covenants contained in this Agreement and the other Loan Documents.
7.14 Affiliates. Without the prior written consent of the Lender, the Borrower shall not engage in
business with any of its affiliates except in the ordinary course of business and on terms that are
no less favorable to the Borrower than would apply in an arm’s length transaction.
7.15 Organization; Control and Management; Transfers. Until such time as the Loans are fully
repaid, there shall be no Transfer (hereinafter defined) of any interest in the Borrower, nor any
change in the Control (hereinafter defined) or management of either the Borrower or the
Guarantor, nor any Transfer of the Property except for sales of Lots and Units in accordance with
the terms of the Loan Documents, without the Lender’s prior written consent. “Transfer” means
any assignment, pledge, conveyance, sale, transfer, mortgage, encumbrance, grant of a security
interest or other disposition, either directly or indirectly, in the aggregate of fifty percent
(50%) or more of the beneficial ownership interests of an entity and the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of an
entity, whether through the ability to exercise voting power, by contract or otherwise.
“Controlled by” and “controlling” shall have the respective correlative meanings thereto.

SECTION EIGHT
DEFAULT AND REMEDIES
8.1 Default. Each of the following shall constitute an “Event of Default” under this Agreement:
(a) Failure to Pay. If: (i) the Borrower shall fail to pay any monthly payment required under
either of the Notes (“Monthly Payments”) when due thereunder or (ii) the Borrower shall fail to
pay any amount (other than the Monthly Payments) as an when due under any of the Loan
Documents;
(b) Failure to Give Notices. If the Borrower fails to give the Lender any notice required by
Section 7.5 of this Agreement within thirty (30) days after it has actual knowledge of the event
giving rise to the obligation to give such notice.
(c) Failure to Permit Inspections. If the Borrower refuses to permit the Lender to inspect its
books and records in accordance with the provisions of Section 7.6 or failure to permit the
Lender to inspect the Property upon reasonable advance notice.
(d) Failure to Observe Covenants. If the Borrower fails to perform or observe any term,
covenant, warranty or agreement contained in this Agreement or in the other Loan Documents
and such failure shall continue for a period of thirty (30) days after written notice of such failure
has been given to the Borrower by the Lender; provided, however, if such default is not in the
payment of any sum due to the Lender hereunder, or was not the subject of an Event of Default
for which notice was previously provided, and provided the Borrower is diligently pursuing the
cure of such default , then the Borrower shall have an additional sixty (60) days within which to
cure such default prior to the Lender exercising any right or remedy available hereunder, or at
law or in equity.
(e) Defaults Under Loan Documents. If an Event of Default shall occur under either of the Notes
or any other Loan Document and shall not be cured within any applicable grace period.
(f) Breach of Representation. Discovery by the Lender that any representation or warranty made
or deemed made by the Borrower in this Agreement or in any other Loan Document or in any
statement or representation made in any certificate, report or opinion delivered pursuant to this
Agreement or other Loan Document or in connection with any borrowing under this Agreement
by the Borrower or the Guarantor or any member, manager, officer, agent, employee or director
of the Borrower or the Guarantor, was materially untrue when made or deemed to be made.
(g) Voluntary Bankruptcy. If the Borrower or the Guarantor makes an assignment for the benefit
of creditors, files a petition in bankruptcy, petitions or applies to any tribunal for any receiver or
any trustee of the Borrower or the Guarantor or any substantial part of the property of the
Borrower or the Guarantor, or commences any proceeding relating to the Borrower or the
Guarantor under any reorganization, arrangement, composition, readjustment, liquidation or
dissolution law or statute of any jurisdiction, whether in effect now or after this Agreement is
executed.
(h) Involuntary Bankruptcy. If, within sixty (60) days after the filing of a bankruptcy petition or
the commencement of any proceeding against the Borrower or the Guarantor seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief
under any present or future statue, law or regulation, the proceeding shall not have been
dismissed, or, if within sixty (60) days, after the appointment, without the consent or
acquiescence of the Borrower or the Guarantor, of any trustee, receiver or liquidator of any
Borrower or all or any substantial part of the properties of the Borrower o the Guarantor, the
appointment shall not have been vacated.
(i) Cross Default. If, as a result of default, any present or future obligations of the Borrower or
the Guarantor or any affiliate of the Borrower or the Guarantor to the Lender or any other
creditor, whether due to acceleration provisions or otherwise therein, are declared to be due and
payable prior to the expressed maturity of such obligations.
(j) Material Adverse Change. A material adverse change occurs in the financial or business
condition of the Borrower or the Guarantor.
(k) Judgment. If a judgment, attachment, garnishment or other process is entered against the
Borrower and is not vacated or bonded within sixty (60) days after entry (or such shorter period
of time as necessary in order to avoid attachment or foreclosure), or if a judgment, attachment,
garnishment or other process is entered
against the Guarantor that would materially affect the Guarantor’s ability to perform its
obligations under the Loan Documents, and such judgment, attachment, garnishment or other
process is not vacated or bonded with in sixty (60) day after entry (or such shorter period of time
as necessary in order to avoid attachment or foreclosure).
(l) Dissolution. The dissolution, liquidation or termination of existence of the Borrower or the
Guarantor unless a substitute guarantor, satisfactory to the Lender in its sole and absolute
discretion, assumes all liability under the Guaranty and Environmental Indemnity and executes
any documents which the Lender may reasonably require to implement such substitution, within
sixty (60) days after event of dissolution, liquidation or termination of existence.
(m) Change in Management/Control. A change in the management of or controlling interest in
the Borrower or the Guarantor without the prior written consent of the Lender.
8.2 Remedies. Upon the occurrence of an Event of Default (a) the Lender, at its option, by
written notice to the Borrower, may declare all Indebtedness to the Lender to be immediately due
and payable, whether such Indebtedness was incurred prior to, contemporaneous with or
subsequent to the date of this Agreement and whether represented in writing or otherwise,
without presentment, demand, protest or further notice of any kind, and (b) the Lender may
exercise all rights and remedies available to it under the Loan Documents and applicable law.
The Borrower agrees to pay all costs and expenses incurred by the Lender in enforcing any
obligation under this Agreement or the other Loan Documents, including, without limitation,
attorneys’ fees. No failure or delay by the Lender in exercising any power or right will operate as
a waiver of such power or right, nor will any single or partial exercise of any power or right
preclude any other future exercise of such power or right, or the exercise of any other power or
right.
8.3 Borrower to Pay Fees and Charges. The Borrower shall pay all fees and charges incurred in
the procuring, making and enforcement of the Loans, including without limitation the reasonable
fees and disbursements of Lender’s attorneys, charges for appraisals, the fee of Lender’s
inspector and construction consultant, fees and expenses relating to examination of title, title
insurance premiums, surveys, and mortgage recording, documentary, transfer or other similar
taxes and revenue stamps, loan extension fees, if any, and the Lender’s fees for the Loans.

