**Exhibit 10.11**

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**COMPLETION GUARANTY**

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****THISCOMPLETION GUARANTY**** (this “Completion ****Guaranty********”****)dated as of January 27, 2005, is made by COMSTOCK HOMEBUILDING COMPANIES, INC.,a Delaware corporation (“****Guarantor********”****),in favor of CORUS BANK, N.A. (“****Lender********”****).

 

**R E C I T A L S:**

** **

A.            COMSTOCKPENDERBROOK, L.C., a Virginia limited liability company (“Borrower”),and Lender have entered into a loan in the maximum principal sum of $67,000,000(the “Loan”) pursuant to a loan agreement of even date herewith (the “LoanAgreement”) and certain other documents.

 

B.            Inconnection with the Loan, Borrower has executed and delivered to Lender apromissory note, dated the date hereof (said note, together with any extensionsthereof or modifications or amendments thereto and any notes issued insubstitution or exchange therefor, being hereinafter referred to collectivelyas the “Note”).

 

C.            Tosecure the payment of the obligations and liabilities of Borrower to Lenderunder the Loan Agreement and the Note, Borrower has executed and delivered toLender a deed of trust and certain other documents and instruments evidencingand securing the Loan, including but not limited to a Deed of Trust withAbsolute Assignment of Leases and Rents, Security Agreement and Fixture Filingfor the Loan, dated as of the date hereof (the “Deed of Trust”), whichis a lien on the Property.

 

D.            Lenderhas required, as a condition precedent to making the Loan, that Guarantorexecute and deliver this Completion Guaranty.

 

E.             Guarantorhas a financial interest in Borrower and it will be to the direct financialinterest and benefit of Guarantor to assist Borrower to obtain the Loan fromLender.

 

F.             Guarantorhereby acknowledges that this Completion Guaranty is required by Lender as acondition precedent and inducement to Lender to make the Loan.

 

NOW, THEREFORE,FOR VALUE RECEIVED, in consideration of the foregoing Recitals, each of whichis an integral part hereof and this Completion Guaranty shall be construed inlight thereof, and in consideration of Lender making the Loan to Borrower andfor other good and valuable consideration, the receipt and adequacy of which ishereby acknowledged, Guarantor agrees as follows:

 

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# 1.             Definitions.

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## (a)           Except asotherwise set forth herein, all capitalized terms used but not defined hereinshall have the meanings ascribed to such terms in the Deed of Trust or, if notdefined therein, in the Loan Agreement, which definitions are incorporatedherein by reference as if fully set forth herein.

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## (b)           As usedherein, the term “Loan Party” shall mean any one or more of Borrower,Guarantor and any other Person which is a party to this Completion Guaranty,the Environmental Indemnity Agreement, the Limited Guaranty, or the LoanDocuments, other than Lender.

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## (c)           Allreferences in this Completion Guaranty, the Environmental Indemnity Agreement,the Limited Guaranty, and every other Loan Document to the Loan Agreement, theNote, the Deed of Trust, the Environmental Indemnity Agreement, the LimitedGuaranty, and each and every other Loan Document shall mean the Loan Agreement,the Note, the Deed of Trust, the Environmental Indemnity Agreement, the LimitedGuaranty, and each and every other Loan Document and all modifications,amendments, supplements, extensions, replacements or restatements thereof orthereto.

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# 2.             Guaranty of Completion.

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## (a)           Guarantorhereby absolutely, irrevocably, and unconditionally guarantees, as a principalobligor and not as a surety, to Lender (collectively, the “****Guaranteed Obligations****”):(1) the payment of all costs and the performance of the completion of theProject free and clear of all claims for mechanic’s and materialmen’s Liens andin accordance with:  (i) all applicableLaws, (ii) the Project Budget, (iii) the Construction Documents, (iv) theProject Schedule and (iv) and the terms and conditions of the Loan Agreement(whether before or after any foreclosure or deed-in-lieu thereof and whetherexecuted by Borrower, Lender or a receiver); (2) to pay all amounts required tomaintain the Loan In Balance through the completion of the Project, as requiredpursuant to the terms of the Loan Agreement, including amounts to pay interestat the Interest Rate or Default Rate (each as defined in the Note), asapplicable; (3) to pay all Enforcement Costs (as hereinafter defined); and (4)the payment of all losses, costs, expenses, liabilities and damages incurred byLender arising from any failure of Guarantor to complete the Project inaccordance with clause (1) above. Guarantor hereby expressly acknowledges that after the date hereof theProject Budget may be modified, amended, and supplemented in accordance withthe terms of the Loan Agreement in material respects without notice to or theapproval of Guarantor and Guarantor hereby expressly waives such notice andopportunity to approve.  The GuaranteedObligations shall include all amendments, modifications and supplements to theProject Budget, the Project Schedule and the Construction Documents, whether ornot made with Guarantor’s knowledge or consent.

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## (b)           In theevent that:

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### (i)            Borrowerfails to proceed diligently and make regular progress toward completion of theProject, as determined by Lender in its reasonable determination;

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### (ii)           in Lender’sreasonable determination, Borrower is likely to be unable to complete theProject free of mechanic’s and materialmen’s Liens and claims therefor, incompliance and in accordance with all Laws and Permits, the Project Budget, andthe terms and conditions of the Loan Agreement that pertain to the constructionof the Project;

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### (iii)          Lender,its agents or a receiver takes possession of the Project prior to thecompletion of construction thereof by reason of any Event of Default under theLoan Agreement or any other Loan Document;

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### (iv)          there is awritten disapproval by Lender at any time of any construction at the Projectfor failure to comply with the Loan Agreement, and Borrower fails to cause thesame to be corrected to the reasonable satisfaction of Lender in accordancewith the provisions of the Loan Agreement;

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### (v)           an Eventof Default shall occur under the Loan Agreement or any other Loan Document; or

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### (vi)          the Loan isnot In Balance and the Loan is not made to be In Balance in accordance with theprovisions of the Loan Agreement within the time period provided therefor,

