sedh_ex1017




  Exhibit 10.17







LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this "Agreement")
is made as of the 18th day of June, 2020,
by and between SeD HOME & REITS
INC., a Delaware corporation, (the "Borrower") and
MANUFACTURERS AND TRADERS TRUST
COMPANY, a New York banking corporation (together with its
successors and assigns, the "Lender").

 

WITNESSETH:

 




A.           

The Borrower has
requested that the Lender establish for the benefit of the Borrower
a non-revolving credit facility in an original principal amount not
to exceed the sum of $2,990,000 (such credit facility, as the same
may from time to time be extended, amended, restated, supplemented
or otherwise modified, being hereinafter referred to as the
"Loan").





 




B.           

It is a condition
precedent, among others, to the agreement of the Lender to
establish the Loan that the Borrower executes and delivers this
Agreement in order to evidence certain understandings between the
parties with respect thereto.





 

NOW, THEREFORE,
THIS AGREEMENT WITNESSETH, that in consideration of the premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do
hereby covenant and agree as follows:

 




1.           

The Loan. Subject to and in
accordance with the provisions of this Agreement, the Lender agrees
to make available to the Borrower the Loan in a principal amount
not to exceed the sum of Two Million Nine Hundred Ninety Thousand
Dollars ($2,990,000). The proceeds of the Loan shall be evidenced
by, shall be advanced pursuant to, and shall be repaid, with
interest, in accordance with, the terms and conditions set forth in
a Promissory Note dated of even date herewith executed by the
Borrower, as maker, in favor of the Lender, as payee, in the
original principal amount of $2,990,000 (such Promissory Note, as
the same may from time to time be extended, amended, restated,
supplemented or otherwise modified, being hereinafter referred to
as the "Note"). Interest shall accrue and be payable as provided in
the Note only on such portion of the Loan as may from time to time
be advanced and remain outstanding. The Loan is not a revolving
credit. Thus, amounts advanced to or for the account of the
Borrower under the Loan and repaid may not be
readvanced.





 




2.           

Purpose of the Loan. The
proceeds of the Loan shall be advanced to the Borrower by the
Lender to finance the working capital needs of the Borrower in
connection with its real estate projects. As hereinafter more
particularly set forth, at the time of each request by the Borrower
for an advance of a portion of the proceeds of the Loan, the
Borrower shall furnish to the Lender a signed draw request
certification substantially in the form attached hereto as Exhibit
A and made a part hereof (a "Draw Request"), accompanied by such
information regarding the project and purposes for which funds are
being requested as the Lender may reasonably request, including
without limitation, the proposed budget for such project and any
and all executed instruments, agreements, memoranda of
understandings or other writings relating to such project and such
other information as the Lender may reasonably require. All of such
information shall be subject to the Lender's approval, which
approval shall not be unreasonably withheld.





 




3.           

Guaranties and Security. The
prompt payment and performance of the obligations of the Borrower
to the Lender under the Loan shall be jointly and severally
guaranteed by SeD MARYLAND
DEVELOPMENT, LLC, a Delaware limited liability company, (the
"Owner") and SeD INTELLIGENT HOME
INC., a Nevada corporation, (the "Additional Guarantor"; the
Owner and the Additional Guarantor being hereinafter sometimes
referred to individually as a "Guarantor" and collectively as the
"Guarantors") pursuant to the terms of a Guaranty Agreement dated
of even date herewith executed by the Guarantors in favor of the
Lender (such Guaranty Agreement, as the same may from time to time
be extended, amended, restated, supplemented or otherwise modified,
being hereinafter referred to as the "Guaranty"). The Owner's
obligations to the Lender under the Loan and the Guaranty shall be
secured by, among other things, the lien of an Indemnity Deed of
Trust, Assignment and Security Agreement of even date herewith
executed by the Owner, as grantor, in favor of Steven McGuire,
Timothy J. Reynolds and Danielle Frederick, as trustees, for the
benefit of the Lender (such Indemnity Deed of Trust, Assignment and
Security Agreement, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified, being
hereinafter referred to as the "Deed of Trust"), covering, among
other things, the Owner's fee simple interest in a residential
subdivision located in Frederick County, Maryland known as
"Ballenger Run" (the "Project") containing single-family and
multi-family building lots (individually, a "Lot" and collectively,
the "Lots") and other building parcels (individually, a "Parcel"
and collectively, the "Parcels"), all as more particularly
described in the Deed of Trust (all of such Lots and Parcels,
together will all improvements now or hereafter erected thereon and
all other real and personal property at any time covered by the
lien of the Deed of Trust being hereinafter referred to
collectively as the "Property"). The lien of the Deed of Trust on
the Property shall be subject only to a prior lien of the Lender
arising out of a land development loan in an original principal
amount not to exceed at any one time outstanding the sum of
$8,000,000 and a letter of credit facility in the aggregate stated
amount of $900,000 made by the Lender to the Owner on April 17,
2019 (such land development loan and letter of credit facility, as
the same may be modified, amended, extended or renewed from time to
time, being hereinafter sometimes referred to both individually and
collectively as the "Development Loan"), the proceeds of which are
being utilized by the Lender to finance the development of the
Property in accordance with the terms of a Development Loan
Agreement dated April 17, 2019 executed by and between the Owner
and the Lender (such Development Loan Agreement, as the same may
from time to time be extended, amended, restated, supplemented or
otherwise modified, being hereinafter referred to as the
"Development Loan Agreement").





 



 






 





 




4.           

Cash Collateral Account. In
addition to the lien in favor of the Lender on the Property, the
prompt payment and performance of the obligations of the Borrower
and the Guarantors to the Lender under the Loan shall be secured by
a pledge of all rights of the Borrower and the Guarantors in and to
the cash collateral account maintained at the Lender designated as
Account No. 15004230063014, and styled "Ballenger Run Collateral
Account" (such collateral account, together with all sums now or
hereafter deposited therein, and all interest earned thereon, being
hereinafter referred to collectively as the "Cash Collateral
Account"), which Cash Collateral Account was established, and is
required to be maintained, by the Owner pursuant to the terms of
the Development Loan Agreement. In order to perfect such pledge and
assignment, the Borrower and the Guarantors shall execute and
deliver, in favor of the Lender, contemporaneously herewith, an
Assignment and Pledge of Collateral Account pursuant to which the
Borrower and the Guarantors shall assign, pledge and grant a
security interest to the Lender in all of their respective right,
title and interest, whether held jointly or severally, together or
with others, in and to the Cash Collateral Account, together with
all funds now or at any time hereafter on deposit therein and all
interest earned thereon (such Assignment and Pledge of Collateral
Account, as the same may from time to time be extended, amended,
restated, supplemented or otherwise modified, being hereinafter
referred to as the "Pledge Agreement"; this Agreement, the Note,
the Guaranty, the Deed of Trust, the Pledge Agreement and all other
documents now or hereafter executed and delivered to evidence,
secure, guarantee or otherwise provide for the Loan being
hereinafter collectively referred to as the "Loan
Documents").





