exv10w56



 





Exhibit
10.56



SECOND LOAN MODIFICATION AGREEMENT




     THIS SECOND LOAN MODIFICATION AGREEMENT (this “Agreement” or this “Modification”) is made
effective as of the 22nd day of November, 2006, by and among: COMSTOCK HOMEBUILDING
COMPANIES, INC., a Delaware corporation (the “Borrower,” whether one or more) and BANK OF AMERICA,
N.A., a national banking association, its successors and assigns (the “Lender”).



RECITALS:




     WHEREAS, pursuant to the terms of that certain Revolving Line of Credit Note dated as of
February 22, 2006, by and between Borrower and Lender (and as the same may be further modified,
renewed, supplemented or restated, the “Note”), Lender made a loan (the “Loan”) to Borrower in the
original principal amount of Fifteen Million and No/100 Dollars ($ 15,000,000.00), as evidenced by
the Note (all documents executed in connection with the Loan are hereinafter referred to as the
“Loan Documents”). Borrower’s obligations under the Note and the other Loan Documents are
hereinafter collectively called the “Obligations”.



     WHEREAS, pursuant to that certain Loan Modification Agreement dated August 22,2006, Borrower
and Lender agreed to (i) reduce the maximum outstanding principal amount of the loan to Ten
Million and No/100 Dollars ($10,000,000.00); (ii) extend the Maturity Date of the Loan to November
22, 2006 and (iii) make certain other changes in connection with the Loan and Loan Documents.



     WHEREAS, the outstanding principal balance under the Loan as of the date hereof is Ten
Million and No/100 Dollars ($10,000,000.00); and



     WHEREAS, at the request of the Borrower, the Lender has agreed to modify the Loan to (i)
reduce the principal amount of the Loan; (ii) extend the Maturity Date of the Loan and (ii) modify
certain payment terms of the Loan.



     NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00), and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by all
parties, the parties agree as follows:



     1. Recitals. The recitals set forth above are a material part of this Agreement.
Borrower acknowledges and affirms the accuracy of the recitals set forth above.



     2. Definitions. All capitalized terms herein, unless otherwise defined, shall have
the same meaning ascribed to such terms as in the Loan Documents.



     3. Maturity. All of the Obligations, including (without limitation) all outstanding
principal, accrued and unpaid interest, outstanding late charges,
unpaid fees, and all other
amounts outstanding under the Note and the other Loan Documents, shall be due and payable in full
on December 28, 2007 (the “Maturity Date”). All references to the Maturity Date contained in the
Loan Documents shall refer to the Maturity Date as defined in this Agreement.



     4. Revolving Line of Credit Note.



          a. Revolver. The title of the Note is hereby amended to “Note”. From the date hereof,
the Loan is not revolving. Any amount repaid may not be reborrowed.



Bank of America — Comstock Homebuilding Unsecured Loan Modification




 









 






          b. Amount. The Note is hereby amended to change the maximum aggregate
principal amount which can be outstanding under the Note to Five Million and No/100 Dollars
($5,000,000.00), on the terms and conditions set forth in the Note. Any reference in the Loan
Documents, as modified, to the amount of the Loan or Note as $10,000,000.00 is hereby deleted
in its entirety and the amount $5,000,000.00 is substituted in lieu thereof.



          c. Payments Due at Closing. Upon execution hereof, Borrower shall pay to
Lender (i) Five Million and No/100 Dollars ($5,000,000.00), in reduction of the current
outstanding
principal amount of the Note, which amount is sufficient to reduce the outstanding principal
amount
of the Note to Five Million and No/100 Dollars ($5,000,000.00) and (ii) all unpaid interest
that has
accrued under the Loan as of December 28, 2006.



          d. Interest Payments. Accrued and unpaid interest shall be due and payable
on the 28th of each month commencing January 28, 2007.



          e. Principal Payments. In addition to all other payments required under the
Note, Borrower shall pay to Lender, in immediately available funds, five monthly payments in
the amount of Eight Hundred Thirty Four Thousand and No/100 Dollars ($834,000.00), which shall be
due and payable on July 28, 2007, August 28, 2007, September 28, 2007, October 28, 2007 and
November 28, 2007. Furthermore, Borrower shall pay to Lender, in immediately available funds, one
payment in the amount of Eight Hundred Thirty Thousand and No/100 Dollars ($830,000.00), which
shall be due and payable on the Maturity Date together with all interest, fees and amounts then
due under the Loan.