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then, in any such event, Guarantor agrees, on writtendemand by Lender:  (1) to commence andtimely pay and perform the Guaranteed Obligations in accordance with the termsof the Loan Agreement and the other Loan Documents; (2) to assume allresponsibility for and to cause the Project to be completed free of mechanic’sand materialmen’s Liens and claims therefor, in accordance with all applicableLaws and in accordance with the terms and conditions of the Loan Agreement, theConstruction Documents and the Project Budget; (3) to pay any and all costs andexpenses necessary for said timely and lien-free completion of the Project,even if said costs and expenses are in excess of the Project Budget or anyamendments thereto; (4) to deposit with Lender any amount then requiredpursuant to the terms of the Loan Agreement to cause the Loan to be In Balance,in accordance with the terms of the Loan Agreement;  and (5) to indemnify and hold Lender harmlessfrom and against any and all loss, damage, injury, liability or cost or expenseLender may suffer or incur in connection with the completion of the Project,except to the extent caused by Lender’s gross negligence or willful misconduct.

 

## (c)           IfGuarantor fails to commence and pursue diligently the performance of theGuaranteed Obligations within ten (10) Business Days after its receipt ofwritten notice from Lender demanding the performance of Guarantor, then, eitherbefore or after pursuing any other remedy of Lender against Guarantor, Borroweror any other Loan Party, and regardless of whether Lender shall ever pursue anysuch other remedy, Lender shall have the right, but not the obligation, tocomplete the Project or call upon any other reputable parties to complete the Project(including the right to replace any contractor and any or all materialsubcontractors), with such changes or modifications to the ConstructionDocuments or the Project Budget as Lender deems necessary in Lender’sreasonable discretion, and Lender shall have the right to expend such sums asLender in its sole and exclusive discretion deems proper in order to completethe 

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## Project and toreceive reimbursement from Guarantor. During the course of any construction undertaken by Lender or by anyother party on behalf of Lender, Guarantor shall pay within ten (10) BusinessDays after demand any and all amounts due to contractors, subcontractors andmaterial suppliers and for permits, licenses, entitlements, bonds, taxes,assessments and other items necessary or desirable in connection therewith,subject to the rights to contest granted to Borrower pursuant to the LoanAgreement. Lender may at any time require Guarantor to perform or supervise theperformance of such work in lieu of Lender or any party engaged by Lender.  In the event Guarantor does not complete theProject and Lender does not complete the Project as set forth above, andLender, any affiliate of Lender, or a third party acquires title to the Propertyby foreclosure or deed in lieu thereof, then Guarantor shall pay to Lender, onthe date such Person acquires title to the Property (the “Acquisition Date”),on demand an amount (the “Post-Acquisition Liability Amount”) equal tothe difference between: (a) the then outstanding Secured Obligations and (b)the net proceeds accepted by Lender, in its reasonable discretion, minus actual(including in-house reasonable attorney fees) costs to foreclose upon theProperty (either through a deed in lieu of foreclosure or pursuant to a saleoccurring as part of a judicial or non-judicial foreclosure) as a result ofsale of the Property: (1) to a third party after Lender receives title to theProperty from a deed-in-lieu of foreclosure, (2) to a third party pursuant to asale occurring as part of a judicial foreclosure, or (3) based on Lender’s bidat a judicial sale. If Guarantor fails to pay the Post-Acquisition LiabilityAmount in full within ten (10) Business Days after demand by Lender, Guarantorshall pay interest at the Default Rate set forth in the Note on any unpaidportion of the Post-Acquisition Liability Amount beginning from the periodbeginning on the Acquisition Date and ending on the date of Guarantor’s paymentthereof. Payment of the Post-Acquisition Liability Amount will not affect anysurviving Secured Obligations or Guarantor’s liability under any other LoanDocument. The Guaranteed Obligations shall be deemed to include thePost-Acquisition Liability Amount. Lender may at all times accept a deed to theProperty in lieu of foreclosure or may refuse to accept a deed to the Propertyin lieu of foreclosure, without in any way affecting the obligations ofGuarantor under this Completion Guaranty.

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## (d)           TheGuaranteed Obligations shall not be affected by any errors or omissions ofBorrower, any contractor, any architect, any subcontractor or any agent oremployee of any of them in the design, supervision or performance of the workdescribed in the Loan Agreement, it being understood that such risk is assumedby Guarantor. All amounts required to be paid by the terms hereof and allobligations required to be performed by the terms hereof shall be included inthe Guaranteed Obligations and are payable by Guarantor within fifteen (15)Business Days after demand therefor. Neither the completion of the Project nor failure of said parties tocomplete the Project shall relieve Guarantor of any liability hereunder, rathersuch liability shall be continuing and may be enforced by Lender to the endthat the Project shall timely be completed as contemplated by the LoanAgreement and the Construction Documents, lien-free, without loss, expense,injury or liability of any kind to Lender, except to the extent caused byLender’s gross negligence or willful misconduct.

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## Upon the occurrence of any event set forth in Section2(b), Guarantor agrees immediately after receipt of notice and demand byLender, to pay and perform the Guaranteed Obligations regardless of anydefense, right of set-off or claims which Borrower, Guarantor or any other LoanParty may have against Lender.  Lendermay apply any and all such payments to the Secured Obligations in any order ofpriority as Lender shall, in its sole discretion, determine.  No

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## payment madepursuant to this Completion Guaranty shall reduce or limit the amount payableby Guarantor hereunder.  Nothingcontained in this Section 2 shall be deemed to limit Guarantor’sliability under the Environmental Indemnity Agreement, the Limited Guaranty orany other Loan Document to which Guarantor is a party.

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# 3.             IrrevocableGuaranty.

