Exhibit 10.77

FORBEARANCE AGREEMENT AND

SECOND AMENDMENT OF LOAN AGREEMENT

THIS FORBEARANCE AGREEMENT AND SECOND AMENDMENT OF LOAN AGREEMENT (the
“Forbearance Agreement”), is made as of the 27th day of January, 2009
(“Forbearance Effective Date”) by and among COMSTOCK PENDERBROOK, L.C., a
Virginia limited liability company (“Borrower”) and COMSTOCK HOMEBUILDING
COMPANIES, INC., a Delaware corporation (“Comstock” or “Guarantor”) (Borrower
and Comstock are referred to herein collectively as “Obligors”), and GUGGENHEIM
CORPORATE FUNDING, LLC, having an address at 135 East 57th Street, New York, New
York, 10022 (“Administrative Agent”), for the benefit of the several banks and
other financial institutions or entities from time-to-time parties to the Loan
Agreement, defined below (the “Lenders” and together with the Administrative
Agent, the “Beneficiary”).

RECITALS

WHEREAS, Borrower, Guarantor, the Administrative Agent and the Lenders entered
into a Loan Agreement dated February 22, 2007 as amended by that certain First
Amendment of Loan Documents dated April 10, 2007 (collectively the “Loan
Agreement”), pursuant to which the Lenders agreed to and did make loans to the
Borrower in the aggregate principal amount of $28,000,000.00 (the “Loans”) for
the purposes stated in the Loan Agreement. The Loans are now secured by, among
other things, (1) an Amended and Restated Deed of Trust With Absolute Assignment
Of Leases And Rents, Security Agreement and Fixture Filing executed by Borrower,
as Grantor, in favor of the Administrative Agent and Lenders, as Beneficiaries
(the “Deed of Trust”); (2) an Environmental Indemnity Agreement executed by
Borrower and Guarantor (the “Environmental Indemnity Agreement”); (3) the
Limited Guaranty executed by the Guarantor (the “Guaranty”); (4) the Completion
Guaranty executed by the Guarantor (the “Completion Guaranty”); (5) the Pledge
Agreement executed by the Guarantor (the “Pledge”); and (6) the Collateral
Assignment of Developer’s Rights executed by the Borrower (the “Collateral
Assignment”), each dated February 22, 2007 unless otherwise indicated
(collectively the “Loan Documents”); and

WHEREAS, a number of defaults have occurred under the Loan Documents including
the failure by Borrower to make payment in full of amounts due and owing under
the Loan Documents, and Borrower has requested that the Administrative Agent
forebear from collection of the Loans, and make certain modifications to the
terms and provisions of the Loans and the Loan Agreement; and

WHEREAS, the Administrative Agent and the Lenders are willing to forebear from
exercising their rights and remedies under the Loan Agreement with respect to
the Existing Defaults (defined below), and to make certain modifications to the
terms and provisions of the Loans and the Loan Agreement in accordance with the
provisions of this Forbearance Agreement.

 

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NOW, THEREFORE, for and in consideration of the sum of Ten and 00/100 Dollars
($10.00) cash in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
stipulate and agree as follows:

1. Recitals. All of the foregoing recitals are hereby incorporated into this
Forbearance Agreement. Capitalized terms that are not otherwise defined in this
Forbearance Agreement shall have the same meanings herein as ascribed to such
terms in the Loan Agreement.

2. Acknowledgment of Loan Balances and Default.

a) Borrower and Guarantor each acknowledge that they are in default under the
Loan Documents, such Events of Default being specified in the letters to
Borrower and Guarantor attached hereto as Exhibit A (“Existing Defaults”) and
the Administrative Agent and the Lenders have the right to exercise all remedies
set out in the Loan Documents and available at law and in equity, including but
not limited to foreclosing on the Units and the Property. Borrower and Guarantor
hereby represent, warrant, agree and acknowledge that the outstanding balances
on the Loans as of January 27, 2009 are as follows:

 

 

Tranche A Term Loan:

  

Principal

   $ 0.00

Interest

     0.00       

Total

   $ 0.00

Tranche B Term Loan:

  

Principal

   $ 13,593,605.00

Interest

     424,915.32

Quarterly Admin. Fee

     10,000.00       

Total

   $ 14,028,520.32

b) Borrower and Guarantor each hereby reaffirm to the Administrative Agent and
the Lenders (i) the validity and enforceability of the Loan Agreement and the
other Loan Documents as modified herein; (ii) that the signature of Borrower and
Guarantor upon the Loan Agreement and the Loan Documents were authorized and are
genuine; and (iii) neither the Borrower nor the Guarantor has any knowledge of
any offsets or defenses to the enforceability of the Loan Agreement and the
other Loan Documents.

 

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c) The parties hereto acknowledge that the interest and the Quarterly Admin. Fee
due and owing through January 27, 2009 on the Tranche B Term Loan are to be
added to the principal balance due on the Tranche B Term Loan resulting in a
principal balance due on the Tranche B Term Loan of $14,028,520.32.

3. Payment of Past Due Amounts.

Simultaneously with the execution of this Forbearance Agreement by Borrower and
Guarantor, Borrower agrees to pay, and shall pay, the following amounts:

 

  a) All real estate taxes presently due and owing relating to the Property and
Units, including all past due taxes, penalties and interest, in the amount of
$324,643.21; and

 

  b) All condominium association assessments due and owing for the Units through
January 31, 2009, in the amount of $479,572.81; and

 

  c) To the Administrative Agent the following amounts:

 

  (i) $15,000.00 to reimburse the Administrative Agent for expenses incurred in
connection with the review and audit of books and records of the Borrower by
Alvarez and Marsal; and

 

  (ii) $45,000.00 to reimburse the Administrative Agent for attorney’s fees and
costs incurred in connection with the Loans, the defaults by the Borrower and
Guarantor, the Lawsuit (as defined in Section 9 of this Forbearance Agreement)
and the negotiation, preparation and implementation of this Forbearance
Agreement

Borrower shall provide the Administrative Agent with proof of payment of the
amounts required to be paid pursuant to Sections 3(a) and 3(b) above no later
than the Forbearance Effective Date.

4. Borrower’s Calculation of NOI, Interest Reserve Account, and Proof of
Insurance.

a) On or before the Forbearance Effective Date, Borrower shall deliver to the
Administrative Agent (i) Borrower’s calculation of NOI, as required by
Section 5.1 of the Loan Agreement, for the months of October, November and
December, 2008, (ii) Borrower’s balance sheet for December, 2008 (in a form
reasonably acceptable to Administrative Agent) (“Borrower’s December Balance
Sheet”), and (iii) a rent roll for the Property for January, 2009 (in a form
reasonably acceptable to Administrative Agent). From and after the Forbearance
Effective Date, Borrower shall strictly comply with the requirements of
Section 5.1 of the Loan Agreement, as modified herein.

 

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b) Borrower and Administrative Agent hereby acknowledge that at Closing,
Borrower deposited into the Interest Reserve Account established pursuant to
Section 5.1 of the Loan Agreement the amount of Two Million Five Hundred
Thousand Dollars and No Cents ($2,500,000.00). Borrower and Guarantor
acknowledge that the Administrative Agent had the right to and did set-off
against the Interest Reserve Account and applied the funds in the Interest
Reserve Account against interest and principal amounts owed on the Loans and
that as of the Forbearance Effective Date there are no funds on deposit in the
Interest Reserve Account.

c) Simultaneously with the execution of the Forbearance Agreement, Borrower
shall pay to Administrative Agent the positive difference, if any, between
(i) the net cash reflected on Borrower’s December Balance Sheet, and (ii) the
sum of (A) $25,000, plus (B) the amount used to pay the items set forth in
Section 3 of this Forbearance Agreement, plus (C) a $75,000 partial
reimbursement to Guarantor of expenses paid by Guarantor on behalf of the
Borrower in accordance with the Loan Documents. Any amount paid to
Administrative Agent pursuant to this Section 4(c) shall be applied to the
outstanding principal balance of the Tranche B Term Loans.

d) On or before the Forbearance Effective Date, Borrower shall deliver to
Administrative Agent proof of Insurance in compliance with Section 6.8 of the
Loan Agreement.

5. Modification of Loan Agreement.

Provided that Borrower timely satisfies all of the terms, conditions and
requirements set forth above in this Forbearance Agreement, the Loan Agreement
from and after the Forbearance Effective Date is hereby modified as follows:

 

  a) Section 6.8.1(c) of the Loan Agreement is amended to reduce all insurance
limits and sublimits to Two Million Dollars ($2,000,000) in the annual aggregate
and One Million Dollars ($1,000,000) per occurrence.

 

  b) Section 7.4 of the Loan Agreement is amended to read as follows:

Sale Activity. Borrower shall use all commercially reasonable efforts to market
and sell all Units in the Project for a Unit selling price sufficient to satisfy
the requirements of Section 6.7(i) and Section 7.7(b). Borrower shall provide
Administrative Agent by the tenth (10th) day of each month with a Sales Report
certified by the Borrower for the preceding month. Within ten (10) days after
written request from Administrative Agent, Borrower shall also provide
Administrative Agent with any information reasonably requested by Administrative
Agent or Lenders regarding sales activity at the Project.

 

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  c) Section 7.5 of the Loan Agreement and Exhibit E of the Loan Agreement are
deleted.

 

  d) Section 7.1(c) of the Loan Agreement is deleted.