          f. Additional Financial Statements Required. The following language shall be
added as Section 8(a)(iv) of the Note:


“Additionally, Borrower must submit to Lender within ten (10) days from the end of each month,
monthly financial statements (all of which financial statements must include a balance sheet,
income statement, sources and uses of funds for such fiscal month, projected sources and uses of
funds for the coming month, detailed listing and description of all contingent liabilities, tax
returns,
written verification of liquidity and such other supporting schedules and documentation). All such
financial statements shall be certified as true and correct by Borrower’s Chief Financial Officer
in a form acceptable to the Lender in all respects.”




          g. Form
of Payment. From the date hereof, Borrower must make all payments
of any kind whatsoever, due by Borrower to Lender in connection with the Loan, via wire
transfer of
immediately available funds, in accordance with the wiring instructions attached hereto as
Exhibit A.



          h. Covenants. Section 8(b) and 8(c) of the Note are hereby deleted.



     5. Modification to Atlanta Loan, Highlands Loan and Bellemeade Loan.
Simultaneously with the execution of this Agreement, (i) Comstock Homes of Atlanta, LLC, Comstock
Homes of Myrtle Beach, LLC (formerly known as Parker-Chandler Homes/South Carolina, LLC) and
Borrower shall execute that certain Loan Modification Agreement in connection with that certain
loan originally made by Lender to Comstock Homes of Atlanta, LLC (formerly known as PCH
Development, LLC which is successor by merger to Parker Chandler Homes, Inc.) in the original
principal amount of Seven Million Five Hundred Thousand and No/100 Dollars
($7,500,000.OO) (as the same has been amended, renewed, supplemented or restated from time to



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time, the “Atlanta Homes Loan”) (ii) Highland Avenue Properties, LLC and Borrower shall execute
that certain Loan Modification Agreement in connection with that certain loan originally made by
Lender to Highland Avenue Properties, LLC in the original principal amount of Four Million Eight
Hundred Fifty One Thousand Two Hundred Thirty-Five and No/100 Dollars ($4,851,235.00) (as the same
has been amended, renewed, supplemented or restated from time to time, the “Highlands Loan”); and
(iii) Comstock Bellemeade, L.C. and Borrower shall execute that certain First Loan Modification
Agreement in connection with that certain loan originally made by Lender to Comstock Bellemeade,
L.C. in the original principal amount of Forty-Six Million Seven Hundred Twenty-Five Thousand and
No/100 Dollars ($46,725,000.00) (as the same has been amended, renewed, supplemented or restated
from time to time, the “Bellemeade Loan”).




     6. Borrower’s Representations and Warranties. The Borrower hereby reaffirms all of
representations and warranties set forth in the Loan Documents,  and  further represents and warrants
that: (a) the execution and delivery of this Agreement does not contravene, resulting in a breach
of, or constitute a default under, any deed of trust, loan agreement, indenture or other contract
or agreement to which Borrower is a party or by which Borrower or any of its properties may be
bound (nor would such execution and delivery constitute such a default with the passage of time or
the giving of notice or both), and does not violate or contravene any law, order, decree, rule,
regulation or restriction to which Borrower or any of Borrower’s Property is subject; (b) this
Agreement constitutes the legal, valid and binding obligations of Borrower enforceable in
accordance with its terms; (c) the execution and delivery of, and performance under, this Agreement
are within Borrower’s power and authority without the joinder or consent of any other  party and
have been duly authorized by all requisite action, and are not in contravention  of any law,  or of
any indenture, agreement or undertaking to which Borrower is a party or by which it is bound; (d)
there exists no default under the Note or any other Loan Document which will not be cured by
execution of this Modification; (e) there are no offsets, claims or defenses with respect to the
Obligations; and (f) Borrower is duly organized and legally existing under the laws of the state of
its organization and is duly qualified to do business in the Commonwealth of Virginia. The Borrower
further represents and warrants that, except as disclosed in public filings, there is no material
suit, judicial or administrative action, claim, investigation, inquiry, proceeding or demand
pending (or, to Borrower’s knowledge, threatened) against (i) Borrower, or against any other person
liable directly or indirectly for the Obligations, or (ii) which affects title to any of Borrower’s
Property or the Borrower’s title to any of Borrower’s Property, or (iii) which affects the validity
enforceability or priority of any of the Loan Documents. Borrower agrees to indemnify and hold the
Lender harmless against any loss, claim damage, liability or expense (including, without
limitation, attorneys’ fees) incurred as a result of any representation  or warranty  made by
 Borrower  herein which proves to be untrue or inaccurate in any respect, and any such occurrence
shall constitute a default under the Loan Documents.