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## (a)           **This is an absolute, irrevocable, present and continuing guaranty ofpayment and performance of the Guaranteed Obligations and not of collection.**

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## (b)           The obligationsof Guarantor hereunder are independent of and in addition to the obligations ofGuarantor, Borrower and any other Loan Party under the Environmental IndemnityAgreement, the Limited Guaranty, or any other Loan Document and a separateaction or actions may be brought or prosecuted against Guarantor, whether anyaction is brought against Borrower or any other Loan Party or whether Borroweror any other Loan Party is joined in any action or actions.  In any action to enforce this CompletionGuaranty, Lender, at its election, may proceed against Guarantor, with orwithout:  (i) joining Borrower or anyother Loan Party in any such action; (ii) commencing any action against orobtaining any judgment against Borrower or any other Loan Party; or (iii) commencingany proceeding to enforce the Note or the Loan Agreement or to realize upon allor any part of the Property; provided,however, nothing hereincontained shall preclude Lender from suing on the Note and the Loan Agreementor foreclosing the Loan Documents or from exercising any other rights, remediesor power under the Environmental Indemnity Agreement, the Limited Guaranty, orany Loan Document, and if such foreclosure or other rights, powers or remediesare availed of, only the net proceeds therefrom, after deduction of all chargesand expenses of every kind and nature whatsoever, shall be applied in reductionof the Secured Obligations.  Lender shallnot be required to institute or prosecute proceedings to recover any deficiencyas a condition of any payment hereunder or enforcement hereof.  At any sale of the Property, whether byforeclosure or otherwise, Lender may, at its discretion, purchase all or anypart of such the Property, offered for sale for its own account, and may applyagainst the amount bid therefor the unpaid balance or any part thereof to theSecured Obligations.

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## (c)           Theobligations and liabilities of Guarantor hereunder shall not be diminished oroffset by any payment by Guarantor under any other agreement, document, orinstrument entered into by Guarantor in favor of Lender, including, withoutlimitation, the Limited Guaranty and the Environmental Indemnity Agreement.

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# 4.             Returnof Payments.  Guarantor agrees that,if at any time all or any part of the payments theretofore applied by Lender toany of the Secured Obligations, but only to the extent of the GuaranteedObligations, is rescinded or returned by Lender or Lender is required to payany amount thereof to any other Person for any reason whatsoever (including,without limitation, the insolvency, bankruptcy, liquidation or reorganizationof any party or the determination that such payment is held to constitute apreference under the bankruptcy laws): (i) such Secured Obligations, but only to the extent of the GuaranteedObligations, shall, for the purposes of this Completion Guaranty, be deemed tohave continued in existence to the extent of such payment, notwithstanding suchapplication by Lender, and this Completion Guaranty shall continue to beeffective or be reinstated, as the case may be, as to such Secured Obligations,but only to the

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# extent of the Guaranteed Obligations, all as thoughsuch application by Lender had not been made and Guarantor agrees to pay suchamount to Lender upon demand; and (ii) any security interest granted byGuarantor to Lender to secure Guarantor’s performance under this CompletionGuaranty shall be deemed to be reinstated notwithstanding any release by Lenderof such security interest or pledge. Guarantor shall execute any document, instrument or financing statementnecessary or desirable to effect this provision.

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# 5.             NoDischarge.  Guarantor agrees that theobligations, covenants and agreements of Guarantor under this CompletionGuaranty shall not be discharged, affected or impaired by:

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## (a)           therenewal or extension of time for the payment and/or performance of theobligations under the Environmental Indemnity Agreement, the Limited Guarantyor any of the Secured Obligations under any other Loan Document, whether madeor performed with or without notice to or the knowledge or consent ofGuarantor;

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## (b)           anymodification or amendment of the Loan Documents, with or without notice to orthe knowledge or consent of Guarantor, including but not limited to any furtheror future extensions of credit which shall become a part of the SecuredObligations, any change or modification of the interest rate, payment terms,maturity date or any other covenant of any agreement of Borrower or any otherLoan Party;

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## (c)           anytransfer, waiver, compromise, settlement, modification, surrender, or releaseof the Note, the Loan Agreement, the Environmental Indemnity Agreement, theLimited Guaranty, or any of the other Loan Documents;

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## (d)           therelease or agreement not to sue without reservation of rights of Borrower orany other Loan Party;

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## (e)           theexistence of any defenses to enforcement of the Note, the Loan Agreement, theEnvironmental Indemnity Agreement, the Limited Guaranty or any of the otherLoan Documents, other than payment in full of all the Secured Obligations;

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## (f)            anyfailure, omission, delay or inadequacy, whether entire or partial, of Lender toexercise any right, power or remedy regarding the Loan or to enforce or realizeupon (or to make Guarantor party to the enforcement or realization upon) any ofLender’s security for the Loan, including, without limitation, the Property;

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## (g)           theexistence of any set-off, claim, reduction, or diminution of the SecuredObligations, or any defense of any kind or nature, which Guarantor may haveagainst Borrower, Borrower’s members or any other Loan Party or which Borrower,Guarantor or any other Loan Party has against Lender;

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## (h)           theapplication of payments received from any source to the payment of anyobligation other than the Secured Obligations, even though Lender mightlawfully have elected to apply such payments to any part or all of the SecuredObligations;

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## (i)            theaddition of any and all other endorsers, guarantors, obligors and other personsliable for the payment and/or performance of the Secured Obligations, and theacceptance of any other security for the payment and/or performance of theSecured Obligations;

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## (j)            the poweror authority or lack of power or authority of Borrower to execute and deliverthe Note or the Loan Agreement, or of Borrower or any other Loan Party toexecute, acknowledge or deliver any one or more of the Loan Documents;

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## (k)           thevalidity or invalidity of the Note, the Loan Agreement, the EnvironmentalIndemnity Agreement, the Limited Guaranty, or the other Loan Documents;

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## (l)            theexistence or non-existence of Borrower or any other Loan Party as a legalentity;

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## (m)          thetransfer by Borrower or any other Loan Party of all, or any part of, or anyinterest in all or any part of the Property;

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## (n)           theinstitution by or against Borrower, Borrower’s members or any other Loan Partyof bankruptcy, reorganization, readjustment, receivership or insolvencyproceedings of any nature, or the disaffirmation of the Environmental IndemnityAgreement, the Limited Guaranty, or any one or more of the Loan Documents inany such proceedings or otherwise;

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## (o)           anyirregularity or the unenforceability (by reason of any Governmental Authority’spurporting to reduce or amend or otherwise affect the Secured Obligations), orthe release or discharge of Borrower or Borrower’s members in any receivership,bankruptcy, winding-up or other creditor proceedings;

