Exhibit
10.3


 


LOAN AGREEMENT


 


THIS LOAN AGREEMENT
(this “Agreement”) is made as of this 17th day of December, 1997 by and between
(i) COMSTOCK HOLDING COMPANY, INC.
(individually, “Borrower”), a Virginia corporation and COMSTOCK L’AMBIANCE, L.C., a Virginia
limited liability company (individually, “Comstock L’Ambiance”) (collectively,
Borrower and Comstock L’Ambiance, as their interests may appear, shall be
referred to herein as “Comstock”), and NATIONSBANK,
N.A., a national banking association (the “Lender”).


 


R E C I T A L S:


 


WHEREAS, the Lender
has agreed to make that certain acquisition and revolving construction loan to
the Borrower in the amount of $2,000,000.00, or so much thereof as shall be
advanced and/or readvanced (collectively, the “Loan”), in order to finance
Comstock’s acquisition of developed residential building lots and/or
construction of single family residences and/or townhomes thereon; and


 


WHEREAS, Comstock
L’Ambiance, Christopher Clemente and Gregory Benson have executed and delivered
to Lender their Guaranty dated of even date herewith (as defined herein); and


 


WHEREAS, Lender and
Comstock have agreed to execute this Agreement for the purpose of describing
together with the other Loan Documents (as herein defined) some of the terms
and conditions relating to the disbursement of Loan proceeds, and to otherwise
set forth together with the other Loan Documents (as herein defined) some of
the obligations of Comstock and the Lender.


 


W I T N E S S E T H:


 


For and in consideration of these presents, and in further
consideration of the mutual covenants and agreements herein set forth, and in
consideration of the sum of Ten and no/100 Dollars ($10.00) lawful money of the
United States of America by each of the parties to the other paid, receipt of
which is hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby covenant and agree as follows:


 


ARTICLE I — DEFINITIONS


 


1.1                               Definitions. Comstock and the Lender
agree that, unless the context otherwise specifies or requires, the following
terms shall have the meanings herein specified, such


 


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definitions to be applicable equally to the singular and the plural
forms of such terms and to all genders:


 


(a)                                  Appraised
Value - (i) with respect to a Unit (hereinafter defined), the then current
market value determined pursuant to the most recent appraisal for a base Unit
type, together with the appraised value estimates for significant options which
increase the value of the Unit, and (ii) with respect to a Lot (hereinafter
defined), the then current market value determined pursuant to the most recent
appraisal for the Project (hereinafter defined) where the Lot is located.  All such appraisals shall be ordered by the
Lender, prepared at Comstock’s expense by a certified appraiser acceptable to
the Lender and otherwise satisfactory to the Lender in all respects and such
appraisals may be reviewed and adjusted by the Lender from time to time, taking
into account the Lots/Units, as applicable, settled prior thereto. The Lender
may order, if required by the Lender’s internal policies, reappraisals of a
base Unit-type, at the Lender’s sole discretion and at Comstock’s expense.  Prior to the initial advance of Loan proceeds
in any Project, the Lender shall have received the requisite appraisal(s)
required for such Project. Copies of all such appraisals shall be promptly
delivered to Comstock, provided that Lender has been reimbursed for the cost
thereof.


 


(b)                                  Base
Unit - A Base Unit shall be a house type to be constructed by Comstock
without any optional features which would increase its appraised value.


 


(c)                                  Borrower
- The entity hereinabove designated as such.


 


(d)                                  Contract
- A fully executed contract of sale for a Unit that: (i) has been accepted
by Comstock which is the owner of the Project where the Unit is located which
meets the Lender’s criteria for acceptable contracts; (ii) is not subject to
cancellation without forfeiture of all deposits thereunder (except for cause in
accordance with applicable law and in the event the purchaser fails to obtain
the necessary mortgage loan); (iii) contains no contingencies (including,
without limitation, the sale of the purchaser’s home) except ordinary financing
contingencies; (iv) is accompanied by a cash deposit or deposits in form,
content and amount acceptable to the Lender; and (v) that either (A) provides
for a cash sale (i.e., a sale not contingent upon financing) by a purchaser
whose creditworthiness is satisfactory to the Lender in all respects, or (B) is
accompanied by a pre-qualification letter from a permanent mortgage lender in
form, amount and content satisfactory to the Lender in all respects. In lieu of
copies of Contracts, the Borrower may elect to submit a “Contract Information
Sheet” in form attached hereto as Exhibit “C” for each Unit or Inventory
Lot to be financed under the Loan, which shall summarize the Contract terms and
the status thereof (e.g. approval of financing, contingencies, etc.).  No more than twice monthly Lender shall verify
the accuracy of the information on each Contract Information Sheet through a
review of Borrower’s, files.  The
Contract Information Sheet shall also serve as a turn-around document for the
purpose of notifying the Borrower of the amount of Loan proceeds to be
committed by the Lender for the construction of each Unit.  Notwithstanding the foregoing, the Lender
shall retain the right to request copies of Contracts at any time during the
term of the Loan. At the time any Contract Information Sheet is submitted to
the Lender for its approval, Comstock shall specifically identify to the Lender
each Contract wherein the purchaser is affiliated with or related to Comstock,
any Guarantor (hereinafter


 


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defined) or any of their respective employees, shareholders, partners,
members or other principals, as applicable.


 


(e)                                  Deed
of Trust - Collectively, that certain Credit Line Deed of Trust and
Security Agreement of even date herewith, executed and delivered by Comstock to
secure the Loan, and any other deed of trust encumbering any other Project, as
any of the same may from time to time be amended, modified, supplemented or
spread.


 


(f)                                    Default
- Any of the happenings, events, circumstances or occurrences designated as
such in this Agreement.


 


(g)                                 Environmental
Regulations - “Environmental Regulations” as defined in the Deed of Trust.


 


(h)                                 Future
Projects - construction of various single-family houses and/or townhouse
Units, other than the L’Ambiance Project (hereinafter defined), as approved by
the Lender to be financed with proceeds of the Loan.


 


(i)                                    Guarantor
- Comstock L’Ambiance, Christopher Clemente and Gregory Benson,
collectively, and any other party (including, without limitation, a
co-guarantor of a Future Project, as approved by the Lender) that executes and
delivers a Guaranty, and its or their respective successors, personal
representatives and permitted assigns. Upon repayment of the full amount of the
Loan advanced and outstanding with respect to a particular Project, written
confirmation from the Borrower that no further amounts shall be advanced with
respect to such Project, and release of such Project from the lien of the Deed
of Trust, the co-guarantor which owns such Project shall no longer be deemed a
co-guarantor hereunder and shall be released from all obligations under the
Loan Documents, with the exception of the Environmental Indemnification.


 


(j)                                    Guaranty
- That certain (i) Guaranty Agreement of even date herewith executed and
delivered by each Guarantor to secure the Loan and all other indebtedness under
the Loan Documents (hereinafter defined), and (ii) any and all other guaranty
agreements executed for the benefit of the Lender to secure the Loan, as any of
the same may from time to time be amended, modified, replaced or supplemented.


 


(k)                                Hazardous
Materials - “Hazardous Materials” as defined in the Deed of Trust.


 


(l)                                    Improvements
- Any and all buildings, structures, improvements, alterations or
appurtenances already existing or at any time hereafter constructed or placed
upon the Land or any Lot therein, and any replacements thereof, additions
thereto and substitutions therefor, including without limitation, all
equipment, apparatus, machinery and fixtures of any kind or character forming a
part thereof.


 


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(m)                              Indebtedness
- All amounts due or to become due to the Lender pursuant to or on account of
the Note (hereinafter defined), this Agreement and each of the other Loan
Documents, including, without limitation, all principal (whether advanced prior
to, upon execution of, or after the date of this Agreement and including any
principal that is repaid and readvanced), interest, late charges, loan fees,
extension fees, prepayment fees, amounts drawn under any letters of credit, any
letter of credit fees and all other payments required to be made by the
Borrower pursuant to or on account of the Note, this Agreement and any of the
other Loan Documents, and including any and all amounts advanced by the Lender
for the account of the Borrower pursuant to the provisions of this Agreement
and any of the other Loan Documents, whether or not such amounts are advanced
from the proceeds of the Loan.


 


(n)                                 Inventory
Lot - A Lot that is acquired with Loan proceeds but is not part of a Unit
and is not subject to a Contract.


 


(o)                                  Jurisdiction
of Choice - The Commonwealth of Virginia, the jurisdiction under whose laws
this Agreement shall be governed, unless otherwise provided herein.


 


(p)                                  Land
- All Lots now owned or hereafter acquired by Comstock with Loan proceeds
and more particularly described in the Deed of Trust.


 


(q)                                  Lender
- The party hereinabove designated as such, its successors and assigns.


 


(r)                                  Loan
- That certain acquisition and revolving construction loan in the amount of
$2,000,000.00, or so much thereof as shall be advanced or readvanced, from the
Lender to the Borrower made pursuant to this Agreement, to finance the
acquisition of developed Lots and/or the construction of Improvements thereon,
as evidenced by the Note and secured by the Deed of Trust and the other Loan
Documents. During the term of the Loan, as set forth in the Note, the Borrower
may borrow, repay and reborrow amounts under the Loan; provided, however, that
the maximum amount available for distribution at any time with respect to a
particular Project shall equal (a) the sum of $2,000,000.00 minus (b) the total
amount budgeted under the Loan for all Inventory Lots and Units for which funds
have been advanced under the Loan and not repaid in full.


 


(s)                                  Loan
Documents - This Agreement, the Note, the Deed of Trust, any Guaranty and
any other instrument or documents executed in connection with the Loan, as any
of the same may from time to time be amended, modified or supplemented.


 


(t)                                    Lot
- A subdivided parcel of land contained in a Project on which no
construction has commenced.


 


(u)                                 Maturity
Date - June 30, 1999.


 


(v)                                   Note
- That certain Revolving Deed of Trust Note of even date herewith in the
original principal amount of $2,000,000 00, or so much thereof as shall be
advanced


 


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and/or readvanced, made by the Borrower, payable to the order of the
Lender, as the same may from time to time be amended, modified, replaced or
supplemented.


 


(w)                                Obligations
- Any and all of the covenants, warranties, representations, agreements,
promises and other obligations (other than the Indebtedness) made or owing by
the Borrower, the Guarantors or others to the Lender pursuant to or as
otherwise set forth in the Loan Documents.


 


(x)                                  Plans
and Specifications - Any and all plans and specifications and/or
engineering drawings prepared for Comstock and approved by the Lender in
connection with the construction of Improvements, as the same may from time to
time be amended with the prior approval of the Lender. In no event shall
Lender’s approval, however, be required for changes which do not affect the
market value of the Improvements.


 


(y)                                  Pre-Sold
Unit - A Unit that is the subject of a Contract that has not been canceled.


 


(z)                                  Progress
Inspector - Such person or firm as the Lender may from time to time appoint
or designate to inspect the progress of the construction of the Improvements
and conformity of construction with the Plans and Specifications, and for such
other purposes as may from time to time seem appropriate to the Lender or as
may be required by the terms of this Agreement.


 


(aa)                            Project
or Projects - The L’Ambiance Project (hereinafter defined), and the Future
Projects.


 


(bb)                            Property
- The property described as such in the Deed of Trust, including, but not
limited to, the Land and the Improvements.


 


(cc)                            Speculative
Unit - A Unit (including any model Unit) that is not a Pre-Sold Unit.


 


(dd)                            Title
Company - Any title company approved by the Lender that provides mortgagee
title insurance covering the lien of the Deed of Trust in favor of the Lender
thereon.


 


(ee)                            Unit -
A Lot and all Improvements thereon and may refer to a Speculative Unit and/or a
Pre-Sold Unit.


 


(ff)                                L’Ambiance
Project - construction of up to 19 single-family houses on 19 finished lots
in the subdivision known as “L’Ambiance”, located off of Kirby Road and
Westmoreland Street in McLean, Fairfax County, Virginia.


 


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ARTICLE II — ADVANCES
AND/OR READVANCES OF THE LOAN


 


2.1                               Advances
and/or Readvances of Loan Proceeds. 
The Borrower shall make applications for advances and/or readvances of
proceeds of the Loan in writing specifying the Lot number and draw number
requested; and such applications shall be made not more frequently than twice
per month. The Borrower shall make each such application at least five (5)
business days before the advance is called for. All Loan advances shall be made
either by deposit into an account established by the Borrower with the Lender,
or to the Title Company or another closing agent selected by the Borrower and
approved by the Lender in its sole discretion.


 


2.2                               Limitations
on Amounts Advanced and/or Readvanced and the Terms Therefor.  Each of the following shall constitute a
limitation on the maximum principal amount to be advanced and/or readvanced
under the Loan:


 


(a)                                  With respect to each
Pre-Sold Unit, the Lender shall not fund under the Loan an amount in excess of
the lesser of (i) eighty percent (80%) of the lesser of (x) the contract price
for such Pre-Sold Unit, or (y) the Appraised Value for such Pre-Sold Unit
including applicable appraised options, or (ii) one hundred percent (100%) of
the total costs for such Pre-Sold Unit including applicable options.  Notwithstanding anything contained in this
Agreement or any other Loan Document to the contrary, the portion of any Loan
advance which pertains to a Lot comprising a Pre-Sold Unit shall not exceed one
hundred percent (100%) of the lesser of (i) the price paid for such Lot by
Borrower, or (ii) the Appraised Value for such Lot.


 


(b)                                  With respect to each
Speculative Unit, the Lender shall not fund under the Loan an amount in excess
of the lesser of (i) eighty (80%) of the Appraised Value for such Speculative
Unit including applicable appraised options, or (ii) one hundred percent (100%)
of the total costs for such Speculative Unit including applicable options.
Notwithstanding anything contained in this Agreement or any other Loan Document
to the contrary, the portion of any Loan advance which pertains to a Lot
comprising a Speculative Unit shall not exceed eighty percent (80%) of the
lesser of (i) the price paid for such Lot by Borrower, or (ii) the Appraised
Value for such Lot; provided, however, with respect to the L’Ambiance Project,
the portion of any Loan advance which pertains to a Lot comprising a
Speculative Unit shall not exceed one hundred percent (100%) of the lesser of
(i) the price paid for such Lot by Borrower, or (ii) the Appraised Value for such
Lot.


 


(c)                                  With respect to each
Inventory Lot, the Lender shall not fund under the Loan an amount in excess of
the lesser of (i) seventy-five percent (75%) of the purchase price for such
Lot, or (ii) seventy-five percent (75%) of the Appraised Value for such Lot.
Notwithstanding anything to the contrary herein, with respect to each Inventory
Lot in the L’Ambiance project, the Lender shall not fund under the Loan an
amount in excess of One Hundred Thirty-Two Thousand Three Hundred Thirty-Three
Dollars ($132,333.00).


 


(d)                                  If the Borrower shall
request an initial advance and/or readvance under the Loan for any Unit during
the period that is within ninety (90) days prior to the Maturity Date, the
Lender only shall make such advance and/or readvance in its sole and absolute
discretion.


 


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(e)                                  The Borrower agrees
that Inventory Lots that may be financed with Loan proceeds shall not
exceed:  (i) three (3) Units per
single-family detached Project and nine (9) Units per townhouse Project. The
actual number of Inventory Lots allowed per Project shall be decided by Lender,
in its sole discretion, at the time of specific Project approval.  In no event shall the maximum principal amount
(i) advanced for Inventory Lots for all Projects financed under the Loan plus
(ii) committed for Inventory Lots for all Projects financed under the Loan
exceed Three Hundred Thousand Dollars ($300,000.00) (the “Maximum Inventory
Amount”);  provided, however, it is
acknowledged and agreed that the Maximum Inventory Amount shall be  $400,000.00 until such time as the initial
L’Ambiance Project Inventory Lots are converted to Units. 


 


(f)                                    Comstock agrees
that Speculative Units (including model Units) that may be financed with Loan
proceeds shall not exceed: (i) two (2) single family Units for the L’Ambiance
Project, and (ii) four (4) single family Units and ten (10) townhouse Units for
any Project; provided, however, that (x) at no time during the term of the loan
shall more than fifty percent (50%) of all homes under construction and
financed with Loan proceeds be Speculative Units and (y) no new Speculative
Units may be started (after the initial approval) until sufficient Contracts
exist such that the Project is in compliance with subparagraph (x) above.  Notwithstanding the foregoing, the actual
number of Speculative Units allowed per Project shall be decided by Lender, in
its sole discretion, at the time of specific Project approval. In no event
shall the maximum principal amount (i) advanced for Speculative Units for all
Projects financed under the Loan plus (ii) committed for Speculative Units for
all Projects financed under the Loan exceed Seven Hundred Fifty Thousand and
No/100 Dollars ($750,000.00). 


 


Construction of any townhouse building may be commenced without meeting
the Pre-Sold requirements, so long as the Speculative Unit Limit set forth
hereinabove is not exceeded.


 


(g)                                 The outstanding
principal balance of the Loan (together with all accrued and unpaid interest
and all other amounts due under the Loan) attributable to each Unit and/or
Inventory Lot shall be due and payable on the earlier of: 


 


(i)                                    with respect to any
Inventory Lot, the earlier of (a) the date which is six (6) months after the
first advance attributable to such Inventory Lot, unless extended pursuant to a
Courtesy Extension (as hereinafter defined), or (b) ninety (90) days after
“Project Withdrawal” (hereinafter defined);


 


(ii)                                with respect to
Pre-Sold Units, the earlier of (a) the date of closing pursuant to any sale of
any such Pre-Sold Unit to a third party purchaser, or (b) the date which is
nine (9) months after the first advance attributable to such Pre-Sold Unit,
unless extended pursuant to a Courtesy Extension (as hereinafter defined);


 


(iii)                            with respect to Speculative
Units (excluding model units), the earlier of (a) the date which is twelve (12)
months after the first advance attributable to such


 


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Speculative Unit, unless extended pursuant to a Courtesy Extension (as
hereinafter defined) or (b) ninety (90) days after Project Withdrawal; and


 


(iv)                               with respect to any
Speculative Units that are considered to be model Units, the date which is the
earlier of (a) ninety (90) days after Project Withdrawal, (b) the date of
closing pursuant to any sale of such Unit to a third party purchaser, or (c)
the Maturity Date.


 


Notwithstanding anything to the contrary set forth hereinabove
(including Courtesy Extensions), at such time and in the event the first
advance of Loan proceeds allocated for a Unit repays the principal amount
outstanding with respect to an Inventory Lot, then the funds advanced for such
Unit shall have a maturity date calculated from the date of the initial advance
of Loan proceeds as a Pre-Sold Unit or a Speculative Unit, as applicable.


 


The term “Project Withdrawal” as used herein shall mean in the event
Comstock withdraws its sales efforts at a particular Project by permanently
abandoning the sales efforts (no longer marketing from sales trailer or model)
and/or notifying the land seller of its intention not to comply with the
take-down schedule for lot purchases, as determined by the Lender.


 


The term “Courtesy Extension” as used herein shall refer to Borrower’s
request and Lender’s approval of the extension of any individual maturity date
for one three (3) month period, with no additional fee owed by Borrower to
Lender; such individual maturity date may be further extended for successive
three (3) month periods at Borrower’s request and Lender’s approval, so long as
Borrower pays to Lender prior to each three (3) month period a fee in the
amount of one eight of one percent (1/8%) of the amount committed under the
Loan for such Unit.  Notwithstanding
anything further to the contrary set forth hereinabove, the entire outstanding
principal of the Loan (together with all accrued and unpaid interest and all
other amounts due under the Loan), shall be due and payable in full on the
Maturity Date.  In no event may any
Courtesy Extension extend beyond the Maturity Date.


 


2.3                               Draw
Schedule.  The Lender shall make
advances under the Loan in accordance with a staged draw schedule attached
hereto as Exhibit “A” and made a part hereof by reference, which staged
draw schedule may show anticipated draws for more than one Unit under the Loan.



 


2.4                               Conditions
Precedent to First Advance (Land Advance).  Unless waived by the Lender, as a condition
precedent to the first advance, Comstock must (a) satisfy the conditions
required hereby and (b) execute and deliver to, procure for and deposit with,
and pay to the Lender, and if appropriate, record in the proper records with
all filing and recording fees paid, the documents, certificates, and other
items that are noted on Exhibit “B” as applicable, attached hereto and
incorporated herein by reference, together with such other documents,
instruments, and certificates as Lender may reasonably require from time to
time. 