 

  e) Section 6.7(i) of the Loan Agreement entitled “Unit Selling Price” is
amended to read as follows:

Unit Selling Price. From and after the Forbearance Effective Date, Units shall
be sold for no less than a minimum unit selling price set by the Borrower
necessary to satisfy the payment requirements to the Administrative Agent set
forth in Section 7.7(b), unless otherwise approved by the Administrative Agent,
in writing.

 

  f) Section 7.1(f) of the Loan Agreement is deleted.

 

  g) The first sentence of Section 7.7(a) of the Loan Agreement is amended to
read as follows:

Condominium Closings. No less than three (3) Business Days prior to the closing
of each Residential Unit or Parking Unit pursuant to an Approved Condominium
Contract, Borrower shall deliver notice to Administrative Agent (a “Closing
Notice”) which Closing Notice shall: (i) specifically identify the Residential
Unit(s) and Parking Units to be conveyed; (ii) state the purchase price to be
paid therefore, specifically identifying the portion thereof applicable to the
Residential Unit, Upgrades, if any, and the Parking Units, if any; and (iii) be
accompanied by the form of the partial release to be executed by the
Administrative Agent on behalf of the Lenders in order to release its security
interest under the Deed of Trust in the applicable Residential Unit and/or
Parking Units to be sold and containing a description of the applicable
Residential Unit and/or Parking Units to be released, which partial release
shall be prepared by Borrower at Borrower’s sole cost and expense (“Unit
Releases”).

 

  h) Section 7.7(b) of the Loan Agreement is amended to read as follows:

Release of Units. Upon receipt of a Closing Notice and satisfaction of all
conditions precedent set forth in Section 7.7(a) and this Section 7.7(b), and
upon the confirmation of the closing of a Residential Unit and/or Parking Units
pursuant to an Approved Condominium Contract (such confirmation to be satisfied
through the delivery of a fully executed HUD-1 from the settlement agent
coordinating the closing, and written confirmation from the settlement agent
coordinating the closing of such agent’s receipt of immediately available funds
sufficient to fully fund the closing in

 

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accordance with the fully executed HUD-1 for the closing), Administrative Agent
shall authorize in writing recordation of the deed transferring title to the
Unit pursuant to the Approved Condominium Contract and agrees to release the
applicable Residential Unit, Parking Units and its appurtenant undivided
interest in the common elements from the lien of the Deed of Trust and the other
Loan Documents upon receipt of the Unit Release Payment for each Unit so sold.
As used herein, “Unit Release Payment” means 90% of the Net Sales Price for such
Residential Unit and its Parking Units, but in no event not less than $135,000,
other than with the prior written consent of the Administrative Agent. Borrower
shall cause the Title Insurer, as escrowee, to pay the proceeds of sale in an
amount of not less than the Unit Release Payment directly to Administrative
Agent by wire-transfer of immediately available funds. The proceeds of sale
shall be applied to the outstanding principal balance of the Tranche B Term
Loans.

 

  i) Exhibit F of the Loan Agreement is replaced with Exhibit F attached to this
Forbearance Agreement.

 

  j) Section 6.7(j) of the Loan Agreement is amended to read as follows:

Number of Units Sold. (i) From and after the Forbearance Effective Date and
continuing through December, 2010, prior to the end of each calendar quarter
that all or any part of the Loans are outstanding, Borrower, on an ongoing
cumulative basis, shall have closed on the Minimum Unit Settlements as set forth
below:

Q1 2009: 0

Q2 2009: 0

Q3 2009: 1

Q4 2009: 6

Q1 2010: 8

Q2 2010: 10

Q3 2010: 16

Q4 2010: 24

Borrower’s failure to close on the required Minimum Unit Settlements by the end
of any of the above referenced calendar quarters shall be an Event of Default
under this Agreement unless, (a) within twenty-five (25) days of the end of such
calendar quarter, the Borrower provides Administrative Agent with written notice
that it will either: (i) affect a Unit Deficiency Reduction Payment as defined
in Section 6.7(j)(ii) below, or (ii) affect a

 

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Deed-in-Lieu Cure as defined in Section 6.7(j)(iii) below, and in such notice
specify which option has been chosen by Borrower, and (b) if such notice is
timely delivered, the Borrower delivers the Unit Deficiency Reduction Payment or
the Cure Deed (together with all applicable recording costs for the Cure Deed
and all affidavits and documents reasonably required for the Administrative
Agent to obtain owner’s title insurance for the conveyed Units), as the case may
be, to Administrative Agent within thirty (30) days of the end of such calendar
quarter.

(ii) A “Unit Deficiency Reduction Payment” occurs when the Borrower makes a
release payment to the Administrative Agent for the number of Residential Units
representing the difference between the Minimum Unit Settlements required for
such calendar quarter under Section 6.7(j)(i) herein and the actual cumulative
number of Residential Units closed by the end of such calendar quarter. The
Residential Units shall be released under this provision in accordance with the
order and priority set forth in Section 6.7(j)(iii) until sufficient Residential
Units have been released to satisfy the Event of Default. Each Unit Deficiency
Reduction Payment will be an amount equal to the then Average Debt Per Unit
multiplied by the following in accordance with the applicable Residential Unit
type:

 

Unit Type

  

Multiple

Penderbrook    1.40x McLean    1.30x Fairfax    1.20x Clifton    1.10x

Upon receipt of the Unit Deficiency Reduction Payment, Administrative Agent will
release such Residential Units from the lien of the Deed of Trust. Residential
Units released through a Unit Deficiency Reduction Payment shall be deemed
closed Units for the purpose of: (i) satisfying the Minimum Unit Settlement
requirements set forth in Section 6.7(j)(i); (ii) extending the Maturity Date in
accordance with Section 2.2(f)(ii); and (iii) calculating and re-computing PIK
Interest in accordance with Section 2.6(g).

(iii) A “Deed-in-Lieu Cure” occurs when the Borrower delivers to the
Administrative Agent a deed in the form attached hereto as Exhibit F (“Cure
Deed”) for a total number of Residential Units (and their corresponding Parking
Units and appurtenant undivided interest in the common elements) representing
the difference between the Minimum Unit Settlements required for such calendar
quarter under Section 6.7(j)(i)

 

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herein and the actual cumulative Residential Units closed by the end of such
calendar quarter. The Residential Units shall be conveyed “as-is” and
alternating between unrenovated and renovated Residential Units in the following
order: (A) unrenovated, vacant and not leased, (B) renovated, vacant and not
leased, and once all Residential Units falling into categories (A) and (B) have
been conveyed, then (C) unrenovated, leased, and (D) renovated, leased; all in
accordance with the following sentence. Residential Units shall be conveyed on a
rotating basis in the following order, subject to the renovation status and
availability of each Residential Unit as provided in this Section 6.7(j)(iii)
above: (w) Penderbrook, (x) McLean, (y) Fairfax, and (z) Clifton. For each
Residential Unit conveyed pursuant to this Section 6.7(j)(iii), the Loan balance
will be reduced by an amount equal to the then Average Debt Per Unit conveyed,
multiplied by the following in accordance with the applicable Residential Unit
type:

 

Unit Type

  

Multiple

Penderbrook    1.22x McLean    1.05x Fairfax    0.94x Clifton    0.78x

(iv) Residential Units conveyed to Lender by Cure Deed pursuant to
Section 6.7(j)(iii) shall not be considered closed Units for purposes of
(a) satisfying the requirements for extending the Maturity Date in accordance
with Section 2.2(f)(ii); and (b) calculating and re-computing PIK Interest in
accordance with Section 2.6(g).

(v) In no event shall the Borrower convey to Administrative Agent pursuant to
the provisions of Section 6.7(j)(iii) more than that number of Residential Units
required to satisfy the Event of Default.

 

  k) Section 2.6(b) of the Loan Agreement is amended to read as follows:

Interest (“Interest”) shall accrue and be payable in cash on the outstanding
principal balance of each of the Tranche B Term Loans at the rate (the “Tranche
B Term Loan Interest Rate”) from time to time which is equal to the Index Rate
(as defined in Section 2.6(c)) then in effect plus 200 basis points.

 

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  l) The following is added to Section 2.6 of the Loan Agreement:

(g) (i) Commencing on the Forbearance Effective Date, additional paid in kind
interest (“PIK Interest”) shall accrue on a monthly basis on the Loans. The PIK
Interest rate charged shall depend upon the cumulative number of Residential
Units closed as of the last day of the previous calendar quarter according to
the following schedules:

Schedule A: For Calendar Year 2009:

 

Cumulative
Residential Units
Closed

 

PIK Interest Rate
(basis points per
annum)

0-9   1200 10   700 11   650 12   600 13   550 14   500 15   450 16   400 17  
350 18   300 19   250 20 or more   200

Schedule B: For Calendar Year 2010:

 

Cumulative
Residential Units
Closed

 

PIK Interest Rate
(basis points per
annum)

0-15   1200 16   700 17   650 18   600 19   550 20   500 21   450 22   400 23  
350 24   300 25   250 26 or more   200

 

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Schedule C: For the Calendar Year 2011:

From January 1, 2011 through the Maturity Date the PIK Interest Rate (basis
points per annum) shall be determined based on the rate in effect on Schedule B
herein as of December 31, 2010.

Notwithstanding the above schedules to the contrary, PIK Interest commencing on
the Forbearance Effective Date through March 31, 2009 and PIK Interest
commencing on January 1, 2010 through March 31, 2010 shall accrue at the rate of
1200 basis points per annum (12.0%), subject to adjustment as provided in
Section 2.6(g)(ii). Otherwise, PIK Interest shall accrue at the rates set forth
in the above schedules based on the cumulative number of Residential Units
closed as of the last day of the previous calendar quarter. PIK Interest shall
accrue and be added to the principal amounts owing on the Loans at the end of
each month.