SECTION NINE
GENERAL PROVISIONS
9.1 Defined Terms. Each accounting term used in this Agreement, not otherwise defined, shall
have the meaning given to it under GAAP applied on a consistent basis. The term “person” shall
mean any individual partnership, corporation, trust, joint venture, unincorporated association,
governmental subdivision or agency or any entity of any nature. The term “subsidiary” means,
with respect to any person, a corporation or other person of which shares of stock or other
ownership interest having ordinary voting power to elect a majority of the board of directors or
other managers of such corporation or person are at the time owned, or the management of which
it otherwise controlled, directly or indirectly, through one or more intermediaries, by such
person. The term “affiliate” means, with respect to any specified person, any other person that,
directly or indirectly, controls or is controlled by, or is under common control with, such
specified person. All meanings assigned to defined terms in this Agreement shall be applicable to
the singular and plural forms of the terms defined.
9.2 Notices. All notices, requests, demands and other communication with respect hereto shall be
in writing and shall be delivered by hand, prepaid by Federal Express (or a comparable overnight
delivery service), or sent by the United States first-class mail, certified, postage prepaid, return
receipt requested, to the parties at their respective addresses set forth as follows:
If to the Lender, to:
LENDER
7815 Woodmont Avenue
Bethesda, MD 20814
Attn: Douglas Vigen, Senior Vice President
With a copy to:
Friedlander Misler, PLLC
5335 Wisconsin Avenue, N.W., Suite 600
Washington, D.C. 20015
Attn: David Astrove, Esq.
If to the Borrower, to:
Borrower
c/o Comstock Holding Companies, Inc.
1886 Metro Center Drive, 4th Floor
Reston, VA 20190
Attn: Christopher Clemente
With a copy to:
Borrower
c/o Comstock Holding Companies, Inc.
1886 Metro Center Drive, 4th Floor
Reston, VA 20190
Attn: Jubal Thompson, Esq.
Any notice, request, demand or other communication delivered or sent in the manner aforesaid
shall be deemed given or made (as the case may be) upon the earliest of (a) the date it is actually
received, (b) on the business day after the day on which it is delivered by hand, (c) on the
business day after the day on which it is properly delivered by Federal Express (or a comparable
overnight delivery service), or (d) on the third (3rd) business day after the day on which it is
deposited in the United States mail. Any party may change such party’s address by notifying the
other parties of the new address in any manner permitted by this Section.
9.3 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the
Lender and the Borrower and their respective successors, assigns, personal representatives,
executors and administrators, provided that the Borrower may not assign or transfer its rights
under this Agreement.
9.4 Entire Agreement. Except for the other Loan Documents expressly referred to in this
Agreement, this Agreement represents the entire agreement between the Lender and the
Borrower, supersedes all prior commitments and may be modified only by an agreement in
writing.
9.5 Survival. All agreements, covenants, representations and warranties made in this Agreement
and all other provisions of this Agreement will survive the delivery of this Agreement and the
other Loan Documents and the making of the advances under this Agreement and will remain in
full force and effect until the obligations of the Borrower under this Agreement and the other
Loan Documents are indefeasibly satisfied.
9.6 Governing Law. This Agreement will be governed by and construed in accordance with the
laws of the State of Maryland, without reference to conflict of laws principles.
9.7 Headings. Section headings are for convenience of reference only and shall not affect the
interpretation of this Agreement.
9.8 Participations. The Lender shall have the right to sell all or any part of its rights under the
Loan Documents, and the Borrower authorizes the Lender to disclose to any prospective
participant in the Loan any and all financial and other information in the Lender’s possession
concerning the Borrower or the collateral for the Loans.
9.9 No Third Party Beneficiary. The parties do not intend the benefits of this Agreement or any
other Loan Document to inure to any third party.
9.10 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
LENDER AND THE BORROWER KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
BASED ON, ARISING OUT OF OR UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
9.11 Waiver. The rights of the Lender under this Agreement and the other Loan Documents shall
be in addition to all other rights provided by law. No waiver of any provision of this Agreement,