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## (p)           thedetermination by a court of competent jurisdiction that Borrower or any otherLoan Party is not required to pay and/or perform the Secured Obligationspursuant to operation of law;

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## (q)           theacceptance by Lender of payment of a part of the Secured Obligations, or anyfailure, neglect or omission on the part of Lender to realize on or protect anyof the Secured Obligations or any real estate, personal property, or mortgageor lien security given as security therefor, or to exercise any lien upon, orright of appropriation of, any monies, credits or property of Borrower towardliquidation of the Secured Obligations;

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## (r)            thefailure by Lender or anyone acting on behalf of Lender to perfect or maintainperfection of any lien or security interest upon any part of the Property givenat any time to secure repayment of the Secured Obligations; or

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## (s)           any rightor claim whatsoever which Guarantor may have against Borrower, Borrower’smembers, any other Loan Party or Lender or the successors or assigns of any ofthem;

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all whether or not Guarantor shall have had notice or knowledgeof any act or omission referred to in the foregoing clauses (a) through (s) ofthis Section.

 

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**Guarantor intends that Guarantorshall remain liable hereunder as a principal obligor for the performance of theGuaranteed Obligations until the Guaranteed Obligations shall have beenindefeasibly paid in full and all the Guaranteed Obligations performed inaccordance with the terms and conditions of this Completion Guaranty, the Noteand the other Loan Documents, notwithstanding any fact, act, event oroccurrence which might otherwise operate as a legal or equitable discharge of asurety or guarantor.**

 

# 6.             ApplicationOf Amounts Received.  Any amountsreceived by Lender from whatever source on account of the Secured Obligationsmay be applied by Lender toward the payment of the Guaranteed Obligations, andin such order of application, as Lender may from time to time elect, inaccordance with the provisions of the Loan Documents.  Notwithstanding the foregoing, any amountsreceived by Lender from whatever source on account of the GuaranteedObligations shall be applied by Lender toward the payment of the GuaranteedObligations (provided that in no event shall lender’s receipt and applicationof NOI or Unit Release Payments be considered received on account of or appliedto the Guaranteed Obligations), and in such order of application, as Lender mayfrom time to time elect, in accordance with the provisions of the LoanDocuments.

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# 7.             Waiver.

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## (a)           Guarantorexpressly waives:

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### (i)            notice ofthe acceptance by Lender of this Completion Guaranty;

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### (ii)           notice ofthe existence, creation, payment or nonpayment of the Secured Obligations orany modification, extension, or amendment thereof;

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### (iii)          presentment,demand, protest, notice of protest, notice of presentment, notice of dishonor,default, non-payment, maturity, release, compromise, settlement, extension,renewal of the Loan or any obligation under the Loan Documents, notice ofmaturity, release, compromise or settlement of any or all commercial paper,accounts, contract rights, documents, instruments, chattel paper and guaranteesat any time held by Lender with respect to the transactions contemplated in theLoan Documents, and all other notices whatsoever;

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### (iv)          any failureby Lender to inform Guarantor of any facts Lender may now or hereafter knowabout Borrower, any other Loan Party, the Property, the Secured Obligations orthe transactions contemplated by the Loan Documents;

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### (v)           notice ofany and all changes in the terms, covenants or conditions of the Note or of theother Loan Documents, including extension and renewal;

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### (vi)          any and allsubstitutions, exchanges or releases of all or any part of the Property;

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### (vii)         therelease or agreement not to sue without reservation of rights of anyone liablein any way for the repayment of the Secured Obligations;

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### (viii)        allrights to notice and a hearing prior to Lender’s taking possession or controlof, or to Lender’s replevy, attachment or levy upon the Property;

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### (ix)           any bondor security which might be required by any court prior to allowing Lender toexercise any of Lender’s remedies;

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### (x)            therelease or agreement not to sue without reservation of rights of anyone liablein any way for repayment of the Loan; and

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### (xi)           thebenefit of all valuation, appraisement, extension and exemption laws;

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it being understood and agreed that Lender has no dutyto so inform and that Guarantor is fully responsible for being and remaininginformed by Borrower of all circumstances bearing on the existence or creationof the risk of nonpayment and/or nonperformance of the Secured Obligations.

 

## (b)           Credit maybe granted or continued from time to time by Lender to Borrower without notice toor authorization from Guarantor, including but not limited to making additionalloans or other financial accommodations by Lender to Borrower or any other LoanParty regardless of the financial or other condition of Borrower, any otherLoan Party or the Property and Guarantor agrees that the obligations, covenantsand agreements of Guarantor under this Completion Guaranty shall not bedischarged, affected or impaired thereby.

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## (c)           Nomodification or waiver of any of the provisions of this Completion Guarantyshall be binding upon Lender or Guarantor except as expressly set forth in awriting duly signed and delivered on behalf of Lender.

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## (d)           Guarantorfurther agrees that any exculpatory language pertaining to Borrower or to anyother Loan Party contained in the Note, the Loan Agreement or any other LoanDocument shall in no event apply to this Completion Guaranty, and will notprevent Lender from proceeding against Guarantor to enforce this CompletionGuaranty.

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## (e)           Guarantorhereby waives the benefit of any law that would otherwise restrict or limitLender in the exercise of its right, which is hereby acknowledged, toappropriate without notice at any time hereafter any indebtedness or obligationmatured or unmatured owing from Lender to Guarantor.  Lender may, from time to time, without demandor notice of any kind, appropriate and apply toward the payment of such of theGuaranteed Obligations, and in such order of application, as Lender may, fromtime to time, elect any and all such balances, credits, deposits, accounts,moneys, cash equivalents and other assets, or in the name of Guarantor, then orthereafter held by or under the control of Lender.  Guarantor hereby assigns and transfers toLender any and all cash, negotiable instruments, documents of title, chattelpaper, securities, certificates of deposit, deposit accounts, other cashequivalents and other assets of Guarantor, in the possession or control ofLender for any purpose.