(ii) On each of December 31, 2009 and December 31, 2010, PIK Interest charged
for the preceding twelve (12) month period shall be recomputed based upon the
rates shown on the schedules in Section 2.6(g)(i) corresponding to the
cumulative Residential Units closed during the preceding twelve (12) month
period, and the principal balance due on the Loans shall be adjusted to take
into account this recomputation. By way of example, the PIK Interest rate for Q1
2009 is 1200. If there are five (5) Residential Units closed during Q1 2009,
based upon the number of Units closed, PIK Interest for Q2 2009 will accrue at a
rate of 1200 basis points. If there are then eight (8) additional Residential
Units closed during Q2 2009, based upon the cumulative number of Residential
Units closed for Q1 2009 and Q2 2009 (which is 13), PIK Interest for Q3 2009
will accrue at a rate of 550 basis points. If two (2) additional Residential
Units closed during Q3 2009, based upon the cumulative number of Residential
Units closed for Q1 2009, Q2 2009 and Q3 2009 (which is 15), PIK Interest for Q4
2009 will accrue at a rate of 450 basis points. If two (2) additional
Residential Units closed during Q4 2009, based upon the cumulative number of
Residential Units closed for the calendar year 2009 (which is 17), PIK Interest
for the entire calendar year 2009 is recomputed based upon a rate of 350 basis
points, and the amount of PIK Interest for the calendar year 2009 added to the
principal balance of the Loans would be adjusted accordingly. The PIK Interest
for Q1 2010 would then begin to accrue at a rate of 1200 basis points.

 

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(iii) If the Loans are refinanced or paid in full prior to the Maturity Date,
PIK Interest charged for the calendar year in which the Loans are refinanced or
paid in full (“Payoff Year”) shall be at a rate of 200 basis points, retroactive
to January 1 of the Payoff Year.

 

  m) Section 2.6(e) of the Loan Agreement is amended to read as follows:

Interest accruing through and including the last day of each calendar month
(exclusive of PIK Interest) shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to Section 2.6(d) shall be
payable from time-to-time on demand.

 

  n) Section 5.1 of the Loan Agreement is amended to read as follows:

On the fifteenth day of each calendar month, beginning February 15, 2009,
Borrower shall submit to Administrative Agent Borrower’s calculation of NOI for
the preceding month, a balance sheet for Borrower in form acceptable to
Administrative Agent for the preceding month, and a rent roll for the Project in
form acceptable to Administrative Agent for the current month. Borrower shall
have the right to retain NOI not to exceed $100,000 in each calendar year. All
NOI in excess of $100,000 in each calendar year shall be paid to the
Administrative Agent on each Interest Payment Date and applied to the
outstanding principal balance of the Tranche B Term Loans.

 

  o) The following shall be added to Section 2.2 of the Loan Agreement:

(f) (i) For purposes of this Agreement, the term “Maturity Date” shall mean
March 6, 2011 (“Modified Maturity Date”), subject to the provisions of Section
2.2(f)(ii).

 

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(ii) The Borrower shall be entitled to extend the Modified Maturity Date (such
date being an “Extended Maturity Date”) or the current Extended Maturity Date
based on the cumulative number of Residential Units closed between the
Forbearance Effective Date and the date which is fourteen (14) calendar days
prior to the Modified Maturity Date or then current Extended Maturity Date
(“Sales Period”) as follows:

 

Number of Residential
Units Closed

 

Extended
Maturity Date

45   July 6, 2011 51   September 6, 2011 57   November 6, 2011 63   January 6,
2012 69 or more   March 6, 2012

(iii) If the Modified Maturity Date is extended, the “Maturity Date” shall mean
the then current Extended Maturity Date.

(iv) In the event Borrower has not closed on the number of Residential Units
required in Section 2.2(f)(ii) during the Sales Period to qualify for an
Extended Maturity Date, Borrower (or Borrower’s affiliate acting for the
Borrower) shall have the option of extending the Modified Maturity Date or the
then current Extended Maturity Date by making a release payment for the number
of Residential Units representing the difference between the number of
Residential Units required to be closed under Section 2.2.(f)(ii) to qualify for
an Extended Maturity Date and the actual number of Residential Units closed
during the Sales Period (“Borrower Release Payment Option”). Residential Units
shall be released under this provision in accordance with the order and priority
set forth in Section 7.6(j)(iii) until sufficient Residential Units have been
released to meet the required number of Residential Units closed to qualify for
an Extended Maturity Date. Each Residential Unit release payment will be an
amount equal to then outstanding Average Debt Per Unit multiplied by the
following in accordance with the applicable Residential Unit type:

 

Unit Type

  

Multiple

Penderbrook    1.40x McLean    1.30x Fairfax    1.20x Clifton    1.10x

Borrower shall provide Administrative Agent with written notice no later than
fourteen (14) calendar days prior to the Modified Maturity Date or then current
Extended Maturity Date that it will be exercising the Borrower Release Payment
Option. If Borrower timely exercises the Borrower Release Payment Option,
payment for the Residential Units (calculated in accordance with this
Section 2.2(f)(iv)) (“Borrower Release Payment”) shall be delivered to
Administrative Agent no later than the Modified Maturity Date or the then
current Extended Maturity Date. Upon receipt of the Borrower Release Payment,
Administrative Agent will release such Residential Units from the lien of the
Deed of Trust. Residential Units released pursuant to a Borrower Release Payment
Option will be counted toward the calculation of the number of Residential Units
required to be closed under Section 2.2(f)(ii) with respect to qualifying for
additional Extended Maturity Dates.

 

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(v) If Borrower shall not have closed on the number of Residential Units
required in Section 2.2(f)(ii) to qualify for an extension of the Modified
Maturity Date or the then current Extended Maturity Date during the Sales
Period, and (A) does not exercise the Borrower Release Payment Option set forth
in Section 2.2(f)(iv), or (B) does not refinance or pay the Loans in full by the
Modified Maturity Date or the then current Extended Maturity Date, such shall be
an Event of Default and Administrative Agent and the Lenders may exercise any or
all of the remedies set forth in Article X of the Agreement. If Borrower does
not refinance or pay the Loans in full by any final Extended Maturity Date, such
shall be an Event of Default and Administrative Agent and Lenders may exercise
any or all of the remedies set forth in Article X of the Agreement.

 

  p) Section 5.2 of the Loan Agreement is amended to read as follows:

Deposits for Real Estate Taxes, HOA Fees and Insurance Premiums. (a) At the
election of Administrative Agent, Administrative Agent shall establish a Tax,
HOA and Insurance Reserve Account with a bank or financial institution selected
by Administrative Agent, and Borrower shall on the Interest Payment Date deposit
with Administrative Agent an amount equal to (i) one-twelfth (1/12) of 100% of
the annual Real Estate Taxes next to become due upon the Property for the
payment of Real Estate Taxes when due, (b) one-twelfth (1/12) of 100% of the HOA
Fees next to become due upon the Property for the payment of HOA Fees when due,
and (c) one-twelfth (1/12) of the Insurance Premiums that Administrative Agent
estimates will be payable during the next ensuing twelve (12) months for the
renewal of the coverage afforded by the Insurance Policies upon the expiration
thereof or such higher amount necessary to accumulate with Administrative Agent
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Insurance Policies, which payments shall be
deposited by Administrative Agent into the Tax, HOA and Insurance Reserve
Account; provided that in the case of the first such deposit there shall be
deposited by Borrower, in addition, an amount which, when added to the aggregate
amount of monthly sums next payable under this Section 5.2, will result in a
sufficient reserve to pay the Real Estate Taxes, HOA Fees and Insurance Premiums
next becoming due one month prior to the date when such Real Estate Taxes, HOA
Fees and Insurance Premiums are, in fact, due and payable. If Administrative
Agent determines at any time that the monthly payments are not adequate to fund
the next installment of Real Estate

 

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Taxes, HOA Fees and Insurance Premiums due, Borrower shall make an additional
deposit in an amount equal to the expected deficiency. The amount of the
deposits described in this Section 5.2(a) (herein generally called “Tax, HOA and
Insurance Reserve Funds”) shall be based upon Administrative Agent’s reasonable
estimate as to the amount of Real Estate Taxes, HOA Fees and Insurance Premiums
next to be payable. Failure of Borrower to make the monthly deposits required by
this Section 5.2 shall constitute an Event of Default.

(b) It shall be the responsibility of Borrower to furnish Administrative Agent
with the bills for the Real Estate Taxes, HOA Fees and Insurance Premiums not
later than the date that is thirty (30) days (or such later date if Borrower
does not receive the bills from the billing party by such date) prior to the
date on which the same are due and payable without penalty or premium of any
kind. If the total Tax, HOA and Insurance Reserve Funds on hand shall not be
sufficient to pay all of the Real Estate Taxes, HOA Fees and Insurance Premiums
when the same shall become due, then Borrower shall deliver to Administrative
Agent at the time of the submission of the bills to Administrative Agent as
described above an amount equal to the deficiency. If the total of such Tax, HOA
and Insurance Reserve Funds exceeds the amount required to pay the Real Estate
Taxes, HOA Fees and Insurance Premiums, such excess shall be credited against
subsequent payments to be made for such deposits.