 


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2.5                               Conditions
Precedent to All Advances. 
Unless waived by the Lender, the following conditions must be satisfied
prior to each Loan advance and/or readvance (including the first advance and
the last advance):


 


(a)                                  If the advance or
readvance is being requested to pay for construction costs:


 


(i)                                    In the reasonable
judgment of the Lender, all work completed at the time of the application for
advance has been performed in a good and workmanlike manner and all materials
and fixtures to be usually furnished and installed at that stage of
construction have been furnished and installed in accordance with the draw
schedule.


 


(ii)           The Lender shall have received
satisfactory evidence that the building permit and all other permits and
licenses necessary or required in connection with the work for which payment is
being requested have been issued and are in full force and effect.


 


(iii)         If requested by the Lender, the Lender
shall have received satisfactory evidence that all work requiring inspection by
governmental or regulatory authorities or any rating or inspection organization,
bureau, association or office having or claiming jurisdiction has been duly
inspected and approved by such authorities and that any work that is subject to
a restrictive covenant has been approved by the beneficiaries of such
restrictive covenant.


 


(iv)          If requested by the Lender, the Lender
shall have received from all subcontractors and material suppliers
acknowledgments of payment and releases of liens and rights to claim liens for
work performed or materials delivered through the date of the last preceding
advance.


 


(v)            At Lender’s option, the Lender shall
have verified that Borrower has a “wall check” or “foundation” survey of the
applicable Lot and that shows that (A) all new construction is within the
boundary lines of the Lot and is in compliance with all applicable setback,
location and area requirements, and (B) there is no change in condition which
could adversely affect such Lot.


 


(b)                                  If any Improvements
being financed with the proceeds of the Loan have been materially damaged by
fire or other casualty, the Lender shall have received proceeds of insurance or
other funds contributed by Comstock sufficient in the judgment of the Lender to
effect a satisfactory restoration of such Improvements prior to the maturity
date of the Loan. 


 


(c)                                  Unless the title
insurance policy covering the Lot for which an advance is being requested
provides for coverage in an amount sufficient to cover the requested advance
and for insurance against intervening liens between the date of the policy and
the date of the advance, the Lender shall have received a notice of title
continuation or an endorsement to the title insurance policy providing for such
coverage and showing no change in the status of title or any other exceptions
not previously approved by the Lender. 


 


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(d)                                  The representations
and warranties in this Agreement and in the Deed of Trust and each of the other
Loan Documents shall be true and correct on and as of the date of the advance
with the same effect as if made on such date. 


 


(e)                                  If the advance or
readvance is for construction of a Pre-Sold Unit, the Contract Information
Sheet for such Contract has been submitted to Lender, and the Contract for such
Pre-Sold Unit remains in full force and effect as outlined on the Contract
Information Sheet.


 


(f)                                    Lender shall have
received from Borrower a construction budget, which includes base house and
option costs for all active Projects.


 


(g)                                 All other terms and
conditions of the Loan Documents required to be met as of the date of the Loan
advance shall have been met to the satisfaction of the Lender.


 


2.6                               Additional
Conditions Precedent to Final Advance. 
Unless waived in writing by the Lender, in addition to the requirements
of Section 2.5 above pertaining to
all advances, the following conditions must be satisfied prior to the final
Loan advance:


 


(a)                                  If the proceeds of
the Loan have been used to finance construction of a Unit:


 


(i)            if the Lender shall have so
requested, the Lender shall have received the final “as-built” survey for each
Unit;


 


(ii)           the Lender shall be satisfied that
use and occupancy permits or certificates of occupancy will be issued for
permanent occupancy of all of the Units; and


 


(iii)         if the Lender shall have so requested,
the Lender and the Title Company shall have been provided with all final
waivers of liens or, as to any disputed lien or claim of lien, a bond
acceptable to Lender, or sufficient funds to cover any potential liability have
been placed in escrow with an escrow agent satisfactory to the Lender.


 


(b)                                  All other terms and
conditions of the Loan Documents required to be met as of the date of the final
advance of Loan proceeds shall have been met to the satisfaction of the Lender.


 


2.7                               Use
of Funds. Comstock agrees not to expend any part of the proceeds of the
Loan for any purpose except in accordance with this Agreement and the other
Loan Documents.  Comstock further
covenants and agrees that the proceeds of the Loan shall be used only for
acquisition and/or construction of homes as approved by the Lender in
connection with Projects, including the soft costs and other general and
administrative expenses and overhead expenses of Comstock.


 


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2.8                               Advances
to Others for Account of Comstock. 
The Lender may make Loan advances hereunder in order to satisfy
conditions of the Commitment, the Note or the other Loan Documents.  Any such advance may be made directly to the
Title Company or to any contractor, subcontractor or materialman, or to any of
them jointly. Any and all such advances shall constitute part of the
Indebtedness secured by the Deed of Trust regardless of the disposition of such
amounts by the party or parties to whom an advance is made.


 


2.9                               Additional
Funds.  If, at any time, the
Lender determines that the unfunded balance of the Loan is insufficient to pay
for the cost of completing construction of the Pre-Sold and Speculative Units
according to the plans and specifications for such Units then (unless the
Lender is otherwise satisfied that such deficiency no longer exists):  (i) until such deficiency is cured by
Comstock as set forth in the Loan Documents, the Lender shall not be obligated
to make any further advances relating to such unit for which there is a
deficiency and/or readvances under the Loan; (ii) Comstock shall deposit funds
with the Lender in an amount equal to the deficiency as determined by Lender
within fifteen (15) business days after notification from the Lender to
Comstock of such deficiency; and (iii) such deficiency shall be deemed a
default under the Loan Documents unless adequate funds are deposited with
Lender therefor within the fifteen (15) business day period previously
described in clause (ii) of this paragraph. 
Such funds deposited with Lender shall be advanced to Comstock prior to
any further advances and/or readvances of the proceeds of the Loan for the unit
where a deficiency is determined to exist. Nothing in this Section 2.9 shall be construed so as to
relieve Lender of its obligation to fund all other advances on all other
Units/Projects where said deficiency is not applicable unless such deficiency
is not cured within the timeframe set forth herein.


 


2.10                        Future
Projects.  Prior to the Lender’s
initial advance or readvance of any Loan proceeds for any Future Projects,
Comstock and the Lender must have received, reviewed and found satisfactory (a)
amendments, modifications or spreaders to the Loan Documents, as applicable,
including, without limitation, the addition to the Guaranty of an additional
co-guarantor which owns or will own such Future Project, and (b) the items set
forth on Exhibit “B” attached hereto, as applicable.


 


ARTICLE III — REPRESENTATIONS
AND WARRANTIES


 


Comstock hereby represents and warrants to the Lender, as of the date
hereof and at all times hereafter, that:


 


3.1                               Organization,
Power, Etc. (a) Borrower is a duly organized, validly existing
corporation, in good standing under the laws of the jurisdiction of its
organization; (b) Comstock L’Ambiance is duly organized, validly existing
limited liability company, in good standing under the laws of the jurisdiction
of its organization and shall continue to be so organized until such time as
the L’Ambiance portion of the Loan is repaid; (c) each of the entities
constituting Comstock has the power and authority to own its properties and to
carry on its business as now being conducted; (d) each of the entities
constituting Comstock is duly qualified to do business


 


11
















 


in the jurisdiction where the Property is located and in every
jurisdiction in which the nature of its business or its properties makes such
qualification necessary; (e) each of the entities constituting Comstock is in
compliance with all laws, regulations, ordinances and orders of public
authorities applicable to it; and (f) each of the entities constituting
Comstock has the full power, authority and legal right to execute, deliver and
perform the covenants and obligations set forth in this Agreement and the other
Loan Documents and to carry out the terms hereof and thereof.


 


3.2                               Validity
of Loan Documents.  The
execution, delivery and performance by Comstock of the Note and the other Loan
Documents: (a) are within the legal powers of Comstock; (b) have been duly authorized
by all requisite partnership and/or membership action, as applicable; (c) have
received all necessary governmental approvals; (d) will not violate any
provision of law, any order of any court or other agency of government or any
articles of organization, membership and/or operating agreement, partnership
agreement, indenture, agreement or other instrument to which Comstock is a
party or by which it or any of its property is bound, or be in conflict with,
result in a breach of or constitute (with due notice or lapse of time or both)
a default under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its property or assets, except as contemplated by the
provisions of the Loan Documents; and (e) when executed and delivered by
Comstock, will constitute the legal, valid and binding obligations of the
Comstock and other obligors named therein, if any, in accordance with their
respective terms.


 


3.3                               Financial
Statements.  All financial
statements delivered to the Lender are true and correct in all respects, have
been prepared in accordance with generally accepted accounting practices
consistently applied (other than with respect to individual Guarantors), and
fairly present the financial condition of the Comstock and other parties named
therein as of the dates thereof.  No
material adverse change has occurred in the financial condition reflected
therein since the dates thereof and no material additional liabilities have
been incurred since the most recent date thereof other than the borrowing
contemplated in the Commitment and this Agreement.


 


3.4                               Other
Information.  All other
information, reports, papers and data given to the Lender with respect to Comstock
or others obligated under the terms of the Loan Documents and the Property are
accurate and correct in all material respects and complete insofar as
completeness may be necessary to give the Lender a true and accurate knowledge
of the subject matter.


 


3.5                               Utilities
and Access.  All utility services
and access necessary for the construction of the Improvements and the use
thereof for residential purposes are available at the boundaries of each Lot
(or provisions for the extension of same to each Lot), including, without
limitation, roads, telephone service, water supply, storm and sanitary sewer
facilities, and natural gas or electric facilities.


 


12
















 


3.6                               Defaults.
There is no Default on the part of the Borrower under the Note or any of the
other Loan Documents and no event has occurred that may give rise to a Default.


 


3.7                               Subordinate
Financing.


 


(a)                                  Subordinate
financing on any Future Projects shall be subject to the approval of the Lender
and such approval shall be made on a project by project basis in the Lender’s
sole discretion. The subordination agreement used for any Future Projects shall
be upon Lender’s standard form and shall in all respects be acceptable to
Lender in its sole discretion.


 


ARTICLE IV — AFFIRMATIVE
COVENANTS


 


Until the Indebtedness has been paid in full and the Loan has been
terminated, Comstock hereby affirmatively covenants and agrees as follows:


 


4.1                               Financial
Statements; Sales and Inventory Reports.


 


For purposes of this Agreement, the term the “Entities” shall mean the
Borrower and Comstock L’Ambiance.


 


(a)                                  as
soon as available, but in no event later than ninety (90) days after the close
of each fiscal year of the Entities, and, in the case of the Guarantor not
later than ninety (90) days after the end of each calendar year, financial
statements of the Entities and the Guarantor (all of which financial statements
may include, as requested by the Lender, a balance sheet, income statement,
sources and uses of funds for such fiscal and/or calendar year, projected
sources and uses of funds for the coming year, detailed listing and description
of all contingent liabilities, tax returns, written verification of liquidity
and such other supporting schedules and documentation which the Lender may
request).  All financial statements shall
be internally prepared and shall not be required to be audited by an
independent accountant, except for the financial statements of Borrower, which
shall be audited; and


 


(b)                                 if
requested by the Lender, within thirty (30) days after the close of the
Entities’ respective quarterly business period, an internally prepared balance
sheet and income statement of the Entities;


 


All financial information shall be certified on the Lender’s Financial
Statement Certification form by the Entities or by the Guarantor, as
applicable, with an original signature and date.


 


(c)                                  if
requested by the Lender, within thirty (30) days after the close of Comstock’s
monthly business period, Comstock shall provide to the Lender written status
reports indicating, by project (to include each and every project in which
Borrower is involved, whether or not such project is financed by the Lender),
the number of the Comstock’s lots and


 


13
















 


units (a) sold and settled, (b) under contract, and (c) remaining to be
sold, together with such additional information as the Lender may reasonably
require.


 


The term “financial statements” may include income tax returns,
consolidated statements of related companies, interim statements, statements of
contingent liabilities, detailed cash flow statements, and supporting schedules
and documentation, if requested by the Lender.


 


4.2                               Construction.  After each advance and/or readvance of
proceeds under the Loan, Comstock shall commence to acquire the Land and/or
construct the improvements for which each such advance and/or readvance is
designated and will prosecute the same in good faith with diligence and
continuity in accordance with the Plans and Specifications.


 


4.3                               Approval
and Permits.  No work associated
with the construction of any of the improvements shall be commenced by Comstock
unless and until the Plans and Specifications for such improvements have been
approved by all governmental authorities having or claiming jurisdiction and by
the beneficiary of any applicable restrictive covenant, and unless and until
all required building and other permits have been validly issued and all
required fees and bonds have been paid or posted, as the circumstances may
require.


 


4.4                               Free
and Clear of Liens.  Except as
may be otherwise specifically permitted under the Loan Documents, Comstock
shall not make any contract or arrangement of any kind which would give rise to
a lien on any portion of the Property. 
Construction of each Unit shall be completed by Comstock free and clear
of all mechanics’ and materialmen’s liens.


 


4.5                               Compliance
with Laws - Encroachments.  The
Improvements shall be constructed by Comstock in strict accordance with alt
applicable present and future laws, ordinances, rules, regulations,
requirements and orders of any governmental or regulatory authority having or
claiming jurisdiction.  Each Unit (a)
shall be constructed entirely within the appropriate Lot, (b) will not encroach
upon any easement or right-of-way, or upon the land of others, (c) shall be
wholly within all applicable building restriction lines and set-backs, however
established, and (d) shall be in strict accordance with all applicable use or
other restrictions and the provisions of any prior agreements, declarations,
covenants and all applicable zoning and subdivision ordinances and regulations.


 


4.6                               Surveys.  At the time Comstock requests its first
construction draw on any Lot, Lender shall verify that Borrower has performed a
wall check survey.  Upon the completion
of each Unit, Comstock shall furnish the Lender with a final house location
survey prepared by a registered land surveyor.


 


4.7                               Inspections:
Cooperation.  Comstock shall
permit the Lender and its duly authorized representatives (including, without
limitation, the Progress Inspector) to enter upon the Property at all
reasonable times and in a reasonable manner to inspect the Improvements and any
and all materials and to examine all detailed plans and shop drawings and similar
materials relating to the construction of the Improvements.  Comstock will at all times cooperate and 


 


14
















 


request its subcontractors and materialmen to cooperate with the Lender
and its duly authorized representatives (including, without limitation, the
Progress Inspector) in connection with or in aid of the performance of the
Lender’s functions under this Loan Agreement. 
Comstock shall pay all inspection fees incurred by the Lender in
connection with the Loan; however, so long as no default exists, inspections
shall be limited to two site inspection visits per month per Project, one
monthly site inspection to be performed by the Progress Inspector and the other
monthly draw inspection to be performed in-house by Lender with no
corresponding cost to Comstock. Inspection fees may be deducted by the Lender
from the Borrower’s applicable Loan disbursement.


 


4.8                               Vouchers
and Receipts.  Comstock will
furnish to the Lender, promptly on demand, a computer generated report of job
costs and accounts payable for each Project financed under the Loan, and from
and after any Default under the Loan, (i) any contracts, bills of sale,
statements, receipted vouchers or agreements pursuant to which Comstock has any
claim of title to any materials, fixtures or other articles delivered or to be
delivered to the Land or incorporated or to be incorporated into the
Improvements and (ii) a verified written statement, in such form and detail as
the Lender may require, showing all amounts paid and unpaid for labor and
materials and all items of labor and materials to be furnished for which
payment has not been made and the amounts to be paid therefor.


 


4.9                               Payments
for Labor and Materials. 
Comstock will pay when due all bills for materials supplied and for
services or labor performed in connection with the construction of the
Improvements.


 


4.10                        Correction
of Construction Defects. 
Comstock will promptly correct or cause the correction of any structural
defects in the Improvements and any substantial departures or deviations from
the Plans and Specifications.


 


4.11                        Insurance.  Comstock will comply with all insurance
requirements set forth in the Deed of Trust.


 


4.12                        Hazardous
Materials.  Comstock will comply
with the provisions of the Deed of Trust regarding Hazardous Materials and all
applicable Environmental Regulations.


 


4.13                        Subcontractors.  Comstock shall immediately disclose to the
Lender upon request the names of all subcontractors with whom Comstock has
contracted or intends to contract for construction of the Improvements or for
the furnishing of labor or materials therefor.


 


4.14                        Profits.
Comstock L’Ambiance, L.C. and any entity owning a Future Project shall retain a
minimum of fifty percent (50%) of any and all net profits of Comstock
L’Ambiance, L.C. and any entity owning a Future Project until the later to
occur of (i) the Maturity Date or (ii) the Loan has been paid in full on the
L’Ambiance Project, for Comstock L’Ambiance, L.C., or on a Future Project, for
the entity owning such Future Project.


 


15
















 


ARTICLE V — NEGATIVE
COVENANTS


 


Until the Indebtedness has been paid in full and the Loan has been
terminated, Comstock hereby covenants and agrees as follows:


 


5.1                               Restrictions
on Future Purchases.  Throughout
the term of the Loan, Comstock (including any co-guarantors that may be
approved by the Lender for Future Projects) shall not purchase, with recourse
debt, any tracts of land which are not solely comprised of finished lots
without first notifying the Lender or which contain more than ten (10) lots
without first notifying the Lender.


 


5.2                               Changes
to Plans and Specifications. 
Without the prior written consent of the Lender, Comstock will not
permit any substantial changes in the Plans and Specifications or in the design
concept for the Improvements.


 


5.3                               Prohibition
on Transfer of Assets.  Without
the prior written consent of the Lender, Comstock will not transfer any of its
assets, except for transfers in the ordinary course of business and transfers
for which Comstock receives consideration substantially equivalent to the fair
market value of the transferred asset.


 


5.4                               Assignments.  Without the prior written consent of Lender,
Comstock will not transfer, assign, pledge or hypothecate any of its rights to
advances, or any of its rights or obligations under this Agreement.  Any assignment made or attempted, by Comstock
without the prior written consent of the Lender shall be void.  No consent by the Lender to an assignment by
Comstock shall either (a) release Comstock as the party primarily obligated and
liable under the terms of this Agreement unless Comstock shall be released
specifically by the Lender in writing, or (b) be deemed to be a waiver of the
requirement of prior written consent by the Lender with respect to each and
every further assignment;


 


5.5                               Canceled
Contracts.  In the event of the
cancellation of any Contract which results in the Speculative Unit Limit
outlined in Section 2.2(f) hereof to be exceeded, then Comstock shall, within
ninety (90) days after such cancellation or default, reduce and curtail the
outstanding principal balance of the Loan to a sixty percent (60%)
loan-to-value with regard to the unit or units over such limit, provided that
Comstock has not entered into a Contract with respect to such Unit within such
ninety (90) day period. Notwithstanding the foregoing to the contrary, the
Lender shall not be obligated to fund additional advances and/or readvances
under the Loan for the Speculative Unit(s) which exceed the limit so long as
the limit on Speculative Units continues to be exceeded.  So long as no Default shall exist hereunder
and so long as each and every condition to advances shall have been satisfied,
the Lender shall continue to fund advances and/or readvances under the Loan for
Pre-Sold Units and all Speculative Units as permitted.  It is agreed that exceeding the applicable
limit for Speculative Units is not an event of default and only Comstock’s
failure to curtail the Loan (as required) as it relates to any Speculative Unit
over the limit shall be a Default hereunder.


 


16
















 


ARTICLE VI — DEFAULT


 


Each of the following events shall constitute a “Default” under this
Agreement and each of the other Loan Documents:


 


6.1                               Payment
of Indebtedness.  Any failure by
the Borrower to pay when due any and all amounts payable by the Borrower under
the terms of the Note or any of the other Loan Documents, which failure to pay
remains uncured for a period of five (5) calendar days after the date such
payment is due, including, without limitation, any principal payment, interest
payment, letter of credit reimbursement, loan fee, extension fee, letter of
credit fee or late charge, and including any advances made by the Lender from
the proceeds of the Loan or otherwise and interest thereon at the applicable
rate set forth in the Loan Documents.


 


6.2                               Performance
of Obligations. Any default by the Borrower or Guarantor in the due
observance or performance of any of the Obligations and such default, if other
than in payment of the Indebtedness or other than default with respect to the
following listed sections, shall remain uncured thirty (30) days after the
receipt by Borrower of written notice from Lender identifying such default., If
Borrower receives such notice, Borrower shall diligently pursue a cure of such
default. Default with respect to the following listed sections shall not be
subject to such thirty (30) day notice requirement:  Section
4.11 (Insurance); Section 4.14
(Profits); Section 5.3 (Transfer
of Assets); Section 5.4 (Assignment);
Section 6.3 (51% Ownership); Sections 6.6(b) and 6.6(c) (Progress of Construction); Section 6.7 (Proceeds Insufficient to
Complete); Section 6.8 (Cross
Defaults); Section 6.9 (Mechanics
Liens); Section 6.10 (Adverse
Action or Insolvency); Section 6.12
(Hazardous Materials); and Section 6.13
(Death or Dissolution).