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## (f)            Guarantorhereby waives the filing of a claim with a court in the event of receivershipor bankruptcy of Borrower and waives every defense, cause of action,counterclaim

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## or setoff whichGuarantor may now have or hereafter may have to any action by Lender inenforcing this Completion Guaranty, including, without limitation, everydefense, counterclaim or setoff which Guarantor may now have, or hereafter mayhave, against Borrower, any other Loan Party or any other party liable toLender in any manner.  Guarantor ratifiesand confirms whatever Lender may do pursuant to the terms hereof and withrespect to all or any part of the Property and agrees that Lender shall not beliable for any error in judgment or mistakes of fact or law; provided thatnothing contained herein shall be deemed to limit Lender’s liability for grossnegligence or willful misconduct. Guarantor hereby agrees that Guarantor may be joined as a partydefendant in any legal proceeding (including, but not limited to, a foreclosureproceeding) instituted by Lender against Borrower or any other Loan Party.

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# 8.             EnforcementCosts:  If:

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## (a)           thisCompletion Guaranty, the Loan Agreement, the Note, the Environmental IndemnityAgreement, the Limited Guaranty or any other Loan Document is placed in thehands of an attorney for collection or enforcement or is collected or enforcedthrough any legal proceeding;

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## (b)           anattorney is retained to represent Lender in any bankruptcy, reorganization,receivership, or other proceedings affecting creditors’ rights and involving aclaim under this Completion Guaranty, the Note, the Environmental IndemnityAgreement, the Limited Guaranty or any Loan Document;

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## (c)           anattorney is retained to protect or enforce the security interest created by anyone or more of the Loan Documents; or

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## (d)           anattorney is retained to represent Lender in any other proceedings whatsoever inconnection with a default by Guarantor under this Completion Guaranty, or adefault by Borrower or any other Loan Party in connection with the Loan, any ofthe other Loan Documents, the Environmental Indemnity Agreement, the LimitedGuaranty or the Property, or to protect or preserve any property which iscollateral for the Loan,

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## then Guarantor shall pay to Lender upon demand allreasonable attorneys’ fees, costs and expenses, including without limitation,court costs, filing fees, recording costs, expenses of foreclosure, titleinsurance premiums, minutes of foreclosure and all other costs and expenseincurred in connection therewith (all of which are referred to herein as “EnforcementCosts”), in addition to all other amounts due hereunder. Any EnforcementCosts, together with interest thereon at the Interest Rate (as defined in theNote), shall be a part of the Secured Obligations, secured by the Property,payable by Guarantor to Lender in accordance with the provisions of thisCompletion Guaranty and the Loan Documents. Any reference to attorney’s fees in this Guaranty, the EnvironmentalIndemnity Agreement, the Limited Guaranty or in any other Loan Document shall includefees of any separate law firm or in-house counsel employed by Lender inconnection with the Loan. Notwithstanding anything to the contrary contained herein, fees ofin-house counsel shall be charged at rates of medium to large sized law firmsin the City of Chicago, Illinois for attorneys of comparable expertise andexperience.

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# 9.             TransferOf Secured Obligations. Notwithstanding any assignment or transfer of the Secured Obligations orany interest therein by Lender, all portions of such Secured Obligations whichare Guaranteed Obligations, including those assigned or transferred, shall beand remain Guaranteed Obligations for the purposes of this Completion Guaranty,and each and every immediate and successive assignee or transferee of theSecured Obligations or interest shall, to the extent of the GuaranteedObligations or interests assigned or transferred, be entitled to the benefitsof this Completion Guaranty to the same extent as if such assignee ortransferee were Lender; providedhowever, that unless theassignor or transferor shall otherwise consent in writing, the assignor ortransferor shall have an unimpaired right, prior to and superior to that of itsassignee or transferee, to enforce this Completion Guaranty for its benefit asto such portions of the Guaranteed Obligations or interests therein notassigned or transferred.

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# 10.           Subordination.    Any indebtedness or other obligation ofBorrower, now or hereafter held by or owing to Guarantor, is herebysubordinated to the payment and performance in full of the Secured Obligations.Guarantor hereby covenants and agrees that it will not accept payment ofprincipal, interest or any other amount of any indebtedness or other obligationof Borrower to Guarantor. Such indebtedness or obligation of Borrower toGuarantor shall, at the option of Lender, be collected, enforced and receivedby Guarantor as trustee for Lender, and shall be paid over to Lender on accountof the Secured Obligations, but without impairing or affecting in any mannerthe liability of Guarantor under the other provisions of this CompletionGuaranty.  Nothing in this Section orelsewhere in this Completion Guaranty shall be construed as Lender’sauthorization of or consent to the creation or existence of any suchindebtedness of Borrower to Guarantor.

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# 11.           GoverningLaw; Interpretation.

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## (a)           ThisCompletion Guaranty has been negotiated, executed and delivered in FairfaxCounty, Virginia and shall be governed by and construed in accordance with theinternal laws of the Commonwealth of Virginia, without reference to theconflicts of law principles of that state. In any controversy, dispute or question arising hereunder, under theEnvironmental Indemnity Agreement, the Limited Guaranty or under the other LoanDocuments, Guarantor consents to the exercise of jurisdiction over its personand property by any court of competent jurisdiction situated in theCommonwealth of Virginia (whether it be a court of such State, or a court of theUnited States of America situated in such State), and in connection therewith,agrees to submit to and be bound by, the jurisdiction of such court upon Lender’smailing of process by registered or certified mail, return receipt requested,postage repaid, to Guarantor at its address for receipt of notices under thisCompletion Guaranty.

##  

## (b)           Theheadings of sections and paragraphs in this Completion Guaranty are forconvenience only and shall not be construed in any way to limit or define thecontent, scope, or intent of the provisions hereof.  As used in this Completion Guaranty, thesingular shall include the plural, and masculine, feminine, and neuter pronounsshall be fully interchangeable, where the context so requires.  If any provision of this Completion Guarantyor any paragraph, sentence, clause, phrase, or word, or the applicationthereof, in any circumstances, is adjudicated by a court of competentjurisdiction to be invalid, the validity of the remainder of this CompletionGuaranty shall be construed as if such invalid part were never included herein.