(c) Provided Administrative Agent has required Borrower to deposit funds into
the Tax, HOA and Interest Reserve Account for the payment of Real Estate Taxes,
HOA Fees and Insurance Premiums, and provided Borrower complies with the
provisions of Sections 5.2(a) and (b), Administrative Agent shall timely submit
payment to the proper entities for the amount of Real Estate Taxes, HOA Fees or
Insurance Premiums for which such funds were escrowed. If Borrower has complied
with the provisions of Sections 5.2(a) and (b) and Administrative Agent fails to
timely pay the Real Estate Taxes, HOA Fees or Insurance Premiums, Administrative
Agent shall be solely responsible for payment of all applicable late fees and
costs associated with the late payment of the Real Estate Taxes, HOA Fees and
Insurance Premiums. If Borrower fails to comply with the provisions of Sections
5.2(a) and (b), Administrative Agent shall have no obligation to submit payment
for the Real Estate Taxes, HOA Fees and Insurance Premiums to the proper
entities.

(d) Administrative Agent hereby elects, and Borrower and Guarantor hereby
acknowledge such election, to establish as of the Forbearance Effective Date the
Tax, HOA and Insurance Reserve Account pursuant to Section 5.2(a) and Borrower
shall make payments into the Tax, HOA and

 

14

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Insurance Reserve Account only for Real Estate Taxes and HOA Fees in accordance
with Section 5.2(a) beginning on February 15, 2009. Administrative Agent further
agrees it shall not elect to collect Insurance Premiums so long as it is
provided with a current certificate of insurance evidencing the coverage set
forth in Section 6.8.1.

 

  q) All references in Section 5.3 to the “Tax and Insurance Reserve Account”
shall be replaced with “Tax, HOA and Interest Reserve Account”.

 

  r) Section 9.1(f) of the Loan Agreement is amended to read as follows:

Bankruptcy, Insolvency, etc. Borrower shall: (i) become insolvent or generally
fail to pay, or admit in writing its inability or unwillingness to pay, debts as
they become due; (ii) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for itself or a substantial
part of its property, or make a general assignment for the benefit of creditors;
(iii) in the absence of such application, consent or acquiesce, permit or suffer
to exist the appointment of a trustee, receiver, sequestrator or other custodian
for itself or for a substantial part of its property, and such trustee,
receiver, sequestrator or other custodian shall not be discharged within 60
days, provided that Administrative Agent is hereby expressly authorized to
appear in any court conducting any relevant proceeding during such 60-day period
to preserve, protect and defend its rights and the rights of Lenders under the
Loan Documents; (iv) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of any of Borrower, and, if any such case or proceeding
is not commenced by Borrower, such case or proceeding shall be consented to or
acquiesced in by Borrower, or shall result in the entry of an order for relief
or shall remain for 60 days undismissed, provided that Administrative Agent is
hereby expressly authorized to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend its rights
and the rights of the Lenders under the Loan Documents; or (v) take any
corporate, partnership, trust or other similar action authorizing or in
furtherance of any of the foregoing;

 

15

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  s) Section 9.1(g) of the Loan Agreement is amended to read as follows:

Attachment. There is an attachment, execution or other judicial seizure of any
portion of Borrower’s assets or any assets of Guarantor pledged pursuant to the
Pledge Agreement, and such seizure is not discharged within thirty (30) days of
such attachment, execution or other judicial seizure, as the case may be;

 

  t) Section 9.1(o) of the Loan Agreement is deleted.

 

  u) Section 9.1(p) of the Loan Agreement is amended to read as follows:

Judgments. Any judgment or judicial decree (collectively “Adverse Judgment”) for
the payment of money in excess of $75,000.00 not otherwise covered by insurance
(with deductibles not to exceed $75,000) shall be rendered against Borrower
unless such Adverse Judgment is bonded off of the Property within thirty
(30) days of such Adverse Judgment becoming final.

 

  v) The last paragraph of Section 9.1 of the Loan Agreement is amended to read
as follows:

provided, however, (i) an item of Default listed in Section 9.1(a) shall not be
deemed an Event of Default (except as provided below) until such default
continues for five (5) days after Borrower or Guarantor, as applicable, has been
provided with notice of such default (“Default Notice”) by Administrative Agent
and/or Lenders in accordance with Section 12.2 below; (ii) any item of Default
listed in Sections 9.1(b), (h), (j), (l), (n) and (q) shall not be deemed an
Event of Default (except as provided below) until such default continues for
thirty (30) days after Borrower or Guarantor, as applicable, has been provided a
Default Notice by Administrative Agent and/or Lenders in accordance with
Section 12.2 below; and (iii) any item of Default listed in Sections 9.1(e),
(g), (i), (k), (m), (p) and (r) shall not be deemed an Event of Default (except
as provided below) until such default continues for thirty (30) days after
Borrower or Guarantor, as applicable, has been provided a Default Notice by
Administrative Agent and/or Lenders in accordance with Section 12.2 below. If
two (2) Default Notices have been given by Administrative Agent and/or Lenders
in the twelve (12) month period after the Forbearance Effective Date preceding
an item of Default listed in Sections 9.1(a)-(e) and (g)-(r), then there shall
be no notice or cure period applicable to such item of Default.

 

  w) Exhibit H attached to this Forbearance Agreement is added to the Loan
Agreement as Exhibit H.

 

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  x) The following is added to Article X of the Loan Agreement:

 

  10.6 Deed in Lieu of Foreclosure. (i) On the Forbearance Effective Date,
Borrower shall execute and deliver to the Administrative Agent a deed in the
form attached hereto as Exhibit H (“Deed in Lieu of Foreclosure”). Upon an Event
of Default and acceleration of the Loans pursuant to Section 10.1,
Administrative Agent and Lenders may, and Borrower hereby authorizes
Administrative Agent and Lenders to, attach to the Deed in Lieu of Foreclosure
the legal description(s) for all Residential Units and their corresponding
Parking Units and appurtenant common elements comprising the Project against
which the Deed of Trust is a lien, date the Deed in Lieu of Foreclosure
effective the date of default and make any other additions to the Deed in Lieu
of Foreclosure necessary to comply with recording requirements then in effect in
the County of Fairfax, Virginia, and record the Deed in Lieu of Foreclosure. If
requested by the Administrative Agent, Borrower shall promptly (a) re-execute
the Deed in Lieu of Foreclosure and immediately deliver it to Administrative
Agent; and/or (b) any affidavits and documents reasonably required for the
Administrative Agent to obtain owner’s title insurance for the conveyed Units,
and immediately deliver such affidavits and documents to the Administrative
Agent. Provided Borrower has not (x) applied for, consented to, or acquiesced
in, the appointment of a trustee, receiver, sequestrator or other custodian for
itself or a substantial part of its property, or made a general assignment for
the benefit of creditors, (y) filed for, permitted or suffered to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, or (z) consented to or acquiesced in any
such involuntary case or proceeding, or provided that if any involuntary case or
proceeding described in Section 10.6(i)(y) is filed, it is dismissed within
sixty (60) days of filing, the recordation of the Deed in Lieu of Foreclosure
shall be deemed full satisfaction and payment of the Loans and Guarantor shall
be deemed automatically released from the Guaranty.

(ii) In the event the Administrative Agent exercises the remedy set forth in
Section 10.6(i) and the Borrower becomes a debtor in any bankruptcy commenced
under Title 11 of the U. S. Code prior to the recording of the Deed in Lieu of
Foreclosure, the Borrower, as debtor, shall promptly file a motion in the
bankruptcy proceeding to approve the transfer of the Units pursuant to
Section 10.6(i) (or such higher offer received for the Units), or consent to a
motion filed by the Administrative Agent or the Lenders to approve such
transfer.

 

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(iii) The Administrative Agent may refuse to exercise the remedy set forth in
Section 10.6(i) only in the event the Borrower is unable to deliver clear title
to the Units to be transferred by the Deed in Lieu of Foreclosure, as determined
by the Administrative Agent in its reasonable discretion. In such an event, the
Administrative Agent may promptly proceed to initiate foreclosure of the Units
and Property pursuant to the Deed of Trust, or exercise any other remedies
available to Administrative Agent and Lenders under the Loan Documents or at law
or in equity. Borrower and Guarantor acknowledge and agree that pursuant to the
terms of the Loan Documents, the Administrative Agent has the right to foreclose
on the Units and Property and under applicable law, the Administrative Agent and
the Lenders have the right to bid on the Units and Property at the foreclosure
sale and purchase the Units and Property at the foreclosure sale. Borrower and
Guarantor agree fully to cooperate with the Administrative Agent and the
substitute trustee in foreclosing on the Units and Property, including without
limitation by: (1) providing and/or making available to the Administrative Agent
all appropriate data, records and documents in the possession, custody or
control of the Borrower and Guarantor, pertaining to the Units and Property; and
(2) responding promptly to all reasonable inquiries and requests from the
Administrative Agent.

(iv) Borrower and Guarantor hereby grant authority to the Administrative Agent,
its agents, employees, officers, attorneys, consultants and affiliates to
disseminate, discuss and/or communicate with and contact any and all prospective
purchasers at the foreclosure sale and to engage in such discussions,
communications and other dialogues with such prospective purchasers as the
Administrative Agent in its sole discretion deems appropriate. In connection
with such discussions, communications and dialogues, the Administrative Agent is
authorized, without limitation: (1) to disclose to prospective purchasers any
and all information that the Administrative Agent in its sole judgment and
discretion deems appropriate regarding the Loans including, but not limited to,
any and all information regarding the existing balance of each Loan, the
interest rate of each Loan, and other related information concerning the Loans;
(2) to disclose to prospective purchasers any and all information relating to
the Units and the Property; and (3) to take such other actions as the
Administrative Agent may deem necessary or desirable to facilitate the sale of
the Units and Property including, without limitation, contacting real estate
brokers and prospective purchasers, preparing and disseminating advertising
materials relating to the Units and Property, operating statements and financial
information, and entering upon the Property for any purpose reasonably related
to sale, including, without limitation, showing the Property to prospective
purchasers or interested parties.