 


6.3                               51%
Ownership Interest In co-guarantors. 
Borrower’s failure to maintain a minimum fifty-one percent (51%)
ownership interest in any co-guarantor which owns a Project or any Future
Project.


 


6.4                               Other
Defaults.  The occurrence of any
Default under the Deed of Trust or the Note or any of the other Loan Documents.


 


6.5                               Representations
and Warranties.  Any determination
by the Lender that any representation or warranty contained in any of the Loan
Documents or in any certificate, opinion, financial information or any other
form delivered to the Lender in connection with the Loan, is incorrect or
misleading in any material respect at any time.


 


6.6                               Progress
of Construction.  Except for
delays unavoidably occasioned by strikes, lock- outs, war or civil disturbance,
natural disaster or acts of God (a) any delay in construction of any
Improvements caused by lack of good faith or reasonable dispatch, (b) any
abandonment of the work or discontinuation of construction for a period of more
than thirty (30) consecutive days, unless the Lender is notified of Comstock’s
Project Withdrawal or such abandonment of work or discontinuance of
construction is otherwise approved by the Lender, or (c) any failure to
complete the construction of any Unit on or before the maturity date of the
Loan for such Unit.


 


17
















 


6.7                               Proceeds
Insufficient to Complete.  Any
failure by Comstock to pay or deposit the amount of the deficiency as required
by Section 2.9 of this Agreement,
if the Lender determines that the amount of undisbursed Loan proceeds available
is less than the amount necessary or required to complete and pay for the
construction of a Unit.


 


6.8                               Cross
Defaults.  The occurrence of any
Default or Event of Default under any other loan or credit facility from the
Lender to Borrower.


 


6.9                               Mechanic’s
Lien.  The establishment of any
mechanics’ or materialmen’s lien against any portion of the Property, unless
the same is insured over by the Title Company, satisfied, or bonded to the
satisfaction of the Lender within twenty (20) days.


 


6.10                        Adverse
Action or Insolvency.  (a) the
entry of a final judgment for the payment of money in excess of $50,000.00
against the Borrower or the Guarantor that is not discharged or bonded within
thirty (30) days after the date of entry, (b) the institution of any proceeding
by or against the Borrower or the Guarantor in bankruptcy, or for a
reorganization or an arrangement with creditors under any insolvency or debtor
relief law which is not dismissed or stayed within thirty (30) days of the date
of filing, (c) the appointment of any receiver, liquidator, assignee, custodian
or similar official for the Borrower or the Guarantor or any portion of the
Property, or (d) the issuance of any writ or order of attachment, levy or
garnishment against the Borrower or the Guarantor which is not discharged to
the Lender’s satisfaction within thirty (30) days after the date of such
issuance.  


 


6.11                        Financial
Condition.  Any reasonable
determination by the Lender that a material adverse change has occurred in the
financial condition of the Borrower or any Guarantor.


 


6.12                        Hazardous
Materials.  Violations of any
applicable Environmental Regulations or requirements of the Deed of Trust
pertaining to Hazardous Materials.


 


6.13                        Death
and Dissolution.  The death,
legal incompetency, dissolution, liquidation or termination of Borrower or any
Guarantor, or of any general partner of Borrower or any Guarantor, subject to
the provisions of Section 4 of the Guaranty Agreement.


 


ARTICLE VII — DEFAULT
- REMEDIES


 


7.1                               Remedies
on Default.  Upon the happening
of any Default, the Lender shall not be obligated to advance any additional
Loan proceeds, and, in addition to any other rights or remedies available to it
under this Section, the Deed of Trust and other Loan Documents, the Lender may
enter into possession of the Property or any portion thereof, and perform any
and all work and labor necessary to complete the construction of the
Improvements (whether or not in accordance with the Plans and Specifications)
and to employ watchmen to protect the Property.


 


18
















 


All sums expended by the Lender for such purposes shall be deemed to
have been paid to the Borrower or for its benefit and shall constitute part of
the Indebtedness secured by the Deed of Trust. Comstock hereby constitutes and
appoints the Lender as its true and lawful attorney-in-fact with full power of
substitution to complete the work in the name of Comstock, and hereby empowers
said attorney or attorneys as follows: (a) to use any funds of Comstock,
including any escrow balances and any unadvanced Loan proceeds, for the purpose
of completing the construction of the Improvements, whether or not in the
manner called for in the Plans and Specifications; (b) to make such additions
and changes and corrections in the Plans and Specifications as may be necessary
or desirable in the judgment of the Lender to complete the construction of the
Improvements; (c) to employ such contractors, subcontractors, agents,
architects and inspectors as may be required for such purpose; (d) to pay,
settle or compromise all existing bills and claims which are or may be liens
against the Property, or may be necessary or desirable for the completion of
the work or the clearance of title; (e) in the name of Comstock to execute all
applications and certificates that may be required; (f) to execute, acknowledge
and deliver such documents, instruments and certificates, and to take such
other actions, in the name and on behalf of Comstock and at the sole cost and
expense of Comstock, as the Lender, in its sole discretion, deems necessary,
desirable or appropriate to effectuate the provisions of this section; and (g)
to do any and every act with respect to the construction of the Improvements
that Comstock may do in its own behalf.


 


It is understood and agreed that this power of attorney shall be deemed
to be a power coupled with an interest which cannot be revoked. Such
attorney-in-fact shall also have power to prosecute and defend all actions or
proceedings in connection with the construction of the Improvements and to take
such actions and require such performance as is deemed necessary.


 


The Lender shall also have the right, upon the happening of any
Default, to do any one or more of the following, at its election, but without
any obligation to do so:


 


(a)                                  to
declare the Indebtedness immediately due and payable;


 


(b)                                 to
terminate the Loan;


 


(c)                                  to
decline to make any further Loan advances and/or readvances;


 


(d)                                 to
reduce any claim to judgment;


 


(e)                                  to
exercise any and all rights and remedies afforded by this Agreement and the
other Loan Documents, as well as any and all legal or equitable rights and
remedies afforded under any statute or otherwise; and


 


(f)                                    to
set off and apply against the Indebtedness any and all deposits, funds or
assets at any time held, and any and all indebtedness at any time owed, by the
Lender to or for the credit or account of Comstock.  


 


19
















 


 


7.2                               No
Conditions Precedent to Exercise of Remedies.  Neither Borrower nor any Guarantor shall be
relieved of any obligation by reason of the failure of the Lender to comply
with any request of Comstock or of any other person to take action to foreclose
on the Deed of Trust or otherwise to enforce any provisions of the Note or the
other Loan Documents, or by reason of the release, regardless of consideration,
of all or any part of the Property, or by reason of any agreement of
stipulation between any subsequent owner of any portion of the Property and the
Lender extending the time of payment or modifying the terms of the Notes or the
other Loan Documents without first having obtained the consent of Borrower or
such Guarantor; and in the latter event. 
Borrower and each Guarantor shall continue to be liable to make payments
according to the terms of any such extension or modification agreement, unless
expressly released and discharged in writing by the Lender.  


 


7.3                               Remedies
Cumulative and Concurrent.  No
remedy herein conferred upon or reserved to the Lender is intended to be
exclusive of any other remedies provided for in the Note or in the other Loan
Documents, and each and every such remedy shall be cumulative, and shall be in
addition to every other remedy given hereunder, or under the Note, the Deed of
Trust or the other Loan Documents, or now or hereafter existing at law or in
equity or by statute.  Every right, power
and remedy given by the Note and the Loan Documents to the Lender shall be
concurrent and may be pursued separately, successively or together against the
Borrower, any Guarantor, or the Property or any part thereof, or any one or
more of them; and every right, power and remedy given by the Note or the other
Loan Documents may be exercised from time to time as often as may be deemed
expedient by the Lender.  


 


7.4                               Strict
Performance.  No delay or omission
of the Lender in exercising any right, power or remedy accruing upon the
happening of a Default shall impair any such right, power or remedy or shall be
construed to be a waiver of any such Default or any acquiescence therein.  No delay or omission on the part of the
Lender in exercising any option for acceleration of the maturity of the
Indebtedness, or for foreclosure under the Deed of Trust following any Default
as aforesaid, or any other option granted to the Lender hereunder in any one or
more instances, or the acceptance by the Lender of any partial payment on
account of the Indebtedness, shall constitute a waiver of any such Default and
each such option shall remain continuously in full force and effect.  


 


7.5                               Mandatory
Arbitration.  Any controversy or
claim between or among Comstock and the Lender arising out of or relating to
any Loan Document, including any claim based on or arising from an alleged
tort, shall be determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the Rules of
Practice and Procedure for the Arbitration of Commercial Disputes of Judicial
Arbitration and Mediation Services, Inc., predecessor in interest to Endispute,
Inc. (“J.A.M.S./Endispute”) and the Special Rules set forth below.  In the event of any inconsistency, the
Special Rules shall control, Judgment upon any arbitration award may be entered
in any court having jurisdiction.  Any
party to the Loan Documents may bring an action, including a summary or
expedited proceeding, to compel arbitration of any controversy or claim to
which any of the Loan Documents apply in any court having jurisdiction over
such action.  


 


20
















 


(a)                                  Special
Rules.  The arbitration shall be
conducted in the city of the Borrower’s domicile at the time of this
Agreement’s execution and administered by J.A.M.S./Endispute who will appoint
an arbitrator, if J.A.M.S./Endispute is unable or legally precluded from
administering the arbitration, then the American Arbitration Association shall
serve.  All arbitration hearings will be
commenced within ninety (90) days of the demand for arbitration; further, the
arbitrator shall only, upon a showing of cause, be permitted to extend the commencement
of such hearing for up to an additional sixty (60) days.  


 


(b)                                  Reservation
of Rights.  Nothing in the Loan
Documents shall be deemed to (i) limit the applicability of any otherwise
applicable statutes of limitation or repose and any waivers contained in the
Loan Documents; or (ii) be a waiver by the Lender of the protection afforded to
it by 12 U.S.C. Sec. 91 or any substantially equivalent state law; or
(iii)  limit the right of the Lender (A)
to exercise self help remedies such (but not limited to setoff), or  (B) to foreclose against any real or personal
property, or (C) to obtain from a court provisional or ancillary remedies such
as (but not limited to) injunctive relief, the appointment of a receiver or the
attachment of assets.  The Lender may
exercise such self-help rights, foreclose upon such property, or obtain such
provisional or ancillary remedies before, during or after the pendency of any
arbitration proceeding brought pursuant to the Loan Documents.  At the Lender’s option, foreclosure under a
deed of trust or mortgage may be accomplished by any of the following:  the exercise of a power of sale under the
deed of trust or mortgage, or by mortgage, or by judicial sale under the deed
of trust or mortgage, or by judicial foreclosure.  Neither the exercise of self-help remedies
nor the institution or maintenance of an action for foreclosure or provisional
or ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.  No provision in the Loan Documents regarding
submission to jurisdiction and/or venue in any court is intended or shall be
construed to be derogation of the provisions in any Loan Document for
arbitration of any controversy or claim.


 


ARTICLE VIII — MISCELLANEOUS


 


8.1                               No
Warranty by Lender.  By accepting
or approving anything required to be observed, performed or fulfilled by
Borrower or any Guarantor pursuant to this Agreement or any other Loan
Documents, including, without limitation, any plans, specifications,
certificate, financial information, survey, receipt, appraisal or insurance
policy, 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. Any such acceptance or approval thereof
shall not be or constitute any warranty or representation with respect thereto
by the Lender.


 


8.2                               Liability
of Lender. 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 or gross
negligence. The Lender shall incur no liability to Comstock 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


 


21
















 


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 or gross
negligence.


 


8.3                               Modification
- Waiver. None of the terms or provisions of this Agreement may be
changed, waived, modified, discharged or terminated except as provided in the
Deed of Trust.


 


8.4                               Third
Parties - Benefit.  All conditions
set forth herein with respect to the obligations of the Lender to make Loan
advances are imposed solely and exclusively for the benefit of the Lender, and
no other person shall either have standing to require satisfaction of such
condition in accordance with its terms, be entitled to assume that the Lender
will refuse to make advances in the absence of strict compliance with any or
all of such conditions, or be deemed to be beneficiary of such conditions under
any circumstances, 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 Lender shall in no event be responsible or liable to any person other than
the Borrower for the disbursement of or failure to disburse any of the proceeds
of the Loan, and no contractor, subcontractor, laborer or material supplier or
other person shall have any right or claim against the Lender with respect to
this Agreement.  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.


 


8.5                               Captions
and Headings.  The captions and
headings contained in this Agreement are included herein for convenience of
reference only and shall not be considered a part hereof.


 


8.6                               Counterparts.  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.


 


8.7                               Signs;
Publicity.  At the request and
expense of the Lender, Comstock shall install a sign or signs at a location or
locations on the Property satisfactory to the Lender, reciting, among other
things, that the Lender is financing the construction of the Improvements.  Comstock shall (at the expense of Lender)
obtain all permits, licenses and approvals from the appropriate governmental
agency or association that are necessary for the erection and existence of any
such signs.  Comstock expressly
authorizes the Lender to prepare and to furnish to the news media for
publication from time to time news releases with respect to any portion of the
Property detailing the Lender’s involvement with the financing.


 


8.8                               Applicable
Law.  This Agreement shall be
governed by and construed, interpreted and enforced in accordance with the laws
of the Jurisdiction of Choice, unless the 
“choice of law” rules of the Jurisdiction of Choice can be construed or
interpreted to require the laws of another jurisdiction to govern, in which
case the “choice of law” rules of the Jurisdiction of Choice shall not
apply.  


 


22
















 


8.9                               Time
of Essence. Time shall be of the essence of each and every provision of
this Agreement of which time is an element.


 


8.10                        Conflicts.  The terms and conditions of the Note and the
other Loan Documents are incorporated into this Agreement and made a part
hereof as if specifically set forth herein. In the event any provision of this
Agreement conflicts with the terms of any other Loan Document, the terms of
this Agreement shall prevail. For purposes of this Section the absence of a
provision from any Loan Documents shall not constitute a conflict.


 


8.11                        Quality
of Documents and Other Items. 
Each document, item or other evidence required to be delivered to the
Lender in connection with this Agreement shall be satisfactory in form and
substance to the Lender in its sole discretion. In addition, all surveys,
appraisals, environmental site assessments, inspections, cost, reviews,
subcontracts, leases, bonds, insurance policies and all other documents
required or contemplated by this Agreement and the other Loan Documents shall
be satisfactory to the Lender and, if required by the Lender, Comstock shall
provide the Lender and its counsel with copies of any or all of such documents.
All contractors, subcontractors, sureties, insurers and any other party
responsible for the execution and preparation of the foregoing documents shall
also be satisfactory to the Lender.


 


8.12                        Professional
Services.  If requested by
Lender, Comstock shall: (a) not more frequently than annually, cause an
inspection and written appraisal of the Property (or such parts of it as are designated
in the Lender’s request) to be made and provided to Lender by an appraiser
approved and engaged by the Lender in its sole discretion; and (b) cause to be
conducted or prepared any other written report, summary, opinion, inspection,
review, survey, audit or other professional service relating to the Property or
any operations in connection with it (all as designated in Lender’s request) as
Lender may reasonably request, including, without limitation, any accounting,
auctioneering, architectural, consulting, engineering, design, legal,
management, pest control, surveying, title abstracting or other technical,
managerial or professional service relating to the Property or its operations.
The Lender may elect to deliver any such request by facsimile, by mail or by
hand delivery addressed to the Borrower as provided herein or by any other
legally effective method, and it may be given at any time and from time to
time.


 


8.13                        Further
Assurances.  At the request of
the Lender, Comstock shall take any action or execute any additional document
reasonably required by the Lender to secure the Indebtedness, confirm the lien
of the Deed of Trust or further the intent of any of the Loan Documents.


 


8.14                        Costs
and Expenses.  The Borrower shall
pay all out-of-pocket fees, charges and expenses incurred by or on behalf of
the Lender in connection with the Loan and the making, closing and
administration of the Loan, including, without limitation (a) fees and expenses
for the examination of title to each Lot; (b) recording and filing fees,
recordation taxes and transfer taxes; (c) Title Company premiums, fees and
charges; (d) surveyor charges; (e) 
appraisal fees; (f) inspection fees; (g) the fees and expenses of the
Lender’s counsel; (h) all


 


23
















 


amounts due the Progress Inspector; (i) the payment, satisfaction,
discharge and release of any encumbrance, tax, assessment or other charge or
lien upon any portion of the Property; and (j) the construction, maintenance
and protection of the Improvements and every portion thereof. Further, the
Lender may (but shall be under no obligation to do so) advance for the account
of Comstock as part of or in addition to the Loan any amount or amounts as the
Lender may deem necessary or advisable in order to fulfill the obligations of
Comstock hereunder, which amount or amounts may be disbursed by the Lender
directly to a third party in order to protect its interests, and any amount so
applied by the Lender shall constitute a portion of the Indebtedness, even
though the aggregate of the amounts so applied, together with the other
advances under the Note, may exceed the principal amount of the Note.


 


8.15                        Fees
and Expenses - Indemnity. 
Comstock will hold the Lender harmless and indemnify the Lender from all
claims of brokers and “finders” arising by reason of the Loan, the execution
and delivery of this Agreement or the making of the Loan.  Comstock shall protect, indemnify and save
harmless the Lender and its directors, officers, agents, and employees, the
Deed of Trust trustees, and all independent contractors from and against all
liabilities, obligations, claims, damages, fines, penalties, causes of action,
costs and expenses (including, without limitation, attorneys’ fees and
disbursements), imposed upon or incurred by or asserted against any of them in
connection with the Loan.


 


8.16                        Participation
or Sale of the Loan.  The Lender
may sell the Loan or any undivided ownership or participation interest in the
Loan and disclose in confidence such financial and other information with
respect to Borrower, the Loan, any Guarantor, and/or the Property, or any
portion thereof, which the Lender may deem necessary in connection with such
sale or participation.  Comstock shall
execute, acknowledge and deliver any and all instruments reasonably requested
by the Lender in connection with the foregoing.


 


8.17                        Seal.  If any Borrower is a corporation, the
designation “(SEAL)” on this Agreement shall be effective as the affixing of
such Borrower’s corporate seal physically to this Agreement.


 


8.18                        Waiver
of Jury Trial.  The Borrower and the
Guarantors waive trial by jury in any action or proceeding to which the
Borrower and Guarantors and the Lender may be parties, arising out of or in any
way pertaining to this Agreement, the Note, or any of the other Loan
Documents.  It is agreed and understood
that this waiver constitutes a waiver of trial by jury of all claims against
all parties to such actions or proceedings, including, claims against parties
who are not parties to the Note.  This
waiver is knowingly, willingly and voluntarily made by the Borrower and the
Guarantors.


 


[SIGNATURES APPEAR ON THE NEXT PAGE]


 


24
















 


IN WITNESS WHEREOF,
the Borrower and the Lender, intending to be executed and delivered under seal,
have executed and delivered these presents or caused these presents to be
executed and delivered under seal as of the year and day first above written.