     7. Renewal; Obligation Continuation; No Novation. The Borrower hereby renews the
Obligations and promises to pay and perform the Obligations as modified by this Agreement. All
Obligations evidenced by the Note are hereby ratified and confirmed as valid, subsisting and
continuing to secure the Obligations, as modified hereby, Nothing herein shall in any manner
diminish, impair, waive or extinguish the Note or the Obligations. The execution and delivery of
this Agreement shall not constitute a novation of the debt evidenced by the Note and the Loan
Documents.



     8. Expenses. Borrower shall pay all costs and expenses and reimburse Lender for
any and all expenditures of every character incurred or expended from time to time, regardless of
whether a default shall have occurred, in connection with (a) this Agreement;



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(b) the
restructuring of the Loan which has occurred previous to and simultaneously with the execution of this Agreement;
(c) the issuance by Lender at any time (including any time prior to the execution of this
Agreement) of any default letters or standstill letters or correspondence of any kind to Borrower
in connection with the Loan; (d) the evaluation, monitoring and protection of any of Borrower’s
Property pursuant to rights given in the Loan Documents or by law; and (e) the creation, perfection
or realization upon the Liens, and all costs and expenses relating to Lender’s exercise of any of
its rights and remedies under any of the Loan Documents or at law, including, without limitation,
all filing fees, taxes, brokerage fees and commissions, title review and abstract fees, recordation
and transfer taxes, Uniform Commercial Code search fees, other fees and expenses incident to title
searches, reports and security interests, escrow fees, attorneys’ fees, legal expenses, court
costs, fees and expenses incurred in connection with any complete or partial liquidation of the
Property, and all fees and expenses for any professional service relating to the Property or any
operations conducted in connection with it; provided, however, no right or option granted
by Borrower to Lender or otherwise arising pursuant to any provision of this or any other document
shall be deemed to impose a duty on Lender to supervise, monitor or protect any aspect of the
Property or any operations conducted in connection with it.




     9. Authorization. At the time of execution of this Modification, Borrower shall, if
and to the extent requested by Lender, deliver to Lender (a) the opinion of Borrower’s counsel
dated the date hereof, in form and substance satisfactory to Lender, that this Modification
Agreement has been duly authorized, executed and delivered by Borrower and is binding on, and
enforceable against, the Borrower in accordance with its terms; and (b) such other evidence of due
authorization and execution by the Borrower as the Lender may require.



     10. Further Assurances. The Borrower agrees to execute and deliver to the Lender,
promptly upon request from Lender, such additional documents as may be necessary or appropriate to
consummate the transactions contemplated herein or to perfect, or continue the perfection of, the
Liens.



     11. No Defenses. Borrower represents and warrant that they (individually and
collectively) have no claims, actions, causes of action, defenses, counterclaims or setoffs of any
kind or nature which Borrower can assert against Lender in connection with the making, closing,
administration, collection or enforcement by Lender of the Loan Documents, this Agreement or any
related agreements.



     12. Default Under Deed of Trust. If Borrower shall fail  to  keep  or  perform  any of  the
covenants or agreements contained herein or in any of the Loan Documents, or if any statement,
representation or warranty contained herein is false, misleading or erroneous in any material
respect, Borrower shall be deemed to be in default under the Loan Documents and Lender shall be
entitled at its option to exercise any and all of the rights and remedies granted pursuant to the
Loan Documents, as amended hereby, or any other Loan Document or to which Lender may otherwise be
entitled, whether at law or in equity.