 

18

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(v) Borrower and Guarantor covenant and agree not to oppose any foreclosure of
the Units and Property, covenant and agree not to interpose any defenses to the
Administrative Agent’s efforts to foreclose pursuant to this Article X and
applicable law, and waive any defenses to foreclosure that they have or may have
pursuant to applicable law and/or the Loan documents. Provided Borrower and
Guarantor comply with the above provisions of this Section 10.6(v), and provided
Borrower has not (x) applied for, consented to, or acquiesced in, the
appointment of a trustee, receiver, sequestrator or other custodian for itself
or a substantial part of its property, or made a general assignment for the
benefit of creditors, (y) filed for, permitted or suffered to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, or (z) consented to or acquiesced in any
such involuntary case or proceeding, or provided that if any involuntary case or
proceeding described in Section 10.6(v)(y) is filed, it is dismissed within
sixty (60) days of filing, the foreclosure of the Units and the Property shall
be deemed full satisfaction and payment of the Loans and Guarantor shall be
deemed automatically released from the Guaranty.

 

  y) The first sentence of Section 12.6(c) of the Loan Agreement is amended to
read as follows:

Any Lender (an “Assignor”) may, in accordance with applicable Law and upon
written notice to the Administrative Agent, at any time and from time-to-time
assign to any Eligible Assignee or, with the consent of the Administrative Agent
(which, in each case, shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or other entity (each, an “Assignee”) all
or any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, in form acceptable to Assignor and Assignee (an
“Assignment and Acceptance”), executed by such Assignee and such Assignor (and,
where the consent of the Administrative Agent is required pursuant to the
foregoing provisions, by the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that no such assignment to an Assignee (other than any Lender or any Affiliate,
Related Fund or Control Investment Affiliate thereof) shall be in an aggregate
principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender’s interests under this Agreement), unless
otherwise agreed by the Administrative Agent. In the event an assignment results
in a party other than the Administrative Agent administering the Loan, the
Administrative Agent shall provide notice of the Assignment and Acceptance,
along with proper contact information, to the Borrower and Guarantor within
three (3) business days of the Assignment and Acceptance.

 

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  z) Section 3.4 of the Loan Agreement is amended to read as follows:

Pending Litigation. Except as disclosed on Exhibit C attached to this Agreement,
no actions, suits, or proceedings (including condemnation or eminent domain
proceedings) are pending or, to Borrower’s or Guarantor’s knowledge, threatened
against or affecting Borrower, the Property, the Membership Interests, or any
other assets subject to the Loan Documents. None of the items (if any) listed on
Exhibit C will have a Material Adverse Effect.

 

  aa) Exhibit C of the Loan Agreement is replaced with Exhibit C attached to
this Forbearance Agreement.

 

  bb) Section 3.5 of the Loan Agreement is amended to read as follows:

No Violation. There exists no violation, or default with respect to any of the
Basic Agreements or of any mortgage, deed of trust, indenture or any other
material contract, agreement or instrument applicable to Borrower, Guarantor,
the Property, or the Membership Interests, or by which any of the foregoing is
bound. The execution, delivery and performance of the Loan Documents will not
result in any such violation, conflict or default, or result in the creation of
any Lien on any of the assets of Borrower or Guarantor, other than the Permitted
Exceptions and Liens in favor of Lenders.

 

  cc) Section 3.8 of the Loan Agreement is amended to read as follows:

Truth of Financial Statements; Financial Condition Warranty. Any Financial
Statements delivered to Administrative Agent and/or Lenders by Borrower or
Guarantor prior to or after the date of this Agreement: (a) are materially true,
correct and complete and (b) fairly present in a manner internally consistent
and consistent with prior statements submitted to Administrative Agent and/or
Lenders the respective financial conditions of the subjects thereof and for the
periods referenced therein. Borrower further warrants that except as disclosed
to Administrative Agent in writing, Borrower is not currently a party to any
material pending litigation or administrative proceedings, or subject to any
judicial or non-judicial orders or consent agreements, except as set forth on
Exhibit C. All financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved.

 

20

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  dd) The Table of Exhibits to the Loan Agreement is amended to read as follows:

Appendix A – Definitions and Interpretation

Exhibit A – The Property

Exhibit B – The Note

Exhibit C – Pending Litigation

Exhibit D – Ownership Chart

Exhibit E – Intentionally Deleted

Exhibit F – Cure Deed

Exhibit G – Form of Condominium Contract

Exhibit H – Deed in Lieu of Foreclosure

 

  ee) The following definitions in Appendix A of the Loan Agreement shall be
amended to read as follows:

“Maturity Date” shall have the meaning set forth in Section 2.2(f).

“Minimum Unit Settlements” means with respect to each calendar quarter during
which the Loans are outstanding, the minimum cumulative number of Residential
Units closed by the end of each calendar quarter as set forth in Section 6.7(j).

“Loan Documents” means this Agreement, any Note, the Deed of Trust, the
Environmental Indemnity Agreement, the Limited Guaranty, the Completion
Guaranty, the Pledge Agreement, the Collateral Assignment of Developer’s Rights,
the UCC Financing Statements, any forbearance agreement entered into by
Borrower, Guarantor and Administrative Agent relating to the Loans, and any
other document evidencing, pertaining to or securing the Loans which
Administrative Agent or Lenders may require to be executed and delivered by
Borrower, Guarantor or any Affiliate thereof from time to time, as each of the
same shall be amended, restated, modified, replaced or supplemented from time to
time.

 

21

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“Material Adverse Effect” means an event occurring subsequent to the Closing
Date which has the effect of impairing the validity of the security interest in
the Property.

“Net Sales Price” means with respect to the sale of any Unit (A) the Base
Purchase Price for such Unit plus Upgrades and any costs associated with the
purchase of a Parking Unit, less (B) customary closing costs both paid by
Borrower and paid by the Borrower on behalf of the Unit buyer, reasonable
warranty reserves (not to exceed $750.00), brokerage commissions (including a
1.5% internal sales commissions paid to Borrower’s sales agent), expenses and
prorations paid by Borrower as shown on the RESPA statement for such sale and
approved by Administrative Agent, and the costs to convert the Unit.

“NOI” means, for any applicable period, Gross Operating Income minus Interest to
be paid pursuant to the Agreement, all amounts to be paid pursuant to
Section 5.2, and Operating Expenses.

“Tax and Insurance Reserve Account” shall be renamed “Tax, HOA and Insurance
Reserve Account” and shall mean an account for the payment of Real Estate Taxes,
HOA Fees and Insurance Premiums to be established and applied as set forth in
Section 5.2.

“Tax and Insurance Reserve Fund” shall be renamed “Tax, HOA and Insurance
Reserve Fund” and shall have the meaning ascribed thereto in Section 5.2(a).

 

  ff) The following definitions shall be added to Appendix A of the Loan
Agreement:

“Average Debt Per Unit” shall mean the then current balance due under the Loans
including all accrued PIK Interest divided by the total number of Residential
Units then subject to the lien of the Deed of Trust.

“closed” or “settled” shall mean with respect to a Unit, that settlement has
occurred, title to the Unit has been transferred and funds disbursed by the
settlement agent in accordance with the applicable fully executed HUD-1.

“Forbearance Effective Date” shall mean January 27, 2009.

“HOA Fees” means all fees, dues and annual assessments, regular or special,
which are levied, assessed, made, imposed or charged on or against the Property
by the condominium association for the Project.

 

22

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6. Modification of Guarantys.

Provided the Borrower timely satisfies all of the terms, conditions and
requirements set forth in Sections 1-4 of this Forbearance Agreement, the
Guaranty from and after the Forbearance Effective Date is hereby modified as
follows:

a) Section 2(b)(i) of the Guaranty is amended to read as follows:

if Borrower files a voluntary bankruptcy petition under any section or chapter
of the Bankruptcy Code or any similar law or regulation or is a party to a
collusive involuntary bankruptcy petition or any receivership proceedings in
which Borrower is the debtor, or the making of an assignment for the benefit of
its creditors by Borrower, or the filing of a case or proceeding by Borrower for
its dissolution or liquidation;

b) Provided the Borrower timely satisfies all of the terms, conditions and
requirements set forth in Sections 1-4 of this Forbearance Agreement, the
Completion Guaranty from and after the Forbearance Effective Date is of no
further force and effect.

7. Additional Guarantor Obligations. Guarantor hereby absolutely, irrevocably,
and unconditionally guarantees, as a principal obligor and not as a surety, to
the Administrative Agent and the Lenders (i) the payment of all costs incurred
in connection with all construction and improvements undertaken by Borrower at
the Property, and (ii) to keep the Property free and clear of all claims for
mechanic’s and materialmen’s liens.

