Exhibit 10.97

CREDIT ENHANCEMENT AND INDEMNIFICATION AGREEMENT

This CREDIT ENHANCEMENT AND INDEMNIFICATION AGREEMENT (the “Agreement”) is
entered into as of the      day of February, 2011, by and between Comstock
Homebuilding Companies, Inc., a Delaware corporation (the “Company”), and
Christopher D. Clemente (“Clemente”) and Gregory V. Benson (“Benson”)
(individually or collectively, an “Indemnitee”).

RECITALS

A. The Company is a publicly traded real estate developer in the business of
purchasing, developing, operating and selling real estate projects in the
Washington, D.C. metropolitan area;

B. Clemente is the Chief Executive Officer of the Company and member of the
Board of Directors of the Company;

C. Benson is the Chief Operating Officer and President of the Company, and a
member of the Board of Directors of the Company;

D. The Company has multiple subsidiaries for which the Company is the manager
and sole member of the subsidiaries;

E. The Company and its subsidiaries, from the time, desire to enter into
commercial acquisition, development and construction loans for projects
determined by the Company to be beneficial to the Company;

F. The Company and Indemnitee recognize the difficulty in obtaining commercial
financing for the Company and its subsidiaries on reasonable terms due to
(i) the Company’s current financial position, (ii) current general
macro-economic conditions affecting real estate, and (iii) the current lending
environment for financial institutions.

G. The Company has sought to obtain commercial financing for the Company and its
subsidiaries for certain of its existing projects and has been unable to obtain
commitments for financing at commercially reasonable rates and terms without
additional credit support from the Indemnitee in the form of personal guarantees
of payment and/or performance in order to secure the financing sought by the
Company.

H. In order to assist the Company with its efforts to secure financing ,
Indemnitee, will consider providing the credit enhancement required by the
Company’s lenders and may execute personal guarantees for future indebtedness of
the Company on a case-by-case basis, as determined in the sole and absolute
discretion of each individual Indemnitee, strictly conditioned upon the Company
providing the Indemnitee (i) an irrevocable and unequivocal indemnification and
(ii) payment of credit enhancement fees to the Indemnitee in exchange for the
provision of the guaranty required by the Company’s lenders.

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I. The Company acknowledges and agrees that the financial condition of an
Indemnitee may deteriorate from time to time during the period of time in which
the Indemnitee has offered credit support to the Company and any credit support
provided by an Indemnitee shall not operate to limit or restrict the private
financial transactions of an Indemnitee; including but not limited to its
ability to incur additional debts or contingent liabilities nor shall it form a
basis from which the Company may deny indemnification hereunder.

J. In view of the considerations set forth above, the Company desires to enter
into this Credit Enhancement and Indemnification Agreement to induce Indemnitee
to provide the credit enhancement required by the Company’s lenders with the
understanding that the Indemnitee shall be fully and completely indemnified,
defended, protected and compensated by the Company as set forth herein.

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

1. Recitals. All of the above recitals are incorporated herein by reference as
if fully set forth below and all defined terms in this Agreement shall have the
meanings ascribed to them as set forth in Section 11 hereto.

2. Credit Enhancement Fees and Terms.

(a) Transaction Fee Defined. The Company and Indemnitee acknowledge and agree
that Indemnitee shall not be obligated to enter into any Guaranty on behalf of
the Company and may refuse to offer credit support or enhancement to the Company
for any reason, or for no reason whatsoever, in their sole and absolute
discretion. Provided however, in the event the Indemnitee should determine to
offer the Company credit support or enhancement from time to time, a Guaranty
executed by Indemnitee and subject to this Agreement and any credit enhancement
fee (the “Transaction Fee”) paid to Indemnittee by, or on behalf of the Company,
shall be negotiated on an individual, case-by-case basis, due to among other
things, the inherent risks associated with each project loan secured by the
Company which is subject to a Guaranty.

