Exhibit 10.11**REVOLVING WORKING CAPITAL, LAND ACQUISITION AND DEVELOPMENT****AND RESIDENTIAL CONSTRUCTION BORROWING BASE FACILITY****AGREEMENT**   **Date:** March 21, 2007   **Loan No.:** 1001839    **Borrower:** **LEVITT AND SONS, LLC**  2200 West Cypress Creek Road  Fort Lauderdale, Florida 33309   **Lender:** **OHIO SAVINGS BANK**  200 Ohio Savings Plaza  Mail Code OH 99-0204  1801 East Ninth Street  Cleveland, Ohio 44114  Attn: Frank J. Bolognia, Sr. Executive Vice President   **Maximum Facility Amount:** $100,000,000.00    **Expiration Date:** March 20, 2009, as such date may be extended as set forth below.     **THIS REVOLVING WORKING CAPITAL, LAND ACQUISITION AND DEVELOPMENT AND RESIDENTIAL CONSTRUCTIONBORROWING BASE FACILITY AGREEMENT**(the “**Agreement**”) is entered into as of the date set forth above,by and between Borrower and Lender, with reference to the following facts:     A. Lender has approved a revolving loan facility (the *“****Loan****”*or the *“****Facility****”)*for Borrowerunder which Borrower may request funding for the acquisition or refinance of land, developmentthereof, and the construction of Units (as hereinafter defined) located in one or more ApprovedProjects (as hereafter defined) in the states of Florida, Georgia, North Carolina, South Carolina,Tennessee and Texas, and for working capital purposes. The availability of such credit for newprojects hereunder is subject to the Expiration Date identified above.     B. The total amount of the Facility is the Maximum Facility Amount shown above, theavailability of which is subject to certain sub-limits and restrictions, including theestablishment of a ***Maximum Available Amount****”*that is determined from time to time based on thecurrent value of the underlying collateral and certain other restrictions as set forth on**SCHEDULE 1**.     C. As of the date hereof, Lender has agreed to advance funds under the Facility inconnection with the Project identified in **Section I** of **SCHEDULE 1** hereto, whichshall constitute an Approved project, as defined below. The approval by Lender of additionalApproved Projects*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
and the disbursement of funds in connection therewith shall be upon Borrower’s request and atLender’s sole discretion, in accordance with the provisions hereinafter contained.     D. Except for funds advanced under the Working Capital Line, funds advanced under theFacility shall be secured by one or more mortgages and or deeds of trust, as applicable, in a formsatisfactory to Lender (collectively, and as amended from time to time, the *“****Mortgages****”)*creatingfirst priority liens or deeds of trust encumbering the Property (the *“****Property****”)*included or to beincluded within an Approved Project for which Borrower anticipates an immediate need for financinghereunder. In lieu of recording additional Mortgages to encumber additional Properties to bedesignated additional Approved Projects, any existing Mortgage and the legal description thereinmay be modified and amended, by a mortgage modification and spreader agreement, in form and contentacceptable to Lender, to encumber such additional Property as funds under the Facility are advancedin connection with such additional Property.     E. The repayment of funds advanced from time to time under the Working Capital Line shallbe (i) guaranteed by the Working Capital Line Guarantor and (ii) secured by a pledge of, andsecurity interest in and to, all the equity interests (the “**Working Capital Line Collateral**”) inBorrower.     F. Any term set forth herein in quotes shall be as hereinafter defined in this Agreement.     NOW, THEREFORE, the parties agree as follows:     **1. CERTAIN DEFINITIONS**. As used herein, the following terms shall have the meanings setforth below:          **1.1*****“A&D Draw”***means a “**Draw***”*which is made for the acquisition or refinancing of “A&DLand**”**, development of “A&D Improvements”, or other costs contained in a “**Budget”**for an “**A&DProject**” set forth in an “**A&D Project Addendum”**.          **1.2*****“A&D Draw Request”***means that portion of the Collateral Verification Certificaterepresenting the Collateral Basis Amount for A&D Projects submitted in accordance with the drawprocedures set forth in **Section 4** below which shall be accompanied by (i) an AIAApplication and Certificate for Payment signed by Borrower’s engineer and general contractor, ifapplicable, of the A&D Project, or equivalent acceptable to Lender; (ii) Borrower certifying thestatus of development and the percentage of completion; and (iii) a spreadsheet report for allcosts confirmed by an applicable AIA form.          **1.3*****“A&D Improvements”***means the development improvements being made by Borrower or theapplicable Project Guarantor on A&D Land, as set forth in the A&D Project Budget.          **1.4*****“A&D Land”***means Property for which Borrower or the applicable Project Guarantor hasin place or shall obtain all permits and approvals for development, that is purchased by Borroweror a Project Guarantor for the purpose of eventual development as an A&D Project.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **l.5*****“A&D Land Acquisition”***means the acquisition or refinance of A&D Land by Borrower or aProject Guarantor.          **1.6*****“A&D Land Addendum”***means a document which shall be substantially in the form shown onthe attached **EXHIBIT A**, executed by an “**Authorized Person”**on behalf of Borrower and byLender, which shall indicate Lender’s approval of an A&D Land Acquisition.          **1.7*****“A&D Land Allocation”***means the portion of the Maximum Facility Amount allocated for aparticular A&D Land Acquisition, as set forth in an A&D Land Addendum for such A&D Land Acquisitionor as set forth on an A&D Project Budget.          **1.8*****“A&D Project”***means the A&D Land and the A&D Improvements in or for a particularApproved Project.          **1.9*****“A&D Project Addendum”***means a document which shall be substantially in the form shownon the attached **EXHIBIT B**, executed by an Authorized Person on behalf of borrower and byLender, which shall indicate Lender’s approval of, and special conditions relating to, an A&DProject.          **1.10*****“A&D Project Allocation”***means the portion of the Maximum Facility Amount allocated for aparticular A&D Project, as set forth in an A&D Project Addendum for such A&D Project.          **1.11*****“Appraisal”***means an appraisal ordered by Lender from an independent appraiser acceptableto Lender, that complies with all applicable state and federal laws and regulations and with theUniform Standards of Professional Appraisal Practice; provided, however, that the value shown inany such Appraisal shall be subject to review and potential adjustment by Lender’s in-houseappraisal review department, in its sole discretion.          **1.12*****“Approved Project”***means Property approved by Lender in its sole discretion for inclusionas collateral for this Facility and for Draws hereunder under one of the applicable **“EligibleProperty Types”**. Borrower shall provide Lender with all relevant information for each prospectiveor existing Approved Project based on its applicable Eligible Property Type, including, withoutlimitation and at Lender’s request, appraisals, surveys, recorded plats, plans and specifications,copies of all existing permits and governmental approvals obtained for the Approved Project,insurance policies in form and amount acceptable to Lender and issued by insurance companiesacceptable to Lender, environmental audits, project budgets, and all other documents andinformation that Lender may require, and that otherwise satisfy the requirements for approval of aparticular Project as set forth in **Section 4** below or on **SCHEDULE 1**.          **1.13*****“Authorized Person”***means a person authorized to execute and deliver the “**LoanDocuments**”, A&D Draw Requests, “**Borrowing Base Draw Requests**,” “**Working Capital Line DrawRequests**,” “**Collateral Verification Certificates**” in the form attached hereto and incorporatedherein as **EXHIBIT C**, and “Certificates of Compliance” in the form attached hereto andincorporated herein as **EXHIBIT D**, and to certify financial statements in connection with*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
this Facility, as set forth in a borrowing resolution or otherwise designated by Borrower inwriting from time to time in a form acceptable to Lender.          **1.14*****“Borrower”***means, individually and collectively if more than one, those entitiesidentified above and on **SCHEDULE 1** attached hereto.          **1.15*****“Borrowing Base Draw”***means a Draw other than an A&D Draw or a Working Capital Line Draw.          **1.16*****“Borrowing Base Draw Request”***means that portion of the Collateral VerificationCertificate representing the Collateral Basis Amount other than A&D Projects.          **1.17*****“Borrowing Formula”***means the percentages set forth in **SCHEDULE 1**hereto, whichrepresent the maximum rates at which Draws shall be made hereunder for the A&D Improvements and forthe construction of particular types of Units on the Property.          **1.18*****“Budget”***means a budget or series of budgets that cover all “Eligible Costs” for theacquisition or refinance of A&D Land and/or the development of an A&D Project with proceeds of thisFacility and that have been reviewed and approved by Lender and/or any third-party consultantretained by Lender to review such budget(s) prior to the disbursement of the first A&D Draw to bemade hereunder for such A&D Land Acquisition or A&D Project.          **1.19*****“Collateral Basis Amount”***means as defined in **SCHEDULE 1**.          **1.20*****“Collateral Verification Certificate”***means a document setting forth each A&D LandAllocation and associated costs in place, A&D Project Allocation and associated costs in place, thepercentage of development completed in each such A&D Project, Units (and related “**Developed Lots”**)securing the Facility and associated costs in place, the percentage of construction completed oneach such Unit, the marketing status of each such Unit, and such additional information regardingthe status of construction of each such Unit as Lender, in its sole discretion, may require, whichdocument shall be in the form shown on the attached **EXHIBIT C**, completed by Borrower and certifiedby an Authorized Person in a form provided by Lender or a form otherwise acceptable to Lender, andprovided to Lender within twenty (20) days from month end for the month being reported.          **1.21*****“Construction Documents”***means the general construction contract between Borrower or anyapplicable Project Guarantor and any general contractor for the rendering of all services and thefurnishing of all materials for the development and construction of improvements on any portion ofthe Property, together with any other or additional contracts entered into in connection with theconstruction of the improvements on any portion of the Property, and all subcontracts, “Plans andSpecifications”, and related documents, in all cases satisfactory in form and substance to Lender.          **1.22*****“Curtailment Requirement”***means the minimum required principal repayment schedule, ifany, for a particular A&D Project set forth on the applicable A&D Project Addendum.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **1.23*****“Debt”***means GAAP total liabilities for the specified Financial Covenant Party(ies), butexcluding Subordinated Debt.          **1.24*****“Debt-to-Worth Ratio”***means the ratio of the total Debt of the specified FinancialCovenant Party(ies) to its “Tangible Net Worth”.          **1.25*****“Developed Lot”***means a fully developed, platted, separately conveyable lot developed aspart of an A&D Project.          **1.26*****“Draw”***means a disbursement of funds under the “Note” in accordance with **Section4** below and the other terms of this Agreement.          **1.27*****“Eligible Costs”***means, as applicable, the expenses of acquiring specific property anddeveloping an Approved Project, including, without limitation: interest payments on the Loan,development costs, recording fees, closing and sale costs, and any other costs that Lender mayapprove in its sole discretion.          **1.28*****“Eligible Property Types”***means A&D Land, A&D Improvements, Developed Lots, and Unitsthat are located in one or more Approved Projects that secure the Facility with a first prioritylien or trust deed under the Mortgages (subject only to exceptions approved by Lender) and have notbeen included in Borrower’s Collateral Verification Certificates for longer than the “MaximumHolding Period” specified in **SCHEDULE 1**, if any, for the particular property type.          **1.29*****“Equity Funds”***means an amount to be contributed from Borrower’s own funds equal to thedifference between the Eligible Costs and the amounts available for borrowing under the Facility.          **1.30*****“Expiration Date”***means the date set forth above, which is the date on which Lender’sauthorization for Borrower to add additional collateral to the Facility expires and the Term-OutPeriod begins, as such dates may be extended as set forth below.          **1.31*****“Expiration Date Extension”***means asdescribed in **Section 2.4** herein.          **1.32*****“Financial Covenant Party”***and, collectively, ***“Financial CovenantParties”***means each of the entities whose financial performance determines Borrower’s compliancewith one or more of the financial covenants set forth on **SCHEDULE 2** attached hereto, assuch parties are identified in that Schedule.          **1.33*****“Guarantor”***means, individually and collectively, the Working Capital Line Guarantor andeach Project Guarantor.          **1.34*****“Guaranty”***means, individually and collectively, the Unconditional and Continuing LimitedGuaranty of the Working Capital Line Guarantor and the Unconditional and Continuing Guaranty andIndemnity Agreements executed by the Project Guarantors, as required herein.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **1.35*****“Letter of Credit”***means a letter of credit issued by Lender to or for the benefit ofBorrower or any Project Guarantor.          **1.36*****“Leverage”***means the Debt-to-Worth Ratio.          **1.37*****“Loan Documents”***means the Note, the Guarantees, the Mortgages, the Working Capital LinePledge, this Agreement, and all other agreements and documents evidencing, securing, or otherwiserelating to this Facility or any Draw under this Facility, all of which shall be in the formrequired by Lender.          **1.38*****“Maturity Date”***means the date which is twenty-four (24) months after the ExpirationDate, as such Expiration Date may be extended as provided for herein or in the other LoanDocuments.          **1.39*****“Maximum Available Amount”***shall have the meaning given to such term in **SCHEDULE1**.          **1.40*****“Maximum Holding Period”***means the time period specified in **SCHEDULE 1** for eachEligible Property Type, which time period represents the maximum amount of time that any particularProperty may be included in Collateral Verification Certificates used in calculating the MaximumAvailable Amount in the manner set forth on **SCHEDULE 1**.          **1.41*****“Net A&D Allocations”***means the sum of all A&D Project Allocations less the Per LotAmounts for all Developed Lots within such A&D Projects that are either Released Lots or on whichconstruction of a Unit has commenced, provided such Unit is included in a Collateral VerificationCertificate.          **1.42*****“Note”***means*,*collectively, one or more Revolving Promissory Notes, in the aggregateprincipal amount not exceeding the Maximum Facility Amount, executed and delivered to Lender byBorrower to evidence this Facility, as the same may be amended, modified, split, consolidated orrenewed from time to time.          **1.43*****“Per Lot Amount”***means the per lot amount set forth on the applicable A&D ProjectAddendum.          **1.44*****“Plans and Specifications”***means, as applicable, the final development plans andspecifications and the full set of engineering and architectural plans and specifications fordevelopment or construction in connection with the applicable Approved Project or Units, all asreviewed and approved by Lender.          **1.45*****“Project”***means, from time to time all subdivision development and residentialconstruction work scheduled or proposed by Borrower to be completed with proceeds of the Facilitywith respect to Approved Projects.          **1.46*****“Project Guarantor”***means each owner of Property to become A&D Land or an ApprovedProject, which owner shall have executed and delivered to Lender (i) an unconditional guaranty, inform and content acceptable to Lender in its sole discretion, pursuant to which such*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