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John Dapogny

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Name:

  	
  John Dapogny

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
  Address:

  	
  1313 Dolley Madison Blvd.

  
	
   

  	
  Suite 302

  
	
   

  	
  McLean, Virginia 22101

  
	
   

  	
   

  
	
  ATTEST:

  	
  COMSTOCK L’AMBIANCE:

  
	
   

  	
   

  
	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John Dapogny

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Name:

  	
  John Dapogny

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
  Address:

  	
  1313 Dolley Madison Blvd.

  
	
   

  	
  Suite 302

  
	
   

  	
  McLean, Virginia 22101

  
																



 


[signatures continued on following page]


 


25
















 


	
  WITNESS:

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONSBANK, N.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Linda P. Long

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  8300 Greensboro Drive

  Suite 300

  McLean, Va. 22102-3604

  	
   

  
						



 


26
















 


PREPARED OUT OF STATE


 


SECOND LOAN MODIFICATION AGREEMENT


 


THIS SECOND LOAN MODIFICATION AGREEMENT (this “Agreement”) is made this
28th day of July, 1998, by and among (a) COMSTOCK HOLDING COMPANY,
INC. (“Borrower”), a Virginia corporation, (b) COMSTOCK L’AMBIANCE, L.C., a
Virginia limited liability company (“Comstock L’Ambiance”) and CHRISTOPHER
CLEMENTE and GREGORY BENSON, jointly and severally (collectively, the
“Guarantor”), (c) PATRICIA I. DUBOIS, a resident of Fairfax County, Virginia
and GREGORY L. CARTER, a resident of Fairfax County, Virginia (“Trustees”), and
(d) NATIONSBANK, N.A., a national banking association (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the principal amount of Two Million Eight Hundred Thousand and
No/100 Dollars ($2,800,000.00) (as amended, and as the same may be further
amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented from
time to time, the “Deed of Trust”) granting a security interest to the Trustees
in certain land located in Fairfax County, Virginia, as more particularly
described in Exhibit A attached thereto, and;


 


WHEREAS, Lender and Borrower have mutually agreed to (a) increase the
principal amount of the Loan and the Note to the maximum aggregate amount of
Three Million Three Hundred Fifty Thousand and No/100 Dollars ($3,350,000.00)
and (b) spread the lien of the Deed of Trust to include the certain land
described more particularly in Exhibit A-1 attached hereto, on the terms
and conditions set forth herein.


 


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


 


1
















 


1.                                      Recitals.  The recitals set forth above are a material
part of this Agreement.  Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Note.


 


(a)                                  The
Note is hereby amended to increase the maximum aggregate principal amount which
can be outstanding under the Note at any time to Three Million Three Hundred
Fifty Thousand and No/100 Dollars ($3,350,000.00).


 


(b)                                 Commencing
as of the date hereof, Borrower shall pay to Lender non-refundable loan fees
payable in quarterly payments as follows: (i) on or before August 1, 1998,
a loan fee of $5,235.00, (ii) on or before November 1, 1998, a loan fee of
$5,235.00, (iii) on or before February 1, 1999, a loan fee of $5,235.00,
and (iv) on or before May 1, 1999, a loan fee of $2,921.00. This
Section 2(b) supercedes Section 4 of the Note and Section 7 of
the First Loan Modification Agreement dated June 10, 1998 by and among the
Borrower, Comstock L’Ambiance, the Guarantor, the Trustees and the Lender to
the extent of any fees due and payable thereunder after the date hereof.


 


3.                                      Loan
Agreement.  The Loan Agreement is
hereby amended as follows:


 


(a)                                  Section 1.1(r)
of the Loan Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:


 


“(r)                              Loan
- That certain acquisition and revolving construction loan in the amount of
$3,350,000.00, or so much thereof as shall be advanced or readvanced, from the
Lender to the Borrower made pursuant to this Agreement, to finance the
acquisition of developed Lots and/or the construction of Improvements thereon,
as evidenced by the Note and secured by the Deed of Trust and the other Loan
Documents. During the term of the Loan, as set forth in the Note, the Borrower
may borrow, repay and reborrow amounts under the Loan; provided, however, that
the maximum amount available for distribution at any time with respect to a
particular Project shall equal (a) the sum of $3,350,000.00 minus (b) the total
amount budgeted under the Loan for all Inventory Lots and Units for which funds
have been advanced under the Loan and not repaid in full.”


 


(b)                                 Section 1.1(v)
of the Loan Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:


 


“(s)                            Note
- That certain Revolving Deed of Trust Note of even date herewith made by the
Borrower payable to the order of the Lender in the original principal amount of
$2,000,000.00, as modified and increased to the aggregate principal amount of
$3,350,000.00 or so much thereof as shall be advanced and/or readvanced, as the
same may from time to time be amended, modified, replaced or supplemented.


 


2
















 


4.                                      Deed
of Trust. The Deed of Trust is hereby amended as follows:


 


(a)                                  Spread of Lien.  Borrower and Comstock L’Ambiance hereby
irrevocably grants, bargains, and conveys (and to the extent any of such
property was previously conveyed to the Trustees pursuant to the Deed of Trust,
regrants, rebargains and reconveys) to the Trustees and their respective
successors in trust, and their assigns, with power of sale, and the lien of the
Deed of Trust is spread to include, the Additional Property as described on Exhibit
A-1 attached hereto, to have and to hold the same, together with all and
singular the rights, privileges, tenements, hereditaments and appurtenances
thereto in any way incident or belonging unto the Trustees and to their
successors and assigns forever, in and upon the same uses and trusts and with
all the powers and duties as set forth in the Deed of Trust, with like force
and effect.  All terms, provisions,
covenants, stipulations, conditions and agreements contained in the Deed of
Trust are incorporated herein by this reference for all purposes.


 


(b)                                 Section 1.1(q) of
the Deed of Trust is hereby deleted in its entirety and the following is
substituted in lieu thereof:


 


“(q)                           Loan - Any and all loans from the Beneficiary to the Grantor
and/or the other Loan Documents, including that certain acquisition and
revolving construction loan from the Beneficiary to the Grantor in the original
principal amount of $2,000,000.00, as modified and increased to the aggregate
principal amount of $3,350,000.00, and any and all letters of credit issued by
the Beneficiary for the account of the Grantor, to finance the acquisition of
Lots and/or the construction of Improvements thereon, as evidenced by the Note
and secured by this Deed of Trust and the other Loan Documents.”


 


(c)                                  The first and third
recitals of the Deed of Trust are hereby amended to delete the word
“$2,800,000.00” as it appears therein and to substitute the term
“$3,350,000.00”  in lieu thereof in each
instance.


 


5.                                      Guaranty
Agreement.  The first and fourth
recitals of the Guaranty are hereby amended to delete the word “$2,800,000.00”
as it appears therein and to substitute the term  “$3,350,000.00” in lieu thereof in each
instance.


 


6.                                      Environmental
Indemnity Agreement.  The first
paragraph of that certain Environmental Indemnity Agreement dated
December 17, 1997 by Borrower and Guarantor in favor of the Lender, as
modified, is hereby amended to replace the definition of the “Loan” with the
following:


 


“a loan to Borrower evidenced by a certain Revolving Deed of Trust Note
dated December 17, 1997 and made payable to the order of the Lender in the
original principal amount of $2,000,000.00, as amended and increased to the
maximum aggregate principal amount of $3,350,000.00, or so much thereof as
shall be advanced or readvanced, and all amendments and modifications thereof”


 


3
















 


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


 


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


 


9.                                      Expenses.  The Borrower promises to pay all costs and
expenses and reimburse the Lender for any and all expenditures of every
character incurred or expended from time to time, regardless of whether a
default shall have occurred, in connection with this Agreement and all other
Loan Documents, and all such amounts shall constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Documents.


 


10.                               Miscellaneous.  To the extent of any conflict between the
Loan Documents and this Agreement, this Agreement shall control. Unless
specifically modified hereby, all terms of the Loan Documents shall remain in
full force and effect. This Agreement (a) shall bind and benefit the parties hereto
and their respective heirs, beneficiaries administrators, executors, receivers,


 


4
















 


trustees, successors and assigns; (b) shall be governed by the laws of
the Commonwealth of Virginia and United States federal law; and (c) may be
executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall
constitute an original agreement enforceable against all who signed it without
production of or accounting for any other counterpart, and all separate
counterparts shall constitute the same agreement. Any terms not defined herein
shall have the meanings set forth in the Loan Documents.


 


11.                               Reaffirmation
of Guaranty.  Each Guarantor, by
signature below as such, for a valuable consideration, the receipt and adequacy
of which are hereby acknowledged, hereby consents to and joins in this
Agreement and hereby declares to and agrees with the Lender that the Guaranty
is and shall continue in full force and effect for the benefit of the Lender
with respect to the Obligations, as amended by this Agreement, that there are
no offsets, claims or defenses of the Guarantor with respect to the Guaranty
nor, to Guarantor’s knowledge, with respect to the Obligations, that the
Guaranty is not released, diminished or impaired in any way by this Agreement
or the transactions contemplated hereby, and that the Guaranty is hereby
ratified and confirmed in all respects. Each Guarantor hereby reaffirms all of
the representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


12.                               Authorization
of Trustees.  Lender, by its
execution hereof, authorizes and instructs the Trustees to execute this
instrument for the purposes set forth herein and expressly acknowledges that
either Trustee may act and the execution by both Trustees shall not be
required.


 


[continued]


 


5
















 


 


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


 


	
  ATTEST/WITNESS:

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  COMSTOCK L’AMBIANCE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONSBANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Lisa M Moore

  	
   

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Linda P. Long

  
	
  Print Title:

  	
   

  	
   

  	
  Vice President

  
	
  [Corporate Seal]

  	
   

  	
   

  
																				



 


[continued]


 


6
















 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  Kelly L. Wyche

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  Kelly L. Wyche

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  Kelly L. Wyche

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
  Patricia DuBois, Trustee

  
	
   

  	
   

  
	
  /s/ Lisa M Moore

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  Lisa M Moore

  	
   

  	
  Gregory L. Carter, Trustee

  
										



 


 


[acknowledgements on following pages]


 


7
















 


THIRD LOAN MODIFICATION AGREEMENT


 


THIS THIRD LOAN MODIFICATION AGREEMENT (this “Agreement”) is made as of
the 30th day of September, 1998, by and among (a) COMSTOCKHOLDING COMPANY, INC.
(“Borrower”), a Virginia corporation, (b) COMSTOCK L’AMBIANCE, L.C., a Virginia
limited liability company (“Comstock L’Ambiance”) and CHRISTOPHER CLEMENTE and
GREGORY BENSON, jointly and severally (collectively, the “Guarantor”), (c)
PATRICIA I. DUBOIS, a resident of Fairfax County, Virginia and GREGORY L.
CARTER, a resident of Fairfax County, Virginia (“Trustees”), and (d)
NATIONSBANK, N.A., a national banking association (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”). Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original principal
amount of Two Million and No/100 Dollars ($2,000,000.00), as modified and
Increased to the principal amount of Three Million Three Hundred Fifty Thousand
and No/100 Dollars ($3,350,000.00) (as amended, and as the same may be further
amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto, and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Loan Agreement, the Guaranty,
and all other documents previously, now or hereafter executed and delivered to
evidence, secure, guarantee, or in connection with, the Obligations, as the
same may from time to time be renewed, extended, amended, supplemented or
restated, are hereinafter collectively called the “Loan Documents”; and all
liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities securing the Note or providing recourse to
Lender with respect thereto are hereinafter collectively called the “Liens”.


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
to amend the terms and


 
















 


conditions of the Loan Documents as more specifically set forth below.


 


1.                                      Recitals.  The recitals set forth above are a material
part of this Agreement.  Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Loan
Amount.  The maximum
principal amount that may be outstanding under the Loan at any time shall be
Four Million One Hundred Thousand and 00/100 Dollars ($4,100,000.00).


 


3.                                      Maturity
Date.  All of the Obligations,
including (without limitation) all outstanding principal, accrued and unpaid
interest, outstanding late charges, unpaid fees, and all other amounts
outstanding under the Note and the other Loan Documents, shall be due and
payable in full on June 30, 1999 (the “Maturity Date”). All references to
the Maturity Date contained in the Loan Documents shall refer to the Maturity
Date as defined in this Agreement. 
Notwithstanding the above, in the event the Lender does not agree in its
sole and absolute discretion to extend the Maturity Date prior to the date
thereof, the principal amount outstanding under the Loan on the Maturity Date
with respect to any Pre-Sold Unit, Speculative Unit or Inventory Lot shall be
due and payable on the earlier of (i) the date calculated in accordance with
Paragraph 2.2(g) of the Loan Agreement as amended or (ii) October 30,
1999.


 


4.                                      Fees.  Simultaneously with the execution of this
Agreement, Borrower shall pay to Lender a loan fee in the amount of
$6,406.25.  Borrower shall also pay to
Lender $6,406.25 on January 1, 1999 and April 1, 1999 as additional
loan fees so long as there is any amount outstanding under the Loan on any such
due date.


 


5.                                      Interest
Rate.  From and after the date
hereof, the Stated Rate as defined in the Note shall mean a variable rate equal
to Lender’s Prime Rate plus three-quarters of one percent (0.75%).


 


6.                                      Speculative
Unit Limit.  The maximum
aggregate amount of the Loan which may be budgeted at any time for Speculative
Units (including model Units) is $1,000,000. The number of Speculative Units
(including model Units) that may be financed with Loan proceeds with respect to
the following projects is as Follows:


 


	
  Project

  	
   

  	
  Number of approved Speculative and model Units

  
	
   

  	
   

  	
   

  
	
  L’Ambiance

  	
   

  	
  2

  



 


7.                                      Inventory
Lot Limit.  The maximum aggregate
amount of the Loan which may be outstanding at any time for Inventory Lots is
$300,000. With respect to each Inventory Lot, the Lender shall not advance
proceeds of the Loan for acquisition thereof in an amount greater than the
lesser of (i) eighty percent (80%) of the purchase price of such Lot and (ii)
seventy-five percent of the Appraised Value of such Lot. The number of
Inventory Lots that may be financed with Loan proceeds with respect to the
following projects is as follows:


 


	
  Project

  	
   

  	
  Number of approved Inventory Lots

  
	
   

  	
   

  	
   

  
	
  L’Ambiance

  	
   

  	
  3

  



 


2
















 


8.                                      Other
Indebtedness.  At such time
Lender has approved a Project as eligible for financing with proceeds of the
Loan, (i) the Borrower shall not borrow any funds other than pursuant to the
Loan in connection with such Project without Lender’s prior written consent,
and (ii) there shall be no other mortages or deeds of trust encumbering the
land that is collateral for the Loan.


 


9.                                      Appraised
Value.  From and after the date
hereof, the Appraised Value of a Unit shall equal the then current market value
determined pursuant to the most recent appraisal for a base Unit type prepared
in accordance with the terms and conditions of the Loan Agreement together with
opinion of contributory value estimates for all options in a Unit, which
estimates must be acceptable to Lender in its sole discretion.


 


10.                               Year
2000 Compliance.  Borrower has
(i) initiated a review and assessment of all areas within its and each of its
Subsidiaries’ business and operations (including those affected by suppliers
and vendors) that could be adversely affected by the “Year 2000 Problem” (that
is, the risk that computer applications used by the Borrower or any of its
Subsidiaries (or its suppliers and vendors) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31,1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. The Borrower reasonably
believes that all computer applications (including those of its suppliers and
vendors) that are material to its or any of its Subsidiaries’ business and
operations will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be
“Year 2000 compliant”), except to the extent that a failure to do so could not
reasonably be expected to have Material Adverse Effect. The Borrower will
promptly notify the Lender in the event the Borrower discovers or determines
that any computer application (including those of its suppliers and vendors)
that is material to its or any of its or any of its Subsidiaries’ business and
operations will not be Year 2000 compliant on a timely basis, except to the extent
that such a failure could not reasonably be expected to have a Material Adverse
Effect


 


11.                               Borrower’s
Representations and Warranties. 
The Borrower hereby reaffirms all of the representations and warranties
set forth in the Loan Documents (as defined in the Loan Agreement, as amended
hereby), and further represents and warrants that (a) the execution and
delivery of this Agreement do not contravene, resulting in an breach of, or
constitute a default under, any deed of trust, loan agreement, indenture or
other contract or agreement to which the Borrower is a party or by which the
Borrower or any of its properties may be bound (nor would such execution and
delivery constitute such a default with the passage of time or the giving of
notice or both), and do not violate or contravene any law, order, decree, rule,
regulation or restriction to which the Borrower or the Property is subject; (b)
this Agreement constitutes the legal, valid and binding obligations of the
Borrower enforceable in accordance with its terms; (c) the execution and
delivery of, and performance under, this Agreement are within the Borrower’s
power and authority without the joinder or consent of any other party and have
been duly authorized by all requisite action, and are not in contravention of
any law, or of the Borrower’s charter, bylaws or other corporate organizational
documents or of any indenture, agreement or undertaking to which the Borrower
is a party or by which it is bound; (d) there exists no default under the Note
or any other Loan Document; (e) there are no offsets, claims or defenses with
respect to the Borrower’s or Guarantor’s obligations under any of the Loan
Documents (the “Obligations”); and (f) the Borrower is duly organized and
legally existing under the laws of the Commonwealth of Virginia and is duly
qualified to do business in the Commonwealth of Virginia. The Borrower further
represents and warrants that, except as disclosed in writing to the Lender,
there is no suit, judicial or administrative action, claims, investigation,
inquiry, proceeding or demand pending (or, to the Borrower’s knowledge


 


3
















 


threatened) against (i) the Borrower, or against any other person
liable directly or indirectly for the Obligations, or (ii) which affects the
Property or the Borrower’s title to the Property, or (iii) which affects the
validity, enforceability or priority of any of the Loan Documents. The Borrower
agrees to indemnify and hold the Lender harmless against any loss, claim, damage,
liability or expense (including, without limitation, attorneys’ fees) incurred
as a result of any representation or warranty made by the Borrower herein which
proves to be untrue or inaccurate in any respect, and any such occurrence shall
constitute a default under the Loan Documents.


 


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


 


13.                               Expenses.  The Borrower promises to pay all costs and
expenses and reimburse the Lender for any and all expenditures of every
character incurred or expended from time to time, regardless of whether a
default shall have occurred, in connection with this Agreement and all other
Loan Documents, and all such amounts shall constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Documents.


 


14.                               Miscellaneous.  To the extent of any conflict between the
Loan Documents and this Agreement, this Agreement shall control. Unless
specifically modified hereby, all terms of the Loan Documents shall remain in
full force and effect. This Agreement (a) shall bind and benefit the parties
hereto and their respective heirs, beneficiaries administrators, executors,
receivers, trustees, successors and assigns; (b) shall be governed by the laws
of the Commonwealth of Virginia and United States federal law; and (c) may be
executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall
constitute an original agreement enforceable against all who signed it without production
of or accounting for any other counterpart, and all separate counterparts shall
constitute the same agreement. Any terms not defined herein shall have the
meanings set forth in the Loan Documents.


 


15.                               Reaffirmation
of Guaranty.  Each Guarantor, by
signature below as such, for a valuable consideration, the receipt and adequacy
of which are hereby acknowledged, hereby consents to and joins in this
Agreement and hereby declares to and agrees with the Lender that the Guaranty
is and shall continue in full force and effect for the benefit of the Lender
with respect to the Obligations, as amended by this Agreement, that there are
no offsets, claims or defenses of the Guarantor with respect to the Guaranty
nor, to Guarantor’s knowledge, with respect to the Obligations, that the
Guaranty is not released, diminished or impaired in any way by this Agreement
or the transactions contemplated hereby, and that the Guaranty is hereby
ratified and confirmed in all respects. Each Guarantor hereby reaffirms all of the
representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


16.                               Authorization
of Trustees.  Lender, by its execution
hereof, authorizes and instructs the Trustees to execute this instrument for
the purposes set forth herein and expressly acknowledges that either Trustee
may act and the execution by both Trustees shall not be required.


 


4
















 


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


 


 


	
  ATTEST/WITNESS:

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jubal R. Thomson

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Name:

  	
  JUBAL R. THOMSON

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  COMSTOCK L’AMBIANCE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jubal R. Thomson

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Name:

  	
  JUBAL R. THOMSON

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONSBANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Katherine O’Leary McQuie

  	
  (seal)

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name: Katherine O’Leary McQuie

  	
   

  	
   

  	
  Linda P. Long

  
	
  Print Title: Vice President

  	
   

  	
   

  	
  Vice President

  
	
  [Corporate Seal]

  	
   

  	
   

  
																



 


5
















 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jubal R. Thomson

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  JUBAL R. THOMSON

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  
	
  /s/ Jubal R. Thomson

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  JUBAL R. THOMSON

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jubal R. Thomson

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  JUBAL R. THOMSON

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
  Patricia DuBois, Trustee

  
	
   

  	
   

  
	
  /s/ Lisa M Moore

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  

  	
   

  	
  Gregory L. Carter, Trustee

  
											



 


[acknowledgements on following pages]


 


6
















 


FOURTH LOAN MODIFICATION AGREEMENT


 


THIS FOURTH LOAN MODIFICATION AGREEMENT (this “Agreement”) is made as
of the 14 day of July, 1999, by and among (a) COMSTOCK HOLDING COMPANY,
INC.  (“Borrower”), a Virginia
corporation, (b) COMSTOCK L’AMBIANCE, L.C., a Virginia limited liability
company (“Comstock L’Ambiance”) and CHRISTOPHER CLEMENTE and GREGORY BENSON,
jointly and severally (collectively, the “Guarantor”), (c) PATRICIA I. DUBOIS,
a resident of Fairfax County, Virginia and GREGORY L. CARTER, a resident of
Fairfax County, Virginia (“Trustees”), and (d) BANK OF AMERICA, N.A., a
national banking association, successor in interest to NationsBank, N.A. (the
“Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the principal amount of Four Million One Hundred Thousand and
No/100 Dollars ($4,100,000.00) (as amended, and as the same may be further
amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17,1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto, and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Loan Agreement, the Guaranty,
and all other documents previously, now or hereafter executed and delivered to
evidence, secure, guarantee, or in connection with, the Obligations, as the
same may from time to time be renewed, extended, amended, supplemented or
restated, are hereinafter collectively called the “Loan Documents”; and all
liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities securing the Note or providing recourse to
Lender with respect thereto are hereinafter collectively called the “Liens”


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
to amend the terms and conditions of the Loan Documents as more specifically
set forth below.