(b) Transaction Fees as an Addendum to Agreement. Any Transaction Fee paid and
Guaranty executed by Indemnitee subject to this Agreement shall be particularly
identified and summarized on Schedule A hereto, which Schedule A will be updated
and supplemented from time to time (each such summary identified on Schedule A
hereafter being a Transaction Fee Summary). Each Transaction Fee Summary shall
contain at a minimum the following information: i) Lender, ii) Borrower, iii)
Project, iv) Loan amount, v) Transaction Fee amount, vi) and Payment Terms. As
of the Effective Date of this Agreement, the Company, through its subsidiaries,
intends to enter into Loans with Cardinal Bank and Eagle Bank, each of which
require a Guaranty by Indemnitee and for which the Indemnitee has agreed to
offer the required Guaranty and the Company has agreed to abide by the terms
contained on Schedule A. A Transaction Fee shall be due and payable to an
Indemnitee, it heirs, estate, designee, successors, and or assigns until such
time as the Loans have been repaid in full or an Indemmitee has been fully and
unequivocally released from its obligations under a Guaranty.

(c) Default Rate. In the event an Indemnitee is required to incur and pay an
Expense as a result of a Lender seeking to enforce a Guaranty, the Company shall
be charged a Default Rate on the amount of the Expense until all outstanding
Expenses have been reimbursed to an Indemnitee.

 

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3. Indemnification, Contribution and Release.

(a) Indemnification of Indemnitee by the Company. The Company shall fully
indemnify Indemnitee from and against any and all liability and Expenses
(hereafter defined) arising in any way whatsoever from enforcement of the
Guaranty by a Lender regardless of the nature or the amount of such liabilities,
costs, expenses or damages, including but not limited to all legal fees, court
costs and related expenses associated with defending any claims brought against
Indemnitee in connection with the Guaranty or arising from enforcement of this
Agreement.

(b) Contribution to Indemnitee by the Company or Contribution between
Indemnitees. If the indemnification obligations of the Company under
Section 3(a) hereof shall be unavailable to Indemnitee as determined by a court
of competent jurisdiction for any reason other than that set forth in Section 6
hereof with respect to any Expense, then the Company, in lieu of indemnifying
Indemnitee thereunder, shall contribute to the amount paid or payable by an
Indemnitee as a result of such liability or expense up to the full amount of all
expenses paid or payable by each Indemnitee. Should the Company be unable to
indemnify or contribute to an Indemnitee for any reason whatsoever, then each
Indemnitee shall be required to indemnify and or contribute to the other an
amount equal to 50% of the amount of all Expenses related to a Guaranty or Loan
incurred by another Indemnitee, including but not limited to all legal fees,
court costs and related expenses associated with defending any claims brought
against Indemnitee in connection with the Guaranty by a Lender and any and all
legal fees, court costs and related expenses associated with enforcement of the
indemnification and contribution obligations set forth in this Agreement by one
Indemnitee against another Indemnitee.

(c) General Release of Indemnitee. The Company represents and warrants that, on
a periodic basis, it shall make commercially reasonable efforts to obtain a
release of the Indemnitee from any Guaranty of a Loan obtained by the Company
subject to a Guarantee either through negotiations with a current Lender or
pursuant to refinancings of existing indebtedness subject to a Guaranty pursuant
to commercially reasonable terms, as determined by the Company in its reasonable
discretion. In furtherance of this purpose, the Company represents and warrants
that it will also make commercially reasonable efforts to obtain a release of
the Indemnitee from any Guaranty of a Loan obtained by the Company subject to a
Guarantee as part if its efforts to raise additional capital for the Company.

(d) Condition Precedent Release. Notwithstanding the requirement set forth in
Section 3(c) hereof, the Company shall be required to obtain the full release of
an Indemnitee, at no cost to the affected Indemnitee from all obligations under
a Loan and Guaranty, as a condition precedent to the occurrence of any of the
following events:

(i) A Change in Control of the Company;

 

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(ii) the termination for convenience or cause of an Indemnitee pursuant to their
employment arrangement;

(iii) the sale of a subsidiary of the Company unless any Loan and Guaranty
enforceable against an Indemnitee is paid in full as a result of the sale;

(iv) the filing of a petition for voluntary or involuntary bankruptcy by or
against the Company or any of its subsidiaries or an admission in writing by the
Company or any of its subsidiaries of their inability to pay their debts when
due, related to a Loan and Guaranty enforceable against an Indemnitee;