owner shall have jointly and severally guaranteed the repayment, in full, of the Facility, (ii) aMortgage encumbering such Property as a first priority lien or deed of trust thereon and (iii) suchother documents as may be reasonably required in connection with the requested designation ofProperty owned by such person or entity as A&D Land or an Approved Project, in accordance with**Section 3** hereof.          **1.47*****“Qualified Contract”***means a binding contract, in form and content reasonablysatisfactory to Lender, for the sale of a Unit for consideration approved by Lender to a purchaserunaffiliated with Borrower or Guarantors, under which (i) Borrower or the applicable ProjectGuarantor has received cash deposit(s) in such percentage of the Unit’s approved sale price asLender may reasonably require; (ii) the proposed purchaser is purchasing the Unit for cash or hasbeen approved for permanent financing by an institutional lender reasonably satisfactory to Lender;(iii) all contract contingencies, other than seller’s performance (including financingcontingencies), have been satisfied or waived; (iv) all applicable cancellation or rescissionperiods have expired; and (v) neither Borrower, Guarantor nor any affiliate thereof is obligated toprovide any purchase money financing for such Unit.          **1.48*****“Released Lot”***means a Developed Lot which has been released from the lien andencumbrance of the applicable Mortgage.          **1.49*****“Sub-Limit”***means the Maximum Available Amount and the related restrictions on theaggregate amounts outstanding under the Facility for the Working Capital Line or for particularEligible Property Types and related limits on disbursements for certain purposes, all as set forthin **SCHEDULE 1** hereto.          **1.50*****“Subordinated Debt”***means indebtedness and liabilities of Borrower that have beensubordinated by written agreement in form and substance acceptable to Lender to indebtedness owedby Borrower to Lender.          **1.51*****“Tangible Net Worth”***means the aggregate of shareholder equity of the specifiedFinancial Covenant Party(ies) increased by Subordinated Debt due to parent and decreased by allintangible assets (i.e., goodwill, trademarks, organizational expenses, and similar intangibleitems) and decreased by obligations due from shareholders and/or affiliates of the specifiedFinancial Covenant Party(ies).          **1.52*****“Term-Out Period”***means the twenty four (24) month period immediately following theExpiration Date, during which the Facility is subject to certain additional restrictions, all asset forth on **SCHEDULE 1** hereto.          **1.53*****“Unit”***means a Developed Lot and the residential dwelling constructed or to beconstructed thereon, located in an Approved Project including any of the following, as designatedin Borrower’s Collateral Verification Certificate and confirmed or adjusted by Lender’sinspections:               **1.53.1*****“Model Unit”***means a Unit that is under construction or has been constructed for use asa model for sales and marketing purposes.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
               **1.53.2 “*****Pre-Sold Unit”***means a Unit with respect to which there exists a Qualified Contract,subject only to completion, final inspection and closing.               **1.53.3*****“Spec Unit”***means a Unit that is not pre-sold (or as to which a Qualified Contract hasbeen terminated), and that will be sold on the open market upon completion.          **1.54*****“Unsatisfied Curtailment Requirement”***means the cumulative Curtailment Requirement fora particular A&D Project as reduced by all Per Lot Amounts for all Developed Lots within such A&DProject that are either Released Lots or on which construction of a Unit has commenced, providedsuch Unit is included in a Borrowing Base Draw Request.          **1.55*****“Working Capital Line”***means a portion of the Facility, in the amount not exceeding$15,000,000.00 at anyone time, available for disbursement to Borrower without regard to theBorrowing Formula or any Collateral Basis Amount, in accordance withthe provisions of **Section 2.6**and **Section 4** hereof.          **1.56 “*****Working Capital Line Collateral”***means all of the equity interests in Borrower, andany successor thereof, which interest shall have been duly and validly pledged to Lender ascollateral security for the prompt and full satisfaction of all obligations of the Working CapitalLine Guarantor under its Guaranty of the Working Capital Line.          **1.57*****“Working Capital Line Draw”***means a Draw made under, and subject to all conditionspertaining to, the Working Capital Line, in accordance with **Section 4** hereof.          **1.58*****“Working Capital Line Draw Requests”***means a written request for the disbursement toBorrower in accordance with the procedures set forth in **Section 4** below.          **1.59*****“Working Capital Line Guarantor”***shall mean Levitt Corporation a Florida corporation,and its successors.          **1.60 “*****Working Capital Line Pledge”***shall mean the Pledge and Security Agreement of even dateherewith, executed by the Working Capital Line Guarantor in favor of Lender, encumbering theWorking Capital Line Collateral as security for the obligations of the Working Capital LineGuarantor under its limited guaranty of the Facility.     **2. LINE OF CREDIT PROVISIONS.**          **2.1 Description of the Facility.**The purpose of the Facility is to fund the Borrower’sworking capital needs and the acquisition or the refinance of A&D Land, the development of A&DLand, and the construction of Units located in one or more Approved Projects, and neither Borrowernor any Project Guarantor shall use Draws for any other purpose. Subject to the terms andconditions of this Agreement, upon Borrower’s submission of a Working Capital Line Draw Request ora Collateral Verification Certificate (comprised of A&D Draw Requests and Borrowing Base DrawRequests) and subject to Lender’s approval, Lender will authorize Draws, which shall be subject tothe Maximum Facility Amount, the Maximum Available Amount, and all related Sub-Limits. Lender willmaintain records reflecting the disbursed and un-disbursed portions of the Maximum Facility Amountand Maximum Available*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
Amount, A&D Land Allocations, A&D Project Allocations, Net A&D Allocations, and payments receivedand applied to the outstanding Facility, interest accrued, and other matters related to theFacility and the Note, which shall be conclusive evidence of amounts owing thereunder absentmanifest error.          **2.2 Interest and Payment Provisions.**               **2.2.1 Interest and Payment Provisions**. Interest rates and payment provisions shall be as setforth in the Note and as further described in **Section 2.2.3.**               **2.2.2 A&D Project Interest Reserves.**If applicable to a specific A&D Project, that portionof an A&D Land Allocation or an A&D Project Allocation allocated in the Budget for the A&D LandAcquisition or A&D Project set forth in the A&D Land Addendum or A&D Project Addendum, if any, forthe payment of interest (the “Interest Reserve”) shall be retained by Lender and shall be availablefor payment of accrued interest due Lender pursuant to that portion of the outstanding principalbalance of the Note consisting of A&D Draw Requests for the particular A&D Project. Borrower herebyauthorizes Lender to advance such proceeds on behalf of Borrower directly to Lender each month topay such portion of the interest due on the Note, notwithstanding that Borrower may not haverequested an advance of such amount. Such advance, if made, shall be made by a bookkeeping entry onLender’s records, shall be considered an A&D Draw Request, added to the outstanding principalbalance of the Note and shall be deemed paid to and received by Borrower. The authorization herebygranted, however, shall not obligate Lender to make any such advance or prevent Borrower frompaying interest from its own funds. Borrower acknowledges that the payment of interest by themethod described in this section is for its convenience and benefit. Notwithstanding any term orprovision hereof to the contrary, if from time to time Lender reasonably determines, in its soleand absolute discretion, that the undisbursed portion of the interest reserve established pursuantto the Budget for the A&D Project (the “Undisbursed Reserve Sum”) may not be sufficient to defrayin its entirety the entire amount of interest allocated to the A&D Project which Lender thenanticipates is likely to accrue during the remainder of the time the A&D Draw Request for such A&DProject shall be outstanding (the “Anticipated Interest Sum”), whether as a result of (a) anyexisting or anticipated increase in the applicable interest rate, (b) any existing or anticipateddeviation from sales or income pro-formas or projections, (c) any existing or anticipated increasein cost of development or delay in commencement or completion of development, and/or (d) any othermatter Lender deems relevant in assessing the possibility of any interest reserve insufficiency,then Lender may, at its option, elect to (i) make no further advances from the Undisbursed ReserveSum and require interest payments to be made directly by Borrower, (ii) require Borrower to depositin an escrow account with Lender or such other escrow agent as Lender may designate, pursuant to anescrow agreement in form and content as required by Lender, an amount equal to the differencebetween the Anticipated Interest Sum and the Undisbursed Reserve Sum, and/or (iii) require Borrowerto provide such other and further assurances to Lender as Lender may, in its discretion, reasonablyrequire, it being agreed that Borrower’s failure to fully comply with any of Lender’s requirementspursuant to this **Section 2.2.2**within ten (10) days from the delivery to Borrower of Lender’snotice of such requirements shall, without further notice, constitute an “Event of Default” underthis Agreement and each of the other Loan Documents.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
               **2.2.3 Principal Payments.**In addition to the interest and principal payment requirements ofthe Note, Borrower shall make principal payments as needed from time to time in order to ensurethat the principal amount outstanding under the Facility at no time exceeds the Maximum FacilityAmount, that the aggregate outstanding principal amount of Draws at no time exceeds the MaximumAvailable Amount, or any applicable Sub-Limits are exceeded. Further, if there exists UnsatisfiedCurtailment Requirements such that, after the application of such principal payments, theCollateral Basis Amounts (as further described in **SCHEDULE 1**) for all Eligible Property Typesincluded in the Maximum Available Amount are insufficient to cover all Unsatisfied CurtailmentRequirements and the face amount of all outstanding Letters of Credit, Borrower shall make anadditional principal payment sufficient to satisfy all Unsatisfied Curtailment Requirements, whichshall be applied by Lender to the Unsatisfied Curtailment Requirements, and to the outstandingFacility and shall further comply with the provisions of**Section 2.5** below. Provided no Event ofDefault shall have occurred (and not been waived, in writing, by Lender), principal paymentsreceived by Lender shall be applied to the Facility first, to the extent applicable, in accordancewith the preceding sentence and then as directed by Borrower. Following the occurrence of any Eventof Default, which shall not have been waived, in writing, by Lender, Lender may apply suchprincipal receipts in such order as Lender may determine, in its sole discretion.          **2.3 Facility Fees and Costs.**Borrower shall pay, either from proceeds of the Facility or fromBorrower’s own funds, at Lender’s discretion, the nonrefundable Facility Fees in the amounts and inthe manner specified in **SCHEDULE 1**. Borrower shall pay, within five (5) business daysfollowing Lender’s demand, all reasonable out-of-pocket costs related to the Facility, includingwithout limitation: title insurance premiums, appraisal fees, recording costs, third-partyarchitect/engineer fees, fees for plan and cost reviews, if any, by third-party consultants, andattorneys’ fees.          **2.4 Extension of Expiration Date.**Upon each annual anniversary of the date hereof, at thesole discretion and option of Lender, the Expiration Date may be extended in writing for a periodof twelve (12) months, subject to Lender’s review of the latest annual fiscal year end financialinformation, and all supplemental current financial statements provided by Borrower to Lender andsuch other information as Lender may deem material, and on such terms as Lender may require,including payment of any applicable Facility Fee (SeeSchedule 1 hereto).          **2.5 Letter of Credit.**From time to time, upon the request of Borrower, Lender shall issueLetter(s) of Credit to or for the benefit of Borrower or any Project Guarantor; provided,however, that the issuance of each Letter of Credit by Lender shall be subject to theapproval of Lender in Lender’s sole discretion. Each such Letter of Credit shall have an expirydate no later than thirty (30) days prior to the then applicable Maturity Date. In the event thatthe sum of (i) the outstanding principal balance of the Note plus (ii) unadvanced A&D LandAllocations and unadvanced Net A&D Allocations, plus (iii) the face amount of all outstandingLetters of Credit issued to or for the benefit of Borrower or any Project Guarantor, exceeds thesum of (a) the amount of the Working Capital Line and (b) the Collateral Basis Amounts for allEligible Property Types included in the Maximum Available Amount after the application of anyprincipal payments required by **Section 2.2.3** above, Borrower shall immediately deposit withLender, upon demand therefor, the amount of such excess, which shall be deposited into an accountestablished with Lender, which account shall be assigned as additional collateral for the*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