     13. No Waiver by Lender. Borrower acknowledges and agrees that the execution of this
Agreement by the Lender is not intended nor shall it be construed as (a) an actual or implied
waiver of any, default under the Note or any other Loan Document (apart from Borrower’s failure to
pay the Loan in full on November 22, 2006), or (b) an actual or implied waiver of any condition or
obligation imposed upon the Borrower pursuant to the Note or any other Loan Document, except to
the extent, if any, specified herein.



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     14. Borrower’s Performance. If Borrower should fail to comply with any of the
agreements, covenants or obligations of the Borrower under this or any other Loan Document, then
Lender (in Borrower’s name or in its own name) may, but is under no obligation to, perform them or
cause them to be performed for the account of Borrower at Borrower’s sole expense, Any and all
expenses thus incurred or paid by Lender shall be Borrower’s demand obligations to Lender and shall
bear interest, from the date of Lender’s payment of any such obligation or expense for Borrower’s
account until the date on which Borrower repays it to Lender, at the default rate of  interest set
forth in the Note. Upon  making  any such payment or  incurring  any such  expense, Lender shall be
fully subrogated to all of the rights of the person or entity receiving such payment. Any amounts
owing by Borrower to Lender pursuant to this provision or any other provision of this Agreement
shall automatically and without notice constitute a portion of the Obligations evidenced by the
Note and the other Loan Documents. The amount and nature of any such expense and the time when paid
shall be fully established by the affidavit of Lender or any of Lender’s officers or agents.



     15. Release
of Lender. Upon execution of this Agreement, Borrower hereby releases,
remises and forever discharges Lender, its employees, officers, directors, consultants, advisors,
participants, agents and affiliates (collectively, the “Lender Parties”) from any and all
causes of actions, suits, debts, claims and demands whatsoever arising prior to execution of this
Agreement in law or in equity due to any action taken or omitted be taken by any of the Lender
Parties in connection with the Loan, the Atlanta Homes Loan, the Highlands Loan, the Bellemeade
Loan or any other potential transaction between Borrower (or any affiliate of Borrower) and
Lender that may have been discussed with Lender but  not consummated.



     16. Miscellaneous. To the extent of any conflict between the Note (or any earlier
modification of it) and this Modification, this Modification shall control. Except as hereby
expressly modified, all terms of the Note and all other Loan Documents (as any of them may have
been previously modified by any written agreement) remain in full force and effect. This
Modification Agreement (a) shall bind and benefit the parties hereto and their respective heirs,
beneficiaries, administrators, executors, receivers, trustees, successors and assigns (provided,
however, no party other than the Lender shall assign its rights hereunder without the prior
written consent of the Lender); (b) may be modified or amended only by a writing signed by the
Lender and the Borrower; (c) SHALL BE GOVERNED BY (INCLUDING BUT NOT LIMITED TO ITS VALIDITY,
ENFORCEMENT AND INTERPRETATION) THE LAWS OF THE COMMONWEALTH OF VIRGINIA AND UNITED STATES FEDERAL
LAW; (d) may be executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall constitute an original
agreement enforceable against all who signed it without production of or accounting for any other
counterpart, and all separate counterparts shall constitute the same agreement; and (e) embodies
the entire agreement and understanding between the parties with respect to modifications of
documents provided for herein and supersedes all prior conflicting or inconsistent agreements,
consents and understandings relating to such subject matter. “Borrower” shall include, in their
individual capacities and jointly, all parties hereinabove named as the Borrower. The duties,
covenants, conditions, obligations, and warranties of the Borrower in this Agreement
shall be joint and several obligations of the Borrower and, if more than one, of each party named
a the Borrower hereinabove, and each such party’s heirs, legal representatives, successors and
assigns. If any Borrower is a corporation, partnership or other legal entity, the Borrower and the
person or persons signing for it represent and warrant to the Lender that this Agreement is duly
executed, acknowledged and delivered by the Borrower’s duly authorized representatives. Whenever
used herein, the singular number shall include the plural and the plural the singular, and any
gender shall be applicable to all genders. The use of the words “herein”, “hereof, “hereunder”
and other similar compounds of the word “here” shall refer to this entire Modification and not to
any particular section, paragraph or provision. The headings in this Modification shall be accorded
no significance in interpreting it.