or any other Loan Document, shall be effective unless in writing, and no waiver shall extend
beyond the particular purpose involved. No waiver in any one case shall require the Lender to
give any subsequent waivers.
9.12 Severability. If any provision of this Agreement or any other Loan Document is held to be
void, invalid, illegal or unenforceable in any respect, such provision shall be fully severable and
this Agreement or the applicable Loan Document shall be construed as if the void, invalid, illegal
or unenforceable provision were not included in this Agreement or in such Loan Document.
9.13 No Setoffs. With respect to a monetary default claimed by the Lender under the Loan
Documents, no setoff, claim, counterclaim, reduction or diminution of any obligation or defense
of any kind or nature that the Borrower has or may have against the Lender (other than the
defenses of payment, the Lender’s gross negligence or willful misconduct) shall be available
against the Lender in any action, suit or proceeding brought by the Lender to enforce this
Agreement or any other Loan Document. The foregoing shall not be construed as a waiver by the
Borrower of any such rights or claims against the Lender, but any recovery upon any such rights
or claims shall be had from the Lender separately, it being the intent of this Agreement and the
other Loan Documents that the Borrower shall be obligated to pay, absolutely and
unconditionally, all amounts due under this Agreement and the other Loan Documents.
9.14 No Merger. The Borrower and the Lender expressly agree that the Borrower’s agreement
and obligation to pay the Lender’s reasonable attorneys’ fees and costs, and all other litigation
expenses, shall not be merged into any judgment obtained by the Lender, but shall survive the
same and shall not be extinguished by any monetary judgment. It is the express intent of the
parties hereto that all post-judgment collection fees and expenses (including reasonable
attorneys’ fees and costs) shall survive entry of a final judgment and shall be collectible by the
Lender against the Borrower from time to time following entry of any final judgment obtained
by the Lender against the Borrower.
9.15. Counterparts. This Agreement may be executed for the convenience of the parties in
several counterparts, which are in all respects similar and each of which is to be deemed to be
complete in and of itself, and any one of which may be introduced in evidence or used for any
other purpose with the production of the other counterparts thereof.
9.16 Consent to Jurisdiction. The Borrower irrevocably submits to jurisdiction of any state or
federal court sitting in the Commonwealth of Virginia or the State of Maryland over any suit,
action or proceeding arising out of or relating to this Agreement, the Notes or any other Loan
Documents. The undersigned irrevocably waives, to the fullest extent permitted by law, any
objection that the undersigned may now or hereafter have to the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Final judgment in any
such court shall be conclusive and binding and may be enforced in any court in which the
undersigned is subject to jurisdiction by a suit upon such judgment provided that service of
process is effected as provided herein or as otherwise permitted by applicable law.
9.17 Service of Process. The Borrower hereby consents to process being served in any suit,
action or proceeding instituted in the Commonwealth of Virginia or the State of Maryland in
connection with the Loans by (i) the mailing of a copy thereof by certified mail, postage prepaid,
return receipt requested, to the Borrower at the address set forth in the Notices section of this
Agreement and (ii) serving a copy thereof upon the Borrower’s registered agent for service of
process. The undersigned irrevocably agrees that such service shall be deemed to be service of
process upon the undersigned in any such suit, action or proceeding. Nothing in this Agreement
shall affect the right of the Lender otherwise to bring proceedings against the undersigned in the
courts of any jurisdiction or jurisdictions.
9.18 Exhibits. All exhibits referred to herein as attached hereto are incorporated in full by
reference as though fully set forth in this Agreement. The Exhibits are:
Exhibit A: Legal Description of the Property
Exhibit A Phasing
-1:
Exhibit B: Unit Costs Budget
Exhibit C: Carve Out Obligations
Exhibit D: Reserved
[SIGNATURES ON FOLLOWING PAGES]
IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be
executed in their respective names by duly authorized representatives as of the day and year first
above written. The Guarantor joins herein to consent and agree to the terms, conditions,
provisions and covenants of those sections of this Agreement that address a covenant or
obligation of the Guarantor.
WITNESS: BORROWER:

BORROWER, a Virginia limited liability

company

By: COMSTOCK VENTURES XVI, L.C., a

Virginia limited liability company

By: Comstock Holding Companies, Inc.,

a Delaware corporation, Its Manager

Print Name:
By
:
Christopher D. Clemente
Chief Executive Officer
[SEAL]
COMMONWEALTH OF VIRGINIA
COUNTY OF , ss:
I, , a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Christopher D. Clemente personally appeared before me in said jurisdiction and acknowledged
that he is the Chief Executive Officer of Comstock Holding Companies, Inc., which is the
Manager of Comstock Ventures XVI, L.C., a Virginia limited liability company, which is the
Manager of Borrower, a Virginia limited liability company, party to the foregoing instrument,
and that the same is his act and deed and the act and deed of said Borrower.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, this day of , 2012.

Notary Public

[SEAL] My Commission expires: .

Notary Registration No. .

 GUARANTOR:
Witness:
COMSTOCK HOLDING COMPANIES, INC.,
a Delaware corporation

Print Name:
By:
Christopher D. Clemente
Chief Executive Officer
COMMONWEALTH OF VIRGINIA
COUNTY OF , ss:
I, , a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Christopher D. Clemente personally appeared before me in said jurisdiction and acknowledged
that he is the Chief Executive Officer of Comstock Holding Companies, Inc., a Delaware
corporation, party to the foregoing instrument, and that the same is his act and deed and the act
and deed of said Comstock Holding Companies, Inc..
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, this day of , 2012.

Notary Public

[SEAL] My Commission expires: .

Notary Registration No. .

LENDER:
Witness:
EAGLEBANK

Print Name:
By
:
Douglas Vigen
Senior Vice President
[SEAL]
COMMONWEALTH OF VIRGINIA
COUNTY OF , ss:
I, , a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Douglas Vigen personally appeared before me in said jurisdiction and acknowledged that he a
Senior Vice President of EAGLEBANK; that he has been duly authorized to execute and deliver
the foregoing instrument for the purposes therein contained and that the same is his act and deed;
that the seal affixed to said instrument is such corporate seal and that it was so affixed by order
of the Board of Directors of said Bank; and that he signed his name thereon by like order.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, this day of , 2012.

Notary Public

[SEAL] My Commission expires: .

Notary Registration No. .