Note. Thereafter, Borrower shall maintain a balance in such account in the amount of such excess,as such excess may increase or decrease over time in conjunction with changes in the MaximumAvailable Amount and availability under the Working Capital Line.          **2.6 Working Capital Line.**Subject to all of the terms and conditions set forth in **Section4** or otherwise in this Agreement, upon Borrower’s submission of Working Capital Line DrawRequests, Lender shall disburse Draws under the Working Capital Line without regard to anyCollateral Basis Amount, provided that the amount of any such disbursement shall not exceed thelimitation set forth in **Section 4.4.3** hereof. At Borrower’s request at any time during theterm of the Facility, Borrower may irrevocably elect, by written notice to Lender, to terminate theWorking Capital Line. Effective upon receipt of any such termination notice, Lender’s obligation todisburse any further Working Capital Line Draws shall cease and the Working Capital Line shall bereduced to the then outstanding principal balance thereof, as further reduced by the amount of eachprincipal payment subsequently received by Lender and applied by Lender to the Working CapitalLine, as provided in this Agreement. Upon the termination of the Working Capital Line and therepayment, in full, of the Working Capital Line, Lender shall (a) cancel the Working Capital LineGuarantor’s Guaranty, (b) terminate Lender’s security interests in the Working Capital LineCollateral and (c) cancel and return to the Working Capital Line Guarantor the Working Capital LineGuarantor’s Guaranty and the Working Capital Line Collateral.     **3. CONDITIONS TO CLOSING AND ADVANCEMENT OF FUNDS FORPROPERTY.**Lender’s obligation to advance any funds under this Facility with respect to any existingApproved Project or A&D Land, and Lender’s subsequent obligation to advance funds with respect toany additional Property, shall be in Lender’s sole and absolute discretion and subject to approvalby Lender’s credit administration department and (unless waived or deferred by Lender, in writing)the satisfaction, at Borrower’s sole cost and expense, of each of the following conditions for theparticular Property providing the basis for which Borrower is requesting funds:          **3.1 Approved Project.**The additional Property shall either have been approved as A&D Land byLender, in its sole discretion, or shall be located in an Approved Project, and for A&D Projects,Lender shall have approved Borrower’s plans for the current stage of development of such A&DProject proposed as additional Property hereunder. For A&D Land, it shall be sufficient to indicateLender’s approval by its execution of an A&D and Addendum. For an A&D Project, it shall besufficient to indicate Lender’s approval by its execution of an A&D Project Addendum, which maycontain special conditions precedent to any or all advances hereunder.          **3.2 Guaranty of Property Owner.**The fee owner of the applicable Property shall have become aProject Guarantor, guaranteeing repayment (as a direct obligor, and not as a guarantor ofcollection) of the Note and all obligations of Borrower under the Facility.          **3.3 Recording of Mortgages.**A Mortgage (together with an assignment of leases, rents,development and similar rights and such other security documents as are customary in the applicablejurisdiction) shall have been recorded in the appropriate jurisdiction and Borrower or theapplicable Project Guarantor shall have paid all recording fees and taxes*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
(excluding real estate taxes not then due and payable) and removed all encumbrances (a) necessaryto perfect the Mortgage as first lien or first deed of trust (as applicable) on the applicableProperty and (b) not approved by Lender, in its sole discretion.          **3.4 Title Policy.**Borrower or the applicable Project Guarantor shall have procured, beforeany A&D Draw is made hereunder with respect to the particular A&D Land or A&D Project, after theinitial recordation of the Mortgage encumbering such Property or following the recording of anyamendments thereto or any additional Mortgages required to secure the Facility, an ALTA 1970 formextended coverage lender’s policy of title insurance (or its equivalent acceptable to Lender) in aform and issued by a title company satisfactory to Lender, in an insured amount of not less than(a) in those jurisdictions imposing material taxes on Mortgages based on the amount securedthereby, the Maximum Available Amount allocated to the applicable Approved Project plus 120%, and(b) in all other jurisdictions, an amount equal to the Maximum Facility Amount minus the maximumamount of the Working Capital Line (i.e. $85,000,000.00), insuring the Mortgages as first liens orfirst deeds of trust (as applicable) on all Property securing the Facility, subject only to suchexceptions as may be approved in writing by Lender and including such endorsements as shall becustomary or as Lender may require, including, but not limited to Tie-In Endorsements, Florida Form9 (or comparable comprehensive endorsements in other States), Letter of Credit Endorsements andRevolving Credit Endorsements (provided issuance of the requested endorsements is legal in theapplicable State). *No work of any character is to be commenced or material delivered to theapplicable Property before the title policy insuring such Mortgage is furnished to Lender andLender has advised Borrower that such policy has been received and is acceptable to Lender, exceptto the extent that the title policy ultimately provided to Lender insures the first lien priorityof such Mortgage subject only to permitted exceptions approved by Lender despite any such priorwork and without exceptions for construction liens.*The intention of the parties hereto is thatevery Mortgage granted as security for the Facility is and, to the extent modified by anymodification and spreader thereof, shall continue to be prior to any construction lien. If anymaterial is delivered or work performed before Lender has received each such policy, Lender may, atits option, refuse to make any Draws hereunder with respect to such Property, other than to pay allexpenses incurred in connection with the Facility and proceed to exercise any and all remediesavailable to Lender under the Loan Documents upon an occurrence of an Event of Default.          **3.5 Appraisals and Market Studies.**For A&D Land, Lender shall have obtained an Appraisalsetting forth the as-is market value of the undeveloped A&D Land. For A&D Projects, Lender shallhave obtained an Appraisal setting forth the as-is market value of the undeveloped A&D Land and thebulk discounted market value of the Developed Lots to be developed in the A&D Project. For Units,Lender shall have obtained a master appraisal on base model types and lots with option valueaddendum for each Approved Project which shall be utilized throughout the period of sales of theUnits, but updated if and when requested by Lender at Borrower’s expense. In addition, Borrowershall deliver to Lender a then current market study for the Units to be constructed in suchProject. Each such Appraisal and market study shall demonstrate a market value acceptable to Lenderutilizing Lender’s then current policies and guidelines. Further, at any time, Lender shall havethe right to re-appraise any portion of the Property at Borrower’s expense and adjust theCollateral Basis Amounts for such portions of the*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
Property in the event such re-appraisal indicates a decline in the market value of the re-appraisedportions of the Property.          **3.6 Plans/Permits.**For A&D Projects (i.e. for Draws other than simply to finance orrefinance A&D Land), Lender shall have been provided with Plans and Specifications, acceptable toLender and its third party consultant, for the applicable phase of development or construction and,for A&D Land on which Borrower intends to begin Unit construction, a final plat map, in a formsatisfactory in all respects to Lender, shall have been recorded in the appropriate jurisdiction.In addition, Borrower shall have provided Lender with evidence satisfactory to Lender that Borroweror the applicable Project Guarantor has obtained or will obtain (as determined in Lender’sreasonable satisfaction) all permits and approvals necessary to allow Borrower or the applicableProject Guarantor to proceed with the development of the A&D Project or the construction ofindividual Units in accordance with the Plans and Specifications.          **3.7 Third Party Contracts.**Borrower or the applicable Project Guarantor shall have providedLender with such construction, development, engineering, and architectural contracts, and majorsubcontracts relating to the applicable Approved Project, as Lender may request and Lender in itssole discretion shall have approved such contracts in writing.          **3.8 Budget.**Lender (and its inspecting engineer) shall have received and approved a costbreakdown and itemization of all hard and soft costs for the applicable Approved Project and thesources for payment of such costs from the Borrower or the applicable Project Guarantor. Thisitemization shall include: (i) a summary page indicating costs of land, site work, hard and softcosts of construction, and (ii) detailed schedules supporting the construction costs.          **3.9 Zoning and Concurrency.**Borrower shall have provided Lender with evidence satisfactoryto Lender that the Property has zoning and concurrency approvals which will permit the developmentand construction of the applicable Approved Project.          **3.10Search.**Lender shall have received satisfactory federal and state tax lien, judgment, UCC, and pending litigation search for Borrower and the applicable Project Guarantor forthe state and county in which Borrower and such Project Guarantor was formed as well as for theState and county in which the applicable Property is located in each case, dated not more thansixty (60) days prior to the date of the first Draw to be disbursed with respect to such Property.          **3.11 Cost Analysis.**Lender shall have received a cost analysis, in form and substancesatisfactory to Lender, as determined in its sole discretion that supports the information in theBudget submitted by Borrower.          **3.12 Insurance.**Borrower shall have provided Lender with evidence acceptable to Lender ofthe insurance required to be maintained under **Section 8.11** hereof and under any of theother Loan Documents, which insurance shall be in form and amount, and issued by companiessatisfactory to Lender.          **3.13 Utilities.**Where applicable, Borrower shall have delivered to Lender evidencesatisfactory to Lender that all utilities, including water, electric, gas, and telephone, and allstorm and sanitary sewer drainage facilities are or will be available at the Property for*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
utilization by Borrower or the applicable Project Guarantor for the development and use of theApproved Project and that the respective lines and treatment or generating plants are of adequatesize and capacity to serve the Approved Project.          **3.14 Survey**. At Lender’s request, Borrower shall have delivered to Lender a current survey(dated note more than ninety (90) days prior to the date of the first Draw with respect to suchProperty), properly certified and in a form acceptable to Lender, showing such Property to be freefrom encroachments and otherwise acceptable to Lender.          **3.15 Soil Tests, Environmental Report.**Borrower shall have delivered to Lender copies of allsoil analysis reports, all soil compaction tests, all environmental reports or statements, and allother tests prepared or performed with respect to Property, all of which shall be satisfactory toLender in form and content. In addition, Lender shall have received a fully completed environmentalquestionnaire, in form and content acceptable to Lender, the answers to which must be acceptable toLender, in it sole discretion. Further, Lender shall have received and approved from an approvedengineer hired by Borrower, a Phase I Environmental Site Assessment together with a Reliance Letterthereto issued in favor of Lender (if said assessment is not addressed to Lender), in form andsubstance satisfactory to Lender, as determined in its sole and absolute discretion, indicating,that the Property in the subdivision proposed for approval is free from risk, in Lender’s solejudgment, from all hazardous substances, toxic substances, or hazardous wastes as defined by anyfederal, state, or local law, statute, ordinance, or regulation and is free of all othercontamination which, even if not so regulated, is known to pose a hazard to the health of anyperson on or about the Property, and unless specifically approved by Lender, that the subjectProperty is not located within a “Wetlands” or “Flood Plain” area, and contains no undergroundstorage tanks or oil or gas wells.          **3.16 Fees and Expenses.**Borrower shall have paid all legal, appraisal, and inspection fees;title insurance and survey costs; recording and filing fees; documentary stamp, intangible or otherapplicable mortgage taxes; real estate commissions; hazard and liability insurance and propertytaxes (due and payable) on the Project; and any and all other charges or expenses reasonablyincurred by Lender in connection with the Loan or the preparation and recording or filing of theLoan Documents. Borrower shall indemnify and hold Lender harmless against any and all claims forsuch fees, charges, commissions, taxes, or other expenses of any kind in any way connected with theLoan.          **3.17 Notice of Commencement.**For each Unit (or building within which such Unit is situated),Borrower or the applicable Project Guarantor shall have prepared and recorded a Notice ofCommencement in accordance with Chapter 713, Part I, Florida Statutes, or any similar requirementunder the lien laws of the State in which the applicable Property is situated.          **3.18 Financial Reports and Covenant Compliance.**Borrower, and the reporting parties set forththerein, shall have provided Lender with current versions of all the financial reports described in**SCHEDULE 2,** and Borrower and such reporting parties shall be in compliance with allreporting requirements and financial covenants set forth on **SCHEDULE 2.***Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **3.19 Default.**No Event of Default shall have occurred (which shall not have been waived, inwriting, by Lender) and no event shall have occurred which, with the giving of notice or passage oftime, could become an Event of Default.          **3.20 Other Documents.**Borrower shall have provided Lender with such other reports,certificates, documents, and instruments regarding Borrower, the applicable Project Guarantor andthe applicable Property and Approved Project as may be listed in the A&D Land Addendum or A&DProject Addendum or as Lender may otherwise reasonably require.          **3.21 Authority Documents.**               **3.21.1 Organizational Documents.**Borrower and each Guarantor shall have provided Lenderwith an updated certified copy of each of their respective Articles of Incorporation, Bylaws andshareholder agreements or Articles of Organization and Operating Agreements, together with allamendments and modifications thereto, and such other organizational documents as Lender mayrequest, and a certified copy of each assumed name certificate, if any, of Borrower and/or eachGuarantor.               **3.21.2 Good Standing Certificates.**Borrower and each Guarantor shall have provided Lenderwith good standing certificates, or their equivalent, issued by the Secretary of State or otherappropriate offices within the State of organization of Borrower and each Guarantor, and evidencesatisfactory to Lender of Borrower’s and each Guarantor’s authorization to do business in the Statewherein the Approved Project is located, if the State of Borrower’s and/or the Guarantor’sorganization is other than the State of the location of the applicable Approved Project.               **3.21.3 Resolutions and Consents.**Borrower shall have provided Lender with certifiedresolutions and/or consents authorizing Borrower and the applicable Guarantor to enter into theLoan Documents, including but not limited to the Mortgages or any mortgage modification andspreader agreement amending any then existing Mortgage (if the applicable Property is not currentlysubject to the Mortgage).               **3.21.4 Delivery of Loan Documents.**Borrower and Guarantors shall have executed anddelivered to Lender all Loan Documents required by Lender and anyother documentation as required by Lender to carry out the provisions and purposes of this Agreement andthe Facility.               **3.21.5 Borrower’s Counsel’s Opinions.**Lender shall have received an opinion letter fromcounsel to the Borrower or the applicable Project Guarantor, in form and content satisfactory toLender and its counsel, opining to such matters as Lender may require, including, but not limitedto opinions regarding (a) the due organization, existence and good standing of Borrower or theapplicable Project Guarantor (and any applicable general partner or manager thereof), (b) the duepower, authorization and execution of the Guaranty, Mortgage and other applicable Loan Documentsexecuted by such Project Guarantor, (c) that the form of the Mortgage and other documents to berecorded or filed are proper for recording or filing in the applicable State and (d) all documentsexecuted by the Borrower or the Project Guarantor (as applicable) are valid and binding (subject tocustomary qualifications and assumptions).*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