 




5.           

Advance Procedures. At least
five (5) business days prior to the requested date of each advance
of any portion of the proceeds of the Loan, the Borrower shall
deliver to the Lender a properly completed and executed written
Draw Request, substantially in the form of Exhibit A attached
hereto (or in another form reasonably approved by the Lender),
confirming that the advance is being requested in connection with
one of the Borrower's real estate projects and setting forth the
amount of proceeds desired, together with such project budgets,
schedules, statements, invoices, bills, and other documents,
certificates and information reasonably required by the Lender
documenting the application of those proceeds of the Loan. Upon the
satisfaction of all applicable conditions of this Agreement and the
other Loan Documents, the Lender shall make the requested advance
to the Borrower within five (5) business days after such
satisfaction. Each Draw Request, and the Borrower's acceptance of
any advance, shall be deemed to ratify and confirm that all
representations and warranties contained herein and in each of the
other Loan Documents remain true and correct in all material
respects as of the date of the Draw Request and the advance,
respectively. The Lender shall not be required to make advances
more frequently than once during each calendar month.





 




6.           

Conditions Precedent to
Advances. (a) Prior to the first advance of any portion of
the proceeds of the Loan, the Borrower shall satisfy each of the
following requirements:





 




(i)           

The Lender shall
have received its required Facility Fee (as hereinafter defined)
and the Borrower shall have paid all other fees, costs and expenses
(including the reasonable fees and costs of the Lender's counsel)
then required to be paid pursuant to this Agreement and all other
Loan Documents.





 




(ii)           

The Lender shall
have received and approved financial statements relating to the
Borrower and the Guarantors, in form and detail satisfactory to the
Lender and certified as to accuracy, in all material respects, by
or on behalf of the Borrower and the Guarantors.





 




(iii)           

The Lender shall
have received and approved such evidence as the Lender may
reasonably require of the existence, good standing, authority and
capacity of the Borrower and the Guarantors to execute, deliver and
perform their respective obligations to the Lender under the Loan
Documents, including, an instrument certifying the officers or
other representatives of the Borrower and the Guarantors who are
authorized to execute the Loan Documents; and true and complete
copies of resolutions and/or consents of the Borrower and the
Guarantors approving the Loan Documents and authorizing the
transactions contemplated in this Agreement and the other Loan
Documents.





 




(iv)           

The Borrower and
the Guarantors shall have duly executed, acknowledged and/or sworn
to as required, and delivered to the Lender all Loan Documents then
required by the Lender, dated the date of this Agreement, each in
form and content reasonably satisfactory to the
Lender.





 




(v)           

The Lender shall
have received the written opinion of counsel satisfactory to the
Lender for the Borrower and the Guarantors addressed to the Lender,
dated the date of this Agreement.





 




(vi)           

The Lender shall
have received a paid policy of title insurance in standard ALTA
form or a valid and enforceable commitment to issue the same from a
company satisfactory to the Lender in the amount of the Loan and
which may be endorsed or assigned to the successors and assigns of
the Lender without additional cost, insuring the lien of the Deed
of Trust to be a valid second lien on the Property, free and clear
of all defects, exceptions and encumbrances except such as the
Lender and its counsel shall have approved.





 



 






 





 




(vii)           

The Lender shall
have received advice, in form and substance and from a source
satisfactory to the Lender, to the effect that a search of the
applicable public records discloses no conditional sales contracts,
chattel mortgages, leases of personalty, financing statements or
title retention agreements filed or recorded against the Property
except such as the Lender shall have approved.





 




(viii)           

The Lender shall
have received all policies of insurance required by the terms of
the Deed of Trust and by the other Loan Documents to be in effect
from a company or companies and in form and amount satisfactory to
the Lender, including without limitation, flood insurance (in the
amount of the Loan or the maximum limit of coverage available on
the Property, whichever is less or evidence that flood insurance is
not available or otherwise required with respect to the Property),
together with written evidence, in form and substance satisfactory
to the Lender, that all fees and premiums due on account thereof
have been paid in full.





 




(ix)           

The Lender shall
have received and approved an appraisal of the
Property.





 




(x)           

The Lender shall
have received and approved one or more executed purchase contracts
with NVR, Inc. ("NVR") covering all of the remaining Lots and
Parcels within the Property, including without limitation, all of
the Lots within the section of the Property known as the CCRC
Multifamily Parcel, which must be in form and substance
satisfactory to the Lender in all respects (collectively, the "NVR
Purchase Contracts"), together with satisfactory evidence that such
NVR Purchase Contracts remain in full force and effect, and a
subordination agreement executed by NVR, in form and substance
acceptable to the Lender in all respects, pursuant to which any
lien held by NVR as security for its deposit under the NVR Purchase
Contracts shall be subordinated to the lien of the Lender under the
Deed of Trust.





 




(xi)           

The Borrower shall
have delivered to the Lender, in form and content reasonably
satisfactory to the Lender, such other documents, instruments,
certificates and agreements as the Lender may reasonably
request.





 




(b)           

As conditions
precedent to each advance made pursuant to a Draw Request and in
addition to all other requirements contained in this Agreement and
the other Loan Documents, the Borrower must satisfy the following
additional conditions:





 




(i)           

All conditions set
forth in subsection (a) above shall have been
satisfied.





 




(ii)           

No default or any
event which, with the giving of notice or the lapse of time, or
both, could become a default shall then exist hereunder or under
any of the other Loan Documents.





 




(iii)           

The representations
and warranties made in the Loan Documents must then be true and
correct in all material respects on and as of the date of each such
advance.





 




(iv)           

The Lender shall
have received and approved such information regarding the purpose
for which funds are being requested in connection with one of the
Borrower's real estate projects as the Lender may reasonably
request.