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## 11

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## (c)           Time is ofthe essence of this Completion Guaranty.

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## (d)           Allpayments to be made hereunder shall be made in currency and coin of the UnitedStates of America which is legal tender for public and private debts at thetime of payment.

##  

## (e)           Whereverpossible each provision of this Completion Guaranty shall be interpreted insuch manner as to be effective and valid under applicable Law, but if any provisionof this Completion Guaranty shall be prohibited by or invalid under such Law,such provision shall be ineffective to the extent of such prohibition orinvalidity, without invalidating the remainder of such provision or theremaining provisions of this Completion Guaranty.

##  

## (f)            It isagreed that Guarantor’s liability is independent of any other guaranties at anytime in effect with respect to all or any part of Borrower’s indebtedness toLender, including, but not limited to, the Limited Guaranty, and that Guarantor’sliability hereunder may be enforced regardless of the existence of any suchother guaranties.

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# 12.           Singularand Plural; Joint and Several Liability. If there is more than one Borrowerentity, all references to Borrower herein shall be Borrower or any one or moreof them.  All obligations and liabilitiesof Guarantor hereunder are in addition to, not in lieu of and are independentof:  (a) all obligations of Borrowerunder any other Loan Document, including the Note and the Loan Agreement; and(b) any obligation of Guarantor under the Environmental Indemnity Agreement,the Limited Guaranty, or any other Loan Document to which Guarantor is aparty.  All obligations of Guarantorhereunder shall be joint and several.

#  

# 13.           EntireAgreement.  This Completion Guaranty,the Note, the Environmental Indemnity Agreement, the Limited Guaranty, and theother Loan Documents constitute the entire agreement between the parties withrespect to the subject matter hereof and supersede all prior such agreementsand understandings, both written and oral. This Completion Guaranty may not be modified or amended except by awritten instrument signed by Lender and Guarantor.  If this Completion Guaranty is executed inseveral counterparts, each of those counterparts shall be deemed an original,and all of them together shall constitute one and the same instrument.

#  

# 14.           Termination.Lender agrees that the obligations of Guarantor under this Completion Guarantyshall terminate, subject to the provisions of Section 4 hereof, on the earliestof (i) the completion of the Project; or (ii) in the alternative, when Lendershall have received indefeasible payment in full of all the Secured Obligationsand all other sums due and owing under this Completion Guaranty and all the GuaranteedObligations shall have been fully performed; or (iii) in the alternative, uponpayment of the Post-Acquisition Liability Amount.

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# 15.           Successorsand Assigns; Miscellaneous.  ThisCompletion Guaranty shall inure to the benefit of and may be enforced by Lenderand any subsequent holder of the Note, the Loan Agreement, the EnvironmentalIndemnity Agreement, the Limited Guaranty, or the other Loan Documents, and allof the covenants, agreements and obligations of Guarantor hereunder shallextend to and be binding upon and enforceable against Guarantor and the heirs,administrators, legal representatives, successors and assigns ofGuarantor.  This Completion Guaranty andthe

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# obligations hereunder shall not be discharged,affected, or impaired, in whole or in part, upon the bankruptcy, insolvency ordeath of Guarantor.

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# 16.           FurtherAssurances; Representation by Counsel.

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## (a)           Guarantorfurther covenants and agrees that Guarantor shall at any time and from time totime, upon the reasonable request of Lender, take, or cause to be taken, anyaction and execute and deliver any further documents which, in the reasonableopinion of Lender, may be necessary, required or desirable in order to carryout the intent and purposes of this Completion Guaranty.

##  

## (b)           Guarantorhereby represents and warrants that it has consulted and conferred withcompetent legal counsel of its choice before executing this CompletionGuaranty, the Environmental Indemnity Agreement, the Limited Guaranty, and allother Loan Documents.  Guarantor furtherrepresents and warrants that it has read and understood the terms of thisCompletion Guaranty and intends to be bound hereby.  In the event of an ambiguity or conflict inthe terms hereof, the rule of construction requiring resolution against thedrafter of the document shall not be applied.

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# 17.           Notices.  Any and all notices given in connection withthis Completion Guaranty shall be deemed adequately given only if in writingand addressed to the party for whom such notices are intended at the addressset forth below.  All notices shall bedelivered in accordance with the notice provisions of the Loan Agreement.  Any and all notices referred to in thisCompletion Guaranty, or which either party desires to give to the other, shallbe addressed as follows:

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| To Guarantor:   |   | Comstock Homebuilding  Companies, Inc.               |
|-----------------|--------|------------------------------------------------------|
|            |   | 11465 Sunset Hills Road                              |
|            |   | Suite 510                                            |
|            |   | Reston, Virginia  20190                         |
|            |   | Attention:  Christopher Clemente                |
|            |   | Telecopy Number:  (703) 760-1520                |
|            |   |                                                 |
| with a copy to: |
|            |   |                                                 |
|            |   | Bankert &  Associates, P.C.                      |
|            |   | 3025 Hamaker Court                                   |
|            |   | Suite 501                                            |
|            |   | Fairfax, Virginia  22031                        |
|            |   | Attention:  Joseph E. Bankert, Esq.             |
|            |   | Telecopy Number:  (703) 876-4628                |
|            |   |                                                 |
| To Lender:      |   | Corus Bank, N.A.                                     |
|            |   | 3959 N. Lincoln Avenue                               |
|            |   | Chicago, IL 60613                                    |
|            |   | Attn:  David Krischke, Assistant Vice President |
|            |   | Telecopy Number:  (773) 832-3553                |

 

13

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with a copy to:

 

Corus Bank, N.A.3959 N. Lincoln AvenueChicago, IL 60613Attn:  Joel Solomon, General CounselTelecopy Number:  (773) 832-3536

 

with a copy to:

 

Sidley Austin Brown &Wood LLP1501 K Street, N.W. Washington, D.C.  20005Attn:  Andrea J. Cummings, Esq.Telecopy Number:  (202) 736-8711

 

Any party hereto may, by notice given hereunder,designate any further or different addresses to which subsequent notices,certificates or other communications shall be sent.