               **3.21.6 Other Conditions.**Borrower and Guarantors shall have fulfilled each and every othercondition to any initial Draw (i.e. to finance or refinance A & D Land) or any subsequent Draw setforth in SCHEDULE 1 attached hereto or the applicable A&D Land Addendum or A&D Project Addendum.     **4. A&D DRAWS/BORROWING BASE DRAWS/WORKING CAPITAL LINEDRAWS.**Lender shall make Draws available to Borrower for the purposes and in accordance with theprocedures set forth in this Agreement, and in the case of all Draws other than Working CapitalLine Draws, based on Borrower’s most current Collateral Verification Certificate, in each case,subject to verification or adjustment based on Lender’s inspections and review as set forth below,and provided that the total amount outstanding under the Facility shall at no time exceed theMaximum Facility Amount and Maximum Available Amount as defined in **SCHEDULE 1**. Lender mayimpose such additional conditions on such Draws as Lender may subsequently determine are necessaryto insure that the proceeds of the Facility are applied to the purposes contemplated hereunder.          **4.1 Draw Procedures.**               **4.1.1 Collateral Verification Certificate Report.**Borrower shall submit periodicCollateral Verification Certificates no less than one (1) time per month and within twenty (20)days of month end for the month being reported, on a day Lender is open for business at theaddress set forth above, that shall cover all amounts being requested hereunder for A&D Draws andBorrowing Base Draws by providing Lender with such information, authorizations, and documents asLender may request, including but not limited to Borrower’s A&D Draw Request, a spreadsheet reportfor all A&D Project Budget Costs and related costs incurred, and a report detailing and listing allcosts by category (**“Borrower’s Job Cost Reports”**) by Approved Project and Borrowing Base DrawRequest. If all conditions to Draws set forth herein and in the applicable Loan Documents have beensatisfied, including each of the conditions set forth in**Section 3**above and in **SCHEDULE 1**hereof, Lender will make available the difference between the current outstanding principal amountof the Facility and the Maximum Available Amount as directed from time to time by Borrower.               **4.1.2 All Draws.**Lender shall not be required to fund any Draw unless, on the date suchDraw is requested to be made (which shall not be less than 5 business days after Lender’s receiptof the applicable Draw request), each of the following conditions are satisfied:                    **4.1.2.1 Representations and Warranties**. All representations and warranties containedherein or in any of the applicable Loan Documents shall be true and correct, in all materialrespects;                    **4.1.2.2 No Default.**Borrower and Guarantors shall be in full compliance with all terms,conditions, and covenants set forth herein or in any of the applicable Loan Documents, no Event ofDefault shall have occurred (which shall not have been waived, in writing, by Lender) and no eventshall have occurred which, with the giving of notice or passage of time would become an Event ofDefault;*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
                    **4.1.2.3 No Illegality.**No change in applicable Laws, or in the interpretation of such Lawsshall have occurred which would make it illegal for Lender toperform its obligations under this Agreement, and the making of any advance hereunder would notcause Lender to exceed its then current loans-to-one-borrower limitation; and                    **4.1.2.4 Title Endorsements.**If required by Lender in accordance with the terms of thisAgreement, Lender has received (i) such continuation endorsements and date-down endorsements to thetitle policies issued pursuant to **Section 3.4** hereof, in form and substance satisfactory toLender as Lender determines in its sole discretion necessary to insure the priority of theapplicable Mortgages as valid first liens on the Property described in the most recent CollateralVerification Certificate or (ii) an unconditional, irrevocable written commitment by the applicabletitle insurance company to issue such endorsements.          **4.2 Project Information.**Borrower shall provide all information requested by Lender, in formand content satisfactory to Lender, prior to any Draw hereunder, including without limitation:Budgets for all Approved Projects under development or Units under construction, appraisals,surveys, recorded plats, plans and specifications, copies of all applicable permits andgovernmental approvals obtained for the particular Approved Project, copies of all recordeddeclarations or covenants affecting that Approved Project, insurance policies in form and amountreasonably acceptable to Lender and issued by insurance companies reasonably acceptable to Lender,environmental reports, borrowing resolutions, evidence of corporate or other status, currentcontractor’s licenses, lien waivers or subordinations, evidence of all required surety bonding andinsurance coverages, plan and cost reviews performed by an independent inspection agent, and allother documents and information that Lender may require. Date down endorsements to title insurancepolicies and/or lien releases may be required as a condition to making any Draw (other than aWorking Capital Line Draw).          **4.3 Property Inspections.**               **4.3.1 A&D Project Inspections.**Lender may, at Lender’s option, inspect A&D Projects atsuch intervals and as often as Lender may desire but not less than quarterly, and Lender will notwithhold funding for A&D Draw Requests pending the inspection report next due. Should inspectionsof the A&D Projects indicate that the A&D Draw Requests portion of the Collateral VerificationCertificate overstate the values, costs, or completion percentages, in addition to any other remedyafforded Lender, Lender may increase its frequency or scope of its inspections.               **4.3.2 Lot and Unit Inspections.**Lender may, at Lender’s option, inspect Developed Lots andUnits securing the Facility at such intervals and as often as Lender may desire. Lender shall havesole discretion as to which portion and how much of the Property to inspect. Should inspections ofthe Property indicate that the Collateral Verification Certificates overstate the values, costs, orcompletion percentages, in addition to any other remedy afforded Lender, Lender may increase itssample size, frequency, or scope of its inspections.               **4.3.3 All Inspections.**Borrower shall cooperate and shall cause Guarantors to cooperatewith Lender in arranging for inspections by representatives of Lender or*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
any third-party consultant retained by Lender of the progress of the development and constructionfrom time to time, including an examination of (i) the Approved Project improvements; (ii) allmaterials to be used in the development and construction; (iii) all Plans and Specifications; (iv)any contract, bill of sale, statement, receipt, or voucher in connection with the Approved Projectimprovements; (v) all work done, labor performed, materials furnished in and about the ApprovedProjects; (vi) all books, contracts, and records with respect to the Approved Projects; and (vii)any other Construction Document. Borrower shall cooperate and shall cause the Project Guarantors tocooperate with Lender to enable Lender to perform its functions hereunder and shall promptly complywith Lender’s requirements and correct any deficiency regarding the construction of the ApprovedProjects or the progress thereof. Draw inspections shall be made by in-house Lender personnel or bya third-party architect/engineer, as required by Lender. Borrower shall pay inspection costs ofLender within twenty (20) days of demand. If inspections of the Property indicate that theCollateral Verification Certificate overstates the values, costs, or completion percentages, inaddition to any other remedy afforded Lender, Lender may increase its sample size, frequency orscope of its inspections. In such event Borrower shall pay an additional inspection feecommensurate with the increased inspections.          **4.4 Draw Amounts.**               **4.4.1 A&D Draw Requests.**The allowed amount of each A&D Draw Request shown in theCollateral Verification Certificate shall be subject to the Maximum Facility Amount and allapplicable Sub-Limits, in accordance with the approved Budget for the A&D Project set forth on theapplicable A&D Project Addendum and determined by the information provided by Borrower in its A&DDraw Request, subject to adjustment based on Lender’s inspections. A&D Draw Requests shall befurther limited by the A&D Limitations set forth in **paragraph K** on **SCHEDULE 1** or inthe applicable A & D Project Addendum. If applicable, the A&D Draws shall also be made for thepayment of interest in accordance with the provisions of **Section 2.2.2** above (to the extentprovided for in the applicable Budget) and for payment of all other Eligible Costs shown in theBudget for the particular A&D Project, payable by or on behalf of Borrower in connection with theparticular A&D Project. The allowed amount of each A&D Draw Request shall be determined, atLender’s option: (i) by Lender’s review of a detailed report listing all invoices and costs asprovided by Borrower and Lender’s confirming physical inspection; (ii) on a percentage completionbasis with reference to the schedules included in the applicable approved Budget, as established bya physical inspection of the construction conducted by Lender or its agent (or, at Lender’s solediscretion, as disclosed by the information provided by Borrower in the A&D Draw Request); or (iii)by a combination of the foregoing methods. Lender shall require that Borrower or the applicableProject Guarantor contribute any Equity Funds necessary to pay any portion of Eligible Costsincurred to the date of Borrower’s Collateral Verification Certificate that are not covered by theapplicable A&D Draw Request which, unless otherwise agreed to by Lender, in writing, shall beamounts not less than (a) thirty-five percent (35%) of the cost of the A&D Land and (b) twentypercent (20%) of all hard and soft costs incurred from time to time in connection with theapplicable Project. The aggregate amount available shall be the total of such Eligible Costsactually paid or incurred by Borrower for each of the cost line items specified in such Budget, butin no event shall the A&D Draw Request for a particular A&D Project exceed the total of all sumsallocated to such cost line items, being in the aggregate the A&D Project Allocation.Notwithstanding anything herein to the contrary, Lender, in its sole discretion, shall have theright, but shall not be obligated, to increase, decrease, reallocate, or reapply the amount of theA&D Project Allocation to be disbursed for each item set forth in the Budget. Notwithstanding anyother provisions contained herein, Borrower shall*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
maintain records of all Approved Project invoices and Lender, at its discretion, may requiresubmission by Borrower of the invoices set forth on the spreadsheets.               **4.4.2 Borrowing Base Draws.**The allowed amount of each Borrowing Base Draw Request shall besubject to the Maximum Facility Amount, the Maximum Available Amount and all applicable Sub-Limitsand determined by the information provided by Borrower and Guarantors. Borrower shall not beentitled to any Draws based on the information in a particular Collateral Verification Certificateuntil Lender has had at least five (5) full business days to review and confirm the informationprovided by Borrower in that certificate, subject to adjustment based on Lender’s inspections;provided, however, that Lender’s failure to require adjustment within such time frame shall in noway limit Lender’s right to require adjustments thereafter prior to the time funds are to beavailable in order to allow time for inspection. Borrower acknowledges that the foregoingdisbursement schedule may be different than the disbursement schedule contained in Borrower’s orthe Project Guarantors’ construction contracts or subcontracts and Borrower acknowledges that it isits responsibility to resolve any such differences directly with the applicable contractors orsubcontractors. The Maximum Available Amount is based on the applicable Collateral Basis Amountsfor the Eligible Property Types calculated as set forth on **SCHEDULE 1.** In reviewingBorrower’s Collateral Verification Certificate, determinations of “value,” “cost,” and “percentageof completion” shall be made by Lender in its reasonable discretion and in accordance with itsstandard credit procedures. In the event the percentage of completion or other information relatingto a particular Eligible Property Type as determined by Lender varies from the information providedby Borrower in its most current Collateral Verification Certificate, Lender may, at any time and inits sole discretion, use the information as determined by Lender to calculate the Collateral BasisAmount.               **4.4.3 Working Capital Line Draws.**The allowed amount of each Working Capital Line Drawshall be subject to the Maximum Facility Amount and shall in no event exceed the difference between$15,000,000.00 and the outstanding principal balance allocated to the Working Capital Line fromtime to time.               **4.4.4 Application of Draws.**Although Borrowing Base Draws shall not be made hereunder on aline-item or paid invoice basis, the parties intend that all such proceeds of the Facility beapplied first to pay all costs incurred for the refinance or purchase and development of theProperty and the construction of single family residences thereon, as applicable, and that A&DDraws and Borrowing Base Draws be used to pay all such costs before being used to repay Borrower orany Guarantor any portion of their equity in the Property. Working Capital Line Draws may be usedby Borrower for general working capital purposes; provided,however, that in noevent shall proceeds of the Working Capital Line (or the Facility) be used for (a) personal,consumer, family, household, educational, agricultural or similar uses, (b) land banking or landspeculation or (c) the purpose of purchasing or carrying any margin stock within the meaning ofRegulation G of the Board of Governors of the Federal Reserve System or to extend credit to anyparty for the purpose of purchasing or carrying any such margin stock, or for any purpose whichviolates, or is inconsistent with, Regulation X of such Board of Governors. Lender shall have noobligation to ensure that proceeds of the Facility are properly applied to purposes of the Facilityas set forth herein or in the other Loan Documents. Borrower shall have the sole obligation toensure proper allocation of all Draws hereunder. Despite the foregoing, Lender shall have theright, but not the obligation, to disburse Facility proceeds directly to any unpaid supplier oflabor, materials, equipment, services, or supplies whose claim*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