 
















 


1.                                      Recitals.  The recitals set forth above are a material
part of this Agreement.  Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Loan
Amount.  The maximum principal
amount that may be committed under the Loan at any time shall be Four Million
Five Hundred Thousand and 00/100 Dollars ($4,500,000.00).


 


3.                                      Maturity
Date.  All of the Obligations,
including (without limitation) all outstanding principal, accrued and unpaid
interest, outstanding late charges, unpaid fees, and all other amounts
outstanding under the Note and the other Loan Documents, shall be due and
payable in full on June 30, 2000 (the “Maturity Date”). All references to
the Maturity Date contained in the Loan Documents shall refer to the Maturity
Date as defined in this Agreement. Notwithstanding the above, in the event the
Lender does not agree in its sole and absolute discretion to extend the
Maturity Date prior to the date thereof, the principal amount outstanding under
the Loan on the Maturity Date with respect to any Pre-Sold Unit, Speculative
Unit or Inventory Lot shall be due and payable on the earlier of (i) the date
calculated in accordance with Paragraph 2.2(g) of the Loan Agreement as amended
or (ii) October 30, 2000.


 


4.                                      Fees.  Simultaneously with the execution of this
Agreement, Borrower shall pay to Lender a loan fee in the amount of $5,625.00
for the calendar quarter July 1, 1999 through September 30, 1999.
Borrower shall also pay to Lender a quarterly loan fee in an amount equal to
..125% of the total amount committed under the Loan on the first day of each
calendar quarter thereafter as an additional loan fee so long as there is any
Loan Amount committed under the Loan on any such due date.


 


5.                                      Interest
Rate.  From and after the date
hereof, the Stated Rate as defined in the Note shall mean a variable rate equal
to Lender’s Prime Rale plus one-half of one percent (0.50%).


 


6.                                      Speculative
Unit Limit.  The maximum
aggregate amount of the Loan which may be budgeted at any time for Speculative
Units (including model Units) is $1,800,000. The portion of any Loan advance
which pertains to a Lot comprising a Speculative Unit shall not exceed ninety
percent (90%) of the lesser of (i) the price paid for such Lot by Borrower, or
(ii) the Appraised Value for such Lot.


 


7.                                      Inventory
Lot Limit.  The maximum aggregate
amount of the Loan which may be budgeted at any time for Inventory Lots is
$425,000. With respect to each Inventory Lot, the Lender shall not fund under
the Loan an amount in excess of the lesser of (i) seventy-five percent (75%) of
the purchase price for such Lot, or (ii) seventy-five percent (75%) of the
Appraised Value for such Lot.


 


8.                                      Financial
Statements.  From and after the
date hereof, Section 4.1(b) of the Loan Agreement is hereby deleted in its
entirety and the following Section 4.1(b) is substituted in lieu thereof:


 


“4.1(b)          The Entities shall,
within forty-five (45) days after the close of the Entities’ respective
quarterly business period, provide to Lender an internally prepared balance
sheet and income statement of the Entities;


 


All financial information shall be certified on the Lender’s Financial
Statement Certification form attached hereto as Exhibit A by the Entities or by
the Guarantor, as applicable, with an original signature and date.”


 


2
















 


9.                                      Profits.  From and after the date hereof,
Section 4.14 of the Loan Agreement is hereby deleted in its entirety.


 


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


 


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


 


12.                               Expenses.  The Borrower promises to pay all costs and
expenses and reimburse the Lender for any and all expenditures of every
character incurred or expended from time to time, regardless of whether a
default shall have occurred, in connection with this Agreement and all other
Loan Documents, and all such amounts shall constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Documents.


 


13.                               Miscellaneous.  To the extent of any conflict between the
Loan Documents and this Agreement, this Agreement shall control. Unless
specifically modified hereby, all terms of the Loan Documents shall remain in
full force and effect. This Agreement (a) shall bind and benefit the parties
hereto and their respective heirs, beneficiaries administrators, executors,
receivers, trustees, successors and assigns; (b) shall be governed by the laws
of the Commonwealth of Virginia and United States federal law; and (c) may be
executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall
constitute an


 


3
















 


original agreement enforceable against all who signed it without
production of or accounting for any other counterpart, and all separate counterparts
shall constitute the same agreement. Any terms not defined herein shall have
the meanings set forth in the Loan Documents.


 


14.                               Reaffirmation
of Guaranty.  Each Guarantor, by
signature below as such, for a valuable consideration, the receipt and adequacy
of which are hereby acknowledged, hereby consents to and joins in this
Agreement and hereby declares to and agrees with the Lender that the Guaranty
is and shall continue in full force and effect for the benefit of the Lender
with respect to the Obligations, as amended by this Agreement, that there are
no offsets, claims or defenses of the Guarantor with respect to the Guaranty
nor, to Guarantor’s knowledge, with respect to the Obligations, that the
Guaranty is not released, diminished or impaired in any way by this Agreement
or the transactions contemplated hereby, and that the Guaranty is hereby
ratified and confirmed in all respects. Each Guarantor hereby reaffirms all of
the representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


15.                               Authorization
of Trustees.  Lender, by its
execution hereof, authorizes and instructs the Trustees to execute this instrument
for the purposes set forth herein and expressly acknowledges that either
Trustee may act and the execution by both Trustees shall not be required.


 


[SIGNATURES APPEAR ON FOLLOWING PAGES]


 


4
















 


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


 


 


	
  ATTEST/WITNESS:

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Name:

  	
  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  COMSTOCK L’AMBIANCE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Name:

  	
  Kelly L. Wyche

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Katherine O’Leary McQuie

  	
   

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name: Katherine O’Leary McQuie

  	
   

  	
   

  	
  Linda P. Long

  
	
  Print Title: Vice President

  	
   

  	
   

  	
  Vice President

  
	
  [Corporate Seal]

  	
   

  	
   

  
																	



 


5
















 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  Kelly Wyche

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  
	
  /s/ Kelly Wyche

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  Kelly Wyche

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  Kelly L. Wyche

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
  Patricia DuBois, Trustee

  
	
   

  	
   

  
	
  /s/ Linda P. Long

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  LINDA P. LONG

  	
   

  	
  Gregory L. Carter, Trustee

  
										



 


[acknowledgements on following pages]


 


6
















 


PREPARED OUT OF STATE


 


FIFTH LOAN MODIFICATION AGREEMENT


 


THIS FIFTH LOAN MODIFICATION AGREEMENT (this “Agreement”) is made as of
the 6th day of March, 2000, by and among (a) COMSTOCK HOLDING
COMPANY, INC. (“Borrower”), a Virginia corporation, (b) COMSTOCK L’AMBIANCE,
L.C., a Virginia limited liability company (“Comstock L’Ambiance”), COMSTOCK
SHERBROOKE, L.C., a Virginia limited liability company (“Comstock Sherbrooke”)
and CHRISTOPHER CLEMENTE and GREGORY BENSON, jointly and severally
(collectively, the “Guarantor”), (c) KATHERINE O’LEARY MCQUIE, a resident of
Fairfax County, Virginia and GREGORY L. CARTER, a resident of Fairfax County,
Virginia (“Trustees”), and (d) BANK OF AMERICA, N.A., a national banking association,
successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the principal amount of Four Million Five Hundred Thousand and
No/100 Dollars ($4,500,000.00) (as amended, and as the same may be further
amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto, and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Loan Agreement, the Guaranty,
and all other documents previously, now or hereafter executed and delivered to
evidence, secure, guarantee, or in connection with, the Obligations, as the
same may from time to time be renewed, extended, amended, supplemented or
restated, are hereinafter collectively called the “Loan Documents”; and all
liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities securing the Note or providing recourse to
Lender with respect thereto are hereinafter collectively called


 
















 


the “Liens”.


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
to amend the terms and conditions of the Loan Documents as more specifically
set forth below.


 


1.                                      Recitals.  The recitals set forth above are a material
part of this Agreement.  Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Assumption
and Release.  Comstock Sherbrooke
hereby assumes all of the obligations of Comstock L’Ambiance under the Deed of
Trust and under the Guaranty as if it was an original Guarantor.  Lender hereby agrees that Comstock
L’Ambiance, but not Comstock Sherbrooke, is hereby released as a Grantor under
the Deed of Trust and as a Guarantor under the Guaranty subject to those
provisions contained in the Loan Documents which specifically survive the
expiration or earlier termination of the Loan Documents.


 


3.                                      The
Sherbrooke Project.  From and
after the date hereof, the Projects as defined in the Loan Documents, shall
include the acquisition of approximately seventy-three (73) townhouse
condominium lots and the construction of up to seventy-three (73) townhouse
condominium Units on such lots in the subdivision known as Sherbrooke subject
to that certain condominium regime known as the Sherbrooke – II Townhouse
Condominium (the “Sherbrooke Condominium”), located at the intersection of
Old Bridge Road and Smoketown Road in Prince William County, Virginia, known as
the Sherbrooke Project.


 


4.                                      Speculative
Unit Limit.  The maximum
aggregate amount of the Loan which may be budgeted at any time for Speculative
Units (including model Units) is $1,800,000. The portion of any Loan advance
which pertains to a Lot comprising a Speculative Unit shall not exceed ninety
percent (90%) of the lesser of (i) the price paid for such Lot by Borrower, or
(ii) the Appraised Value for such Lot. The maximum number of Speculative Units
(including model Units) that may be financed with Loan proceeds at any one time
with respect to any Project shall be ten (10); provided, however, that at the
time of the initial advance of Loan proceeds with respect to the Sherbrooke
Project, the maximum number of Speculative Units (including model Units) shall
be twelve (12), provided further that no subsequent advances of Loan proceeds
shall be made until such time as the number of Speculative Units (including
model Units) being financed with Loan proceeds at any Project has been reduced
to ten (10).


 


5.                                      Inventory
Lot Limit.  The maximum aggregate
amount of the Loan which may be budgeted at any time for Inventory Lots is
$425,000. With respect to each Inventory Lot, the Lender shall not fund under
the Loan an amount in excess of the lesser of (i) seventy-five percent (75%) of
the purchase price for such Lot, or (ii) seventy-five percent (75%) of the
Appraised Value for such Lot. The maximum number of Inventory Lots that may be
financed with Loan proceeds at any one time with respect to any Project shall
be nine (9).


 


6.                                      Plans
and Specifications.  Borrower
shall provide Lender with satisfactory evidence that any and all plans and
specifications prepared in connection with the Sherbrooke Project have been
approved by the applicable condominium association and the Commonwealth of
Virginia, if such approvals are required.


 


7.                                      Impositions.  Borrower shall provide Lender with
satisfactory evidence that any and all condominium dues and assessments imposed
upon the Sherbrooke Project by any condominium association in accordance with
any declaration of condominium or any other such


 


2
















 


document of record are paid in full and to date and that no failure to
pay any assessment or dues has created a lien which would be superior to that
of Lender’s interest hereunder.


 


8.                                      Insurance.  In the event that any of the insurance
requirements contained in the Loan Documents shall be obtain by any condominium
association, Borrower shall provide certificates of insurance in a form
satisfactory to Lender evidencing that the Sherbrooke Project is covered by all
insurance required by the Loan Documents. Comstock Sherbrooke shall have the
Board of Directors of the Sherbrooke – II Townhouse Condominium Association
designate Lender to be Insurance Trustee pursuant to Section 7.6 of the
Sherbrooke By-Laws, hereinafter defined in Paragraph 9.


 


9.                                      Condominium.  Lender hereby acknowledges that,
notwithstanding anything to the contrary in Section 5.5 of the Deed of
Trust, the Sherbrooke Project is currently subject to a condominium regime
pursuant to that certain Declaration of Sherbrooke – II Townhouse Condominium
dated September 19, 1997 and recorded among the land records of Prince
William County, Virginia in Deed Book 2489 at Page 1067 (as the same may be
modified or amended, the “Sherbrooke Declaration”) and the By-Laws related
thereto attached to the Sherbrooke Declaration as Exhibit C (as the same may be
modified or amended, the “Sherbrooke By-Laws”) and that certain Declaration of
Covenants, Conditions and Restrictions by S. Brooke Corporation and Sherbrooke
Swim and Racquet Association dated December 31, 1991 and recorded among
the aforesaid Land Records in Deed Book 1877 at Page 1159 (as the same may be
modified or amended, the “Recreational Facility Declaration”). Comstock
Sherbrooke shall, on a phase by phase basis, become a Special Declarant under
the  “Sherbrooke Condominium Documents”
(as hereinafter defined) in connection with its acquisition of the Sherbrooke
Project on such phase by phase basis pursuant to that certain Transfer of
Special Declarant Rights for Sherbrooke – II Townhouse Condominium by and
between S. Brooke Corporation and Comstock Sherbrooke, L.C. dated on even date
herewith, as the same may be amended (the “Transfer of Special Declarant
Rights”) (Comstock Sherbrooke shall be known as “Declarant” for purposes of
Paragraphs 9, 10 and 11 herein).  Borrower
hereby agrees to provide to Lender a copy of the Transfer of Special Declarant
Rights executed in connection with its acquisition of each phase of the
Sherbrooke Project within five (5) days of the date hereof. It shall constitute
a default under the Loan Documents if there is any amendment, modification or
termination of the Sherbrooke Condominium Documents without Lender’s prior
written consent; provided, however, Lender understands that the Declarant
currently intends to apply to the Commonwealth of Virginia to amend the
Sherbrooke Condominium Documents to modify the public offering statement to
name Declarant as the declarant under the Sherbrooke Condominium Documents with
respect to those phases of the Sherbrooke Condominium which Declarant will be
acquiring and to amend the plans of the Sherbrooke Condominium Documents to
insert the Unit types which Borrower will be constructing on those phases of
the Sherbrooke Condominium which Declarant will acquire (the “Initial
Amendment”). Lender hereby consents to the Initial Amendment subject to the
following conditions: (i) the Initial Amendment shall be in substantially the
same form as that draft of the Initial Amendment previously delivered to the
Lender for its review in connection with this Agreement; (ii) no modification
to the form of the Initial Amendment shall be submitted to the Commonwealth of
Virginia for approval without the prior written consent of Lender; and
(iii)  evidence of approval of the
Initial Amendment by the Commonwealth of Virginia shall be received by Lender
within sixty (60) days following the date hereof. The “Sherbrooke Condominium
Documents” shall mean the Sherbrooke Declaration, the Sherbrooke By-Laws, any
public offering statement, any plats and plans of the Sherbrooke Condominium,
and any


 


3
















 


other documents related to the Sherbrooke Condominium, as any of the
foregoing documents maybe amended or modified.


 


10.                               Future
Amendments to the Sherbrooke Condominium Documents.  Notwithstanding anything to the contrary
contained in Paragraph 9 of this Agreement, any amendments or modifications of
the Sherbrooke Condominium Documents (the “Future Amendments”), other than the
Initial Amendment, must have the prior written consent of Lender and shall be
subject to the following conditions: (i) no documents shall be submitted to the
Commonwealth of Virginia for approval in connection with the Future Amendments
without the prior written consent of Lender; (ii) evidence of approval of the
Future Amendments by the Commonwealth of Virginia (if required) shall be
received by Lender within sixty (60) days following the date of the submission
of any Future Amendment to the Commonwealth of Virginia; (iii) in the event
Declarant intends a Future Amendment be an amendment or modification of the
Sherbrooke Declaration or the Sherbrooke By-Laws, evidence shall be provided to
Lender that Declarant has received proper approval or consent, if any such
approval or consent is required, to amend the Sherbrooke Declaration or the
Sherbrooke By-Laws; and (iv) evidence shall be provided to Lender that any
Future Amendment has been executed by S. Brooke Corporation, if required
pursuant to the Transfer of Special Declarant Rights. In no event shall
Borrower or Declarant subject the Sherbrooke Project or any portion thereof to
a new condominium regime without the prior written consent of Lender and
approval of any such new condominium documents by Lender.


 


11.                               Assignment
of Declarant Rights.  The
Declarant hereby assigns to Lender all of its rights, title and interest as
Declarant and Special Declarant in and to the Sherbrooke Condominium and any
future condominium association.


 


12.                               Failure
to Pay Condominium Assessments. 
Any default by Borrower in the payment of any assessments or fees levied
pursuant to any by-laws or condominium declaration or any other condominium
instruments for which Borrower or Comstock Sherbrooke are responsible and to
which the Sherbrooke Project is subject or which would create a lien on the collateral,
or any installment thereof shall be a Default under the Loan Documents.


 


13.                               Notice
to Board of Directors and Managing Agent of Condominium Association.  Borrower agrees to notify the Board of
Directors and the Managing Agent of the Condominium Association with the name
and address of Lender in accordance with Section 9.1 of the Sherbrooke
By-Laws.


 


14.                               Spreader
of Lien.  Borrower hereby
irrevocably grants, bargains, and conveys (and to the extent any of such
property was previously conveyed to the Trustees pursuant to the Deed of Trust,
regrants, rebargains and reconveys) to the Trustees and their respective
successors in trust, and their assigns, with power of sale, and the lien of the
Deed of Trust is spread to include, the Additional Property as described on Exhibit
A-2 attached hereto, to have and to hold the same, together with all and
singular the rights, privileges, tenements, hereditaments and appurtenances
thereto in any way incident or belonging unto the Trustees and to their
successors and assigns forever, in and upon the same uses and trusts and with
all the powers and duties as set forth in the Deed of Trust, with like force
and effect. All terms, provisions, covenants, stipulations, conditions and
agreements contained in the Deed of Trust are incorporated herein by this
reference for all purposes. Simultaneously with the recordation hereof,
Comstock Sherbrooke agrees to record the Transfer of Special Declarant Rights.
In addition, Comstock Sherbrooke agrees that upon substantial completion by
Borrower of the


 


4
















 


Units in any particular phase of the Sherbrooke Project to record the
form of amendment necessary to expand the Sherbrooke Condominium pursuant to
Article 4 of the Sherbrooke Declaration.


 


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


 


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


 


17.                               Expenses.  The Borrower promises to pay all costs and
expenses and reimburse the Lender for any and all expenditures of every
character incurred or expended from time to time, regardless of whether a
default shall have occurred, in connection with this Agreement and all other
Loan Documents, and all such amounts shall constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Documents.


 


18.                               Miscellaneous.  To the extent of any conflict between the
Loan Documents and this Agreement, this Agreement shall control. Unless
specifically modified hereby, all terms of the Loan Documents shall remain in
full force and effect. This Agreement (a) shall bind and benefit


 


5
















 


the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b)
shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the parties
hereto on separate counterparts, and each counterpart, when executed and
delivered, shall constitute an original agreement enforceable against all who
signed it without production of or accounting for any other counterpart, and
all separate counterparts shall constitute the same agreement. Any terms not
defined herein shall have the meanings set forth in the Loan Documents.


 


19.                               Reaffirmation
of Guaranty.  Each Guarantor, by
signature below as such, for a valuable consideration, the receipt and adequacy
of which are hereby acknowledged, hereby consents to and joins in this
Agreement and hereby declares to and agrees with the Lender that, subject to
the provisions of Paragraph 2 herein, the Guaranty is and shall continue in
full force and effect for the benefit of the Lender with respect to the
Obligations, as amended by this Agreement, that there are no offsets, claims or
defenses of the Guarantor with respect to the Guaranty nor, to Guarantor’s
knowledge, with respect to the Obligations, that the Guaranty is not released,
diminished or impaired in any way by this Agreement or the transactions
contemplated hereby, and that the Guaranty is hereby ratified and confirmed in
all respects.  Each Guarantor hereby
reaffirms all of the representations and warranties set forth in the
Guaranty.  Each Guarantor acknowledges
that without this consent and reaffirmation, Lender would not execute this
Agreement or otherwise consent to its terms. 
Each Guarantor, by signature below, hereby acknowledges and agrees that
Comstock Sherbrooke joins herein as a Guarantor under the Guaranty as if it was
an original Guarantor and that Comstock L’Ambiance is released as a Guarantor
under the Guaranty, subject to those provisions contained in the


Guaranty which expressly survive the expiration or earlier termination
of the Guaranty.