8. Forbearance.

Conditioned upon Borrower’s full, faithful and timely performance under this
Forbearance Agreement and the Loan Documents, the Administrative Agent and
Lenders hereby agree that so long as the Borrower and Guarantor comply with the
terms of this Forbearance Agreement and the Loan Documents, for the period
commencing on the Forbearance Effective Date and continuing until the Maturity
Date under the Loan Agreement (the “Forbearance Period”), and except as provided
below, Lender will not, solely with respect to the Existing Defaults:

 

  a) Institute foreclosure proceedings against any property pledged as security
for the Loans; or

 

  b) Pursue or institute any other remedies, legal and/or equitable, against the
Borrower or the Guarantor in connection with the Loans.

On or after the Maturity Date (without further notice to the Borrower or the
Guarantor) or upon the occurrence of any Event of Default under this Forbearance
Agreement, or any of the Loan Documents (whichever occurs first), the
Forbearance Period will terminate, and the Administrative Agent, in its sole
discretion, may declare any or all of the Loans to be in default, institute
foreclosure proceedings against any encumbered property and/or pursue its
remedies legal and equitable, against the Borrower and Guarantor.

 

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9. Dismissal of Litigation/Cancellation of Foreclosure Sale. On the Forbearance
Effective Date, Borrower and Guarantor shall endorse an order in the form
attached hereto as Exhibit B (“Order”) dismissing with prejudice that certain
action filed by Borrower and Guarantor against Administrative Agent in the
Circuit Court of Fairfax County, Virginia (“Court”), Case No. 200816874
(“Lawsuit”) and immediately submit the Order to the Court for entry and take all
such further action as may be required for the dismissal of the Lawsuit with
prejudice. On the Forbearance Effective Date, Administrative Agent and Lenders
shall cancel the foreclosure sale originally noticed for January 22, 2009 and
thereafter continued for a period of thirty days, and provide Borrower and
Guarantor with such evidence of the cancellation as their attorneys shall
reasonably request.

[Remainder of page intentionally left blank. Document continues on the following
page]

10. Discounted Payoff. Borrower may, at Borrower’s sole option, pay off the
Loans through a cash payment (“Discounted Payoff”), which Lenders and
Administrative Agent hereby acknowledge and deem acceptable, as set forth below:

 

Number of

Days from the Forbearance

Effective Date in which to

Make the Discounted

Payoff

   Amount of
Discounted Payoff

0-60

   $ 11,700.000

61-90

     12,200,000

91-120

     12,500,000

In the event that Borrower makes the required Discounted Payoff in a timely
manner, all rights and interests of the Lenders and Administrative Agent in the
Residential Units and to the Property shall cease, and all rights and
obligations of the Borrower, Guarantor, Lenders, and Administrative Agent under
this Forbearance Agreement and under the Loan Documents shall be released and
deemed satisfied. In such event, Administrative Agent and Lenders shall execute
a deed of release for recordation prepared by Borrower and to be recorded by
Borrower, at Borrower’s sole cost and expense, in form reasonably acceptable to
Administrative Agent.

 

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11. No Waiver by Lender.

Borrower and Guarantor each represent, warrant and agree that:

a) Administrative Agent and Lenders have not waived and, by entering into this
Forbearance Agreement, do not waive any existing default or any default which
may occur subsequent to execution of this Forbearance Agreement; and

b) Administrative Agent and Lenders have not waived and, by entering into this
Forbearance Agreement, do not waive any of their respective remedies against the
Borrower or the Guarantor.

12. General Release of Claims.

a) For any time in the past up to and including the Forbearance Effective Date
hereof, Borrower and Guarantor each represent and warrant that they,
individually and/or collectively, have no claims, defenses, actions or causes of
action or set offs of any kind or nature which they, individually and/or
collectively can assert against the Administrative Agent or any Lender in
connection with the Loans, this Forbearance Agreement, the Loan Agreement or any
other Loan Document .

b) IN THE EVENT BORROWER OR THE GUARANTOR, INDIVIDUALLY AND/OR COLLECTIVELY HAVE
ANY CLAIMS, DEFENSES, ACTIONS OR CAUSES OF ACTION OR SET OFFS OF ANY KIND OR
NATURE, KNOWN OR UNKNOWN, FOR ANY TIME IN THE PAST UP TO AND INCLUDING THE
FORBEARANCE EFFECTIVE DATE HEREOF, WHICH THEY INDIVIDUALLY AND/OR COLLECTIVELY
NOW OR HEREAFTER MAY ASSERT AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER, IN
CONNECTION WITH THE LOAN AGREEMENT, DEED OF TRUST OR ANY OTHER LOAN DOCUMENT
AND/OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF THIS
FORBEARANCE AGREEMENT, THE LOAN AGREEMENT, DEED OF TRUST OR ANY OTHER LOAN
DOCUMENT, THEN BY EXECUTING THIS FORBEARANCE AGREEMENT, THEY FOREVER WAIVE AND
RELINQUISH THEM.

13. Default.

The following shall constitute Events of Default:

a) Failure by Borrower to make any payments on the Loans in accordance with the
terms of this Forbearance Agreement and the Loan Documents;

 

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b) Failure by Borrower or Guarantor to perform any term, covenant or agreement
in this Forbearance Agreement that continues uncured for three (3) business days
after Borrower or Guarantor, as applicable, has been provided notice by
Administrative Agent and/or Lenders in accordance with Section 25 hereof.;

c) Failure by Borrower or Guarantor to perform any term, covenant or agreement
in the Loan Documents that constitutes an Event of Default thereunder;

d) Failure by any Borrower or Guarantor to perform any term, covenant or
agreement contained in any of the Loan Documents that constitutes an Event of
Default thereunder not modified by this Forbearance Agreement.

If an Event of Default shall occur, the Administrative Agent may declare the
Loans to be in default and declare the entire amount then outstanding, including
all interest, late charges and all other amounts owing, to be immediately due
and payable without regard to any previously agreed maturity date or the
Forbearance Period. Upon the occurrence of an Event of Default, and at any time
thereafter, the Administrative Agent and the Lenders shall have the right to
institute foreclosure proceedings under the Deed of Trust and to sell and
dispose of any collateral given to secure the Loans, upon such terms and in such
manner as the Administrative Agent or the Lenders deems advisable, consistent
with the Loan Documents. Such action by the Administrative Agent or the Lenders
shall not be exclusive of any other remedy available to them.

14. Conflict Between Documents.

In the event that there is any conflict between the terms and provisions of the
Loan Documents and any one or more of the terms and conditions of this
Forbearance Agreement or of any documents executed pursuant hereto, the terms
and conditions of this Forbearance Agreement and the documents executed pursuant
hereto shall supersede and control the terms of the Loan Document in conflict
herewith.

15. Time is of the Essence.

Time is of the essence as to all of the obligations of the parties under this
Forbearance Agreement and the Loan Documents.

16. Applicable Law.

This Forbearance Agreement shall be construed, performed and enforced in
accordance with the laws of the Commonwealth of Virginia.

 

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17. Further Assurances.

The parties hereto agree to execute, acknowledge and deliver such other
documents and to provide such other information as may be reasonably necessary
and/or required in order to fully consummate the transactions which are the
subject hereof. The Borrower and Guarantor agree to promptly execute and deliver
any documents the Administrative Agent or the Lenders may reasonably believe to
be necessary or required to fully perfect Lender’s interests in any and all
collateral provided for in any of the Loan Documents.

18. Binding Effect.

This Forbearance Agreement and the respective covenants, provisions, terms,
conditions and agreements herein contained together with the Loan Documents,
shall inure to the benefit of, and be binding upon, the parties hereto and their
respective legal successors and assigns.

19. Entire Agreement.

This Forbearance Agreement and the documents to be executed pursuant hereto and
the Loan Documents constitute the entire agreement between the parties hereto
with regard to the subject matter addressed herein. Borrower and Guarantor
acknowledge and agree that all prior discussions, negotiations and
correspondence between the parties relating to the subject matter hereof are
hereby merged into this Forbearance Agreement and that there are no other oral,
written or other agreements of any nature whatsoever between the parties with
respect to the subject matter hereof other than those documents specifically
referred to in this Forbearance Agreement, the Exhibits hereto and in the Loan
Documents.

20. Modifications and Waiver.

No modification or waiver of any of the provisions of this Forbearance Agreement
or the Loan Documents, and no consent by any party to any departure therefrom
shall be effective unless such modification or waiver shall be in writing and
signed by a duly authorized representative of all parties, and the same shall
then be effective only for the period and on the conditions and for the specific
instance and purposes specified in such writing. No waiver of any breach or
default shall be deemed to be a waiver of any breach or default thereafter
occurring. No omission or delay by any party in exercising any right or power
hereunder or under any Loan Document shall impair such right or power or be
construed to be a waiver of any default or any acquiescence therein.

21. Severability.

Should any one or more of the provisions contained in this Forbearance Agreement
or the Loan Documents be declared invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of any of the remaining
provisions contained therein shall not in any way be affected or impaired
thereby.

 

27

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22. Successors and Assigns.

This Forbearance Agreement and the respective covenants, provisions, terms,
conditions and agreements herein contained shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives, successors and assigns. Whenever in this Forbearance Agreement
one of the parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall be included, and
all covenants and conditions contained in this Forbearance Agreement by or on
behalf of a party shall bind and inure to the benefit of their respective heirs,
legal representatives, successors and assigns, whether so expressed or not. This
paragraph shall in no manner be construed to confer upon Borrower or Guarantor
any right to assign any of their rights and obligations hereunder.

23. Number and Gender.

Words which import one gender shall be applied to any gender where appropriate
or whenever the context of this Forbearance Agreement requires, words of the
singular number shall include the plural and vice versa.