 

# 18.           AdditionalRepresentations and Warranties.  Inaddition to and independent of any other obligation or liability under this CompletionGuaranty, Guarantor hereby represents and warrants to Lender as follows:

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## (a)           Executionand Binding Effect.  This CompletionGuaranty, the Environmental Indemnity Agreement, the Limited Guaranty, and eachother Loan Document to which Guarantor is a party and which is executed anddelivered or required to be executed and delivered on or before the date ofwhich this representation and warranty is made, or deemed made, has been dulyand validly executed and delivered by Guarantor.  This Completion Guaranty, the EnvironmentalIndemnity Agreement, the Limited Guaranty, and each such other Loan Documentconstitutes, and the Environmental Indemnity Agreement, the Limited Guaranty,and each other Loan Document when executed and delivered by Guarantor willconstitute, the legal, valid and binding obligations of Guarantor, jointly andseverally, enforceable against Guarantor in accordance with its terms, subjectto bankruptcy, insolvency and other laws affecting creditor’s rightsgenerally.  This Completion Guarantyshall continue to be effective with respect to any guaranteed obligationsarising or created after any attempted revocation by Guarantor and afterGuarantor’s death, in which event this Completion Guaranty shall be bindingupon Guarantor’s estate and Guarantor’s legal representatives and heirs.

##  

## (b)           Violationof Agreements.  To the best ofGuarantor’s knowledge, neither the execution and delivery of this CompletionGuaranty, nor consummation of the transactions herein or therein contemplated,nor performance of or compliance with the terms and conditions hereof orthereof, does or will at any time during the term hereof:

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### (i)            violatesor conflicts with any Laws, or

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### 14

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### (ii)           violates,conflicts with or will result in a breach of any term or condition of, orconstitute a default under, or result in (or give rise to any right, contingentor otherwise, of any Person to cause) any termination, cancellation, prepaymentor acceleration of performance of, or result in the creation or imposition of(or give rise to any obligation, contingent or otherwise, to create or impose)any lien upon any property of Guarantor (except for any lien in favor of Lendersecuring the Secured Obligations) pursuant to, or otherwise result in (or giverise to any right, contingent or otherwise, of any Person to cause) any changein any right, power, privilege, duty or obligation of Guarantor under or inconnection with:

###  

#### (a)           anyagreement or instrument creating, evidencing or securing any indebtedness orguaranty equivalent to which Guarantor is a party or by which it or any oftheir properties (now owned or hereafter acquired) may be subject or bound, or

####  

#### (b)           any otheragreement or instrument or arrangement to which Guarantor is a party or bywhich it or any of its properties (now owned or hereafter acquired) may besubject or bound.

####  

## (c)           GovernmentApprovals and Filings.  To the bestof Guarantor’s knowledge, no approval, order, consent, authorization,certificate, license, permit or validation of, or exemption or other action by,or filing, recording or registration with, or notice to, any governmentalauthority (collectively, “Governmental Action”) is or will be necessaryin connection with the execution and delivery of this Completion Guaranty, theEnvironmental Indemnity Agreement, the Limited Guaranty, or any other LoanDocument to which Guarantor is a party, the consummation of the transactionsherein or therein contemplated, the performance of or compliance with the termsand conditions hereof or thereof, or to ensure the legality, validity, bindingeffect, enforceability or admissibility in evidence hereof or thereof.

##  

## (d)           Violationof Laws.  To the best of Guarantor’sknowledge, Guarantor is not in violation of any applicable statute, regulationor ordinance of the United States of America, of any state, city, town,municipality, county or of any other jurisdiction, or of any agency thereof(including, but not limited to any Hazardous Materials Laws (as defined in theEnvironmental Indemnity Agreement)).

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## (e)           Solvency.  Guarantor (i) is now and at all times duringthe term hereof shall be generally paying its debts as they mature; (ii) nowowns, and at all times during the term hereof shall own, property which, at afair valuation, is greater than the sum of its debts, and (iii) now has and atall times during the term hereof shall have capital sufficient to carry on itsbusiness and personal affairs and any such affairs in which it is about toengage.

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## (f)            Proceeding.  There is no condition, event or circumstanceexisting, or any litigation, arbitration, governmental or administrativeproceedings, actions, examinations, claims or demands pending nor, to Guarantor’sknowledge, threatened affecting Guarantor which are likely to result in aMaterial Adverse Effect, and Guarantor knows of no basis therefor.

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## 15

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## (g)           TaxReturns.

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### (i)            All taxand informational returns required to be filed by or on behalf of Guarantorhave been properly prepared, executed and filed.  All taxes, assessments, fees and othercharges upon Guarantor, or upon any of its properties or incomes, which are dueand payable have been paid other than those not yet delinquent and payablewithout premium or penalty, and except for those being diligently contested ingood faith by appropriate proceedings, and in each case adequate funds andprovisions for such taxes have been made by Guarantor.

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### (ii)           Guarantordoes not know of any proposed additional assessment or basis for any materialassessment for any additional taxes (whether or not reserved against).

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### (iii)          Guarantorhas paid all charges shown to be due and payable on said tax returns or on anyassessments made against it or any of its property, and all other charges imposedon it or any of its properties by any governmental authority.

###  

## (h)           DefaultUnder Other Agreements.  Guarantorhas not received any written notice of a default with respect to any indenture,loan agreement, mortgage, deed or other similar agreement relating to theborrowing of monies to which it is a party, and by which it is bound.

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## (i)            Insurance.  Guarantor maintains with financially soundand reputable insurers, not related to or affiliated with Guarantor, insurancewith respect to its properties and assets and against at least suchliabilities, casualties and contingencies and in at least such types andamounts as is customary in the case of individuals having similar propertiesand assets similarly situated.