 


20.                               Authorization
of Trustees.  Lender, by
its execution hereof, authorizes and instructs the Trustees to execute this
instrument for the purposes set forth herein and expressly acknowledges that
either Trustee may act and the execution by both Trustees shall not be
required.


 


[SIGNATURES APPEAR ON FOLLOWING PAGES]


 


6
















 


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


 


 


	
  ATTEST/WITNESS:

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  COMSTOCK SHERBROOKE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK SHERBROOKE, L.C.,
a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John M Dezinno

  	
   

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name: JOHN M DEZINNO

  	
   

  	
   

  	
  Linda P. Long

  
	
  Print Title: VICE PRESIDENT

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
																		



 


[signatures continue on next page]


 


7
















 


 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  
	
  /s/ Kelly  L.Wyche

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  Kelly L. Wyche

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK L’AMBIANCE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Linda Long

  	
   

  	
   

  	
  /s/ Katherine O’Leary McQuie

  	
   

  
	
  Print Name:  LINDA LONG

  	
   

  	
  Katherine O’Leary McQuie, Trustee

  
	
   

  	
   

  
	
  /s/ Linda Long

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  LINDA LONG

  	
   

  	
  Gregory L. Carter, Trustee

  
															



 


 


[acknowledgements on following pages]


 


8
















 


PREPARED OUT OF STATE


 


SIXTH LOAN MODIFICATION AGREEMENT


 


THIS SIXTH LOAN MODIFICATION AGREEMENT (this “Agreement”) is made as of
the 20th day of July, 2000, by and among (a) COMSTOCK HOLDING
COMPANY, INC. (“Borrower”), a Virginia corporation, (b) COMSTOCK SHERBROOKE,
L.C., a Virginia limited liability company (“Comstock Sherbrooke”) and
CHRISTOPHER CLEMENTE and GREGORY BENSON, jointly and severally (collectively,
the “Guarantor”), (c) KATHERINE O’LEARY MCQUIE, a resident of Fairfax County,
Virginia and GREGORY L. CARTER, a resident of Fairfax County, Virginia
(“Trustees”), and (d) BANK OF AMERICA, N.A., a national banking association,
successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the principal amount of Four Million Five Hundred Thousand and
No/100 Dollars ($4,500,000.00) (as amended, and as the same may be further
amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto and that certain
Supplemental Credit Line Deed of Trust and Security Agreement dated as of
March 6, 2000 and recorded in Deed Book     at
page     , among the Land Records of Prince William
County, Virginia, as amended (as amended, and as the same may be further
amended or supplemented from time to time, the “Supplemental Deed of Trust”),
and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Supplemental Deed of Trust, the
Loan Agreement, the Guaranty, and all other documents previously, now or
hereafter executed and delivered to evidence, secure, guarantee, or in
connection with, the Obligations, as the same may from time to time be renewed,
extended,


 
















 


amended, supplemented or restated, are hereinafter collectively called
the “Loan Documents”; and all liens, security interests, assignments, superior
titles, rights, remedies, powers, equities and priorities securing the Note or
providing recourse to Lender with respect thereto are hereinafter collectively
called the “Liens”


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and Lender hereby agree to amend the
terms and conditions of the Loan Documents as more specifically set forth
below.


 


1.                                      Recitals.  The recitals set forth above are a material
part of this Agreement.  Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Loan
Amount. The maximum principal amount that may be committed under the
Loan at any time shall be Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00).


 


3.                                      Maturity
Date.  All of the Obligations,
including (without limitation) all outstanding principal, accrued and unpaid
interest, outstanding late charges, unpaid fees, and all other amounts
outstanding under the Note and the other Loan Documents, shall be due and
payable in full on June 30, 2001 (the “Maturity Date”). All references to
the Maturity Date contained in the Loan Documents shall refer to the Maturity
Date as defined in this Agreement. Notwithstanding the above, in the event the
Lender does not agree in its sole and absolute discretion to extend the
Maturity Date prior to the date thereof, the principal amount outstanding under
the Loan on the Maturity Date with respect to any Pre-Sold Unit, Speculative
Unit or Inventory Lot shall be due and payable on the earlier of (i) the date
calculated in accordance with Paragraph 2.2(g) of the Loan Agreement as amended
or (ii) October 30, 2001.


 


4.                                      Financial
Statements.  From and after the
date hereof, annual financial statements required to be furnished to Lender by
the Borrower and Guarantor shall be furnished to Lender as soon as available,
but in no event later than one hundred fifty (150) days after the end of each
calendar year.


 


5.                                      Restrictions
on Future Purchases.  From and
after the date hereof, Section 5.1 of the Loan Agreement is hereby deleted
in its entirety and shall be of no further force and effect.


 


6.                                      Borrower’s
Representations and Warranties. 
The Borrower hereby reaffirms all of the representations and warranties
set forth in the Loan Documents (as defined in the Loan Agreement, as amended
hereby), and further represents and warrants that (a) the execution and
delivery of this Agreement do not contravene, resulting in an breach of, or
constitute a default under, any deed of trust, loan agreement, indenture or
other contract or agreement to which the Borrower is a party or by which the
Borrower or any of its properties may be bound (nor would such execution and
delivery constitute such a default with the passage of time or the giving of
notice or both), and do not violate or contravene any law, order, decree, rule,
regulation or restriction to which the Borrower or the Property is subject; (b)
this Agreement constitutes the legal, valid and binding obligations of the
Borrower enforceable in accordance with its terms; (c) the execution and
delivery of, and performance under, this Agreement are within the Borrower’s
power and authority without the joinder or consent of any other party and have
been duly authorized by all requisite action, and are not in contravention of
any law, or of the Borrower’s charter, bylaws or other corporate organizational
documents or of any indenture, agreement or undertaking to which the Borrower
is a party or by which it is bound; (d) there exists no default under the Note
or any other Loan Document; (e) there are no offsets, claims or defenses with
respect to the Borrower’s or


 


2
















 


Guarantor’s obligations under any of the Loan Documents (the
“Obligations”); and (f) the Borrower is duly organized and legally existing
under the laws of the Commonwealth of Virginia and is duly qualified to do
business in the Commonwealth of Virginia. The Borrower further represents and
warrants that, except as disclosed in writing to the Lender, there is no suit,
judicial or administrative action, claims, investigation, inquiry, proceeding
or demand pending (or, to the Borrower’s knowledge threatened) against (i) the
Borrower, or against any other person liable directly or indirectly for the
Obligations, or (ii) which affects the Property or the Borrower’s title to the
Property, or (iii) which affects the validity, enforceability or priority of
any of the Loan Documents. The Borrower agrees to indemnify and hold the Lender
harmless against any loss, claim, damage, liability or expense (including,
without limitation, attorneys’ fees) incurred as a result of any representation
or warranty made by the Borrower herein which proves to be untrue or inaccurate
in any respect, and any such occurrence shall constitute a default under the
Loan Documents.


 


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


 


8.                                      Expenses.  The Borrower promises to pay all costs and
expenses and reimburse the Lender for any and all expenditures of every
character incurred or expended from time to time, regardless of whether a
default shall have occurred, in connection with this Agreement and all other
Loan Documents, and all such amounts shall constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Documents.


 


9.                                      Miscellaneous.  To the extent of any conflict between the
Loan Documents and this Agreement, this Agreement shall control. Unless
specifically modified hereby, all terms of the Loan Documents shall remain in
full force and effect. This Agreement (a) shall bind and benefit the parties
hereto and their respective heirs, beneficiaries administrators, executors,
receivers, trustees, successors and assigns; (b) shall be governed by the laws
of the Commonwealth of Virginia and United States federal law; and (c) may be
executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when executed and delivered, shall
constitute an original agreement enforceable against all who signed it without
production of or accounting for any other counterpart, and all separate
counterparts shall constitute the same agreement. Any terms not defined herein
shall have the meanings set forth in the Loan Documents.


 


10.                               Reaffirmation
of Guaranty.  Each Guarantor, by
signature below as such, for a valuable consideration, the receipt and adequacy
of which are hereby acknowledged, hereby consents to and joins in this
Agreement and hereby declares to and agrees with the Lender that, the Guaranty
is and shall continue in full force and effect for the benefit of the Lender
with respect to the Obligations, as amended by this Agreement, that there are
no offsets, claims or defenses of the Guarantor with respect to the Guaranty
nor, to Guarantor’s knowledge, with respect to the Obligations, that the
Guaranty is not released, diminished or impaired in any way by this Agreement
or the transactions contemplated hereby, and that the Guaranty is hereby
ratified and confirmed in all respects. Each Guarantor hereby reaffirms all of
the representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


3
















 


11.                               Authorization
of Trustees.  Lender, by its
execution hereof, authorizes and instructs the Trustees to execute this
instrument for the purposes set forth herein and expressly acknowledges that
either Trustee may act and the execution by both Trustees shall not be
required.


 


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


 


 


	
  ATTEST/WITNESS:

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  COMSTOCK SHERBROOKE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK SHERBROOKE, L.C.,
a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  	
   

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John M De Zinno

  	
   

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name: JOHN M DE ZINNO

  	
   

  	
   

  	
  Linda P. Long

  
	
  Print Title: Vice President

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
																					



 


4
















 


[signatures continue on next page]


 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  TRUSTEES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:  

  	
   

  	
  Katherine O’Leary McQuie, Trustee

  
	
   

  	
   

  
	
  /s/ John M De Zinno

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  JOHN M DE ZINNO

  	
   

  	
  Gregory L. Carter, Trustee

  
												



 


[acknowledgements on following pages]


 


5
















 


PREPARED
OUT OF STATE


 


SEVENTH
LOAN MODIFICATION AGREEMENT


 


THIS SEVENTH LOAN MODIFICATION AGREEMENT (this “Agreement”) is made as
of the 18th day of January, 2001, by and among (a) COMSTOCK HOLDING
COMPANY, INC. (“Borrower”), a Virginia corporation, (b) COMSTOCK SHERBROOKE,
L.C., a Virginia limited liability company (“Comstock Sherbrooke”) and
CHRISTOPHER CLEMENTE and GREGORY BENSON, jointly and severally (collectively,
the “Guarantor”), (c) KATHERINE O’LEARY MCQUIE, a resident of Fairfax County,
Virginia and GREGORY L. CARTER, a resident of Fairfax County, Virginia
(“Trustees”), and (d) BANK OF AMERICA, N.A., a national banking association,
successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the current principal amount of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00) (as amended, and as the same may be
further amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17, 1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto and that certain
Supplemental Credit Line Deed of Trust and Security Agreement dated as of
March 6, 2000 and recorded among the Land Records of Prince William
County, Virginia, as amended (as amended, and as the same may be further
amended or supplemented from time to time, the “Supplemental Deed of Trust”),
and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Supplemental Deed of Trust, the
Loan Agreement, the Guaranty, and all other documents previously, now or
hereafter executed and delivered to evidence, secure, guarantee, or in
connection with, the Obligations, as the same may from time to time be renewed,
extended, amended, supplemented or restated, are hereinafter collectively
called the “Loan Documents”; and


 
















 


all
liens, security interests, assignments, superior titles, rights, remedies,
powers, equities and priorities securing the Note or providing recourse to
Lender with respect thereto are hereinafter collectively called the “Liens”


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
to amend the terms and conditions of the Loan Documents as more specifically
set forth below.


 


1.                                      Recitals.  The
recitals set forth above are a material part of this Agreement. Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Speculative Unit Limit. The maximum aggregate amount of the Loan
which may be budgeted at any time for Speculative Units (including model Units)
is $1,200,000.


 


3.                                      Inventory Lot Limit.  The
maximum aggregate amount of the Loan which may be budgeted at any time for
Inventory Lots is $200,000.


 


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


 


5.                                      Renewal; Lien Continuation;
No Novation.  The Borrower hereby renews the Obligations
and promises to pay and perform the Obligations as modified by this Agreement.
All liens evidenced by the Loan Documents (the “Liens”) are hereby ratified and
confirmed as valid, subsisting and continuing to secure the Obligations, as
modified hereby. Nothing herein shall in


 


2
















 


any
manner diminish, impair, waive or extinguish the Note, the Obligations or the
Liens. The execution and delivery of this Agreement shall not constitute a
novation of the debt evidenced and secured by the Loan Documents.


 


6.                                      Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


7.                                      Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b)
shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the
parties hereto on separate counterparts, and each counterpart, when executed
and delivered, shall constitute an original agreement enforceable against all
who signed it without production of or accounting for any other counterpart,
and all separate counterparts shall constitute the same agreement.  Any terms not defined herein shall have the
meanings set forth in the Loan Documents.


 


8.                                      Reaffirmation of Guaranty.  Each
Guarantor, by signature below as such, for a valuable consideration, the
receipt and adequacy of which are hereby acknowledged, hereby consents to and
joins in this Agreement and hereby declares to and agrees with the Lender that,
the Guaranty is and shall continue in full force and effect for the benefit of
the Lender with respect to the Obligations, as amended by this Agreement, that
there are no offsets, claims or defenses of the Guarantor with respect to the
Guaranty nor, to Guarantor’s knowledge, with respect to the Obligations, that
the Guaranty is not released, diminished or impaired in any way by this
Agreement or the transactions contemplated hereby, and that the Guaranty is hereby
ratified and confirmed in all respects. Each Guarantor hereby reaffirms ail of
the representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


9.                                      Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


3
















 


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


 


 


	
  ATTEST/WITNESS:

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jubal Thompson

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name:  JUBAL THOMPSON

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:  Counsel

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE:

  
	
   

  	
   

  
	
   

  	
  COMSTOCK SHERBROOKE, LC.,

  
	
   

  	
  a
  Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jubal Thompson

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name:  JUBAL THOMPSON

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:  Counsel

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Lendra E. Lundofer

  	
   

  	
  By:

  	
  /s/ Linda
  P. Long

  	
   

  
	
  Print
  Name: Lendra E. Lundofer

  	
   

  	
  Linda
  P. Long

  
	
  Print
  Title: Vice President

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
											



 


[signatures continue on next page]


 


4
















 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jubal Thompson

  	
   

  	
  /s/ Christopher
  Clemente

  	
   

  
	
  Print Name:  JUBAL THOMPSON

  	
  Christopher
  Clemente, individually [SEAL]

  
	
   

  	
   

  
	
  /s/ Jubal Thompson

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:  JUBAL THOMPSON

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE, L.C.,

  
	
   

  	
  a
  Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jubal Thompson

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:  JUBAL THOMPSON

  	
   

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:  Counsel

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
  Katherine O’Leary McQuie, Trustee

  
	
   

  	
   

  	
   

  
	
  /s/ Lendra E. Lundofer

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:  LENDRA E. LUNDOFER

  	
   

  	
  Gregory L. Carter,
  Trustee

  
													



 


[acknowledgements
on following pages]


 


5
















 


PREPARED
OUT OF STATE


 


 


EIGHTH LOAN
MODIFICATION AND SPREADER AGREEMENT


 


THIS EIGHTH LOAN MODIFICATION AND SPREADER AGREEMENT (this “Agreement”)
is made as of the 5  day of March,
2001, by and among (a) COMSTOCK HOLDING COMPANY, INC. (“Borrower”), a Virginia
corporation, (b) COMSTOCK SHERBROOKE, L.C., a Virginia limited liability
company (“Comstock Sherbrooke”) and CHRISTOPHER CLEMENTE and GREGORY BENSON,
jointly and severally (collectively, the “Guarantor”), (c) KATHERINE O’LEARY
MCQUIE, a resident of Fairfax County, Virginia and GREGORY L. CARTER, a
resident of Fairfax County, Virginia (Trustees”), and (d) BANK OF AMERICA,
N.A., a national banking association, successor in interest to NationsBank,
N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance, as modified (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as modified
and increased to the current principal amount of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00) (as amended, and as the same may be
further amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note and the Loan are
jointly and severally guaranteed by that certain Guaranty Agreement dated as of
December 17,1997, by the Guarantor for the benefit of the Lender (the
“Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit Line Deed of Trust
and Security Agreement dated as of December 17, 1997 and recorded in Deed
Book 10211 at page 1879, among the Land Records of Fairfax County, Virginia, as
amended (as amended, and as the same may be further amended or supplemented
from time to time, the “Deed of Trust”) granting a security interest to the
Trustees in certain land located in Fairfax County, Virginia, as more
particularly described in Exhibit A attached thereto and that certain
Supplemental Credit Line Deed of Trust and Security Agreement dated as of
March 6, 2000 and recorded among the Land Records of Prince William County,
Virginia, as amended (as amended, and as the same may be further amended or
supplemented from time to time, the “Supplemental Deed of Trust”), and;


 


WHEREAS, the Borrower’s obligations under the Note and the other Loan
Documents (hereinafter defined) are hereinafter collectively called the
“Obligations”; the Note, the Deed of Trust, the Supplemental Deed of Trust, the
Loan Agreement, the Guaranty, and all other documents previously, now or
hereafter executed and delivered to evidence, secure, guarantee, or in
connection with, the Obligations, as the same may from time to time be renewed,
extended, amended, supplemented or restated, are hereinafter collectively
called the “Loan Documents”; and all liens, security interests, assignments,
superior titles, rights, remedies, powers, equities and priorities securing the
Note or providing recourse to Lender with respect thereto are hereinafter


 
















 


collectively
called the “Liens”


 


NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower, Guarantor and Lender
hereby agree to amend the terms and conditions of the Loan Documents as more
specifically set forth below.


 


1.                                      Recitals.  The
recitals set forth above are a material part of this Agreement. Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


2.                                      Loan Amount.  The
maximum principal amount that may be committed under the Loan at any time shall
be Three Million Three Hundred Thousand and 00/100 Dollars ($3,300,000.00).


 


3.                                      Spread of Lien. 
Comstock Sherbrooke hereby irrevocably grants, bargains, and conveys
(and to the extent any of such property was previously conveyed to the Trustees
pursuant to the Deed of Trust, regrants, rebargains and reconveys) to the
Trustee and its respective successors in trust, and their assigns, with power
of sale, and the lien of the Deed of Trust is spread to include, the Additional
Property as described on Exhibit A-1 attached hereto, to have and to
hold the same, together with all and singular the rights, privileges,
tenements, hereditaments and appurtenances thereto in any way incident or
belonging unto the Trustee and to its successors and assigns forever, in and
upon the same uses and trusts and with all the powers and duties as set forth
in the Deed of Trust, with like force and effect. All terms, provisions,
covenants, stipulations, conditions and agreements contained in the Deed of
Trust are incorporated herein by this reference for all purposes.


 


All references in the Deed of Trust to the “Land” shall be deemed to
include the Additional Property described in Exhibit A-1 attached hereto
in addition to the real property described in Exhibit A attached hereto.
The parties hereto agree that whenever the term “Land” is used in the Deed of
Trust and the other Loan Documents, shall be deemed to include not only the
real property described in Exhibit A, but also the real property
described in Exhibit A-1.


 


4.                                      Loan Fee.  Upon
execution hereof, Borrower shall pay to Lender an irrevocable Loan fee in the
amount of Three Hundred Thirty-Three Dollars ($333.00).