has or may become a lien against any portion of the Property, or to require that Draws be made inthe form of dual-payee checks or other restricted forms of transfer.     **5. MANNER OF CONSTRUCTION.**          **5.1 Conformance with Plans and Laws.**All work shall be performed and the Approved Projectsand Units shall be developed and constructed in a good and workmanlike manner, free from allmaterial defects in materials or workmanship. Development of Approved Projects and construction anduse of the Units shall conform in all material respects to the applicable Plans and Specificationsand all federal, state, and local laws, ordinances, regulations, and rules relating thereto*(****“Laws”****),*including, without limitation, all building, zoning, planning, subdivision, fire,traffic, safety, health, disability, labor, discrimination, environmental, air quality, wetlands,shoreline, and flood plain laws, ordinances, regulations, and rules. The Laws shall also includeall governmental and private covenants, conditions, and restrictions applicable to the developmentof the Property and the construction of Units thereon. Prior to any Draw hereunder with respect toany Approved Project, Lender may require Borrower to supply evidence satisfactory to Lender that itand each applicable Project Guarantor has complied in all material respects with the applicablePlans and Specifications and that neither Borrower nor any Project Guarantor has been cited for theviolation of any Laws.          **5.2 Right of Entry.**Lender or its agents shall at all times have the right to enter upon anyportion of the Project during the period of development or construction upon one (1) business dayprior notice to Borrower. If the work is not satisfactory to Lender in its reasonable discretion,Lender shall have the right to stop such non-conforming work and order its replacement, whether ornot the unsatisfactory work has theretofore been incorporated in the improvements.          **5.3 Rights In Personal Property.**No materials, equipment, fixtures, or any other part ofsuch improvements or apparatus to be used in connection therewith shall be purchased and/orinstalled under conditional sale agreements or other arrangements wherein the right is reserved ormay accrue to anyone to remove and/or to repossess any such items.          **5.4 No Changes in the Construction Documents.**Borrower and the Project Guarantors shall makeno changes in the Plans and Specifications or the other Construction Documents, after the samehave been approved by Lender, which would result in an increase in the cost of construction by morethan five percent (5%) in the aggregate, without first obtaining the written consent of Lender tosuch changes (which shall not be unreasonably withheld), unless such increased cost is as a resultof options chosen by and fully paid for by the purchaser of a Pre-Sold Unit or required by Law.          **5.5 Deadline for Start of Development/Construction.**Borrower and/or the applicable ProjectGuarantor shall begin development of particular A&D Improvements prior to or by the commencementdate set forth in the A&D Project Addendum for the applicable A&D Project. In the event that thedevelopment of such A&D Improvements has not commenced on or before the Commencement Date set forthin the applicable A&D Project Addendum, all funding availability for such A&D Project shall beimmediately reduced to zero on the Collateral*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
Verification Certificate. Borrower and/or the applicable Project Guarantor shall begin constructionof a particular Unit, as applicable, within ninety (90) days of the Unit’s inclusion in aCollateral Verification Certificate or Lender shall require that the advance for the Developed Lotupon which the Unit shall be constructed be reduced to no more than sixty-five percent (65%)loan-to-appraised value.          **5.6 Start Limitation.**Unless otherwise approved by Lender, neither Borrower nor any ProjectGuarantor shall be entitled to add any additional A&D Projects to the Facility either (a) at anytime during which Borrower is in violation of the minimum pre-tax net income financial covenant setforth in **Schedule 2****,****Section B** hereto or (b) after the Expiration Date, as suchdate may be extended as set forth herein. Further, Lender shall not be required to advance any Drawor portion thereof with respect to any Unit, as to which construction shall have commenced laterthan six (6) months prior to the Maturity Date (as same may be extended pursuant to the termshereof).          **5.7 Lender’s Right to Complete Development/Construction.**If (i) development or constructionis at any time abandoned, discontinued, or not carried on with reasonable dispatch and not curedwithin five (5) days after written notice or such longer period as approved by Lender, except asmay be extended by force majeure, if Borrower commences to cure and is proceeding diligently tocomplete such cure; (ii) the work is not properly performed as determined by Lender and suchfailure is not cured within five (5) days after written notice or such longer period as approvedby Lender if Borrower commences to cure and is proceeding diligently to complete such cure; or(iii) an Event of Default exists under the Loan Documents, then Lender may, at its option and inaddition to any and all other remedies available to Lender under the Loan Documents, withoutfurther notice, take possession of the affected Property and enter into contracts for or proceedwith the finishing of such improvements according to the applicable Plans and Specifications andpay the cost thereof. Borrower shall repay any and all costs incurred by Lender in taking suchaction upon demand by Lender and repayment thereof, together with interest charged at the defaultrate under the Note from the date funds are advanced by Lender for such purpose, shall be securedby the Mortgages.          **5.8 Recorded Covenants.**Borrower shall submit to Lender a copy of any declaration ofcovenants, conditions, and restrictions, or any other restrictive covenants affecting the Propertyand obtain Lender’s approval of any such declaration or covenant prior to recording, which approvalshall not be unreasonably withheld. Upon approval, Lender agrees to consent to such document(s), tothe extent such consent is required by Law.          **5.9 Time/Construction/Development.**Once Borrower or the applicable Project Guarantor hascommenced physical development of A&D Improvements within a particular A&D Project or constructionof a particular Unit, Borrower and the applicable Project Guarantor shall not cease orsubstantially cease productive work on that A&D Project or Unit, as applicable, for more thantwenty (20) days in the aggregate, except as may be extended by force majeure, without the priorwritten consent of Lender. In any event, unless each A&D Project shall be completed to Lender’ssatisfaction on or before the Completion Date set forth in the applicable A&D Project Addendum,Lender shall have no further obligation to fund further A&D Draws with respect to such A&D Project.Once construction of an individual Unit with proceeds of the Facility shall be commenced, theconstruction of such Unit shall be diligently pursued to*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
completion, to Lender’s reasonable satisfaction, and shall remain included in CollateralVerification Certificates, but only for such period specified by Lender in writing. [see**SCHEDULE 1** attached hereto].          **5.10 Actions Required by Lien Laws.**Borrower shall take all steps necessary under the Laws ofeach applicable State to prevent the assertion of claims or liens against the Property or any partthereof or right or interest appurtenant thereto, or of claims against Lender or the Facility andshall otherwise comply with all provisions of lien laws applicable to Borrower, each ProjectGuarantor and the Property.          **5.11 Costs Incurred by Lender.**Borrower shall be liable to Lender for all sums paid orincurred by Lender in finishing the improvements or otherwise protecting its security hereunder,whether the same shall be paid or incurred pursuant to the provisions of this **Section 5** orotherwise in accordance with the Loan Documents, and all such payments made or liabilities incurredby Lender of any kind whatsoever as a result thereof shall be paid by Borrower to Lender withintwenty (20) days of demand, together with interest at the default rate under the Note to the dateof payment to Lender, and all of the foregoing sums, including interest thereon, shall be deemedadvances by Lender to protect its security, separate and distinct from advances of proceeds of theFacility, and shall be evidenced and secured by the Guarantees, the Mortgages and other LoanDocuments:     **6. PARTIAL RELEASES.**So long as (i) there does not exist any Event of Default or uncureddefault by Borrower or Guarantors hereunder or under the other Loan Documents or under any documentevidencing or securing any other loan from Lender or its affiliates to Borrower, the Guarantors ortheir subsidiaries or affiliates or (ii) there does not exist any event which, following noticeand/or the expiration of any applicable cure period without a cure, would constitute a defaultthereunder, Borrower shall be entitled to a partial release of the particular Unit and/or DevelopedLot or other parcel of land from the lien and encumbrance of the applicable Mortgage only uponBorrower’s fulfillment and the applicable Project Guarantor’s fulfillment of all conditions to suchpartial release set forth below:          **6.1 Third-Party Sale.**The Unit or Developed Lot has been sold to a third- party unaffiliatedwith Borrower pursuant to a Qualified Contract;          **6.2 Interest and Reimbursable Advances.**Borrower pays any delinquent monthly interestpayments and any advances by Lender that are reimbursable by Borrower hereunder or under any of theLoan Documents, whether or not Borrower is then in default with respect to such reimbursement;          **6.3 Property Legally Subdivided.**The applicable Property has been legally subdivided intoparcels or lots such that both (a) the Developed Lot or Unit to be released and (b) the portion ofthe applicable Property remaining subject to the Mortgage are legally segregated properties capableof being transferred in accordance with the law;*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **6.4 Access Unimpaired.**The partial release does not deny or unreasonably impair access topublic roads and utilities for either the portion of the Property remaining subject to theapplicable Mortgage or the Developed Lot or Unit to be released;          **6.5 Indemnification of Property.**Borrower or the applicable Project Guarantor secures allnecessary services of surveyors, engineers, and other consultants of any kind or nature whatsoeverrequired in connection with the partial release in order to sufficiently identify the portion ofthe Property to be released and to enable Lender or any trustee to complete the partial release;and          **6.6 Request for Partial Release.**Lender shall have received a written request for suchrelease at least three (3) business days prior the proposed date for such release, and such requestshall be accompanied by a statement, certified to be true, accurate and complete by an AuthorizedPerson, calculating the Collateral Basis Amount remaining after the requested release;          **6.7 Costs and Expenses.**Borrower pays the reasonable costs of preparing and delivering thepartial release, the premium for any special title insurance endorsements required by Lender, andany and all other escrow, legal, closing, and recording costs incurred by Lender in connection withsuch partial release.          **6.8 Release Price.**Provided all the conditions of this **Section 6** have been compliedwith by the Borrower, the release price for a Unit or Developed Lot shall be for the considerationof ZERO DOLLARS ($0.00), except that if the removal of the Unit or developed Lot from theCollateral Basis Amount would cause the outstanding principal amount under the Facility to exceedthe Maximum Available Amount or any Sublimit, Borrower shall pay within five (5) days, a “ReleaseFee” equal to such excess principal amount, which Lender shall apply to the outstanding principalbalance of the Facility in accordance with the provisions of **Section 2.2** hereof.          **6.9 Other Releases.**Subject to the satisfaction of the conditions contained in this Section6 above, Lender shall release the lien and encumbrance of the applicable Mortgage from any portionof the Property that is conveyed or dedicated to a homeowners’ or master association or that isdedicated to governmental entities, if such conveyance is made without any compensation and madepursuant to an agreement or applicable homeowners or condominium documents approved, in writing, byLender. At Borrower’s request, Lender shall terminate the Working Capital Line Pledge, release itslien upon the Working Capital Line Collateral and return the Working Capital Line Collateral to theWorking Capital Line Guarantor, subject to and in accordance with the provisions of Section2.6 hereof.          **6.10 Joinders and Consents**. Lender agrees, upon Borrower’s request, to join in any plat forA&D Land and any utility easements or licenses, and to consent to any homeowner’s associationdocuments or declarations, development agreements or similar instruments affecting the A&D Land andneeded by the applicable Project Guarantor in connection with the development of such A&D Land (ascontemplated in the applicable A&D Project Addendum), at no cost or liability to Lender, providedthat such instruments are in form and substance reasonably acceptable to Lender; provided,however**,** that Lender shall not be*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
required to join in or consent to any such document if doing so would materially diminish the valueof the A&D Land or require Lender to directly assume any obligations of Borrower or any ProjectGuarantor thereunder.     **7. GENERAL REPRESENTATIONS AND WARRANTIES.**Borrower, as of the date of execution hereof andas of the date of each request for a Draw hereunder, represents and warrants to Lender that:          **7.1 Payment of Taxes and Proper Books and Records.**Borrower and each Guarantor have filedall required tax returns and paid all federal and state taxes, FICA payments, and similar taxes nowdue and owing, and maintains proper books and records relating to all operations of Borrower andeach Guarantor.          **7.2 Liens and Encumbrances.**The liens, security interests and assignments created by theLoan Documents are valid, effective, properly perfected and enforceable liens, security interestsand assignments. There are no claims for social security, unemployment compensation, unpaid taxes,construction work or materials, or other obligations to or claims by any governmental body or anyprivate person, firm, or corporation that are or could become liens upon the Property securing theFacility.          **7.3 Condemnation.**Neither Borrower nor any Guarantor has received any notice of any eminentdomain or condemnation proceeding that in any way affects any material portion of the Property and,to the best of Borrower’s and each Guarantor’s knowledge, no such action or proceeding is pendingor threatened.          **7.4 Improvement Districts.**Except as disclosed to Lender in writing or in the title policy,no portion of the Property is situated within any metropolitan, local, special, or otherimprovement district and neither Borrower nor any Guarantor has knowledge of any proposal underwhich any portion of the Property or any particular Project is to be placed in any such improvementdistrict. Neither Borrower nor any Guarantor shall consent or agree to the inclusion of theProperty in an improvement district of any kind without the written consent of Lender so long asany portion of the Loan remains unpaid.          **7.5 Access.**Each parcel of the Property has full and free (subject to terms of easements)access to and from public highways, streets, and/or roads, and neither Borrower nor any Guarantorhas knowledge of any fact or condition that would result in the termination of such access.          **7.6 Existence and Authority.**Borrower and each Guarantor are duly organized, validlyexisting, and in good standing under the laws of the State in which it is organized. Borrower andeach Guarantor have taken all necessary action on the part of Borrower and Guarantors relating tothe authorization, execution, delivery and performance of this Agreement and the related LoanDocuments, and this Agreement and all related documents, when executed and delivered, will be validand enforceable against Borrower and Guarantors in accordance with their terms.          **7.7 Litigation.**There are no pending or threatened actions or proceedings by or againstBorrower, any Guarantor or any Project before any federal, state, or local court or*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