(e) Condition Subsequent Release. Notwithstanding anything set forth in
Section 3(c) hereof, the Company shall be required to obtain the full release of
an Indemnitee, at no cost to the affected Indemnitee from all obligations under
a Loan and Guaranty, within the earlier of: (i) sixty (60) days from the
occurrence of any of the following events, or (ii) within three (3) days after
the receipt by an Indemnitee of a notice of a default pursuant to a Guaranty and
Loan:

(i) the death of an Indemnitee or the disability of an Indemnitee that results
in an Indemnitee taking a leave of absence from his employment;

(ii) receipt by the Company or an Indemnitee of a notice from a Lender of a
material adverse change in the financial condition of the Company or a
subsidiary of the Company that the Lender asserts constitutes, or by the passage
of time may constitute, an event of default under a Loan,

(iii) a Change in Control of the Lender for which an Indemnitee has provided a
Guaranty pursuant to a Loan;

(iv) a participation of all or any portion of an interest in a Loan by a Lender
to another lender unless the Lender has retained the full authority to negotiate
the terms of the Loan with the Company, or its subsidiary;

4. Expenses; Indemnification Procedure.

(a) Reimbursement of Expenses. To the extent not prohibited by a court order
from a court of competent jurisdiction, the Company shall reimburse Expenses
incurred by Indemnitee within ten (10) days after written demand by Indemnitee
therefor to the Company and presentation of any invoices received by an
Indemnitee. The Company shall reimburse Expenses incurred by Indemnitee to
defend any Proceeding against the Indemnitee brought by a Lender or to enforce a
Guaranty, or a Proceeding by one Indemnitee against the other, by payment of its
legal Expenses as incurred, and in no event later event later than thirty
(30) days after written demand by Indemnitee therefor to the Company.

(b) Notice; Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee’s right to be indemnified under this Agreement, (i) give
the Company notice in writing as soon as practicable of any Proceeding for which
indemnification could be sought under this Agreement and (ii) shall not occur
Expenses prohibited by the Loan Documents, including but not limited to the
enforcement of a Proceeding against another Indemnitee in contravention of a
Guaranty of Lender.

 

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(c) No Presumptions; Burden of Proof.

In connection with any determination as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.

(d) Notice to Insurers. If, at the time of the receipt by the Company of a
notice of a Proceeding, the Company has liability insurance in effect which may
cover such Proceeding, the Company shall give prompt notice of the commencement
of such Proceeding to the insurers in accordance with the procedures set forth
in the respective policies. The Company shall thereafter take all commercially
reasonable action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such action, suit, proceeding, inquiry or
investigation in accordance with the terms of such policies, subject to
Indemnitee’s rights set forth in Section 4(e) below, provided however,
Indemnitee’s right to selection of counsel is limited to the panel list of
counsel set forth in the applicable policy.

(e) Selection of Counsel. In the event the Company shall be obligated hereunder
to pay the expenses of a Proceeding, the Company shall be entitled to assume the
defense of such Proceeding with counsel selected by the Company but approved by
the Indemnitee in its sole discretion, upon the delivery to the Indemnitee of
written notice of its election to do so. In the event the Company does not
assume the defense of such Proceeding, the Indemnitee shall be entitled to
assume the defense of such Proceeding and select its own counsel and the
Indemnitee shall be entitled to settle a claim against the Indemnitee without
the prior consultation and approval of the Company. If such defense is conducted
by the Indemnitee, the Company will be liable for payment of the Indemnitee’s
expenses in accordance with 4(a) above. If such defense is assumed by the
Company, the Company shall have the right to employ Indemnitee’s counsel in any
such Proceeding in which it is a party if Indemnitee and its counsel shall not
have reasonably concluded that there is a conflict of interest between the
Company and Indemnitee in the conduct of any such defense.