 


5.                                      Borrower’s and Comstock
Sherbrooke’s Representations and Warranties.  The
Borrower and Comstock Sherbrooke hereby jointly and severally reaffirm all of
the representations and warranties set forth in the Loan Documents (as defined
in the Loan Agreement, as amended hereby), and further jointly and severally
represent and warrant that (a) the execution and delivery of this Agreement do
not contravene, resulting in an breach of, or constitute a default under, any
deed of trust, loan agreement, indenture or other contract or agreement to
which the Borrower or Comstock Sherbrooke is a party or by which the Borrower,
Comstock Sherbrooke or any of their respective properties may be bound (nor
would such execution and delivery constitute such a default with the passage of
time or the giving of notice or both), and do not violate or contravene any
law, order, decree, rule, regulation or restriction to which the Borrower,
Comstock Sherbrooke or the Property is subject; (b) this Agreement constitutes
the legal, valid and binding obligations of the Borrower and Comstock
Sherbrooke enforceable in accordance with its terms; (c) the execution and
delivery of, and performance under, this Agreement are within the Borrower’s
and Comstock Sherbrooke’s power and authority without the joinder or consent of
any other party and have been duly authorized by all requisite action, and are
not in contravention of any law, or of the Borrower’s or Comstock Sherbrooke’s
charter, bylaws or other corporate organizational documents or of any
indenture, agreement or undertaking to which the Borrower or Comstock
Sherbrooke is a party or by which it is bound; (d) there exists no default
under the Note or any other Loan


 


2
















 


Document;
(e) there are no offsets, claims or defenses with respect to the Borrower’s or
Guarantor’s obligations under any of the Loan Documents (the “Obligations”);
and (f) the Borrower and Comstock Sherbrooke are each duly organized and
legally existing under the laws of the Commonwealth of Virginia and is duly
qualified to do business in the Commonwealth of Virginia. The Borrower and
Comstock Sherbrooke further jointly and severally represent and warrant that,
except as disclosed in writing to the Lender, there is no suit, judicial or
administrative action, claims, investigation, inquiry, proceeding or demand
pending (or, to the Borrower’s or Comstock Sherbrooke’s knowledge threatened)
against (i) the Borrower, or against any other person liable directly or
indirectly for the Obligations, or (ii) which affects the Property or the
Borrower’s or Comstock Sherbrooke’s title to the Property, or (iii) which
affects the validity, enforceability or priority of any of the Loan Documents.
The Borrower and Comstock Sherbrooke jointly and severally agree to indemnify
and hold the Lender harmless against any loss, claim, damage, liability or
expense (including, without limitation, attorneys’ fees) incurred as a result
of any representation or warranty made by the Borrower or Comstock Sherbrooke
herein which proves to be untrue or inaccurate in any respect, and any such
occurrence shall constitute a default under the Loan Documents.


 


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


 


7.                                      Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


8.                                      Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b)
shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the
parties hereto on separate counterparts, and each counterpart, when executed
and delivered, shall constitute an original agreement enforceable against all
who signed it without production of or accounting for any other counterpart,
and all separate counterparts shall constitute the same agreement.  Any terms not defined herein shall have the
meanings set forth in the Loan Documents.


 


9.                                      Reaffirmation of Guaranty.  Each
Guarantor, by signature below as such, for a valuable consideration, the receipt
and adequacy of which are hereby acknowledged, hereby consents to and joins in
this Agreement and hereby declares to and agrees with the Lender that, the
Guaranty is and shall continue in full force and effect for the benefit of the
Lender with respect to the Obligations, as amended by this Agreement, that
there are no offsets, claims or defenses of the Guarantor with respect to the
Guaranty nor, to Guarantor’s knowledge, with respect to the Obligations, that
the Guaranty is not released, diminished or impaired in any way by this
Agreement or the transactions contemplated hereby, and that the Guaranty is
hereby ratified and confirmed in all respects. Each Guarantor hereby reaffirms
all of the representations and warranties set forth in the Guaranty. Each
Guarantor acknowledges that without this consent and reaffirmation, Lender
would not execute this Agreement or otherwise consent to its terms.


 


3
















 


10.                               Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


4
















 


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


 


	
  ATTEST/WITNESS:

  	
   

  	
  BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  COMSTOCK SHERBROOKE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK SHERBROOKE, LC.,

  
	
   

  	
   

  	
  a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John M De Zinno

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
   

  
	
  Print Name:

  	
  JOHN M DE ZINNO

  	
   

  	
   

  	
  Linda P. Long

  	
   

  
	
  Print Title:

  	
  SR. VICE PRESIDENT

  	
   

  	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
										



 


[signatures
continue on next page]


 


5
















 


	
  ATTEST/WITNESS:

  	
  GUARANTORS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente, individually [SEAL]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L Wyche

  	
   

  	
  /s/ Gregory Benson

  	
   

  
	
  Print Name:

  	
  KELLY L WYCHE

  	
   

  	
  Gregory Benson, individually [SEAL]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  COMSTOCK SHERBROOKE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
  Print Name:

  	
  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
   

  	
  TRUSTEES

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Katherine O’Leary McQuie, Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  John M De Zinno

  	
   

  	
   

  	
  /s/ Gregory L. Carter

  	
   

  
	
  Print Name:

  	
  JOHN
  M DE ZINNO

  	
   

  	
  Gregory L. Carter, Trustee

  
															



 


[acknowledgements
on following pages]


 


6
















 


PREPARED
OUT OF STATE


 


NINTH LOAN
MODIFICATION AND SPREADER AGREEMENT


 


THIS NINTH LOAN MODIFICATION AND SPREADER AGREEMENT
(this “Agreement”) is made as of the 31 day of August, 2001, by and among (a) COMSTOCK HOLDING COMPANY, INC. (“Borrower”),
a Virginia corporation, (b) COMSTOCK SHERBROOKE,
L.C., (“Comstock Sherbrooke”), a Virginia limited liability company,
COMSTOCK FAIRFAX I, L.C., (“Comstock
Fairfax”) a Virginia limited liability company, COMSTOCK SERVICE CORP., INC., (“Comstock Service”), a Virginia
corporation, CHRISTOPHER CLEMENTE and GREGORY
BENSON, jointly and severally (collectively, the “Guarantor”), (c) LINDA P. LONG,  a resident of Loudoun County, Virginia and GREGORY L. CARTER, a resident of Fairfax
County, Virginia (Trustees”), and (d) BANK OF
AMERICA, N.A., a national banking association, successor in interest
to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan
Agreement (the “Original Loan Agreement”) dated as of December 17, 1997,
by and among Lender, Borrower, and Comstock L’Ambiance (as modified, and as the
same may be further modified, renewed, supplemented or restated, the “Loan
Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17,
1997 made by Borrower payable to the order of the Lender in the original
principal amount of Two Million and No/100 Dollars ($2,000,000,00), as modified
and increased to the current principal amount of Three Million Three Hundred
Thousand and No/100 Dollars ($3,300,000.00) (as amended, and as the same may be
further amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, the Borrower’s obligations under the Note
and the Loan are jointly and severally guaranteed by that certain Guaranty
Agreement dated as of December 17, 1997, by the Guarantor for the benefit
of the Lender (the “Guaranty”); and


 


WHEREAS, the Loan is secured by that certain Credit
Line Deed of Trust and Security Agreement dated as of December 17, 1997
and recorded in Deed Book 10211 at page 1879, among the Land Records of Fairfax
County, Virginia, as amended (as amended, and as the same may be further
amended or supplemented from time to time, the “Deed of Trust”) granting a
security interest to the Trustees in certain land located in Fairfax County,
Virginia, as more particularly described in Exhibit A attached thereto
and that certain Supplemental Credit Line Deed of Trust and Security Agreement
dated as of March 6, 2000 and recorded among the Land Records of Prince
William County, Virginia, as amended (as amended, and as the same may be
further amended or supplemented from time to time, the “Supplemental Deed of
Trust”), and;


 


WHEREAS, Lender and Borrower have mutually agreed to
increase the principal amount of the Loan and the Note to the maximum aggregate
amount of Seven Million Four Hundred Thousand and No/100 Dollars
($7,400,000.00) which Borrower shall use for acquisition and construction of
Phase 16 at Sherbrooke Townhouse Condominium (the “Additional Property”) on the
terms and conditions set forth herein.


 
















 


WHEREAS, all of the obligations under the Loan, as
modified hereby, shall be secured by the Deed of Trust as amended and spread
hereby to encumber the Additional Property.


 


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


 


1.                                        Recitals.  The
recitals set forth above are a material part of this Agreement.  Borrower and Guarantor each acknowledge and
affirm the accuracy of the recitals set forth above.


 


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


 


3.                                         Loan Amount.  The
second sentence of Paragraph 1.1 (r) of the Loan Agreement is hereby deleted
and replaced with the following:


 


During the term of the Loan, as set forth in the Note, the Borrower may
borrow, repay and reborrow amounts under the Loan; provided, however, that the
maximum amount available for disbursement at any time under the Loan shall
equal (a) Seven Million Four Hundred Thousand and No/100 Dollars
($7,400,000.00) minus (b) the total amount then advanced and outstanding under
the Loan, provided however, that Lender shall not make the initial advance
under the Loan with respect to any Inventory Lot or Unit for which funds have
not previously been advanced under the Loan if the total amount budgeted under
the Loan for all Inventory Lots and Units for which funds have been advanced
under the Loan and not repaid in full equals or exceeds Twelve Million and
No/100 Dollars ($12,000,000.00).


 


4.                                         Maturity Date. All of the Obligations, including (without
limitation) all outstanding principal, accrued and unpaid interest, outstanding
late charges, unpaid fees, and all other amounts outstanding under the Note and
the other Loan Documents, shall be due and payable in full on December 31,
2002 (the “Maturity Date”). All references to the Maturity Date contained in
the Loan Documents shall refer to the Maturity Date as defined in this
Agreement.  Notwithstanding the above, in
the event the Lender does not agree in its sole and absolute discretion to extend
the Maturity Date prior to June 30, 2002, the principal amount outstanding
under the Loan on the Maturity Date with respect to any Pre-Sold Unit,
Speculative Unit or Inventory Lot shall be due and payable on the earlier of
(i) the date calculated in accordance with Paragraph 2.2(g) of the Loan
Agreement as amended or (ii) the Maturity Date.


 


5.                                        Spread of Lien. Comstock Holding and Comstock Sherbrooke
hereby irrevocably grant, bargain, and convey (and to the extent any of such
property was previously conveyed to the Trustees pursuant to the Deed of Trust,
regrants, rebargains and reconveys) to the Trustee and its respective
successors in trust, and their assigns, with power of sale, and the lien of the
Deed of Trust is spread to include the Additional Property as described in Exhibit
A-1 attached hereto, to have and to hold the same, together with all and
singular the rights, privileges, tenements, hereditaments and appurtenances
thereto in any way incident or belonging unto the Trustee and to its successors
and assigns forever, in and upon the same uses and trusts and with all the
powers and duties as set forth in the Deed of Trust, with like force and
effect.  All terms, provisions,
covenants, stipulations, conditions and agreements contained in the Deed of
Trust are incorporated herein by this reference for all purposes.


 


2
















 


All references in the Deed of Trust to the “Land”
shall be deemed to include the Additional Property described in Exhibit A-1
attached hereto in addition to the real property described in Exhibit A
attached hereto. The parties hereto agree that whenever the term “Land” is used
in the Deed of Trust and the other Loan Documents, shall be deemed to include
not only the real property described in Exhibit A, but also the real
property described in Exhibit A-1.


 


6.                                       Financial Statements. From and after the date hereof, financial
statements required to be furnished to Lender by the Borrower and Guarantor
shall be furnished to Lender as follows:


 


	
   

  	
   

  	
   

  	
   

  	
  Days Due After Period End

  	
   

  	
  Quality

  	
   

  
	
  Name

  	
   

  	
  Frequency

  	
   

  	
  Annual

  	
   

  	
  Interim

  	
   

  	
  Annual

  	
   

  	
  Interim

  	
   

  
	
  Comstock
  Holding Company, Inc.*

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA Audited

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Sherbrooke, L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Fairfax I, LC.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Homes of North Carolina, L.L.C.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA  Reviewed

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Service Corp.,  Inc. *

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA  Reviewed

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Beckett’s Crossing

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Haddon Hall

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Wakefield, L.L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Delta Ridge II, L.L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Any
  future new project entities

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Christopher
  Clemente

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Gregory
  Benson

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  



 










*
Note:  The CPA Reviewed financial
statement for Comstock Service Corp.  is
defined as the consolidated financial statement of Comstock Service Corporation
and Project Entities, to include a line item representing Comstock Service
Corps, ownership interest and equity in earnings of affiliated entities  (Comstock North Carolina, LLC and any future
affiliated entities).  This reviewed
financial statement will be used to monitor covenant compliance.


 


3
















 


 


7.                                      Wescott Ridge Project. From and after the date hereof, the Projects
as defined in the Loan Documents, shall include the acquisition of
approximately one hundred seventy (170) condominium lots and the construction
of up to one hundred thirty-three (133) market rate Units and thirty-seven (37)
affordable dwelling Units (the “Affordable Dwelling Units”) on such lots in the
subdivision known as the Courts of Wescott Ridge (the ‘Wescott Ridge Project”),
which shall be subject to a condominium regime to be formed in the future,
located in western Fairfax County, adjacent to the Fairfax County Government
Center.


 


8.                                        Speculative Unit Limit. The maximum aggregate number of Speculative
Units (including model Units) which may be constructed from the proceeds of the
Loan at any time shall be as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Speculative Units

  	
   

  
	
  Sherbrooke

  	
   

  	
  8
  Units

  	
   

  
	
  Wescott Ridge

  	
   

  	
  14
  Units (excluding Affordable Dwelling Units)

  	
   

  



 


9.                                        Inventory Lot Limit.  The number
of Inventory Lots that may be financed with Loan proceeds with respect to the
following projects is as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Inventory Lots

  	
   

  
	
  Sherbrooke

  	
   

  	
  0 Lots

  	
   

  
	
  Wescott
  Ridge

  	
   

  	
  39 Lots 
  (excluding Affordable Dwelling Units)

  	
   

  



 


10.                               Limitation on Amounts
Advanced and/or Readvanced and the Terms Therefor. 
Paragraph 2.2 of the Loan Agreement is hereby deleted and replaced with
the following:


 


Each of the following shall constitute a
limitation on the maximum principal amount to be advanced and/or readvanced
under the Loan:


 


(a)                                  With respect to each Pre-Sold Unit, the
Lender shall not fund under the Loan an amount in excess of eighty percent
(80%) of the lesser of (i) the contract price for such Pre-Sold Unit or (ii)
the Appraised Value for such Pre-Sold Unit including applicable appraised
options. Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary, the portion of any Loan advance which pertains to a
Lot comprising a Pre-Sold Unit shall not exceed one hundred percent (100%) of
the lesser of (i) the price paid for such Lot by Borrower, or (ii) the
Appraised Value for such Lot.


 


Construction of any townhouse building may be
commenced without meeting the Pre-Sold requirements so long as the Speculative
Unit Limit set forth hereinabove is not exceeded. At Wescott Ridge, the first
building may be started on a speculative basis, however, any buildings
thereafter must comply with a fifty percent (50%) pre-sale requirement.


 


(b)                                  With respect to each Speculative Unit, the
Lender shall not fund under the Loan an amount in excess of eighty percent
(80%) of the lesser of (i) the Appraised Value for such Speculative Unit
including applicable appraised options or (ii) the projected contract price for
such Speculative Unit.  Notwithstanding
anything


 


4
















 


contained in this Agreement or any other Loan Document to the contrary,
the portion of any Loan advance which pertains to a Lot intended to be used for
a  Speculative Unit shall not
exceed one hundred percent (100%) of the lesser of (i) the price paid for such
Lot by Borrower, or (ii) the Appraised Value for such Lot.


 


(c)                                  With respect to each Affordable Dwelling
Unit, the Lender shall not fund under the Loan an amount in excess of the
lesser of (1) one hundred percent (100%) of the lesser of (a) the Appraised
Value for such Affordable Dwelling Unit including applicable appraised options
or (b) the projected contract price for such Affordable Dwelling Unit or (2)
one hundred percent (100%) of the total costs for such Affordable Dwelling Unit
including applicable options. Notwithstanding anything contained in this
Agreement or any other Loan Document to the contrary, the portion of any Loan
advance which pertains to a Lot intended to be used for a Affordable Dwelling
Unit shall not exceed one hundred percent (100%) of the lesser of (i) the price
paid for such Lot by Borrower, or (ii) the Appraised Value for such Lot, if
applicable.


 


(d)                                  With respect to each Lot, the Lender shall
not fund under the Loan an amount in excess of the lesser of seventy-five
percent (75%) of (i) the purchase price for such Lot, or (ii) the Appraised
Value for such Lot (which may be the discounted Appraised Value, if
applicable). No funding shall permitted for partial townhouse building pads
unless the entire building pad is encumbered by the Deed of Trust.


 


(e)                                  The outstanding principal balance of the Loan
(together with all accrued and unpaid interest and all other amounts due under
the Loan) attributable to each Unit and/or Inventory Lot shall be due and
payable on the earlier of:


 


(i)                                    with respect to Pre-Sold Units, the earlier
of (a) the date of settlement pursuant to any sale of any such Pre-Sold Unit to
a third party purchaser, or (b) the date which is nine (9) months after the
first advance attributable to such Pre-Sold Unit, unless extended pursuant to a
Courtesy Extension (as hereinafter defined);


 


(ii)                                With respect to Speculative Units (excluding
model units), the earlier of (a) the date which is twelve (12) months after the
first advance attributable to such Speculative Unit, unless extended pursuant
to a Courtesy Extension (as hereinafter defined) or (b) ninety (90) days after
“Project Withdrawal” (hereinafter defined);


 


(iii)                            with respect to any Speculative Units that
are considered to be model Units, the date which is the earlier of (a) ninety
(90) days after Project Withdrawal, (b) the date of settlement pursuant to any
sale of such Unit to a third party purchaser, or (c) the Maturity Date;


 


(iv)                               with respect to any Affordable Dwelling Units
the earlier of (a) the date which is twelve (12) months after the first advance
attributable to such Affordable Dwelling Units, unless extended pursuant to a
Courtesy Extension (as hereinafter defined) or (b) the date of settlement
pursuant to any sale of such Unit to a third party purchaser; and


 


(v)                                   with respect to any Inventory Lot, the date
which is nine (9)


 


5
















 


months after the first advance attributable to such Inventory Lot,
unless extended pursuant to a Courtesy Extension (as hereinafter defined).


 


Notwithstanding anything to the contrary set forth
hereinabove (including Courtesy Extensions), at such time and in the event the
first advance of Loan proceeds allocated for a Unit repays the principal amount
outstanding with respect to an Inventory Lot, then the funds advanced for such
Unit shall have a maturity date calculated from the date of the initial advance
of Loan proceeds as a Pre-Sold Unit, a Speculative Unit or an Affordable
Dwelling Unit, as applicable.


 


The term “Project Withdrawal” as used herein
shall mean in the event Borrower withdraws its sales efforts at a particular
Project by permanently abandoning the sales efforts (no longer marketing from
sales trailer or model) and/or notifying the land seller of its intention not
to comply with the take-down schedule for lot purchases, as determined by
the Lender.


 


The term “Courtesy Extension” as used herein
shall refer to Borrower’s request and Lender’s approval of the extension of any
individual maturity date for one three (3) month period, with no additional fee
owed by Borrower to Lender; such individual maturity date may be further
extended for successive three (3) month periods at Borrower’s request and
Lender’s approval, so long as Borrower pays to Lender prior to each three (3)
month period a fee in the amount of one-fifth of one percent (0.20%) of the
amount committed under the Loan for such Unit. Notwithstanding anything further
to the contrary set forth hereinabove, the entire outstanding principal of the
Loan (together with all accrued and unpaid interest and all other amounts due
under the Loan), shall be due and payable in full on the Maturity Date.  In no event may any Courtesy Extension extend
beyond the Maturity Date.


 


11.                               Financial Covenants.


 


(a)                                    Comstock Holding Company.  From
and after the date hereof, it shall be an Event of Default under the Loan
entitling Lender to pursue any or all of its remedies if (i) the ratio of
Borrower’s Total Debt to Borrower’s Tangible Net Worth exceeds 7:1, and (ii)
Borrower’s Tangible Net Worth is less than the sum of $1,200,000.00 from
December 31, 2001 until June 30, 2002. Tangible Net Worth shall mean
(i) the Partner’s Capital as shown on the Borrower’s financial statements
approved by Lender less (ii) intangible assets as shown on such financial
statements, if any.


 


(b)                                    Comstock Service.  From
and after the date hereof, it shall be an Event of Default under the Loan
entitling Lender to pursue any or all of its remedies if (i) the ratio of
Comstock Service’s Total Debt to Comstock Service’s Tangible Net Worth exceeds
7:1, and (ii) Comstock Service’s Tangible Net Worth is less than the sum of
$1,500,000.00 from December 31, 2001 through June 30, 2002.  Tangible Net Worth shall mean (i) the
Shareholder’s Capital as shown on the Comstock Service’s financial statements
approved by Lender less (ii) intangible assets as shown on such financial
statements, if any.