administrative agency, that might have a material adverse effect on Borrower or any Guarantor ortheir respective ability to perform under this Agreement or the related Loan Documents, except ashas been disclosed to Lender in writing.          **7.8 Financial Statements; Taxes; Indebtedness.**Borrower has furnished to Lender (i) currentfinancial statements that have been prepared in accordance with generally accepted accountingprinciples (or such variations thereof as may have been explained to and approved by Lender inwriting) consistently followed and (ii) such other financial information as may be requiredhereunder, and such information fairly presents the financial condition of Borrower as of theapplicable date in all material respects and the results of its operations for the applicableperiod, and since such date there has been no material change in such Borrower’s condition oroperations. Borrower has filed all federal, state, and other tax returns required to be filed byit. The IRS has not asserted any liability for taxes in excess of those already paid by Borrowerand its assets are free of any federal or state tax liens. Borrower does not have indebtedness inexistence as of the applicable date other than the indebtedness reflected on the financialstatements referred to above, except as has been disclosed in writing to Lender.          **7.9 Legally Enforceable Agreements.**This Agreement is, and each of the other Loan documentswhen delivered pursuant to this Agreement shall be, legal, valid and binding obligations ofBorrower and each Guarantor, as applicable, enforceable against Borrower and the applicableGuarantor in accordance with their respective terms, except to the extent that such enforcement maybe limited by applicable bankruptcy, insolvency and other similar laws affecting creditors’ rightsgenerally.          **7.10 Compliance with Other Instruments.**The execution, delivery, and performance of thisAgreement and all other Loan Documents shall not violate the provisions of any applicable law,order, or resolution of any governmental authority having jurisdiction over Borrower or anyGuarantor and shall not conflict with or result in a breach of any of the terms, conditions, orprovisions of Borrower’s or Guarantors’ organizational documents or any other agreement orinstrument to which Borrower or any Guarantor is a party, or result in the creation or impositionof any lien, charge, or encumbrance of any nature whatsoever upon any of the properties or assetsof Borrower or any Guarantor except for the security interests created hereunder.          **7.11 Permits and Licenses.**Borrower or the applicable Project Guarantor has obtained, orwill obtain when necessary or appropriate (but in any event prior to submitting an A&D Draw Requestor a Borrowing Base Draw Request with respect to the applicable improvements), all licenses,permits, consents, approvals and authorizations necessary or appropriate for the commencement andcompletion of the A&D Improvements and the construction of the Units in all of the ApprovedProjects for which funding has been requested, and after the issuance thereof, all such licenses,permits, consents, approvals and authorizations shall remain in full force and effect.          **7.12 Business Location.**Borrower keeps all of its records pertaining to its assets andaccounts at the office located at the address indicated on page one of this agreement, whichaddress is either Borrower’s principal place of business or the place of business from whichBorrower manages the main part of its business operations. Borrower shall give Lender prior*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
written notice of any change in such location or the location of any asset in which Lender has asecurity interest.          **7.13 OFAC.**Neither Borrower nor any Guarantor is (nor shall be) a person with whom Lender isrestricted from doing business under regulations of the Office of Foreign Asset Control ( ***“OFAC”****)*of the Department of the Treasury of the United States of America (including, those Persons namedon OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order(including, the September 24,2001 Executive Order Blocking Property and Prohibiting TransactionsWith Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental actionand is not and shall not engage in any dealings or transactions or otherwise be associated withsuch persons. In addition, Borrower hereby agrees to provide Lender with any additional informationthat Lender may deem necessary from time to time in order to ensure compliance with all applicablelaws concerning money laundering and similar activities.          **7.14 Environmental Matters.**Borrower and each Guarantor has duly complied with, and itsbusinesses, operations, assets, equipment, property, leaseholds, or other facilities are incompliance with, the provisions of all federal, state and local environmental, health, and safetylaws, codes and ordinances, and all rules and regulations promulgated thereunder. Borrower and eachGuarantor has been issued and will maintain all required federal, state and local permits,licenses, certificates, and approvals relating to (a) air emissions; (b) discharged to surfacewater or groundwater; (c) noise emissions; (d) solid or liquid waste disposal; (e) the use,generation, storage, transportation, or disposal of toxic or hazardous substances or wastes(intended hereby and hereafter to include any and all such materials listed in any federal, stateor local law, code or ordinance, and all rules and regulations promulgated thereunder as hazardousor potentially hazardous); or (f) other environmental, health or safety matters. Neither Borrowernor any Guarantor has received notice of, nor knows of, or suspects, facts which might constituteany violations of any federal, state or local environmental, health or safety laws, codes orordinances, and any rules or regulations promulgated thereunder with respect to its businesses,operations, assets, equipment, property, leaseholds or other facilities. Except in accordance witha valid governmental permit, license, certificate or approval, there has been no emission, spill,release or discharge into or upon (a) the air; (b) soils, or any improvements located thereon; (c)surface water or groundwater; or (d) the sewer, septic system or waste treatment, storage ordisposal system servicing any of the Property, of any toxic or hazardous substances or wastes at orfrom any of the Property in violation of any applicable law; and accordingly the Property is freeof toxic or hazardous substances or wastes in amounts in violation of applicable laws. There hasbeen no complaint, order, directive, claim, citation or notice by any governmental authority or anyperson or entity with respect to (a) air emission; (b) spills, releases or discharges to soils orimprovements located thereon, surface water, groundwater or the sewer, septic system or wastetreatment, storage or disposal systems servicing any Property; (c) noise emissions; (d) solid orliquid waste disposal; (e) the use, generation, storage, transportation or disposal of toxic orhazardous substances or waste; or (f) other environmental, health or safety matters affecting theBorrower, any Guarantor or their businesses, operations, assets, equipment, property, leaseholds orother facilities. Borrower and Guarantors do not have any indebtedness, obligation or liability,absolute or contingent, matured or not matured, with respect to the storage, treatment, cleanup ordisposal of any solid wastes, hazardous*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
wastes, or other toxic or hazardous substances (including without limitation any such indebtedness,obligation or liability with respect to any current regulation, law or statute regarding suchstorage, treatment, cleanup or disposal).          **7.15 No Brokerage Commission.**Neither Borrower nor any Guarantor has, in connection withthis Facility, entered into any agreement, incurred any obligation, made any commitment or takenany action which might result in a claim for or an obligation to pay a brokerage commission,finder’s fee or similar fee in respect to the transactions described in this Agreement, andBorrower shall indemnify Lender against all loss, expense, demand and liability (includingattorneys fees) arising in connection with any such claim or obligation.     **8. AFFIRMATIVE COVENANTS.**Borrower shall:          **8.1 No Liens.**Make all necessary payments so that at all times the property securing thisFacility shall be completely free of any lien or claim of any governmental department or agency orof any private person, firm, or corporation unless such lien or claim is specifically permitted byLender in writing or contemplated in this Agreement. Borrower shall, upon request, furnish fullinformation to Lender and permit inspection of its and Guarantor’s books and records by Lender, soas to satisfy Lender of full compliance with the provisions of this paragraph.          **8.2 Legal Entity, Business, etc.**(a) Maintain its existence in the form under which itcurrently operates, and preserve in full force and effect all its rights and franchises having amaterial effect upon its business or the ownership of its properties; and (b) give prompt notice toLender of any material change in Borrower’s or Guarantor’s business or financial position, anychange in any location where Borrower’s or Guarantor’s accounts and/or assets are to be maintained,the location of any new places of business of Borrower or Guarantor, and the changing or closing ofany of its existing places of business, and any change in Borrower’s or Guarantor’s name.          **8.3 Financial Reports, Information and Covenants.**Furnish to Lender all reasonably availableinformation concerning the condition of Borrower and Guarantor, and their current operations,including balance sheets and income statements and such other financial information at suchreasonable times as Lender may require, but in no instance less often than annually. Suchinformation shall be certified by a duly authorized officer or agent of Borrower and Guarantor, asapplicable. Without limiting the foregoing, so long as any amount remains outstanding under theNote or any of the other Loan Documents, Borrower agrees to comply with the specific financialreporting requirements and to maintain and satisfy the financial ratios and covenants set forth on**SCHEDULE 2**to this Agreement, as such covenants may subsequently be amended.          **8.4 Inspection.**Permit any authorized representative of Lender, upon one (1) business dayprior notice to Borrower, to visit Borrower’s and Guarantor’s business location and project sitesand to inspect and take extracts from its books, accounts, and records and to discuss its business,finances, and accounts with its officers and authorized representatives. Borrower acknowledges thatLender may, at Lender’s option, perform collateral audits at such intervals and as often as Lendermay desire.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
     **8.5 Payment of Taxes.**Pay all taxes, assessments, and governmental charges upon Borrower andGuarantor or levied against any of its properties prior to the date on which penalties will attach,unless and to the extent the same shall be contested in good faith and by appropriate lawfulproceedings by Borrower and/or Guarantor, in accordance with the provisions of the Mortgages orother applicable Loan Documents. Upon Lender’s request, Borrower shall provide to Lender a scheduleof real estate taxes owed with respect to the Property on such date of each year during the termhereof when the Borrower or any Project Guarantor is assessed a tax on any Property by theapplicable State. Upon Lender’s request, Borrower shall provide copies of cancelled checks or paidreceipts evidencing the payment of all applicable real estate taxes for the Property no later thansuch date of each year during the term hereof, when the aforementioned real estate taxes are due inthe applicable State, such date being the last day when the real estate taxes can be paid withoutincurring a penalty in the State.     **8.6 Use of Proceeds.**Use each Draw hereunder only for payment or reimbursement to Borrowerof the Eligible Costs on the Project and for no other purpose.     **8.7 Compliance with Law.**Comply with all applicable requirements (including applicable Laws)of any governmental authority having jurisdiction over Borrower, Guarantor, any particular project,or the Property.     **8.8 USA Patriot Act.**Borrower covenants to Lender that if it becomes aware that it, anyGuarantor or any respective affiliate is identified on any Blocked Persons List, the Borrower shallimmediately notify the Lender in writing of such information. Borrower further agrees that in theevent it, any Guarantor or any respective affiliate is at any time identified on any BlockedPersons List, such event shall be an Event of Default, and shall entitle Lender to exercise any andall remedies provided in any Loan Documents or otherwise permitted by law. In addition, the Lendermay immediately contact the Office of Foreign Assets Control and any other government agency theLender deems appropriate in order to comply with its legal obligations. Upon the occurrence of suchEvent of Default, Lender will forbear enforcement of its rights and remedies during such time as(a) the person or entity identified in a Blocked Persons List is contesting in good faith byappropriate legal proceedings such person’s or entity’s inclusion in a Blocked Persons List, and(b) the Lender determines, in its sole and absolute discretion, that such forbearance will notadversely affect title to, the condition or value of, or any lien in favor of Lender andencumbering any part of the Property or otherwise adversely impact the ability of any person orentity to perform such person’s or entity’s obligations under or with respect to any Loan Document.     **8.9 Furnishing Notice.**Provide Lender with copies of all material notices pertaining to anyparticular project or the Property that are received by Borrower or Guarantor, including noticesfrom any governmental authority or insurance company, within seven (7) days after such notice isreceived.     **8.10 Municipal Districts.**Borrower shall immediately give notice to Lender of anynotification or advice that Borrower or Guarantor may receive from any municipality or other thirdparty of any intent or proposal to include all or any part of an Approved Project in a municipalutilities district or similar municipal district. Lender shall have the right to file a written*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