 




(v)           

As of the date of
the making of each such advance, no default or event of default (as
described or defined therein) shall have occurred under the
Development Loan or under any other indebtedness or liability for
borrowed money of the Borrower or of either of the Guarantors,
which default or event of default shall remain uncured beyond any
applicable grace and/or cure period provided therefor.





 




(vi)           

As of the date of
the making of each such advance, to the knowledge of the Borrower,
no event shall have occurred, nor shall any condition exist, that
could reasonably be expected to have an adverse effect on the
enforceability of the Loan Documents, be materially adverse to the
financial condition of the Borrower or of either of the Guarantors,
be materially adverse to the ability of the Borrower or of either
of the Guarantors to fulfill its obligations under the Loan
Documents, or otherwise have any material adverse effect whatsoever
on the Project.





 




(vii)           

The Borrower shall
have delivered to the Lender such other information, documents,
certificates and agreements as reasonably may be required by the
Lender.





 




7.           

Limitations on Advances; Lender's
Obligations. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, THE LENDER SHALL HAVE NO OBLIGATION TO MAKE ANY
ADVANCE UNDER THE LOAN IF: (A) AN EVENT OF DEFAULT SHALL HAVE
OCCURRED HEREUNDER OR UNDER ANY OF THE LOAN DOCUMENTS, WHICH
REMAINS UNCURED; OR (B) AFTER GIVING EFFECT TO THE BORROWER'S
REQUEST FOR SUCH ADVANCE, THE AGGREGATE PRINCIPAL AMOUNT OF ALL
ADVANCES MADE BY THE LENDER UNDER THE LOAN WOULD EXCEED THE SUM OF
$2,990,000.





 



 






 





 




8.           

Partial Release Provisions.
Notwithstanding anything contained herein or in any of the other
Loan Documents to the contrary, the Owner shall have the right to
obtain a release of individual Lots and Parcels from the lien of
the Deed of Trust in connection with a conveyance of the same to
NVR pursuant to the terms of the NVR Purchase Contracts or to
another third-party purchaser under a contract of sale approved by
the Lender in accordance with the terms set forth in Exhibit B
attached hereto and made a part hereof.





 




9.           

Financial Covenants. The
Borrower shall comply, and shall cause each of the Guarantors to
comply, with all of the terms and conditions of Exhibit C attached
hereto and made a part hereof with respect to each and every one of
the financial covenants described therein.





 




10.           

Facility Fee. In consideration
of the agreement of the Lender to establish the Loan for the
benefit of the Borrower, and in addition to the monthly
installments of interest required under the Note, the Borrower
shall pay to the Lender a one-time, non-refundable facility fee in
the amount of $22,500, which shall be due and payable
contemporaneously with the execution and delivery of this Agreement
(the "Facility Fee").





 




11.           

Loan Account. The Lender will
establish and maintain a loan account on its books to which the
Lender will debit (a) the principal amount of each advance made by
the Lender hereunder as of the date made, (b) the amount of any
interest accrued on the Loan as and when due, and (c) any other
amounts due and payable by the Borrower to the Lender from time to
time under the provisions of this Agreement or any of the other
Loan Documents. During the continuance of any Event of Default (as
hereinafter defined), any payments made by the Borrower on account
of the Loan shall be applied in such order or manner as the Lender
may determine in its sole and absolute discretion.





 




12.           

Events of Default. In addition
to those events of default specifically enumerated in the Note, the
Deed of Trust, the Pledge Agreement and/or any of the other Loan
Documents, the occurrence of any of the following events shall
constitute an event of default (an "Event of Default") and shall
entitle The Lender to exercise all rights and remedies provided in
the Note, the Pledge Agreements and the other Loan Documents as a
result of the occurrence of the same:





 




(a)           

The Borrower shall
fail to pay any principal, interest or other amount of money due
under the Loan, within ten (10) days after the date as and when
due, regardless of how such amount may have become due; but
excluding, however, from such grace period, the failure of the
Borrower to pay all amounts due on the maturity date of the Note;
or





 




(b)           

Any information
contained in any financial statement, schedule, report or any other
document prepared by or on behalf of the Borrower, either of the
Guarantors or any other party or parties in connection with the
Loan proves at any time to be not in all material respects true and
accurate at the time made, or the Borrower, either of the
Guarantors or any such other party or parties shall have failed to
state any material fact or any fact necessary to make such
information not misleading, or any representation or warranty
contained in this Agreement, or in any other document, certificate
or opinion delivered to the Lender in connection with the Loan,
proves at any time to be incorrect or misleading in any material
respect as of the date such representation or warranty was made or
deemed made; or





 




(c)           

Any covenant,
agreement or condition herein (other than one involving the payment
of money) is not fully and timely performed, observed or kept and
such failure remains uncured for more than thirty (30) days after
written notice thereof shall have been sent by the Lender to the
Borrower, unless (i) the nature of the failure is such that it
cannot be cured within the thirty (30) day period, (ii) the
Borrower institutes corrective action within the thirty (30) day
period, and (iii) the Borrower diligently pursues such action until
the failure is remedied and completes the cure thereof within a
period of an additional thirty (30) days; or





 




(d)           

A default or an
event of default shall occur under any of the other Loan Documents,
which default or event of default remains uncured beyond any
applicable grace and/or cure period provided therefor;
or





 




(e)           

The Borrower or
either of the Guarantors (i) applies for, or consents in writing
to, the appointment of a receiver, trustee or liquidator of the
Borrower or of either of the Guarantors or of all or substantially
all of the Borrower's or of either of the Guarantors'' assets, or
(ii) files a voluntary petition in bankruptcy or admits in writing
its inability to pay its debts as they become due, or (iii) makes a
general assignment for the benefit of creditors, or (iv) files a
petition or an answer seeking a reorganization (other than a
reorganization not involving the liabilities of the Borrower or
either of the Guarantors) or an arrangement with creditors or takes
advantage of any bankruptcy or insolvency law, or (v) files an
answer admitting the material allegations of a petition filed
against the Borrower or either of the Guarantors in any bankruptcy,
reorganization or insolvency proceeding; or





 



 






 





 




(f)           