24. Counterparts.

This Forbearance Agreement may be executed in one or more counterparts, and all
such executed counterparts shall contain one agreement, binding on all the
parties hereto, notwithstanding that all the parties are not signators to the
original or the same counterpart.

25. Notices.

All notices, requests, demands or other communications provided for herein shall
be made pursuant to the Loan Documents.

26. Agreement to Lifting of Automatic Stay.

Borrower and Guarantor agree that in the event Borrower shall (a) file with any
bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended; (b) be the subject of any order for
relief issued under Title 11 of the U.S. Code, as amended; (c) file or be the
subject of any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or other
relief for debtors; (d) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator, or liquidator; (e) be the
subject of any order, judgment or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any

 

28

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reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or relief for debtors, Lender
immediately shall be entitled to relief from any automatic stay imposed by
Section 362 of Title 11 of the U.S. Code, as amended, or otherwise, on or
against the exercise of the rights and remedies available to it under the Loan
Documents and Borrower and Guarantor each waive any right to object and agree
not to object to any motion by the Administrative Agent and/or the Lenders for
relief from the automatic stay. It is understood and agreed by the Borrower and
Guarantor that this provision was a negotiated and bargained for condition of
the Administrative Agent and the Lenders and that they would not have agreed to
the terms of this Forbearance Agreement if this provision had not been included.

27. WAIVER OF JURY TRIAL/SUBMISSION TO JURISDICTION.

a) TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER, GUARANTOR, THE
ADMINISTRATIVE AGENT AND LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS FORBEARANCE AGREEMENT, ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY EXERCISE BY ANY PARTY
OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO
THE LOANS OR THE PROJECT (INCLUDING, WITHOUT LIMITATION, ANY CLAIM OR DEFENSE
ASSERTING THAT THIS FORBEARANCE AGREEMENT WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS TO ENTER INTO THIS FORBEARANCE AGREEMENT.

b) IN ADDITION TO ANY OTHER PROPER JURISDICTION AND VENUE PROVIDED FOR IN THE
LOAN DOCUMENTS, BORROWER AND GUARANTOR, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, CONSENT TO AND SUBMIT TO PERSONAL JURISDICTION AND VENUE OF
ANY LITIGATION CONCERNING OR RELATING TO THIS FORBEARANCE AGREEMENT IN THE
CIRCUIT COURT OF FAIRFAX COUNTY AND/OR THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA, AND BORROWER AND GUARANTOR AGREE THAT SUCH
JURISDICTION AND VENUE ARE PROPER.

28. Power and Authority.

Each of the parties to this Forbearance Agreement warrants that it has full
power and authority to enter into, execute, deliver and perform this Forbearance
Agreement, and that no consent, license, approval, authorization, registration
or declaration with any court, governmental authority or any other person or
entity is required in connection with the execution, delivery, performance,
validity and enforceability of this Forbearance Agreement or the documents to be
executed in connection herewith.

 

29

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29. Representation by Counsel.

BORROWER AND GUARANTOR EACH ACKNOWLEDGE AND AGREE THAT THEY HAVE HAD THE
OPPORTUNITY TO BE REPRESENTED BY COUNSEL OF THEIR CHOICE AND HAVE BEEN ADVISED
TO SEEK INDEPENDENT LEGAL COUNSEL, THEY HAVE REVIEWED THIS FORBEARANCE AGREEMENT
AND HAVE BEEN FULLY ADVISED OF ITS CONTENTS AND THE MEANING THEREOF. BORROWER
AND GUARANTOR FURTHER REPRESENT THAT THEY ARE SIGNING THIS FORBEARANCE AGREEMENT
VOLUNTARILY AND WITH FULL UNDERSTAND OF ITS CONTENTS AND MEANING.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

 

30

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WITNESS the following signatures and seals as of the date first above written.

 

BORROWER:

 

COMSTOCK PENDERBROOK, L.C.,

a Virginia limited liability company

By:   

Comstock Homebuilding Companies, Inc.,

a Delaware corporation,

Its Manager

  By:        (SEAL)   Name:          Title:      

STATE OF ____________

CITY/COUNTY OF ____________________, to-wit:

I, _______________________, a Notary Public in and for the City/County and Sate
aforesaid, do hereby certify that ______________, ______________ of Comstock
Homebuilding Companies, Inc., the Manager of Comstock Penderbrook, L.C., whose
name as such is signed to the foregoing instrument bearing date on the 27th day
of January, 2009, has acknowledged the same before me in my City/County and
State aforesaid.

GIVEN under my hand and seal this _____________ day of January, 2009.

   Notary Public

My Commission Expires: __________________________

Notary No. ____________________

[signatures continue on the following page]

 

31

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GUARANTOR:

 

COMSTOCK HOMEBUILDING COMPANIES, INC.

a Delaware corporation

By:        (SEAL) Name:        Title:      

STATE OF ____________

CITY/COUNTY OF ____________________, to-wit:

I, _________________, a Notary Public in and for the City/County and Sate
aforesaid, do hereby certify that ______________, ______________ of Comstock
Homebuilding Companies, Inc., whose name as such is signed to the foregoing
instrument bearing date on the 27th day of January, 2009, has acknowledged the
same before me in my City/County and State aforesaid.

GIVEN under my hand and seal this _________________ day of January, 2009.

   Notary Public

My Commission Expires: ______________________

Notary No. ________________

[signatures continue on the following page]

 

32

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ADMINISTRATIVE AGENT:

 

GUGGENHEIM CORPORATE FUNDING, LLC,

as Administrative Agent

By:        (SEAL) Name:        Title:      

STATE OF ____________

CITY/COUNTY OF ________________, to-wit:

I, _______________________, a Notary Public in and for the City/County and Sate
aforesaid, do hereby certify that ______________, ______________ of Guggenheim
Corporate Funding, LLC, whose name as such is signed to the foregoing instrument
bearing date on the 27th day of January, 2009, has acknowledged the same before
me in my City/County and State aforesaid.

GIVEN under my hand and seal this _______________ day of January, 2009.

   Notary Public

My Commission Expires: ________________________

Notary No. _______________________

[signatures continue on the following page]

 

33

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LENDER: ORPHEUS FUNDING LLC By:   

Guggenheim Investment Management, LLC,

its Manager

  By:        (SEAL)   Name:          Title:      

STATE OF ____________

CITY/COUNTY OF _______________________, to-wit:

I, _________________________, a Notary Public in and for the City/County and
Sate aforesaid, do hereby certify that ______________, ______________ of
Guggenheim Investment Management, LLC., the Manager of Orpheus Funding LLC,
whose name as such is signed to the foregoing instrument bearing date on the
27th day of January, 2009, has acknowledged the same before me in my City/County
and State aforesaid.

GIVEN under my hand and seal this ______________ day of January, 2009.

   Notary Public

My Commission Expires: _____________________

Notary No. __________________

 

34

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EXHIBIT A

See attached four (4) letters from LeClairRyan to Comstock Penderbrook, L.C.
dated August 20, 2008, October 1, 2008, October 15, 2008 and November 19, 2008.

 

35

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EXHIBIT B

V I R G I N I A:

IN THE CIRCUIT COURT OF FAIRFAX COUNTY

 

COMSTOCK PENDERBROOK, L.C.,   )     

ET. AL.

  )      Plaintiffs,   )        )     

v.

  )      Case No. 2008-16874   )      GUGGENHEIM CORPORATE FUNDING,   )     

LLC

  )      Defendant.   )     

FINAL ORDER OF DISMISSAL

THIS CAUSE came before this Court upon the joint representations of counsel for
Plaintiffs Comstock Penderbrook, L.C. and Comstock Homebuilding Companies, Inc.
(“Plaintiffs”) and counsel for Defendant Guggenheim Corporate Funding, LLC,
(“Defendant”) that the matters at issue between them as expressed in Plaintiff’s
Complaint filed in this case have been compromised, agreed and settled.

UPON CONSIDERATION WHEREOF, it appearing to the Court that the claims set forth
in Plaintiff’s Complaint filed herein against Defendant have been settled,
compromised and agreed, and that Plaintiffs’ Complaint should be dismissed with
prejudice, all as evidenced by the signatures below, it is therefore

ORDERED, that Plaintiff’s Complaint be and is hereby DISMISSED WITH PREJUDICE.

THIS CAUSE IS ENDED.

Entered this ____ day of January, 2009.

 

36

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   Circuit Court Judge

 

WE ASK FOR THIS:   

Rodney H. Glover (VSB# 17780)

Brian Walsh (VSB # 73508)

WILEY REIN LLP

1776 K Street, N.W.

Washington, D.C. 20006

(202) 719-7381/7469

(202) 719-7049 (facsimile)

Counsel for Plaintiffs, Comstock Penderbrook, L.C.

And Comstock Homebuilding Companies, Inc.

  

R. Scott Caulkins (VSB #23584)

LeCLAIR RYAN, A Professional Corporation

225 Reinekers Lane, Suite 700

Alexandria, Virginia 22314

703-684-8007

703-684-8075 (facsimile)

 

Ray W. King (VSB#22253)

LeCLAIR RYAN, A Professional Corporation

999 Waterside Drive, Suite 2525

Norfolk, Virginia 23510

757-441-8929

757-624-3773 (facsimile)

Counsel for Defendant, Guggenheim Corporate Funding, LLC

 

37

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EXHIBIT C

Pending or Potential Litigation as of the Forbearance Effective Date

Network Multifamily Security Corporation. v. Comstock Penderbrook, L.C.
(“Comstock”)

Jurisdiction: General District Court of Fairfax County, Virginia served on or
about January 15, 2009

Amount in Controversy: $66,659.04

Plaintiff, a company previously providing security monitoring service for the
Penderbrook Condominium owned by Comstock, has filed a claim for breach of
contract for failure to pay for security monitoring services. The vendor was
replaced by a competing vendor due to inadequate performance. Comstock intends
to defend this claim.