objection to the inclusion of all or any part of an Approved Project in such a district, either inits own name or in the name of Borrower and/or Guarantor, and to appear at, and participate in, anyhearing with respect to the formation of any such district.     **8.11 Insurance.**The following insurance shall be obtained and maintained and all relatedpremiums shall be paid as they become due:          **8.11.1 Property.**Insurance of the Approved Project against damage or loss by fire,lightning, and other perils, on an all-risks basis, such coverage to be in an amount not less thanthe full replacement cost, and during the period of construction of any portion of each ApprovedProject, such policy shall be written in the so-called **“Builder’s Risk Completed ValueNon-Reporting Form,”**on an all-risks basis, with no coinsurance requirement except as approved byLender, shall contain a provision granting the insured permission to complete and/or occupy theApproved Project, in each case providing for a deductible not exceeding $200,000.00 or such greateramount as to which Lender may grant its written approval, which approval shall not be reasonablywithheld.          **8.11.2 Liability.**Commercial general liability insurance protecting Borrower or theapplicable Project Guarantor and Lender against loss or losses from liability imposed by law orassumed in any agreement, document, or instrument and arising from bodily injury, death, orproperty damage with a limit of liability of not less than $2,500,000.00 per occurrence and$9,000,000.00 general aggregate. Such policies must be written on an occurrence basis so as toprovide blanket contractual liability, broad form property damage coverage, and coverage forproducts and completed operations.          **8.11.3 Flood.**A policy or policies of flood insurance in the maximum amount of floodinsurance available with respect to the Property under the Flood Disaster Protection Act of 1973,as amended. This requirement will be waived upon presentation of evidence satisfactory to theLender that no portion of the Property is located within an area identified by the U.S. Departmentof Housing and Urban Development as having special flood hazards.          **8.11.4 Windstorm.**A policy or policies of windstorm insurance in the maximum amount ofinsurance available with respect to the collateral and otherwise meeting Lender’s requirements.Lender hereby acknowledges that Borrower’s coverage in effect on the date hereof is acceptable.          **8.11.5 Workman’s Compensation.**Workman’s compensation insurance, disability benefitsinsurance, and such other forms of insurance as required by law covering loss resulting frominjury, sickness, disability, or death of employees of Borrower or each applicable ProjectGuarantor, any contractor, and any subcontractor located on or assigned to each Approved Project.Borrower shall cause each contractor and each subcontractor having employees located on or assignedto each Approved Project to obtain and maintain this same coverage for all eligible employees.          **8.11.6 Additional Insurance.**Borrower shall obtain and maintain such other policies ofinsurance as Lender may reasonably request in writing.*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
          **8.11.7 Other.**All policies for required insurance shall be in form and substance reasonablysatisfactory to Lender. All required insurance shall be procured and maintained in financiallysound and generally recognized responsible insurance companies selected by Borrower and approved byLender. Such companies must be authorized to write such insurance in the State where the applicableProperty is situated. Each company shall be rated “A” or better by A.M. Best Co., in Best’s KeyGuide, or such other rating acceptable to Lender in Lender’s sole and absolute discretion. Allproperty policies evidencing required insurance shall name Lender as first mortgagee and losspayee. All liability policies evidencing required insurance shall name Lender as additionalinsured. The policies shall not be cancelable as to the interests of the Lender due to the acts ofBorrower. The policies shall provide for the insurer to endeavor to provide at least thirty (30)days prior written notice of the cancellation or modification thereof to Lender.          **8.11.8 Evidence.**The original or a certified copy of each insurance policy or, if acceptableto Lender in its sole and absolute discretion, certificates of insurance evidencing that suchinsurance is in full force and effect, shall be delivered to Lender, together with proof of thepayment of the premiums thereof. Prior to the expiration of such policies, Borrower shall furnishLender evidence that such policy has been renewed or replaced in the form of the original or acertified copy of the renewal or replacement policy or, if acceptable to Lender in its sole andabsolute discretion, a certificate reciting that there is in full force and effect, with a termcovering at least the next succeeding calendar year, insurance of the types and in the amountsrequired in this **Section 8.11.**     **8.12**Environmental Covenants. Borrower hereby agrees that:          (a) If Borrower receives any notice of (i) the happening of any event involving the spill,release, leak, seepage, discharge or cleanup of any Hazardous Substance (as hereinafter defined) onor in connection with any Property or in connection with operations thereon in violation of anyapplicable law or (ii) any complaint, order, citation or notice with regard to air emissions, waterdischarges, or any other environmental, health or safety matter affecting or related to any theProperty (an “Environmental Complaint”) from any person or entity (including without limitation theEPA), then Borrower shall immediately notify Lender orally and in writing of the notice. Forpurposes of this **Section 8.12****,**“Hazardous Substance” shall mean and include those elementsor compounds which are from time to time contained in the list of hazardous substances adopted bythe United States Environmental Protection Agency (“EPA”) and the list of toxic pollutantsdesignated by Congress or the EPA or defined by any other federal, state or local statute, law,ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liabilityor standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or materialas now or at any time hereafter in effect.          (b) Borrower, jointly and severally with each applicable Project Guarantor, shall indemnifyLender, its officers, directors employees and their respective successors and assigns(collectively, the “Indemnified Parties”) and shall hold the Indemnified Parties harmless fromand against any and all losses, liabilities, including strict liability, damages, injuries,expenses, including reasonable attorneys’ and paralegals’ fees, costs of any settlement orjudgment and claims of any and every governmental agency for, with respect to, or as a direct orindirect result of, the presence, usage, storage, generation or disposal on or*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
under or in connection with any Property, or the escapes, seepage, leakage, spillage, discharge,emission, discharging or release from any Property of any Hazardous Substance (including,without limitation, liabilities or claims asserted or arising under the ComprehensiveEnvironmental Response, Compensation and Liability Act, under any so called federal, state orlocal “superfund” or “superlien” law, or under any statute, law ordinance, code, rule,regulation, order or decree regulating, relating to or imposing liability, including strictliability, or standards of conduct concerning any HazardousSubstance); provided, however, thatthe foregoing shall not extend to matters caused solely by the Indemnified Parties or otherthird party owners following a sale or foreclosure of any such Property or conveyance by theIndemnified Parties in lieu of foreclosure.     **9. NEGATIVE COVENANTS.**While any sums remain outstanding hereunder, Borrower shall not,without Lender’s prior written consent:          **9.1 Indebtedness.**Incur indebtedness other than: (i) indebtedness owed to Lender or to anyaffiliate of Lender which is secured by the Property, other than as provided in this Agreement;(ii) unsecured current indebtedness incurred in the ordinary course of business; (iii) which wouldnot violate the financial covenants of Borrower; (iv) purchase money secured indebtedness forequipment acquired in the ordinary course of business; (v) indebtedness secured by liens permittedhereby; (vi) indebtedness for taxes, assessments, and governmental charges permitted hereby; and(vii) indebtedness for land acquisition, development, and construction activities obtained byBorrower in the ordinary course of business.          **9.2 Liens and Encumbrances.**Create or permit to exist any mortgage, pledge, lien, or otherencumbrance with respect to any of its assets secured by the Loan Documents, and except for thefollowing permitted liens: (i) liens for taxes, assessments, and governmental charges notdelinquent or being contested in good faith; (ii) liens of the kinds arising in the ordinary courseof business of Borrower in respect to obligations that are not due or being contested in goodfaith; (iii) liens in respect to judgments against Borrower for which Borrower has posted a bond orotherwise secured payment in a manner acceptable to Lender asprovided in **Section 12** below and withrespect to which Borrower shall, in good faith, be prosecuting an appeal or proceeding for review,and a stay of execution shall have been secured; (iv) liens in respect to indebtedness owed toLender or to any affiliate of Lender; (v) lien s that do not affect property securing anyindebtedness to Lender and secure indebtedness for land acquisition, development, and constructionactivities relating to loans obtained by Borrower in the ordinary course of business; and (vi)other liens permitted under **Section 8.1** herein.          **9.3 Assignment or Sale of Assets.**Assign or sell any of its assets, except in the ordinarycourse of its business consistent with its past practices or in connection with any indebtednessconsented to by Lender (including collateral assignments permitted under **Section 9.2** above)to the extent same would violate any financial covenant of Borrower set forth on **Schedule2.**          **9.4 Corporate, Limited Liability Company, and Partnership Restrictions.**Borrower shall notissue any limited liability company interest in Borrower or grant any option,right-of-first-refusal, warrant, or other right to purchase any limited liability company interestor other securities in Borrower. Each Project Guarantor is and shall remain wholly owned and*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
controlled by Borrower, either directly or through entities wholly owned and controlled byBorrower, and Borrower shall not permit any Project Guarantor to issue any capital stock or othersecurities of, or any limited liability membership or partnership interests in any ProjectGuarantor, or grant any option, right-of-first refusal warrant or other right to acquire equityinterests in any Project Guarantor which would or could result in any Project Guarantor not beingdirectly or indirectly wholly owned by Borrower. Neither Borrower nor any Project Guarantor shallamend, modify, restate, supplement, or terminate its certificate of incorporation or bylaws, itslimited liability company operating agreement, or its partnership agreement, as the case may be,without the prior written consent of Lender, which shall not be unreasonably withheld or delayed.Neither Borrower nor any Project Guarantor shall reorganize itself or consolidate with or mergewith or into any other corporation, limited liability company or other legal entity, or permit anyother corporation, limited liability company or other legal entity to be merged into Borrower orany Project Guarantor, if, as a result thereof, the foregoing covenants contained in **Section9.4** will have been breached. Notwithstanding the foregoing provisions, Lender herebyacknowledges its consent to (i) the merger of the Working Capital Line Guarantor into BFC FinancialCorporation (“BFC”) and (ii) the transfer of the Borrower and/or any Project Guarantor into anentity controlled by BFC, provided that (a) with respect to any transfer described in clause (ii),(1) Borrower (or its successor in interest) remains the direct or indirect owner of the equityinterests in any “transferred” Project Guarantor and (2) all of the equity interests in Borrower(or its successor in interest) remain or are encumbered by a valid first lien security interest infavor of Lender, securing the Working Capital Line Guaranty, (b) Lender shall have been providedwith at least five (5) business days advance notice of such transfer, (c) Lender shall havereceived properly executed Loans to One Borrower Certificates or other documents required by allapplicable governmental or regulatory authorities or agencies having jurisdiction over Lender and(d) after giving effect to such transfer, Lender shall not be in violation of any applicable law,regulation, rule, ordinance or order of any applicable governmental or regulatory authority oragency having jurisdiction over Lender. In addition, without the prior written consent of Lender,in its sole and absolute discretion, neither Borrower nor any Guarantor shall be dissolved orliquidated.          **9.5 Dividends, Distributions and Payment of Subordinated Debt.**During the existence of anEvent of Default or at any time in which Borrower is not in compliance with the Financial Covenants(or if Borrower would not be in compliance with the Financial Covenants as a result of any of thefollowing), neither Borrower nor any Project Guarantor will directly or indirectly do any of thefollowing: (i) declare or pay any dividend or other distribution on or on account of any capitalstock or other securities of Borrower or any Project Guarantor; (ii) pay any management fee; (iii)make any loans to shareholders of or members or partners in Borrower or any Project Guarantor; (iv)make any purchase, redemption, retirement, or other acquisition of any shares of any class ofcapital stock of or any membership interest or partnership interest in Borrower or any ProjectGuarantor or of any warrants or rights to purchase any such stock, membership interest orpartnership interest; or (v) make any payment of, or with respect to, any Subordinate Debt.     **10. EVENTS OF DEFAULT.**          **10.1 Events of Default Defined.**The occurrence of any of the events described below shall bean ***“Event of Default”***: (a) failure to pay any principal reduction or*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
interest payment when and as the same shall become due and payable hereunder or under any of theLoan Documents or under any other indebtedness of Borrower or Guarantor or their affiliates toLender, whether at its scheduled payment date or otherwise, subject to any applicable grace periodas set forth in the Loan Documents; (b) any representation or warranty made now or hereafter byBorrower or any Guarantor pursuant to this Agreement or any other Loan Document, or any statement,report, or certificate provided to Lender by Borrower or any Guarantor in connection therewith,proves to be false in any material respect; (c) Borrower or any Guarantor fails to perform anyother non-curable term, provision, or covenant in this Agreement or in any other Loan Document; (d)Borrower or any Guarantor fails to perform or is in breach of any other curable, non-monetary term,provision or covenant contained in this Agreement and fails to cure such default within ten (10)days after notice thereof from Lender; provided,however, that if such curable,non-monetary default may not reasonably be cured within ten (10) days, an “Event of Default” shallnot be deemed to have occurred unless (i) Borrower fails to commence the actions necessary to curesuch default within ten (10) days after Lender’s notice thereof or (ii) such default is not curedwithin sixty (60) days after Lender’s notice of such default; or (e) Borrower or any Guarantorshall become involved in financial difficulties as evidenced by failing generally to pay debts asthey become due, or filing a petition under any chapter of the Bankruptcy Code, or filing anyanswer or admission asking for such relief, or making an assignment for the benefit of creditors,or consenting to the appointment of a trustee or receiver for all or a major portion of suchparty’s assets, or the entry of an order for relief against such party as a debtor under anychapter of the Bankruptcy Code, or the entry of a court order appointing a receiver or trustee forall or a major portion of such party’s property without its consent, which order shall not bevacated or stayed within sixty (60) days of its entry.          **10.2 Remedies.**Upon the occurrence of and continuation of any Event of Default, any and allliabilities of Borrower and Guarantors to Lender shall become immediately due and payable withoutpresentment, demand, protest, or notice (except as provided in this Agreement) of any kind, all ofwhich are hereby expressly waived by Borrower (unless prohibited by applicable law) and Borrowershall have no further right to additional Draws hereunder. Lender may exercise, at its option, anyof the rights and remedies available to it hereunder or otherwise available under law or equity,including without limitation, electing (a) to perform any defaulted covenant or provision to suchextent as Lender shall elect in its sole discretion, and/or to disburse funds under the Note forsuch purpose (including, without limitation, payment of insurance premiums, taxes, or assessments),which amounts, together with interest thereon from the disbursement date until paid at a rate perannum equal to the Default Rate provided for in the Note, shall be secured by the Mortgages; (b) totake control of any or all collateral until all amounts due hereunder are paid in full; or (c) toexercise all rights and remedies of Lender under this Agreement, under any other Loan Documents,and under applicable law.     **11. PAYMENT OF EXPENSES.**Borrower shall pay all reasonable costs and expenses of Lender inconnection with the underwriting, processing, closing, and funding of the Facility and thepreparation, negotiation, execution, and delivery of the Loan Documents, as well as any amendments,modifications, consents, or waivers relating thereto, including, without limitation, attorneys’fees (including reasonable fees of Lender’s in-house counsel, if used) and costs. In addition,Lender shall be entitled to recover any reasonable costs and expenses incurred in connection withthe preservation of rights under and enforcement of the Loan Documents, or the*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