An order, judgment
or decree is entered by any court of competent jurisdiction on the
application of a creditor adjudicating the Borrower or either of
the Guarantors as bankrupt or insolvent, or appointing a receiver,
trustee or liquidator of the Borrower or of either of the
Guarantors or of all or substantially all of the Borrower's or
either of the Guarantors' assets, and such order, judgment or
decree continues unstayed and in effect for a period of sixty (60)
days from the date entered; or





 




(g)           

At any time during
the term of the Loan any default or event of default shall occur
under the Development Loan, which default or event of default shall
remain uncured beyond any applicable grace and/or cure period
provided therefor; or





 




(h)           

At any time during
the term of the Loan, without the prior, express written consent of
the Lender, (i) any one or more of the NVR Purchase Contracts is
terminated or becomes of no further force or effect for any reason
whatsoever, (ii) a default or event of default shall occur under
any of the NVR Purchase Contracts, which default or event of
default shall continue beyond any applicable grace and/or cure
period provided therefor, or (iii) any of the NVR Purchase
Contracts is modified or amended in any material manner;
or





 




(i)           

At any time during
the term of the Loan, without the Lender's prior express written
consent thereto, the Borrower and/or either of the Guarantors fails
to comply with the terms of Section 9 hereof with respect to any of
the financial covenants set forth in Exhibit C attached hereto and
made a part hereof.





 




13.           

Fees and Expenses; Indemnity.
The Borrower shall pay all reasonable fees, charges, costs and
expenses incurred by the Lender in connection with the preparation
or enforcement of any of the Loan Documents or otherwise required
to satisfy the conditions of the Loan Documents, including without
limitation, all reasonable attorneys' fees and charges. The
Borrower shall hold the Lender harmless and indemnify the Lender
against all claims of brokers and "finders" arising by reason of
the execution and delivery of the Loan Documents or the
consummation of the transaction contemplated hereby to the extent
that such claims result from or are related to the actions of the
Borrower or the Guarantors or any person or entity affiliated with
the Borrower and/or the Guarantors.





 




14.           

Financial Information; Reports.
The Borrower further covenants and agrees to provide or cause to be
provided to the Lender, as and when the same shall be due, all of
the financial information and other reports required to be provided
pursuant to the terms of the Deed of Trust and each of the other
Loan Documents. The Borrower further agrees to provide or cause to
be provided to the Lender, with reasonable promptness, such
additional information, reports or statements as the Lender may
from time to time reasonably request.





 




15.           

Further Assurances; Authorization to
File Documents; No Merger. At any time, and from time to
time, within ten (10) business days following any written request
by the Lender, the Borrower will, at the Borrower's expense, (a)
promptly correct any defect, error or omission in any Loan
Document, (b) execute, acknowledge, deliver, procure, record or
file such further instruments and do such further acts as the
Lender reasonably deems necessary, desirable or proper to carry out
the purposes of the Loan Documents and to identify and subject to
the liens and security interests of the Loan Documents any property
intended to be covered thereby, including any renewals, additions,
substitutions, replacements or appurtenances thereto, (c) execute,
acknowledge, deliver, procure, file or record any document or
instrument the Lender reasonably deems necessary, desirable or
proper to protect the liens or the security interest under the Loan
Documents against the rights or interests of third persons, and (d)
provide such certificates, documents, reports, information,
affidavits and other instruments and do such further acts
reasonably deemed necessary, desirable or proper by the Lender to
comply with the requirements of any governmental authority having
jurisdiction over the Lender. Upon any failure by the Borrower to
do so after the Lender's written request and a reasonable
opportunity to comply, the Lender may make, execute and record any
and all such instruments, certificates and other documents for and
in the name of the Borrower or the Guarantors, all at the sole
expense of the Borrower, and the Borrower hereby appoints the
Lender the agent and attorney-in-fact of the Borrower and the
Guarantors to do so, this appointment being coupled with an
interest and being irrevocable. Without limitation of the
foregoing, the Borrower irrevocably authorizes the Lender at any
time and from time to time to file any initial financing
statements, amendments thereto and continuation statements deemed
necessary or desirable by the Lender to establish or maintain the
validity, perfection and priority of the security interests granted
under the Loan Documents, and the Borrower ratifies any such
filings made by the Lender prior to the date hereof.





 




16.           

Standard of Conduct of the
Lender. Except to the extent the Lender has otherwise
expressly agreed to act reasonably as provided herein or in any of
the other Loan Documents, nothing contained in this Agreement or
any other Loan Document shall limit the right of the Lender to
exercise its business judgment or to act, in the context of the
granting or withholding of any advance or consent under this
Agreement or any other Loan Document, in a subjective manner,
whether or not objectively reasonable under the circumstances, so
long as the Lender's exercise of its business judgment or action is
made or undertaken in good faith. The Borrower and the Lender
intend by the foregoing to set forth and affirm their entire
understanding with respect to the standard pursuant to which the
Lender's duties and obligations are to be judged and the parameters
within which the Lender's discretion may be exercised hereunder and
under the other Loan Documents. As used herein, "good faith" means
honesty in fact in the conduct and transaction
concerned.





 



 






 





 




17.           

No Partnership. Nothing
contained in this Agreement shall be construed in a manner to
create any relationship between the Borrower and the Lender other
than the relationship of borrower and lender and the Borrower and
the Lender shall not be considered partners or co-venturers for any
purpose on account of this Agreement.





 




18.           

Authorized Persons. The Lender
is authorized to rely upon the continuing authority of the
Authorized Persons named in the Note to bind the Borrower with
respect to all matters pertaining to the Loan and the Loan
Documents, including the submission of Draw Requests, the selection
of interest rates and the initiation of wire transfers. Such
authorization may be changed only upon written notice addressed to
the Lender accompanied by evidence, reasonably satisfactory to the
Lender, of the authority of the person giving such notice. Such
notice shall be effective not sooner than five (5) business days
following receipt thereof by the Lender.





 




19.