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## (j)            AdverseConditions.  No condition,circumstance, event, agreement, document, instrument, restriction, litigationor proceeding (or to Guarantor’s knowledge, threatened litigation or proceedingor basis therefor) relating to Guarantor exists, (i) which are likely to resultin a Material Adverse Effect; (ii) which would constitute an Event of Defaultunder this Completion Guaranty, the Environmental Indemnity Agreement, theLimited Guaranty, or any of the Loan Documents; or (iii) which would constitutesuch an Event of Default with the giving of notice or lapse of time or both.

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# 19.           AdditionalCovenants Of Guarantor.

#  

## (a)           Guarantorshall deliver or cause to be delivered to Lender those reports and financialstatements set forth below.  All suchfinancial statements shall be internally prepared and shall fairly andaccurately present in all material respects the assets, liabilities andfinancial conditions of Guarantor and such other Persons, if any, describedtherein as of and for the periods ending of such dates set forth therein.

##  

### (i)            A disclosureof any judgments and pending or threatened material litigation againstGuarantor, Borrower or the Property promptly upon Guarantor’s awareness of suchlitigation;

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### 16

### 

###  

### (ii)           On orbefore April 30 of each year during the term of the Loan, federal and stateincome tax returns of Guarantor, all certified to be true, complete and correctby an authorized representative of Guarantor, as appropriate; provided, that ifan extension is filed by Guarantor with the Internal Revenue Service orapplicable state revenue department, then if Lender is provided a true, correctand complete copy of such extension, Guarantor may deliver such income taxreturns to Lender simultaneously upon the filing thereof;

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### (iii)          Withinninety (90) days of the end of each fiscal year, completed, signed and datedannual financial statements, including income statements and balance sheets, ofGuarantor, with such verifications, supporting documentation or additionalstatements as Lender may reasonably request, certified by an officer ofGuarantor as being true, correct and complete; and

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### (iv)          Guarantorshall provide, from time to time during the term hereof, such other informationand reports, financial and otherwise, concerning Borrower, Guarantor and theProperty as Lender may reasonably request.

###  

## (b)           Upondemand by Lender, at any time and from time to time, whether or not an Event ofDefault has occurred under the Note, the Loan Agreement or any other LoanDocument, Guarantor shall execute a reaffirmation of and shall remake thisCompletion Guaranty as of such date. Failure of Guarantor to reaffirm and remake this Completion Guaranty atany time, on demand, shall be an Event of Default hereunder and under the Note,the Loan Agreement and the other Loan Documents, without notice or opportunityto cure.

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# 20.           Jurisdictionand Venue.

#  

## (a)           TO THEMAXIMUM EXTENT PERMITTED BY LAW, GUARANTOR AND LENDER EACH HEREBY AGREES THATALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS COMPLETION GUARANTYBE TRIED AND DETERMINED IN A FEDERAL COURT OR STATE COURT LOCATED IN THECOMMONWEALTH OF VIRGINIA.

##  

## (b)           TO THEMAXIMUM EXTENT PERMITTED BY LAW, GUARANTOR AND LENDER EACH HEREBY EXPRESSLYWAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENSOR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCEWITH THIS SECTION; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINSTANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THECOURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BEFOUND.  GUARANTOR HEREBY EXPRESSLY ANDIRREVOCABLY SUBMITS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF THECOMMONWEALTH OF VIRGINIA FOR THE PURPOSE OF SUCH LITIGATION AS SET FORTH ABOVEAND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY INCONNECTION WITH SUCH LITIGATION. GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BYCERTIFIED OR REGISTERED MAIL, POSTAGE 

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## 17

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##  

## PREPAID, OR BYPERSONAL SERVICE AT THE ADDRESS OF GUARANTOR STATED ABOVE OR ANY OTHER METHODPERMITTED BY LAW.  TO THE EXTENT THATGUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANYCOURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENTPRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TOITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY INRESPECT OF ITS OBLIGATIONS UNDER THIS COMPLETION GUARANTY.

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# 21.           Waiverof Jury Trial.  TO THE MAXIMUM EXTENTPERMITTED BY LAW, GUARANTOR AND LENDER EACH HEREBY KNOWINGLY VOLUNTARILY ANDINTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY ACTION,CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING OUT OF, UNDER OR INCONNECTION WITH THIS COMPLETION GUARANTY, THE ENVIRONMENTAL INDEMNITYAGREEMENT, THE LIMITED GUARANTY,  OR ANYOTHER LOAN DOCUMENT, OR IN ANY WAY CONNECTED WITH, RELATED TO OR INCIDENTAL TOTHE DEALINGS OF GUARANTOR AND LENDER WITH RESPECT TO THIS COMPLETION GUARANTY,THE ENVIRONMENTAL INDEMNITY AGREEMENT, THE LIMITED GUARANTY, OR ANY OTHER LOANDOCUMENT, OR THE TRANSACTIONS RELATED HERETO, OR ANY COURSE OF CONDUCT, COURSEOF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTYIN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING INCONTRACT, TORT, OR OTHERWISE.  TO THEMAXIMUM EXTENT PERMITTED BY LAW, GUARANTOR AND LENDER HEREBY AGREE THAT ANY SUCHACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE DECIDED BY ACOURT TRIAL WITHOUT A JURY AND THAT GUARANTOR OR LENDER MAY FILE AN EXECUTEDCOPY OF THIS COMPLETION GUARANTY WITH ANY COURT OR OTHER TRIBUNAL AS WRITTENEVIDENCE OF THE CONSENT OF GUARANTOR AND LENDER TO THE WAIVER OF ITS RIGHT TOTRIAL BY JURY.  NO PARTY SHALL SEEK TOCONSOLIDATE, BY COUNTER CLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIALHAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HASNOT BEEN WAIVED.

#  

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18

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****IN WITNESS WHEREOF,****Guarantor has executed this Completion Guaranty as of the date first abovewritten.

 

****GUARANTOR:****

 

****COMSTOCKHOMEBUILDING COMPANIES, INC.,****

****aDelaware corporation****

 

 
| ****By:****                            | ****/s/ Christopher Clemente**** |   |
|----------------------------------------|----------------------------------|--------|
| ****Name: Christopher Clemente****     |
| ****Title: Chief Executive Officer**** |

**** ****

----