5. Life Insurance. Many standard provisions of a Guaranty provide that the death
of an individual guarantor creates an event of default under the Loan or Loan
Documents unless the estate of an individual guarantor affirms the obligation,
entitling the Lender to accelerate repayment of the Loan. As a material
inducement for the Indemnitees to enter into this Agreement, the Company has
agreed to reimburse each Indemnitee for the cost of annual premiums associated
with the purchase of additional life insurance policies pursuant to the
following terms and conditions:

(i) the reimbursement shall be at the written request of an Indemnitee,
submitted with proof of payment and evidence of life insurance coverage;

(ii) the reimbursement of an annual premium to be paid for each policy shall not
exceed $15,000 per Indemnitee (the “Covered “Premium”);

 

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(iii) the Company acknowledges and agrees the Indemnitee shall be the named
beneficiary under the policy or policies and that the estate of an Indemnitee,
or other named beneficiary, shall not have a requirement to retire Loans for
which a Guaranty was entered into by an Indemnitee or to otherwise negotiate the
full release of all Guarantys entered into by an Indemnitee through the payment
of any portion of the proceeds of a policy;

6. Exceptions. Notwithstanding anything to the contrary herein, the Company
shall not be obligated pursuant to the terms of this Agreement to indemnify
Indemnitee for any Expenses incurred by Indemnitee with respect to any
Proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction renders a judgment, order, ruling or decree in
favor of the Company, and the ruling makes a factual determination that each an
every material claim and assertion made by Indemnitee in such Proceeding was
frivolous.

7. Scope; Nonexclusivity.

(a) Scope. It is understood that the parties to this Agreement intend for this
Agreement to be interpreted and enforced so as to provide indemnification of
Expenses to Indemnitee to the fullest extent now or hereafter permitted by law,
subject only to the express exceptions and limitations otherwise set forth in
this Agreement. In the event of any change after the date of this Agreement in
any applicable law, statute or rule which expands the right of the Company to
indemnify an Indemnitee, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits afforded by such change. In
the event of any change in any applicable law, statute or rule which narrows the
right of the Company to indemnify an Indemnitee, such change, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties’ rights and obligations
hereunder.

(b) Nonexclusivity. The indemnification of Expenses provided by this Agreement
shall be in addition to any rights to which Indemnitee may be entitled under the
charter documents of the Company or any Subsidiary, any indemnification or other
agreements entered into by and between the Company and an Indemnitee, any vote
of stockholders or disinterested directors, the General Corporation Law of the
Commonwealth of Virginia, or otherwise.

8. Consents Required. The Company must seek the prior, written consent of
Indemnitee for the following actions of the Company or of its subsidiaries:

(i) Amendment of the Guaranty;

(ii) Amendment of the Loan Documents which consent shall not be unreasonably
witheld; or

(iii) A Transfer or sale of the collateral secured by the Loans unless the Loan
is fully repaid as part of the Transfer or sale; except for partial releases of
collateral pursuant to unit release provisions set forth in the Loan Documents
which is permitted.

 

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(iv) A sale of a subsidiary for which a Guaranty of Indemnitee remains issued
and outstanding, in whole or in part,

(v) A Change in Control of the Company

9. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Proceeding, but not for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.

10. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law, applicable public policy may prohibit the
Company from indemnifying the Indemnitees under this Agreement or otherwise.

11. Construction of Certain Terms and Phrases. As used in this Agreement, the
following terms and phrases shall have the meanings set forth below:

(a) “Change in Control” shall mean: (i) the acquisition by any “person” or
“group” (as defined in or pursuant to Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (other than (A) the
Company or any subsidiary thereof or (B) any employee benefit plan of the
Employer or any subsidiary thereof, directly or indirectly, as “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the
Company representing more than fifty percent (50%) of either the then
outstanding shares or the combined voting power of the then outstanding
securities of the Company; or (ii) (A) a merger, consolidation or other business
combination of the Company with any other “person” or “group” (as defined in or
pursuant to Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof,
other than a merger or consolidation that results in the outstanding common
stock of the Company immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into common stock of the
surviving entity or a parent or affiliate thereof) more than fifty percent
(50%) of the outstanding common stock of the Company or such surviving entity or
a parent or affiliate thereof outstanding immediately after such merger,
consolidation or other business combination, (B) adoption by the stockholders of
a plan of complete liquidation of the Company (C) the sale or disposition by the
Company of all or substantially all of it’s assets (including if accomplished
pursuant to the sale of shares of equity securities (including by any
consolidation, merger or reorganization) of one or more subsidiaries of the
Company which collectively constitute all or substantially all of its assets),
or (iii) the change in the Company’s Board of Directors representing a shift in
more than fifty percent (50%) of the existing directors during the term of this
Agreement.