Notices. All notices required
or which any party desires to give hereunder or under any other
Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed
sufficiently given or furnished if delivered by personal delivery,
by nationally recognized overnight courier service or by certified
United States mail, postage prepaid, addressed to the party to whom
directed at the applicable address set forth below (unless changed
by similar notice in writing given by the particular party whose
address is to be changed), and in the case of notices to the
Lender, to the attention of the bank officer responsible for the
Borrower's banking relationship with the Lender. Any notice shall
be deemed to have been given (a) at the time of personal delivery,
or (b) in the case of courier, one (1) business day after the
delivery of such notice to the courier service, or (c) in the case
of mail, three (3) business days after the date when deposited in
the mail in the manner prescribed above; provided that service of a
notice required by any applicable statute shall be considered
complete when the requirements of that statute are met.
Notwithstanding the foregoing, no notice of change of address shall
be effective except upon actual receipt. In addition, notices may
be sent by electronic mail to the following addresses (moe@sed.com.sg and charley@sed.com.sg) and shall be deemed
given or made when delivered provided that a duplicate copy of such
notice is sent by personal delivery, mail or overnight courier
service in the manner hereinabove provided. This Section shall not
be construed in any way to affect or impair any waiver of notice or
demand provided in this Agreement or in any other Loan Document or
to require giving of notice or demand to or upon any Person (as
hereinafter defined) in any situation or for any
reason.





 

The address of the
Borrower is:

 

SeD Home &
REITs Inc.

c/o SeD Development
USA, Inc.

Hampden
Square

4800 Montgomery
Lane, Suite 210

Bethesda, Maryland
20814




Attn:           

Charles
MacKenzie





With a copy
to:

 

SeD Intelligent
Home Inc.

c/o Singapore
eDevelopment Limited

7 Temasek Boulevard
#29-01B

Suntec Tower
1

Singapore
038987




Attn:           

Moe
Chan





 

The address of the
Lender is:

 

Manufacturers and
Traders Trust Company

Commercial Real
Estate Department

One Light Street,
16th
Floor

Mail Code:
MD2-L160

Baltimore, Maryland
21202

 



 






 





 




20.           

Approvals. By accepting or
approving anything required to be observed, performed or fulfilled
by the Borrower or to be given to the Lender pursuant to this
Agreement, including, without limitation, any document, instrument,
certificate, or other materials or information, the Lender shall
not be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof and any such acceptance or
approval thereof shall not be or constitute any warranty or
representation with respect thereto by the Lender.





 




21.           

Permitted Successors and Assigns;
Disclosure of Information.





 




(a)           

Each and every one
of the covenants, terms, provisions and conditions of this
Agreement and the Loan Documents shall apply to, bind and inure to
the benefit of the Borrower, its successors and those assigns of
the Borrower consented to in writing by the Lender, and shall apply
to, bind and inure to the benefit of the Lender and the endorsees,
transferees, successors and assigns of the Lender, and all Persons
claiming under or through any of them.





 




(b)           

The Borrower agrees
not to transfer, assign, pledge or hypothecate any right or
interest in any payment or advance due pursuant to this Agreement,
or any of the other benefits of this Agreement, without the prior
written consent of the Lender, which consent may be withheld by the
Lender in its sole and absolute discretion. Any such transfer,
assignment, pledge or hypothecation made or attempted by the
Borrower without the prior written consent of the Lender shall be
void and of no effect. No consent by the Lender to an assignment
shall be deemed to be a waiver of the requirement of prior written
consent by the Lender with respect to each and every further
assignment and as a condition precedent to the effectiveness of
such assignment.





 




(c)           

The Lender may sell
or offer to sell the Loan or interests therein to one or more
assignees or participants; and no such assignment or participation
shall modify the liabilities or obligations of the Borrower or
either of the Guarantors under the Loan Documents. The Borrower
shall execute, acknowledge and deliver any and all instruments
reasonably requested by the Lender in connection therewith, and to
the extent, if any, specified in any such assignment or
participation, such assignee(s) or participant(s) shall have the
same rights and benefits with respect to the Loan Documents as such
Person(s) would have if such Person(s) were the Lender hereunder.
The Borrower, on its own behalf and on behalf of the other Borrower
Parties (as hereinafter defined), hereby (i) acknowledges and
agrees that the Lender is entitled, at any time and from time to
time, without notice to or further consent by the Borrower or any
other Borrower Party, to sell, transfer, assign or otherwise
convey, and to attempt to sell, transfer, assign or otherwise
convey, the Loan and the Loan Documents, or any interest herein or
therein or rights with respect hereto or thereto (including, but
not limited to, participation interests, syndication interests,
servicing rights and beneficial interests issued in connection with
mortgage-backed or similar certificates or securities) to any
Person, and (ii) irrevocably authorizes the Lender, and any Person
acting on behalf of the Lender, to deliver and disclose to any
Person any and all information and materials related to the Loan,
the Loan Documents and/or the Borrower Parties now or hereafter in
the Lender's possession (collectively, the "Information"). The
Information may include, but shall not be limited to, original
and/or copies of financial statements, financial projections,
appraisals, studies, reports, business plans, permits, licenses,
approvals, organizational documents, resolutions, consents,
documents (including, but not limited to, the Loan Documents),
plans, drawings, specifications, contracts, bonds, credit reports,
payment histories, account statements and applications (including,
but not limited to, the application for the Loan). As used herein,
the term "Borrower Parties" means, collectively, the Borrower, each
of the Guarantors and all other obligors of all or any obligations
of the Borrower and/or any other Person to the Lender in connection
with the Loan; all subsidiaries and affiliates of the Borrower, the
Guarantors and/or any such other obligor; the members, partners,
managers, stockholders, officers, directors, employees, agents,
contractors and representatives of the Borrower, either of the
Guarantors or any such other obligor and/or any such subsidiary or
affiliate; and any other Person now or hereafter owning a direct or
indirect interest in the Borrower, either of the Guarantors, any
such obligor and/or any such subsidiary or affiliate.





 




22.           

Liability of the Lender;
Indemnification. The Lender shall not be liable for any act
or omission by it pursuant to the provisions of this Agreement in
the absence of fraud, gross negligence or willful misconduct. The
Lender shall incur no liability to the Borrower, or any other party
in connection with the acts or omissions of the Lender in reliance
upon any certificate or other paper believed by the Lender to be
genuine or with respect to any other thing which the Lender may do
or refrain from doing, unless such act or omission amounts to
fraud, gross negligence or willful misconduct. In connection with
the performance of its duties pursuant to this Agreement, the
Lender may consult with counsel of its own selection, and anything
which the Lender may do or refrain from doing, in good faith, in
reliance upon the opinion of such counsel shall be full
justification and protection to the Lender, absent fraud, gross
negligence or willful misconduct by the Lender. In addition, the
Borrower covenants and agrees to indemnify and hold the Lender
harmless from and against any liability for hazardous materials
discovered on or emanating from any parcel of real property
acquired or developed with the proceeds of the Loan.