 

38

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EXHIBIT F

 

Prepared By:    Consideration: _____________________ [insert firm name and
address]   

 

Tax ID/GPIN: ______________________

SPECIAL WARRANTY DEED

THIS SPECIAL WARRANTY DEED is made as of this ____ day of ___________ 200_, by
and between COMSTOCK PENDERBROOK, L.C., a Virginia limited liability company
(“Grantor”), and GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative Agent
(“Grantee”), having a mailing address of 135 East 57th Street, New York, New
York, 10022.

W I T N E S S E T H:

That for and in consideration of the sum of Ten Dollars ($10.00), cash in hand
paid, and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Grantor does hereby grant and convey, with SPECIAL WARRANTY OF
TITLE unto Grantee the property located in the County of Fairfax, Virginia as
described on Exhibit A attached hereto and made a part hereof (the “Property”).

This conveyance is made subject to all easements, conditions and restrictions of
record insofar as they may lawfully affect the Property.

 

39

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WITNESS the following signature and seal.

 

GRANTOR:

COMSTOCK PENDERBROOK, L.C.,

a Virginia limited liability company

By:   

Comstock Homebuilding Companies, Inc.,

a Delaware corporation,

its Manager

  By:        (SEAL)     Name:            Title:      

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________, to-wit:

The foregoing instrument was acknowledged before me this ______ day of
_________, 20___, by ________________________, in his capacity as
____________________ of Comstock Homebuilding Companies, Inc., a Delaware
corporation, the manager of Comstock Penderbrook, L.C., a Virginia limited
liability company, on behalf of said limited liability company. _____________ is
personally known to me or has produced his driver’s license as identification.

   Notary Public

My Commission Expires: ____________________

Notary Registration No.: _____________________

 

40

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[affix seal]

EXHIBIT A

LEGAL DESCRIPTION

(Blanks to be completed upon determination of Units to be conveyed)

Units ___________, and Limited Common Element Parking Spaces ___________, Phase
______, [if there are Units in more than one Phase, repeat the previous line],
all a part of PENDERBROOK SQUARE, A CONDOMINIUM, as shown on the plat attached
to the Declaration recorded in Deed Book 17380 at page 948, as amended by
Amendment to Condominium Instruments recorded in Deed Book 17380 at page 1989,
corrected in Corrective Amendment to Condominium Instruments recorded in Deed
Book 17401 at page 1895 and further corrected in Deed Book 17450 at page 1600,
all among the land records of Fairfax County, Virginia.

TOGETHER WITH an undivided percentage interest appurtenant to the Unit in all
Common Elements of said Project, as described in said Declaration and subsequent
amendments.

TOGETHER WITH the right of ingress and egress from said property and right to
use, for all proper purposes in common with Declarant, its successors and
assigns, and all other occupants from time to time, any and all portions of the
Condominium designated by statute and the Declaration as General Common
Elements.

SUBJECT TO the reservations, restrictions on use and all covenants and
obligations set forth in said Declaration recorded in Deed Book 17380 at page
948, among the said land records, and set forth in the By-Laws of the Unit
Owners Association attached thereto, as it may be amended from time to time; all
of which restrictions, conditions, assessments and all other covenants are
incorporated herein by reference, and which shall be binding on each grantee and
their successors, heirs and assigns.

 

41

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EXHIBIT H

Prepared by and after                                          
                                            Consideration: [insert amount]

recording return to:

[insert firm name and address]

Tax Parcel Id. Nos: [insert numbers]

THIS DEED, made and entered into effective this _______ day of _____________,
20__, by and between COMSTOCK PENDERBROOK, L.C., a Virginia limited liability
company, GRANTOR, and GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative
Agent, GRANTEE, whose mailing address is 135 East 57th Street, New York, New
York, 10022.

W I T N E S S E T H :

WHEREAS, the title to the real property described on Exhibit “A” attached hereto
(“the Property”) is vested in fee simple in the Grantor; and

WHEREAS, the Property is subject to a lien of that certain Amended and Restated
Deed of Trust With Absolute Assignment of Leases and Rents, Security Agreement
and Fixture Filing recorded in the Clerk’s Office of the Circuit Court of the
County of Fairfax, Virginia, in Deed Book 19143, at Page 257 (“Deed of Trust”);
and

WHEREAS, the loan agreement (“Loan Agreement”) evidencing the obligations
secured by said Deed of Trust is owned and held by the Grantee, as
Administrative Agent; and

WHEREAS, the Grantor, being unable to pay the obligations set forth in the Loan
Agreement, has requested the Grantee accept this Deed in satisfaction of said
obligations and the underlying Deed of Trust, and the Grantee, as evidenced by
its signing this Deed, has acceded to said request.

NOW, THEREFORE, in consideration of the premises and the sum of Ten Dollars
($10.00) cash in hand paid, and other good and valuable consideration the
receipt of which is hereby acknowledged, and except as set forth below, the
Grantor grants and conveys with SPECIAL WARRANTY OF TITLE unto the Grantee the
Property.

 

42

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This Deed is given as an absolute conveyance of legal and beneficial title to
the Property to the Grantee and of all redemption rights which the Grantor may
have therein, and not as a deed of trust or security interest of any kind, the
Grantor having sold the Property to the Grantee for a fair and adequate
consideration, such consideration being full satisfaction of the obligations set
forth in the Loan Agreement, the Grantor’s obligations under the Deed of Trust,
and the release of certain parties heretofore guaranteeing the Grantor’s
obligations under the Loan Agreement and Deed of Trust.

In executing this Deed, the Grantor is not acting under any misapprehension as
to the effect thereof, any duress, any undue influence, or any misrepresentation
by the Grantee or its representatives, agents or attorneys; and the Grantee
acknowledges that this Deed is not given as a preference over other creditors of
the Grantor, but rather in lieu of foreclosure of the Deed of Trust.

This conveyance is made subject to the conditions, restrictions, easements and
reservations of record, if any, affecting the Property and constituting
constructive notice.

[Remainder of page intentionally left blank. Signature pages follow.]

 

43

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[Signature page to Deed from Comstock Penderbrook, L.C. to

Guggenheim Corporate Funding, LLC, as Administrative Agent]

WITNESS the following signatures and seals:

 

GRANTOR:

 

COMSTOCK PENDERBROOK, L.C.,

a Virginia limited liability company

By:   

Comstock Homebuilding Companies, Inc., a Delaware corporation,

its Manager

  By:        (SEAL)     Name:            Title:      

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________, to-wit:

The foregoing instrument was acknowledged before me this ______ day of
_________, 20___, by ___________________, in his capacity as
____________________ of Comstock Homebuilding Companies, Inc., a Delaware
corporation, the manager of Comstock Penderbrook, L.C., a Virginia limited
liability company, on behalf of said limited liability company. _____________ is
personally known to me or has produced his driver’s license as identification.

 

   Notary Public

My Commission Expires: ____________________

Notary Registration No.: _____________________

[affix seal]

[Signatures continue on the following page.]

 

44

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[Signature page to Deed from Comstock Penderbrook, L.C. to

Guggenheim Corporate Funding, LLC, as Administrative Agent]

 

ACCEDED TO BY:

 

GUGGENHEIM CORPORATE FUNDING, LLC

By:        (SEAL)   Name:          Title:      

STATE OF NEW YORK

CITY/COUNTY OF ______________, to-wit:

The foregoing instrument was acknowledged before me this _____ day of
________________, 20__ by ___________________ in his capacity as
__________________________ of Guggenheim Corporate Funding, LLC, on behalf of
said limited liability company. ________________________ is personally known to
me or has produced his driver’s license as identification.

 

   Notary Public

My Commission Expires: ______________________

[affix seal]

 

45

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EXHIBIT “A”

LEGAL DESCRIPTION

(Blanks to be completed upon determination of Units to be conveyed)

Units ___________, and Limited Common Element Parking Spaces ___________, Phase
______, [if there are Units in more than one Phase, repeat the previous line],
all a part of PENDERBROOK SQUARE, A CONDOMINIUM, as shown on the plat attached
to the Declaration recorded in Deed Book 17380 at page 948, as amended by
Amendment to Condominium Instruments recorded in Deed Book 17380 at page 1989,
corrected in Corrective Amendment to Condominium Instruments recorded in Deed
Book 17401 at page 1895 and further corrected in Deed Book 17450 at page 1600,
all among the land records of Fairfax County, Virginia.

TOGETHER WITH an undivided percentage interest appurtenant to the Unit in all
Common Elements of said Project, as described in said Declaration and subsequent
amendments.

TOGETHER WITH the right of ingress and egress from said property and right to
use, for all proper purposes in common with Declarant, its successors and
assigns, and all other occupants from time to time, any and all portions of the
Condominium designated by statute and the Declaration as General Common
Elements.

SUBJECT TO the reservations, restrictions on use and all covenants and
obligations set forth in said Declaration recorded in Deed Book 17380 at page
948, among the said land records, and set forth in the By-Laws of the Unit
Owners Association attached thereto, as it may be amended from time to time; all
of which restrictions, conditions, assessments and all other covenants are
incorporated herein by reference, and which shall be binding on each grantee and
their successors, heirs and assigns.

 

46