protection of its collateral thereunder, whether or not any lawsuit is commenced, in all such casesincluding, without limitation, reasonable attorneys’ fees (including reasonable fees of Lender’sin-house counselor any local counsel, if used) and costs, and all such fees and costs incurred byLender in connection with any bankruptcy proceeding affecting the Facility or Lender’s securitytherefor in any manner.     **12. UNAUTHORIZED LIENS OR ENCUMBRANCES.**If any claim of lien is filed or recorded, or anystop notice or other notice of lien is served upon Lender, in connection with any Unit or otherportion of the Property securing the Facility, or if a judgment or other encumbrance is placedagainst any such Property, such Unit or other portion of the Property securing the Facility inviolation of the terms of this Agreement or any other Loan Documents shall be excluded from thecurrent and all future Collateral Verification Certificates until such breach is corrected and itshall constitute an Event of Default unless Borrower, within twenty (20) days of receiving noticeof such event, either (a) pays the related judgment or claim and obtains the release andsatisfaction of such lien, claim of lien, judgment, or encumbrance; or (b) obtains the release ofsuch lien, judgment, or other encumbrance by transferring the same to or providing a surety bond inaccordance with applicable law, and provides to Lender evidence of such release, in form andcontent acceptable to Lender.     **13. OFFSET RIGHTS.**Upon the occurrence of an Event of Default hereunder, Lender may takefrom any funds of Borrower or any Guarantor in its possession or, at the option of Lender, from anyof the proceeds of the Facility, any amounts that Borrower has agreed to pay or is liable forunder any of the Loan Documents, but Borrower shall nevertheless remain liable to Lender until allobligations provided for in this Agreement have been fully paid and discharged, notwithstandingLender may not have elected to take payment from such funds.     **14. DISCLAIMEROF LIABILITY.**The execution of this Agreement or any of the other LoanDocuments by Lender and Borrower or any Guarantor does not constitute a joint venture and noprovision of this Agreement or of any of the other Loan Documents is made or shall be construed forthe benefit of any third party. Borrower has accepted and hereby accepts the sole responsibilityfor the selection of all contractors, subcontractors, and all materials, supplies, and equipment tobe used in the development and construction work at the Property securing the Facility, and Lenderassumes no responsibility to Borrower or any Guarantor, any contractor, subcontractor, or any otherperson for the completion of the improvements or for the quality thereof, nor does Lender assumeany responsibility for the application of Draws or payment of contractors, subcontractors, orsuppliers. Inspection by Lender of development and construction work is for the purpose ofprotecting the security of Lender and is not to be construed as a representation by Lender thatsuch work will be free from faulty material or workmanship. In no event shall Lender be liable toBorrower or any Guarantor for punitive, exemplary, or consequential damages, including, withoutlimitation, lost profits, whatever the nature of a breach by Lender of its obligations under thisAgreement or any of the Loan Documents, and Borrower waives all claims for punitive, exemplary, orconsequential damages.     **15. REQUIRED NOTICE OF DEFAULT TO LENDER.**Lender shall not be in default under this Agreement,or under any other Loan Documents, unless a written notice specifically setting forth the claim ofBorrower shall have been given to Lender within ten (10) days after Borrower first had actualknowledge of the occurrence of the event that Borrower alleges gave*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
rise to such claim and Lender does not remedy or cure the default, if any, promptly thereafter.Borrower waives any claim, set-off, or defense against Lender arising by reason of any allegeddefault by Lender to which Borrower does not give such notice as set forth herein. Borroweracknowledges that such waiver is or may be essential to Lender’sability to enforce its remedieswithout delay and that such waiver therefore constitutes a substantial part of the bargain betweenLender and Borrower with regard to the Loan.     **16. GENERAL PROVISIONS.**          **16.1 Captions, Severability.**Captions and headings are used for convenience only and are notintended to modify or limit the textual provisions of this Agreement. If anyone or more provisionsof this Agreement are determined to be invalid, illegal, or unenforceable, such unenforceabilityshall not affect the other provisions thereof.          **16.2 Notices.**Any notice or demand to Borrower shall be deemed to have been given when sentby certified mail, first class, postage prepaid, sent by overnight mail by a nationally recognizedcourier or personally delivered to Borrower at Borrower’s address set forth above, or to such otheraddress as Borrower may furnish in writing to Lender for such purpose.          **16.3 GOVERNING LAW; CHOICE OF LAW; SUBMISSION TO JURISDICTION.**EXCEPT AS SPECIFICALLYPROVIDED HEREIN AND EXCEPT WHERE FEDERAL LAW IS APPLICABLE AND PREEMPTS STATE LAW (IN WHICH EVENTSUCH FEDERAL LAW SHALL CONTROL), THIS AGREEMENT, THE NOTE, THE LIEN INSTRUMENTS, AND THE OTHER LOANDOCUMENTS SHALL BE GOVERNED BY, CONSTRUED, INTERPRETED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OFTHE STATE OF FLORIDA, WITHOUT REGARD TO THAT STATE’S OR ANY OTHER STATE’S CHOICE OF LAW RULES ORCONFLICTS OF LAW PRINCIPLES.          **16.4 Entire Agreement; Relationship to Prior Agreement; Amendment.**This Agreement is intendedto set forth the entire and final agreement of the parties concerning the subject matter hereof.This Agreement may not be amended or modified except by written agreement of Borrower and Lender.          **16.5 Publicity.**If Lender desires, it may announce and publicize the fact that it isproviding financing, and may (at Lender’s expense) place signs on any property securing thisFacility, as long as such property remains subject to Lender’s security interest.          **16.6 Discretionary Rights.**All rights, powers and remedies granted Lender herein, orotherwise available to Lender, are for the sole benefit and protection of Lender, and except asotherwise provided herein Lender may exercise any such right, power or remedy at its option and inits sole and absolute discretion without any obligation to do so; provided,however, that where Lender’s consent or approval is required and not expressly reserved tothe sole discretion of Lender, such consent or approval shall not be unreasonably withheld ordelayed. In addition, if, under the terms hereof, Lender is given two or more alternative coursesof action, Lender may elect any alternative or combination of alternatives, at its option and inits sole and absolute discretion. All monies advanced by Lender under the terms hereof and allamounts paid, suffered or incurred by Lender in exercising any authority granted herein, includingreasonable*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
attorneys’ fees, shall be secured by the Mortgages and other Loan Documents, shall bear interest atthe Default Rate payable on the Facility until paid, and shall be due and payable by Borrower toLender immediately without demand.     **16.7 Indemnity.**Borrower shall indemnify and hold Lender harmless fromand against all claims, costs, expenses, actions, suits, proceedings, losses, damages andliabilities of any kind whatsoever, including but not limited to attorneys’ fees and expenses,arising out of any matter relating, directly or indirectly, to the Facility, to the ownership,development, construction, or sale of the Property, whether resulting from internal disputes ofBorrower, disputes between Borrower and any Guarantor, or whether involving other third persons orentities, or out of any other matter whatsoever related to this Agreement, the Loan Documents, orany property encumbered thereby, but excluding any claim or liability which arises as the directresult of the gross negligence or willful misconduct of Lender or the breach by Lender of thisAgreement. This indemnity provision shall continue in full force and effect and shall survive notonly the making of the Facility but shall also survive the repayment of the Facility and theperformance of all of Borrower’s other obligations hereunder.     **16.8 Time of Essence.**Time is expressly made of the essence of this Agreement.     **16.9 Successors.**Except as otherwise provided herein, this Agreement shall be binding upon,and shall inure to the benefit of, the parties hereto and their successors and assigns.     **16.10 Participations/Syndications.**Lender, at any time, shall have the right to sell,assign, transfer, negotiate or grant participation or syndication interests in the Facility and inany documents and instruments executed in connection herewith; provided, however, to the extentLender retains any portion of the Facility, Lender shall remain as the lead lender oradministrative agent under the Facility, as applicable. Lender shall endeavor to provide thirty(30) days written notice to Borrower prior to any such sale, assignment, transfer, participation orsyndication if, after giving effect to such transaction, Lender shall no longer be the lead lenderor administrative agent under the Facility; provided,however that Lender shall incur no liabilityto Borrower for failure to deliver such notice, except to the extent such failure shall have beenintentional. Lender is authorized to furnish to any participant, co-lender or prospectiveparticipant or co-lender any information or document that Lender may have or obtain regarding theFacility, Borrower or any Guarantor.     **16.11 Interest.**It is the intention of the parties hereto to conform strictly to usury lawsapplicable to Lender. Accordingly, if the transactions contemplated hereby would be usurious underapplicable law (including the laws of the United States of America and the States of Florida,Georgia, North Carolina, South Carolina, Tennessee or Texas), then, in that event, notwithstandinganything to the contrary in the Note, this Agreement or in any other Loan Document or agreemententered into in connection with or as security for the Note, it is agreed as follows: (i) theaggregate of all consideration which constitutes interest under law applicable to Lender that iscontracted for, taken, reserved, charged or received under the Note, this Agreement or under any ofthe other aforesaid Loan Documents or agreements or otherwise in connection*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
with the Note shall under no circumstances exceed the maximum amount allowed by such applicablelaw, and any excess shall be credited by Lender on the principal amount of the Facility (or, if theprincipal amount of the Facility shall have been paid in full, refunded by Lender to Borrower); and(ii) in the event that the maturity of the Note is accelerated by reason of an election of Lenderresulting from any Event of Default under this Agreement or otherwise, or in the event of anyrequired or permitted prepayment, then such consideration that constitutes interest under lawapplicable to Lender may never include more than the maximum amount allowed by such applicable law,and excess interest, if any, provided for in this Agreement or otherwise shall be canceledautomatically as of the date of such acceleration or prepayment and, if theretofore paid, shall becredited by Lender on the principal amount of the Facility (or, if the principal amount of theFacility shall have been paid in full, refunded by Lender to Borrower). Without limiting theforegoing, all calculations of the rate of interest taken, reserved, contracted for, charged,received or provided for under the Note or any of the other Loan Documents which are made for thepurpose of determining whether the interest rate exceeds the applicable highest lawful rate (the“**Highest Lawful Rate**”) shall be made, to the extent allowed by law, by amortizing, prorating,allocating and spreading in equal parts during the period of the full stated term of the Facility,all interest at anytime taken, reserved, contracted for, charged, received or provided for underthe Note or any of the other Loan Documents. If at anytime the sum of the stated interest rate onthe Note exceeds the Highest Lawful Rate, the rate of interest to accrue on the Note shall belimited to the Highest Lawful Rate, but any subsequent reductions in any index upon which thestated rate of the Note is based shall not reduce the interest to accrue on the Note below theHighest Lawful Rate until the total amount of interest accrued on the Note equals the amount ofinterest which would have accrued if a varying rate per annum equal to the stated interest rate onthe Note had at all times been in effect. If at maturity or final payment of the Note the totalamount of interest paid or accrued on the Note under the foregoing provisions is less than thetotal amount of interest which would have accrued if a varying rate per annum equal to the statedinterest rate on the Note had at all times been in effect, then Borrower agrees, to the fullestextent permitted by law, to pay to Lender an amount equal to the difference between (a) the lesserof (i) the amount of interest which would have accrued on the Note if the Highest Lawful Rate hadat all times been in effect and (ii) the amount of interest which would have accrued on the Note ifa varying rate per annum equal to the stated interest rate on the Note had at all times been ineffect, and (b) the amount of interest accrued in accordance with the other provisions of the Note.     **16.12 Waiver of Jury Trial.**LENDER AND BORROWER EACH HEREBY WAIVE, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, ANDVOLUNTARILY MADE BY LENDER AND BORROWER, AND LENDER AND BORROWER ACKNOWLEDGE THAT NO PERSON ACTINGON BEHALF OF THE OTHER PARTY TO THIS AGREEMENT HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THISWAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER FURTHERACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THESIGNING OF THIS AGREEMENT AND*Borrowing Base Facility Agreement- Loan No. 1001839*
 

 
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, ANDTHAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL     **16.13 Execution in Counterparts.**This Agreement maybe executed in any number of counterpartsand by different parties hereto in separate counterparts, each of which when so executed shall bedeemed to be an original and all of which taken together shall constitute one and the sameagreement.     **16.14 Notice Regarding Oral Agreements. THIS AGREEMENT AND ALL THE OTHER LOAN DOCUMENTSEMBODY THE FINAL, ENTIRE AGREEMENT OF BORROWER AND LENDER AND SUPERSEDE ANY AND ALL PRIORCOMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TOTHE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF BORROWER AND LENDER. THERE ARE NOORAL AGREEMENTS BETWEEN BORROWER AND LENDER.**     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year firstabove written.           **BORROWER:**   **LENDER:**             LEVITT AND SONS, LLC, a Florida limited