 



 






 





 




23.           

Severability. In the event any
provision of this Agreement (or any part of any provision) is held
by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision (or remaining
part of the affected provision) of this Agreement; but this
Agreement shall be construed as if such invalid, illegal or
unenforceable provision (or any part thereof) had not been
contained in this Agreement, but only to the extent it is invalid,
illegal or unenforceable.





 




24.           

Third Parties; Benefit. All
conditions to the obligation of the Lender to make advances
hereunder are imposed solely and exclusively for the benefit of the
Lender and its assigns and no other Persons shall have standing to
require satisfaction of such conditions in accordance with their
terms or be entitled to assume that the Lender will refuse to make
advances in the absence of strict compliance with any or all
thereof and no other Person shall, under any circumstances, be
deemed to be the beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by the Lender at any
time in the sole and absolute exercise of its discretion. The terms
and provisions of this Agreement are for the benefit of the parties
hereto and, except as herein specifically provided, no other Person
shall have any right or cause of action on account
thereof.





 




23.           

WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING OR ACTION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTE OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).





 

EACH
PARTY HERETO HEREBY:

 




(a)           

CERTIFIES
THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER;





 




(b)           

ACKNOWLEDGES
THAT THIS WAIVER AND THE PROVISIONS OF THIS SECTION WERE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN
DOCUMENTS;





 




(c)           

CERTIFIES
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY
MADE;





 




(d)           

AGREES
AND UNDERSTANDS THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH PROCEEDING OR
ACTION, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS OR ANY OTHER AGREEMENT, AND FURTHER AGREES THAT SUCH PARTY
SHALL NOT SEEK TO CONSOLIDATE ANY SUCH PROCEEDING OR ACTION WITH
ANY OTHER PROCEEDING OR ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED;





 




(e)           

AGREES
THAT THE BORROWER AND THE LENDER ARE EACH HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING OR ACTION AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF JURY TRIAL; AND





 




(f)           

REPRESENTS
AND WARRANTS THAT SUCH PARTY HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.





 




26.           

Forum. The Borrower hereby
irrevocably submits generally and unconditionally for itself and in
respect of its property to the non-exclusive jurisdiction of any
state court or any United States federal court sitting in the State
specified in the governing law section of this Agreement. The
Borrower hereby irrevocably waives, to the fullest extent permitted
by law, any objection that the Borrower may now or hereafter have
to the laying of venue in any such court and any claim that any
such court is an inconvenient forum. The Borrower hereby agrees and
consents that, in addition to any methods of service of process
provided for under applicable law, all service of process in any
such suit, action or proceeding in any state court or any United
States federal court sitting in the State specified in the
governing law section of this Agreement or in which any of the
collateral is located may be made by certified or registered mail,
return receipt requested, directed to the Borrower at its address
for notice set forth in this Agreement, or at a subsequent address
of which the Lender received actual notice from the Borrower in
accordance with the notice section of this Agreement, and service
so made shall be complete five (5) days after the same shall have
been so mailed. Nothing herein shall affect the right of the Lender
to serve process in any manner permitted by law or limit the right
of the Lender to bring proceedings against the Borrower in any
other court or jurisdiction.





 



 






 





 




27.           

Defined Terms. In all cases
where more than one party executes this Agreement as a Borrower,
then the term "Borrower" as used in this Agreement shall refer to
all such Persons jointly and severally, and to each of them, and
all promises, agreements, covenants, waivers, consents,
representations, warranties and other provisions in this Agreement
are made by and shall be binding upon each and every such
undersigned Person, jointly and severally, and the Lender may
pursue any Borrower hereunder without being required to pursue any
other Borrower. Whenever the context of any provisions hereof shall
require it, words in the singular shall include the plural, words
in the plural shall include the singular, and pronouns of any
gender shall include the other genders. Captions and headings in
this Agreement are for convenience only and shall not affect the
construction hereof. The terms "herein", "hereof" "hereto"
"hereunder" and similar terms refer to this Agreement and not to
any particular Section or subsection of this Agreement. The terms
"include" and "including" shall be interpreted as if followed by
the words "without limitation". For purposes of this Agreement,
"Person" or "Persons" shall include firms, associations,
partnerships (including limited partnerships), joint ventures,
trusts, corporations, limited liability companies, and other legal
entities, including governmental bodies, agencies, or
instrumentalities, as well as natural persons.





 




28.           

Patriot Act Notice. The Lender
hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the "Patriot Act") and 31 C.F.R. §
1010.230 (the "Beneficial Ownership Regulations"), the Lender is
required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of
the Borrower, a Beneficial Ownership Certification, and other
information that will allow the Lender to identify the Borrower in
accordance with the Patriot Act and the Beneficial Ownership
Regulations. The Borrower shall, promptly following a request by
the Lender, provide all documentation and other information that
the Lender requests in order to comply with its internal policies
and its ongoing obligations under "know your customer" and
anti-money laundering rules and regulations, including without
limitation, the Patriot Act and the Beneficial Ownership
Regulations.





 




29.           

Amendments. None of the terms
or provisions of this Agreement may be changed, waived, modified,
discharged or terminated except by instrument in writing executed
by the party or parties against whom enforcement of the change,
waiver, modification, discharge or termination is asserted. None of
the terms or provisions of this Agreement shall be deemed to have
been abrogated or waived by reason of any failure or failures to
enforce the same.





 




30.           

Governing Law. This Agreement
shall be governed by and construed, interpreted and enforced in
accordance with the laws of the State of Maryland.





 




31.           

Counterparts; Electronic
Signatures. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original for all
purposes; provided, however, that all such counterparts shall
together constitute one and the same instrument. In addition, the
parties hereto hereby acknowledge and agree that, for all purposes,
any Loan Document, or any other instrument or agreement (or
signature page thereto) signed and transmitted electronically shall
be treated as an original document. The signature of any party
thereon is to be considered as an original signature, and the
document transmitted is to be considered to have the same binding
effect as an original signature on an original
document.





 




32.           