(b) “Default Rate” shall mean interest on the outstanding principal balance of
Expenses incurred and paid by an Indemnitee at a rate equal to the greater of
(i) the interest rate being charged pursuant to the terms of the Loan, including
any default interest rate under the Loan, from which the Expense is incurred,
plus twelve percent (12%) per annum or (ii) in the event the interest rate under
the Loan is not capable of being calculated, then a flat interest rate of
eighteen percent (18%) per annum.

 

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(c) “Expense” shall include principal, interest, default interest, late fees,
penalties, extension fees, closing costs, administrative costs, legal costs, and
any and all other costs and expenses charged by a Lender pursuant to a Loan
Guaranty and the Loan Documents, incurred by Indemnitee pursuant to such Loan
along with all additional liability and expense incurred by an Indemnitee in
satisfaction or defense of a Loan (including Indemnitee’s reasonable attorneys’
fees, whose selection of counsel shall be at Indemnitees sole discretion, and
all other reasonable costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in, a
Proceeding), judgments, fines, penalties and any and amounts paid in settlement
of a Proceeding.

(d) “Guaranty” shall refer to any environmental indemnity agreements, personal
guarantees for repayment of indebtedness or satisfaction of other performance
obligations entered into by and between a Lender and an Indemnitee related to a
Loan or any obligations set forth in Loan Documents for which an Indemnitee
otherwise incurs an Expense.

(e) “Lender” shall be any identified lender, or its successors and assigns,
granting a Loan, or any other beneficiary under any Loan Document.

(f) “Loan” shall refer to any loan between the Lender and a Company subsidiary,
now or hereafter particularly identified on Schedule A, as modified and
supplemented from time to time.

(g) “Loan Documents” shall refer to any and all documents executed by the
Company or its subsidiaries in favor of Lender, as well as any Guaranty entered
into to secure a Loan.

(h) “Proceeding” shall mean any threatened, pending or completed action, suit,
proceeding or alternative dispute resolution mechanism, or any hearing, inquiry
or investigation that Indemnitee in good faith believes might lead to the
institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether brought by or in the right of any Lender, an
Indemnitee, the Company or any Subsidiary or otherwise, and whether civil,
criminal, administrative, investigative or other, in which Indemnitee was or is
or becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant by reason of (or arising in part
out of) any event or occurrence related to the Guaranty or this Agreement.

(i) “Subsidiary” shall mean any of the borrowers listed in Schedule A to this
Agreement, as modified and supplemented from time to time.

12. Successors and Assigns. This Agreement shall inure to the benefit of any of
the Indemnitee’s, heirs, successors or assigns and shall be fully binding upon
the Company, its Subsidiaries, and their successors and assigns.

13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.

 

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14. Notice. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when received, and shall in any event be
deemed to be received (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by certified or
registered mail, postage prepaid, (b) upon delivery, if delivered by hand, or
(c) one business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid, and shall be addressed if to
Indemnitee, at Indemnitee’s address as set forth beneath Indemnitee’s signature
to this Agreement and if to the Company at the address of its principal
corporate offices (attention: General Counsel) or at such other address as a
party may designate by ten days’ advance written notice to the other party
hereto. The Company shall provide to Indemnitee any notices it receives from
Lender pertaining to a potential Proceeding within 3 days of receipt of such
notice.

15. Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.

16. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single
section, paragraph or sentence) are held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law. Furthermore, to the
fullest extent possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

17. Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the Commonwealth of
Virginia, without regard to the conflict of laws principles thereof.

18. Survival. All of Company’s representations, warranties, covenants and
indemnities expressed herein shall survive the repayment of the Loans and the
release of the Indemnitees under the Loans or their Guaranty in perpetuity
unless otherwise waived in writing by an Indemnitee and all of the Company’s
representations, warranties, covenants and indemnities expressed herein are
unconditional and are not subject to offset for any amounts due from the
indemnified parties to the Company. Moreover, and by way of example and not
limitation, the Change in Control of the Company or its Subsidiaries and the
change in status of an Indemnitee as an employee of the Company shall not limit
in any way Company’s obligations hereunder or under a Loan, Loan Document or
Guaranty.