EXHIBIT A
Legal Description of the Property
Tract 1:
Lots 42-67 in Square 3719 as shown on Plat of Subdivision recorded among the records of the
District of Columbia Office of the Surveyor in Subdivision Book 206 at Page 117.
Lot OF-40 in Square 3719 as shown on Plat of Subdivision recorded among the records of the
District of Columbia Office of the Surveyor in Subdivision Book 206 at page 117, also known as
Lots 860 thru 870, Lots 872 thru 889 and Lot 891 in Square 3719, (previously known as Lot 40,
Square 3719) as shown on Assessment and Taxation Plat 3855-T, among the records of the
District of Columbia Office of the Surveyor.
Together with those certain easements which benefit the above property as set forth the
Easement and Maintenance Agreement recorded as Instrument No. 2012028660.
Together with those easements which benefit the above property as set forth in the Temporary
Grading & Construction Easement Agreement recorded as Instrument No. 2012028661.
Note: Said property being known for assessment and taxation purposes as Square 3719, Lots
859-891

Tract 2:
Parts of Lots One (1) and Two (2) on a plat of survey of a subdivision of a tract of land know as
part of the original tract of “CHILLUM CASTLE MANOR”, made by B.F. Martin from plat of
survey by George MacCloud, the same being part of the farm of the late Henry Martin, described
in proceedings in District Court Case No. 2944 in the District Court of the United States for the
District of Columbia as follows:
Beginning with the Southwesterly line of Chillum Place at its intersection with Peabody Street
along said Chillum Place, North 36 degrees 52’ 40” West 74.70 feet, thence leaving said Chillum
Place and running South 34 degrees 34’ West 72 feet more or less, to the intersection of Peabody
Street; thence along the Westerly side of Peabody Street in a Southern direction 86 feet more or
less to its intersection with Chillum Place being the point of beginning of said Parcel (formerly
know as Part of Parcel 126/11)
Note: Said property being now known for assessment and taxation purposes as parcel 126/24.
Tract 3:
Lots 128, 129 and 130, Square 3714, as show on Plat of Subdivision recorded among the records
of the District of Columbia Office of the Surveyor in Subdivision Book 206 at Page 126.
Note: Said property being known for assessment and taxation purposes as Square 3714, Lots
125, 126 and 127
EXHIBIT A-1
Site Plan marked to show Phases
[attached]
EXHIBIT B
UNIT COSTS BUDGET
[to be attached prior to first advance of Construction Loan]
EXHIBIT C
CARVE OUT OBLIGATIONS
The Guarantor shall also guaranty the full and timely payment of any and all actual loss, damage,
cost, expense, liability, claim or other obligation incurred by the Lender (including reasonable
attorneys’ fees and out-of-pocket costs actually incurred) arising out of or in connection with any
one or more of the following (the “Carve Out Obligations”):
(i) Fraud, material misrepresentation or willful misconduct by Borrower or Guarantor or any of
their respective members, managers, officers, principals, or any other person properly authorized
to make statements or representations, or act, on behalf of Borrower or Guarantor in connection
with the Loans or the Property;
(ii) physical waste committed on the Property; damage to the Property as a result of the
intentional misconduct, recklessness or gross negligence of Borrower or Guarantor, or any agent
or employee of any such persons; or the removal of any portion of the Property by or at the
direction of Borrower or Guarantor or any direct or indirect member or manager thereof, in
violation of the terms of the Loan Documents (as defined in the Loan Agreement) following a
default under either of the Loans which is not cured within any applicable grace or cure period
(an “Event of Default”);
(iii) subject to any right to contest or bond off such matters, as provided in the Deed of Trust or
Loan Agreement, failure to pay any valid taxes, assessments, mechanics’ liens, materialmen’s
liens or other liens which could create liens on any portion of the Property which would be
superior to the lien or security title of the Deed of Trust or the other Loan Documents, to the full
extent of the amount claimed by any such lien claimant;
(iv) the breach of any representation, warranty or covenant in, and any liability under any
provision in, that certain Environmental Indemnity Agreement of even date herewith given by
Borrower and Guarantor to Lender or the breach of any representation, warranty or covenant
relating solely to, and any liability under any provision concerning, environmental laws,
hazardous substances or asbestos in the Deed of Trust;
(v) the misapplication or conversion of (A) any insurance proceeds paid to Borrower by reason
of any loss, damage or destruction to the Property, (B) any awards or other amounts received by
Borrower in connection with the condemnation of all or a portion of the Property, or (C) any
rents from the Property following an Event of Default or collected in advance; and
(vi) failure to maintain any insurance policies required under the Loan Documents, or timely to
pay or provide the amount of any insurance deductible, to the extent of the applicable deductible,
following a casualty or other insured event.