Entire Agreement. The Loan
Documents constitute the entire understanding and agreement between
the Borrower and the Lender with respect to the transactions
arising in connection with the Loan, and supersede all prior
written or oral understandings and agreements between the Borrower
and the Lender with respect to the matters addressed in the Loan
Documents. In particular, and without limitation, the terms of any
commitment by the Lender to establish the Loan are merged into the
Loan Documents. Except as incorporated in writing into the Loan
Documents, there are no representations, understandings,
stipulations, agreements or promises, oral or written, with respect
to the matters addressed in the Loan Documents. If there is any
conflict between the terms, conditions and provisions of this
Agreement and those of any other instrument or agreement, including
any other Loan Document, the terms, conditions and provisions of
this Agreement shall prevail.





 

 

[Signatures
contained on following pages]

 

 











 





WITNESS the
signatures and seals of the parties hereto as of the day and year
first above written.

 

BORROWER:

 


	
WITNESS OR
ATTEST:

	
SeD HOME &
REITS INC.

	
 


	



	
 

	
 

	
 


	
_____________________________  


	
By:  

	
/s/ Charley
MacKenzie          
           
           
           
           
           
            
(SEAL)

	
 


	
 

	
 

	
Charley MacKenzie
 

	
 


	
 

	
 

	
Director
 

	
 






 

STATE OF
______________, COUNTY OF _______________, TO WIT:

 

I HEREBY CERTIFY,
that on this ______ day of __________, 2020, before me, the
undersigned Notary Public of said State, personally appeared
Charley MacKenzie, who acknowledged himself to be a Director of SeD
Home & REITs Inc., a Delaware corporation, known to me (or
satisfactorily proven) to be the person whose name is subscribed to
the within instrument, and acknowledged that he executed the same
in such capacity for the purposes therein contained.

 

WITNESS my hand and
Notarial Seal.

 

_____________________________

Notary
Public

 

My Commission
Expires:

 

 

 

[Signatures
continued on following page]

 

 

 



 



	










 






 





LENDER:

 

 


	
 WITNESS
OR ATTEST:

	
MANUFACTURERS AND
TRADERS TRUST COMPANY

	
 


	



	
 

	
 

	
 


	
 _____________________________ 




	
By:  

	
/s/ Barbara Simmons
             
           
           
           
           
           
         (SEAL)

	
 


	
 

	
 

	
Name: Barbara
Simmons  


	
 


	
 

	
 

	
Title: Group
VP 


	
 






 

 

STATE OF MARYLAND,
__________ OF __________, TO WIT:

 

I HEREBY CERTIFY,
that on this ______ day of ______________, 2020, before me, the
undersigned Notary Public of said State, personally appeared
__________________, who acknowledged himself/herself to be a Vice
President of Manufacturers and Traders Trust Company, a New York
banking corporation, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the within instrument, and
acknowledged that he/she executed the same for the purposes therein
contained as the duly authorized Vice President of said banking
corporation by signing the name of the banking corporation by
himself/herself as Vice President.

 

WITNESS my hand and
Notarial Seal.

 

_____________________________

Notary
Public

 

My Commission
Expires:

 

 

 



 



	










 






 






EXHIBIT A

 

BORROWER'S
DRAW REQUEST CERTIFICATION

 

The undersigned,
__________________________, on behalf of SeD HOME & REITS INC., a Delaware
corporation, (herein called the "Borrower"), hereby requests
disbursement of a portion of the proceeds of the Loan as
hereinafter set forth pursuant to the terms of the Loan Agreement
dated April ___, 2020 (the "Loan Agreement") executed by
and between the Borrower and MANUFACTURERS AND TRADERS TRUST COMPANY,
a New York banking corporation, (the "Lender") and represents,
warrants, covenants and agrees as follows:

 




1. 

He/she is duly
authorized to make this Certification and is fully cognizant of all
facts and matters herein stated.





 




2. 

The Borrower hereby
requests that an advance be made by the Lender in the amount of
$__________ from the proceeds of the Loan (as defined in the Loan
Agreement). The purposes for which such funds shall be utilized by
The Borrower are as follows:
________________________________________________________________________________
________________________________________________________________________________.
All sums advanced by the Lender pursuant to this Draw Request will
be used solely for the purposes outlined above, and for no other
purpose.





 




3. 

All funds
heretofore advanced by the Lender to the Borrower under the terms
of the Loan Agreement have been utilized by the Borrower to pay
those costs and obligations of the Borrower for which such sums
were requisitioned, and for no other purpose.





 




4. 

As of the date
hereof, the Borrower is in compliance with, and has satisfied, all
conditions precedent to the requested advance pursuant to the terms
of the Loan Agreement, the Note (as defined in the Loan Agreement)
and each of the other Loan Documents (as defined in the Loan
Agreement), unless waived in writing by the Lender.





 




5. 

No default or event
of default or any event which, with the giving of notice or the
lapse of time, or both, could become a default or event of default,
currently exists under the Loan Agreement, the Note or any of the
other Loan Documents.





 




6. 

As of the date
hereof, to the knowledge of the Borrower, no event has occurred or
condition exists which adversely affects the enforceability of any
of the Loan Documents or the financial condition of the Borrower or
either of the Guarantors (as defined in the Loan Agreement), or
which impairs the ability of the Borrower or either of the
Guarantors to fulfill its material obligations under the Loan
Documents, or which otherwise materially adversely affects the
Project (as defined in the Loan Agreement).





 




7. 

The representations
and warranties of the Borrower set forth in the Loan Agreement and
the other Loan Documents are reaffirmed hereby and are true and
correct in all material respects as of the date hereof and such
representations and warranties, along with the representations and
warranties contained herein, will be true and correct in all
material respects on and as of the date of such
disbursement.





 




8. 

The Borrower
understands that this Certification is made for the purpose of
inducing the Lender to make an advance to the Borrower and that, in
making any such advance, the Lender will rely upon the accuracy of
the matters stated in this Certification.