19. Conflicts. Nothing contained in any other writing, including Loan Documents
or a Guaranty, shall diminish or in any way alter the liability of the Company
as set forth in this Agreement.

20. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

 

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21. Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.

22. No Construction as Employment Agreement. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the employ
of the Company or any of its Subsidiaries.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

COMSTOCK HOMEBUILDING

COMPANIES, INC.

By:

 

 

Name:

 

 

Title:

 

 

 

AGREED TO AND ACCEPTED BY: Signature:  

 

Name:   Christopher Clemente Address:  

 

Signature:  

 

Name:   Gregory Benson Address:  

 

 

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Schedule A

ITEM A-1

 

Lender:   Cardinal Bank Borrower:   Comstock Cascades II, L.C. Project:  
Cascades Apartments Corporate Guarantor:   CHCI Personal Guarantor:  
Christopher Clemente, Gregory Benson Loan Amount:   Up to $11,000,000
Maximum of Personal   Guarantor Exposure:   $6,800,000 Transaction Fee:   4%
Transaction Fee per annum and in the aggregate, calculated on the lesser of (i)
the outstanding loan balance at the end of each calendar month, (the “Measuring
Date”); or (ii) the maximum amount of the loan guaranteed by Indemnitee existing
on a given Measuring Date. Payment Terms:   Fifty percent (50%) of the
Transaction Fee shall be paid current (payable monthly) on the 10th day of each
calendar month, commencing on the 10th day of the calendar month immediately
following the month during which the loan closing occurs. The remaining Fifty
percent (50%) of the Transaction Fee shall accrue, on an annual basis, and be
paid annually (non-compounding), commencing on the 10th day of the calendar
month immediately following each anniversary of the loan closing. The
Transaction Fee payments shall be paid 50% to each of Clemente and Benson.

Borrower has executed this Schedule to acknowledge it is jointly and severally
liable with the Company to the Indemnitee, for payment of the Transaction Fee
for the Cardinal Bank loan and all other indemnification requirements set forth
in the Agreement related to the Cardinal Bank loan.

 

Borrower: Comstock Cascades II, L.C. By: Comstock Homebuilding Companies, Inc.,
Its Manager

 

Name:   Joseph M. Squeri Title:   Chief Financial Officer Date:       /    /    

 

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Schedule A

ITEM A-2

 

Lender:   Eagle Bank Borrower:   Comstock Potomac Yard, L.C. Project:   Eclipse
on Center Park Condominium Corporate Guarantor:   CHCI Personal Guarantor:  
Christopher Clemente, Gregory Benson Loan Amount:   Up to $11,850,000
Maximum of Personal   Guarantor Exposure:   Up to $11,850,000 Transaction Fee:  
4% Transaction Fee per annum and in the aggregate, calculated on the lesser of
(i) the outstanding loan balance at the end of each calendar month, (the
“Measuring Date”); or (ii) the maximum amount of the loan guaranteed by
Indemnitee existing on a given Measuring Date. Payment Terms:   Fifty percent
(50%) of the Transaction Fee shall be paid current (payable monthly) on the 10th
day of each calendar month, commencing on the 10th day of the calendar month
immediately following the month during which the loan closing occurs. The
remaining Fifty percent (50%) of the Transaction Fee shall accrue, on an annual
basis, and be paid annually (non-compounding), commencing on the 10th day of the
calendar month immediately following each anniversary of the loan closing. The
Transaction Fee payments shall be paid 50% to each of Clemente and Benson.

Borrower has executed this Schedule to acknowledge it is jointly and severally
liable with the Company to the Indemnitee, for payment of the Transaction Fee
for the Eagle Bank loan and all other indemnification requirements set forth in
the Agreement related to the Eagle Bank loan.

 

Borrower: Comstock Potomac Yard, L.C. By: Comstock Homebuilding Companies, Inc.,
Its Manager

 

Name:   Joeseph M. Squeri Title:   Chief Financial Officer Date:  
    /    /    

 

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