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     17. Notices. All notices, in connection with the Loan addressed to Lender, shall
hereinafter be sent to Lender at the following address:



Lender:




Norman Trepner

Bank of America, N.A.

187 Danbury Road

Wilton, CT 06897

Fax (203) 423-4003




with a copy to:




Bank of America, N.A.

Attn: Loan Administration, Ladreda Spencer

101 E. Kennedy Boulevard (7th Floor)

Tampa, FL 33602

Fax (813) 225-8322




with a
copy to:


Bank of America, N.A.

Attn: Loan Administration, Kathie Hatton

101 E. Kennedy Boulevard (7th Floor)

Tampa, FL 33602

Fax (813) 225-8322




with a copy to:




Friedlander, Misler, Sloan, Kletzkin & Ochsman, PLLC

Attn: David M. Astrove

1101 17th Street, NW, Suite 700

Washington, DC 20036




[remainder of page intentionally left blank]

[signatures to follow]




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     EXECUTED ON THE DATE OR DATES OF THE ACKNOWLEDGMENTS HEREOF, BUT EFFECTIVE AS OF THE DATE
FIRST STATED IN THIS AGREEMENT.



	 	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	Joey Manahan	 	 	 	COMSTOCK HOMEBUILDING COMPANIES,	 	 
	 	 	 	 	INC. a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Joey Manahan

	 	 	 	By:	 	/s/ Christopher Clemente	 	 
	 

	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Print Name: Christopher Clemente	 	 
	 

	 	 	 	 	 	Print Title: CEO	 	 
	 
	 	 	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 	 	 






	 	 	 
	COMMONWEALTH OF VIRGINIA

	 	)
	 

	 	) ss:
	COUNTY OF Fairfax

	 	)






     I, Kelly L. Wyche, a notary Public in and for the aforesaid said jurisdiction, do
hereby certify that Christopher Clemente, who is personally well known to me as (or
satisfactorily proven to me to be) the person who signed the foregoing instrument executed this
28 day of December, 2006, personally appeared before me in said jurisdiction and
acknowledged that he is the CEO of the COMSTOCK HOMEBUILDING
COMPANIES, INC., a Delaware corporation which is a party to the
foregoing instrument; that he has been duly authorized to execute and
deliver the foregoing instrument for the purposes therein contained
and that the same is his act and deed and the act and deed of
COMSTACK HOMEBUILDING COMPANIES, INC., a Delaware
corporation.



     IN WITNESS WHEREOF, I have set my hand and Notarial Seal, this 28 day of December, 2006.



	 	 	 	 	 
	 	 	 
	 	     /s/ Kelly L. Wyche
 	 
	 	Notary Public 	 
	 	 	 
	 


(SEAL)




	 	 	 	 	 
	 	My Commission expires: 
11-30-08

 	 
	 	 	 
	 	 	 
	 	 	 
	 



[signatures continue on the next page]




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	WITNESS:	 	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Print Name:	 	 
	 

	 	 	 	 	 	Print Title:	 	 
	 
	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]
	 	 	 	 	 	 	 	 






	 	 	 
	STATE OF FLORIDA

	 	)
	 

	 	) ss:
	COUNTY OF HILLSBOROUGH

	 	)






     I,                                         , a Notary Public in and for the aforesaid said
jurisdiction,  do  hereby certify that                     , who is personally well known to me as
(or satisfactorily proven to me to be) the person who signed the foregoing instrument executed this
      day of December, 2006, personally appeared before me  in  said jurisdiction and
acknowledged that he is the
                     of BANK OF AMERICA, N.A., a national
banking association; that he has been duly authorized to execute and deliver the foregoing
instrument for the purposes therein contained and that the same is his act and deed and the act
and  deed  of BANK OF AMERICA, N.A.



     IN
WITNESS WHEREOF, I have set my hand and Notarial Seal, this
                              day of
December, 2006.

 



	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Notary Public
	 	 
	(SEAL)
	 	 	 	 
	 

	 	My Commission expires:

                              	 	 






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