 

 

 




Dated:
___________________,
20__                                                                                                 

____________________________________





Authorized
Representative of the Borrower

 

 



 



	










 






 






EXHIBIT B

 

PARTIAL
RELEASE PROVISIONS

 

1.           Partial
Releases Generally. The Lender hereby acknowledges and
agrees that the Owner has subdivided and intends to subdivide
portions of the Property into separate residential building Lots
and other Parcels of land and to convey such Lots and Parcels to
third-parties (including NVR). Thus, notwithstanding anything
contained in the Deed of Trust or in any of the other Loan
Documents to the contrary, but except as otherwise expressly
provided in Section 2 below of this Exhibit B, upon the achievement
of each of the Release Conditions (as hereinafter defined), as
determined by the Lender in its sole, but reasonable discretion,
the Owner shall have the right to obtain a release of individual
Lots and Parcels from the lien of the Deed of Trust in connection
with a conveyance of the same to NVR pursuant to the terms of the
NVR Purchase Contracts or to another third-party purchaser under a
contract of sale approved by the Lender. The satisfaction of each
and every one of the following conditions (hereinafter referred to
as the "Release Conditions") shall be a condition precedent to the
right of the Owner to obtain a release of a Lot or Parcel from the
lien and effect of the Deed of Trust:

 




(a)           

The Lender shall
have previously received and approved, which approval shall not be
unreasonably withheld or delayed, a legal and valid subdivision
plat covering that portion of the Property in which the Lot or
Parcel proposed to be released shall be located, approved (to the
extent necessary) by all required governmental authorities, which
shall confirm (i) that the Lot or Parcel which is proposed to be
released is a separate and distinct lot or parcel of property, and
(ii) that the balance of the Property remaining subject to the lien
of the Deed of Trust conforms in all respects with all required
zoning and building codes, rules and regulations, with adequate
means of ingress and egress from a public roadway, together with
such cross easement agreements as may be deemed reasonably
necessary by the Lender;





 




(b)           

Unless such Lot or
Parcel is being conveyed pursuant to the terms of the NVR Purchase
Contracts, the Lender shall have previously received and approved,
which approval shall not be unreasonably withheld or delayed, a
fully executed contract of sale covering the Lot or Parcel proposed
to be released, which shall provide for a purchase price acceptable
to the Lender in all respects and which shall provide sufficient
sums for the payment of the Release Fee required pursuant to the
terms hereof;





 




(c)           

At the time of the
request by the Owner for a release of such Lot or Parcel from the
lien of the Deed of Trust, there shall not exist any Event of
Default hereunder or under any of the other Loan Documents, nor any
condition or state of facts which after notice and/or lapse of time
would constitute an Event of Default hereunder or under any of the
other Loan Documents;





 




(d)           

At the time of the
release of such Lot or Parcel from the lien of the Deed of Trust,
the Owner shall have paid to the Lender a release fee (a "Release
Fee") in an amount equal to the amount required for the release of
such Lot or Parcel pursuant to the terms of the Development Loan
Agreement, and such Release Fee shall have been applied to the sums
then outstanding under the Development Loan in accordance with the
terms thereof; provided, however, that in the event that at the
time of the sale of such Lot or Parcel, no Release Fee is payable
by the Owner under the terms of the Development Loan Agreement as a
result of the fact that the Development Loan has been repaid in
full and all outstanding Letters of Credit, if any, issued by the
Lender under the Development Loan have been returned to the Lender
or shall otherwise be fully cash collateralized, or for any other
reason, then the Lender shall have the right to require that the
Owner pay to the Lender an amount equal to the Release Fee that
would have been payable for the release of such Lot or Parcel under
the terms of the Development Loan Agreement and either apply such
sum to the payment of amounts outstanding under the Loan, in such
order or manner as the Lender may require, or deposit such sum into
a deposit account maintained by the Lender and pledged to the
Lender as additional collateral for the Loan pursuant to the terms
of an assignment and pledge of deposit account in form and
substance satisfactory to the Lender in all respects;





 




(e)           

At the time of the
release of such Lot or Parcel from the lien of the Deed of Trust,
there shall be not less than $2,600,000 on deposit in the Cash
Collateral Account; and





 




(f)           

The Owner shall
have paid all reasonable out-of-pocket costs and expenses incurred
by the Lender in connection with such release, including, without
limitation, legal fees and all recording costs.





 

2.           
Release of Roadways,
Public Parks, School Site and Other Common Areas. In
addition, provided that no Event of Default shall then exist
hereunder or under any of the other Loan Documents, the Lender
agrees to release from the lien of the Deed of Trust any areas
within the Property designated for use as public roadways, public
parks, a school or as "common areas" for no additional
consideration at the time that such areas are properly conveyed to
the appropriate governmental authority or to the appropriate owners
association established for such purpose, so long as the Lender
shall have theretofore reviewed and approved (which approval shall
not be unreasonably withheld or delayed) (a) the final recorded
subdivision plat or plats approved by all appropriate governmental
authorities pursuant to which such public roadways or other areas
shall have been formally established, as may be required, (b) if
applicable, all documents and agreements establishing the owners'
association to which such areas shall be conveyed, and (c) the deed
and all other documents pursuant to which such areas shall be
conveyed; all of which must be reasonably acceptable in all
respects to the Lender.

 

3. Release of Lien on Front Foot
Assessments. Furthermore, provided that no Event of Default
shall then exist hereunder or under any of the other Loan
Documents, at the time of the release by the Lender of any Lot or
Parcel within the Property in accordance with the terms of this
Exhibit B, the Lender agrees to also release from the effect of its
lien and security interest under the Deed of Trust and the other
Loan Documents any interest that the Lender may have in and to the
front benefit charges and assessments covering such released Lot or
Parcel.

 

4.           
Effect of Partial
Releases. Any release by the Lender of any part of the
Property from the lien of the Deed of Trust shall not, in any
manner, affect or impair the lien or priority of the Deed of Trust
as to the remainder of the Property.

 

5.           
Payment of Additional
Charges. In addition to any other charges payable by the
Owner pursuant to the terms hereof, of the Deed of Trust or of any
of the other Loan Documents, the Owner agrees, to the extent not
prohibited by Law, to pay all governmental charges, and all of the
Lender's fees and expenses, for any full or partial release of the
Deed of Trust and any other security interests and liens securing
the Loan, which charges, fees and expenses shall be payable at the
time of such release.

 

 

 

 



 



	










 






 






EXHIBIT C

 

FINANCIAL
COVENANTS

 

The Borrower hereby
covenants and agrees to comply, and to cause each of the Guarantors
to comply, with each and every one of the financial covenants
hereinafter set forth, at the times and in the manner
specified:

 

Required Net
Worth. The Guarantors shall maintain at all times during the
term of the Loan a combined minimum Net Worth in an aggregate
amount equal to not less than $20,000,000, which shall be tested
semi-annually as of June 30 and December 31 of each year. For the
purposes hereof, the term "Net Worth" shall mean, at the time of
determination, the excess of the tangible assets of the Guarantors
over the Guarantors' liabilities, as reasonably determined by the
Lender.