 


12.                                Inspection Fee.  At
the time of the first advance under the Loan for any Unit, Borrower shall pay
to Lender a flat inspection fee in the amount of Fifty and No/100 Dollars
($50.00) per Unit to cover any internal inspection that may be performed by the
Lender. Inspection


 


6
















 


Fees
incurred as a result of an inspection performed by a third party are the
responsibility of the Borrower.


 


13.                                 Loan Fee. 
Simultaneously with the execution of this Agreement, Borrower shall pay
to Lender a loan fee in the amount of $11,242.00 for the calendar quarter
July 1, 2001 through September 30, 2001. Borrower shall also pay to
Lender a quarterly loan fee in an amount equal to one-fifth of one percent
(0.20%) of the total amount committed under the Loan on the first day of each
calendar quarter thereafter as an additional loan fee so long as there is any
Loan Amount committed under the Loan on any such due date.


 


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


 


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


 


7
















 


16.                                 Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


17.                                 Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect.  This Agreement (a) shall bind and benefit the
parties hereto and their respective heirs, beneficiaries administrators,
executors, receivers, trustees, successors and assigns; (b) shall be governed
by the laws of the Commonwealth of Virginia and United States federal law: and
(c) may be executed in several counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when executed and delivered, shall
constitute an original agreement enforceable against all who signed it without
production of or accounting for any other counterpart, and all separate
counterparts shall constitute the same agreement. Any terms not defined herein
shall have the meanings set forth in the Loan Documents.


 


18.                                Additional Guarantors;
Reaffirmation of Guaranty.  Comstock Service Corp., Inc. and Comstock
Fairfax I, L.C., by their execution hereof, jointly and severally hereby join
in and agree to be bound by all of the terms and conditions of the Guaranty as
if each were an original Guarantor thereunder. Each Guarantor, by its signature
below as such, for a valuable consideration, the receipt and adequacy of which
are hereby acknowledged, hereby consents to and joins in this Agreement and
hereby declares to and agrees with the Lender that, the Guaranty is and shall
continue in full force and effect for the benefit of the Lender with respect to
the Obligations, as amended by this Agreement, that there are no offsets,
claims or defenses of the Guarantor with respect to the Guaranty nor, to
Guarantor’s knowledge, with respect to the Obligations, that the Guaranty is
not released, diminished or impaired in any way by this Agreement or the
transactions contemplated hereby, and that the Guaranty is hereby ratified and
confirmed in all respects. Each Guarantor hereby reaffirms all of the
representations and warranties set forth in the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


19.                                Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


8
















 


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


 


	
   

  	
  BORROWER

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ KELLY L. WYCHE

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
  COMSTOCK SHERBROOKE:

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE, LC.,

  
	
   

  	
  a
  Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ KELLY L. WYCHE

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:  

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
									



 


9
















 


	
   

  	
  GUARANTORS

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher
  Clemente

  	
  (SEAL)

  
	
  Print
  Name: 

  	
  Christopher
  Clemente, individually 

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Gregory Benson

  	
  (SEAL)

  
	
  Print
  Name: 

  	
  Gregory Benson, individually

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SHERBROOKE, L.C.,

  
	
   

  	
  a
  Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:

  	
   

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print
  Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK FAIRFAX I, L.C.,
a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:

  	
   

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print
  Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  COMSTOCK SERVICE CORP., INC,

  a Virginia
  corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/
  Gregory Benson

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
  Gregory
  Benson

  	
   

  
	
   

  	
   

  	
   

  	
  President

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  
										



 


10
















 


	
   

  	
   

  	
  TRUSTEES

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  John M. De Zinno

  	
   

  	
  /s/
  Linda P. Long

  	
  (SEAL)

  
	
  Print
  Name:

  	
  JOHN
  M. DE ZINNO

  	
   

  	
  Linda
  P. Long, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/
  John M. De Zinno

  	
   

  	
  /s/
  Gregory L. Carter

  	
  (SEAL)

  
	
  Print
  Name:

  	
  JOHN
  M. DE ZINNO

  	
   

  	
  Gregory
  L. Carter, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LENDER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  John M. De Zinno

  	
   

  	
  By:

  	
  /s/
  Linda P. Long

  	
  (SEAL)

  
	
  Print
  Name:  JOHN M. DE ZINNO

  	
   

  	
   

  	
  Linda
  P. Long

  
	
  Print
  Title:  SENIOR VICE PRESIDENT

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  	
   

  	
   

  
									



 


[acknowledgements
on following pages]


 


11
















 


PREPARED
OUT OF STATE


 


 


TENTH LOAN
MODIFICATION AND SPREADER AGREEMENT


 


THIS TENTH LOAN MODIFICATION AND SPREADER AGREEMENT
(this “Agreement”) is made as of the 12  day
of September, 2002, by and among (a) COMSTOCK
HOLDING COMPANY, INC., a Virginia corporation and COMSTOCK FLYNN’S CROSSING, L.C., a Virginia
limited liability company (collectively “Borrower”), (b) COMSTOCK RIVERSIDE, L.C. (“Comstock
Riverside”), a Virginia limited liability company, COMSTOCK FAIRFAX I, L.C., (“Comstock Fairfax”) a Virginia
limited liability company, COMSTOCK SERVICE
CORP., INC., (“Comstock Service”), a Virginia corporation, CHRISTOPHER CLEMENTE and GREGORY BENSON, jointly and severally
(collectively, the “Guarantor”), (c) LINDA P.
LONG, a resident of Loudoun County, Virginia and GREGORY L. CARTER, a resident of Fairfax
County, Virginia (collectively the “Trustees”), and (d) BANK OF AMERICA, N.A., a national banking
association, successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS, pursuant to the terms of that certain Loan Agreement (the
“Original Loan Agreement”) dated as of December 17, 1997, by and among
Lender, Borrower, and Comstock L’Ambiance (as modified, and as the same may be
further modified, renewed, supplemented or restated, the “Loan Agreement”),
Lender made a loan (the “Loan”) to Borrower in the original principal amount of
Two Million and No/100 Dollars ($2,000,000.00), as evidenced by that certain
Revolving Deed of Trust Note dated December 17, 1997 made by Borrower
payable to the order of the Lender in the original principal amount of Two
Million and No/100 Dollars ($2,000,000.00) (as amended, and as the same may be
further amended, renewed, supplemented or restated, the “Note”); and


 


WHEREAS, pursuant to the terms of that certain Fifth
Modification Agreement dated March 2000 and recorded among the land
records of Prince William County at Deed Book 2874, page 842 and re-recorded at
Deed Book 2932, page 680, the principal amount of the Loan was increased to
Four Million Five Hundred Thousand and No/100 dollars ($4,500,000.00); and


 


WHEREAS, pursuant to that certain Eighth
Modification Agreement dated March 2001 and recorded among the land
records of Prince William County as Instrument No. 2001 03 07 0021469 the
principal amount of the Loan was reduced to Three Million Three Hundred
Thousand and No/100 Dollars ($3,300,000.00); and


 


WHEREAS, pursuant to that certain Ninth Modification Agreement dated
August 31, 2001 and recorded among the land records of Prince William
County as Instrument No. 200109130095284 the principal amount of the Loan was
increased to the current amount of Seven Million Four Hundred Thousand and
No/100 Dollars ($7,400,000.00); and


 


WHEREAS, the Borrower’s obligations under the Note
and the Loan are jointly and severally guaranteed by that certain Guaranty
Agreement dated as of December 17, 1997, by the Guarantor for the benefit
of the Lender (the “Guaranty”); and


 
















 


WHEREAS, the Loan is secured by that certain Credit
Line Deed of Trust and Security Agreement dated as of December 17, 1997
and recorded in Deed Book 10211 at page 1879, among the Land Records of Fairfax
County, Virginia, as amended (as amended, and as the same may be further
amended or supplemented from time to time, the “Deed of Trust”) granting a
security interest to the Trustees in certain land located in Fairfax County,
Virginia, as more particularly described in Exhibit A attached thereto
and that certain Supplemental Credit Line Deed of Trust and Security Agreement
dated as of March 6, 2000 and recorded among the Land Records of Prince
William County, Virginia, as amended (as amended, and as the same may be
further amended or supplemented from time to time, the “Supplemental Deed of
Trust”); and


 


WHEREAS, Lender and Borrower have mutually agreed to
increase the principal amount of the Loan and the Note by Four Million Six
Hundred Thousand and No/100 Dollars ($4,600,000.00) to the maximum aggregate
amount of Twelve Million and No/100 Dollars ($12,000,000.00) which Borrower
shall use for acquisition and construction of the Projects on the terms and
conditions set forth herein; and


 


WHEREAS, the Loan currently matures on
December 31, 2002 and Lender has agreed to extend the maturity date of the
Loan; and


 


WHEREAS, Comstock Flynn’s Crossing, L.C. is
purchasing the Future Project known as “Flynn’s Crossing” as particularly
described in Exhibit A-1 attached hereto (the “Flynn’s Crossing
Property”) and all of the obligations under the Loan, as modified hereby, shall
be secured by the Deed of Trust as amended and spread hereby to encumber the
Flynn’s Crossing Property.


 


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


 


1.                                       Recitals.  The
recitals set forth above are a material part of this Agreement. Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


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


 


3.                                       Loan Amount. The second sentence of Paragraph 1.1(r) of
the Loan Agreement, as amended, is hereby deleted and replaced with the
following:


 


During the term of the Loan, as set forth in the Note, the Borrower may
borrow, repay and reborrow amounts under the Loan; provided, however, that the
maximum amount available for disbursement at any time under the Loan shall
equal (a) Twelve Million and No/100 Dollars ($12,000,000.00) minus (b) the
total amount then advanced and outstanding under the Loan, provided however,
that Lender shall not make the initial advance under the Loan with respect to
any Inventory Lot or Unit for which funds have not previously been advanced
under the Loan if the total amount budgeted under the Loan for all Inventory
Lots and Units for which funds have been advanced under the Loan and not repaid
in full equals or exceeds Seventeen Million and No/100 Dollars
($17,000,000.00).


 


4.                                       Maturity Date.  All
of the Obligations, including (without limitation) all outstanding principal,
accrued and unpaid interest, outstanding late charges, unpaid fees, and all
other amounts outstanding under the Note and the other Loan Documents, shall be
due and payable in full on


 


2
















 


December 31,
2003 (the “Maturity Date”). All references to the Maturity Date contained in
the Loan Documents shall refer to the Maturity Date as defined in this
Agreement. Notwithstanding the above, in the event the Lender does not agree in
its sole and absolute discretion to extend the Maturity Date prior to
June 30, 2003, the principal amount outstanding under the Loan on the
Maturity Date with respect to any Pre-Sold Unit, Speculative Unit or Inventory
Lot shall be due and payable on the earlier of (i) the date calculated in
accordance with Paragraph 2.2(g) of the Loan Agreement as amended or (ii) the
Maturity Date.


 


5.                                       Spread of Lien. Borrower hereby irrevocably grants,
bargains, and conveys (and to the extent any of such property was previously
conveyed to the Trustees pursuant to the Deed of Trust, regrants, rebargains
and reconveys) to the Trustee and its respective successors in trust, and their
assigns, with power of sale, and the lien of the Deed of Trust is spread to
include the Additional Property as described in Exhibit A-1 attached
hereto, to have and to hold the same, together with all and singular the
rights, privileges, tenements, hereditaments and appurtenances thereto in any
way incident or belonging unto the Trustee and to its successors and assigns
forever, in and upon the same uses and trusts and with all the powers and
duties as set forth in the Deed of Trust, with like force and effect. All
terms, provisions, covenants, stipulations, conditions and agreements contained
in the Deed of Trust are incorporated herein by this reference for all
purposes.


 


All references in the Deed of Trust to the “Land”
shall be deemed to include the Additional Property described in Exhibit A-1
attached hereto in addition to the real property described in Exhibit A
attached hereto. The parties hereto agree that whenever the term “Land” is used
in the Deed of Trust and the other Loan Documents, shall be deemed to include
not only the real property described in Exhibit A, but also the real
property described in Exhibit A-1.


 


6.                                       Financial Statements. From and after the date hereof, financial
statements required to be furnished to Lender by the Borrower and Guarantor
shall be furnished to Lender as follows:


 


	
   

  	
   

  	
   

  	
   

  	
  Days Due After Period End

  	
   

  	
  Quality

  	
   

  
	
  Name

  	
   

  	
  Frequency

  	
   

  	
  Annual

  	
   

  	
  Interim

  	
   

  	
  Annual

  	
   

  	
  Interim

  	
   

  
	
  Comstock
  Holding Company, Inc.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA Audited

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Flynn’s Crossing, L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Fairfax I, L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Homes of North Carolina, L.L.C.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA Compiled

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Service Corp., Inc. *

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA Audited

  	
   

  	
  Internal

  	
   

  
	
  Comstock
  Beckett’s Crossing

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Haddon Hall

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Wakefield, L.L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Comstock
  Delta Ridge II, L.L.C.

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Any
  future new project entities

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Christopher
  Clemente

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  
	
  Gregory
  Benson

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  	
   

  



 


3
















 










*
Note: The CPA Audited Financial Statement for Comstock Service Corp., Inc. is
defined as the consolidated financial statement of Comstock Service Corp., Inc.
and its project entities, to include a line item representing Comstock Service
Corp. Inc.’s ownership interest and equity and earnings in affiliated entities
(Comstock Homes of North Carolina, L.L.C. and any future affiliated entities).
This audited financial statement will be used to monitor covenant compliance.


 


7.                                        Flynn’s Crossing Project.  From
and after the date hereof, the Projects as defined in the Loan Documents, shall
include the acquisition of approximately 4.2965 acres of land currently
approved for the construction of up to forty-eight (48) condominium units
including forty-five (45) market rate units and three (3) affordable dwelling
units (the “Affordable Dwelling Units”) on such lots in the subdivision known
as the Flynn’s Crossing which shall be subject to a condominium regime to be
formed in the future, located in Ashburn, Virginia, just off the Dulles
Greenway at the intersection of Ashbum Village Boulevard and Shellhorn
Road in Loudoun County.


 


8.                                        Speculative Unit Limit.  The
maximum aggregate number of Speculative Units (including model Units) which may
be constructed from the proceeds of the Loan at any time shall be as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Speculative Units

  
	
  Riverside Station

  	
   

  	
  10
  Units

  
	
  Wescott Ridge

  	
   

  	
  14
  Units (excluding Affordable Dwelling Units)

  
	
  Flynn’s Crossing

  	
   

  	
  22
  Units (excluding Affordable Dwelling Units)

  



 


9.              Inventory Lot Limit. The number of
Inventory Lots that may be financed with Loan proceeds with respect to the
following projects is as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Inventory Lots

  
	
  Riverside Station

  	
   

  	
  9
  Lots

  
	
  Wescott Ridge

  	
   

  	
  39
  Lots (excluding Affordable Dwelling Units)

  
	
  Flynn’s Crossing

  	
   

  	
  45
  Lots* (excluding Affordable Dwelling Units)

  



 










*
Notwithstanding the foregoing, the Inventory Lot limit for the Flynn’s Crossing
Project shall be decreased to not more than twenty-four (24) Inventory Lots
upon commencement of construction as a condominium project.


 


10.                               Limitation on Amounts
Advanced and/or Readvanced and the Terms Therefor.  The following shall be added as Paragraph
2.2(e)(vi) of the Loan Agreement.


 


(vi)          with respect to any
Inventory Lot in the Flynn’s Crossing Project, the date which is twelve (12)
months after the first advance attributable to such Inventory Lot, unless
extended pursuant to a Courtesy Extension (as hereinafter defined).


 


4
















 


11.                               Financial Covenants.


 


(a)                                  Comstock Holding Company.  From
and after the date hereof, it shall be an Event of Default under the Loan
entitling Lender to pursue any or all of its remedies if (i) the ratio of
Borrower’s Total Debt to Borrower’s Tangible Net Worth exceeds 6:1, and (ii)
Borrower’s Tangible Net Worth is less than the sum of $1,500,000.00 from
December 31, 2002 until June 30, 2003. Tangible Net Worth shall mean
(i) the Partner’s Capital as shown on the Borrower’s financial statements
approved by Lender less (ii) intangible assets as shown on such financial
statements, if any.


 


(b)                                  Comstock Service.  From
and after the date hereof, it shall be an Event of Default under the Loan
entitling Lender to pursue any or all of its remedies if (i) the ratio of
Comstock Service’s Total Debt to Comstock Service’s Tangible Net Worth exceeds
7:1, and (ii) Comstock Service’s Tangible Net Worth is less than the sum of
$1,500,000.00 from December 31, 2002 through June 30, 2003. Tangible
Net Worth shall mean (i) the Shareholder’s Capital as shown on the Comstock
Service’s financial statements approved by Lender less (ii) intangible assets
as shown on such financial statements, if any. The requirements of this
Section 11(b) are subject to the provisions of Section 6 contained in
the “*Note” with respect to monitoring covenant compliance.


 


(c)                                  Comstock Homes of North
Carolina, L.L.C.  From and after the date hereof, it shall be
an Event of Default under the Loan entitling Lender to pursue any or all of its
remedies if (i) the ratio of Comstock Homes of North Carolina, L.L.C. (“CNC”)
Total Debt to CNC’s Tangible Net Worth exceeds 6:1, and (ii) CNC’s Tangible Net
Worth is less than the sum of $1,500,000.00 from December 31, 2002 through
June 30, 2003. Tangible Net Worth shall mean (i) the Shareholder’s Capital
as shown on the Comstock Service’s financial statements approved by Lender less
(ii) intangible assets as shown on such financial statements, if any.


 


12.                                  Inspection Fee.  At
the time of the first advance under the Loan for any Unit, Borrower shall pay
to Lender a flat inspection fee in the amount of One Hundred and No/100 Dollars
($100.00) per Unit to cover any internal inspection that may be performed by
the Lender. Inspection Fees incurred as a result of an inspection performed by
a third party are the responsibility of the Borrower.


 


13.                                  Loan Fee. 
Simultaneously with the execution of this Agreement, Borrower shall pay
to Lender a loan fee on the Loan increase from the date hereof through
September 30, 2002 in the amount of $2,146.67. Borrower shall also pay to
Lender a quarterly loan fee in an amount equal to one-fifth of one percent
(0.20%) of the total amount committed under the Loan on the first day of each
calendar quarter thereafter as an additional loan fee so long as there is any
Loan Amount committed under the Loan on any such due date.


 


14.                               Borrower’s Representations
and Warranties.  The Borrower, Comstock Riverside, Comstock
Fairfax and Comstock Service hereby jointly and severally reaffirm all of the
representations and warranties set forth in the Loan Documents (as defined in
the Loan Agreement, as amended hereby), and further jointly and severally
represent and warrant that (a) the execution and delivery of this Agreement
does not contravene, resulting in an breach of, or constitute a default under,
any deed of trust, loan agreement, indenture or other contract or agreement to
which the Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service is
a party or by which the Borrower, Comstock Riverside, Comstock Fairfax or
Comstock Service or any of their respective properties may be bound (nor would
such execution and delivery constitute such a default with the


 


5
















 


passage
of time or the giving of notice or both), and do not violate or contravene any
law, order, decree, rule, regulation or restriction to which the Borrower,
Comstock Riverside, Comstock Fairfax or Comstock Service or the Property is
subject; (b) this Agreement constitutes the legal, valid and binding
obligations of the Borrower, Comstock Riverside, Comstock Fairfax and Comstock
Service enforceable in accordance with its terms; (c) the execution and
delivery of, and performance under, this Agreement are within the Borrower’s,
Comstock Riverside’s, Comstock Fairfax’s and Comstock Service’s power and
authority without the joinder or consent of any other party and have been duly
authorized by all requisite action, and are not in contravention of any law, or
of the Borrower’s, Comstock Riverside’s, Comstock Fairfax’s or Comstock
Service’s charter, bylaws or other corporate organizational documents or of any
indenture, agreement or undertaking to which the Borrower, Comstock Riverside,
Comstock Fairfax or Comstock Service is a party or by which it is bound; (d)
there exists no default under the Note or any other Loan Document; (e) there
are no offsets, claims or defenses with respect to the Borrower’s or
Guarantor’s obligations under any of the Loan Documents (the “Obligations”);
and (f) the Borrower, Comstock Riverside, Comstock Fairfax and Comstock Service
are each duly organized and legally existing under the laws of the Commonwealth
of Virginia and are duly qualified to do business in the Commonwealth of
Virginia. The Borrower, Comstock Riverside, Comstock Fairfax and Comstock
Service further jointly and severally represent and warrant that, except as
disclosed in writing to the Lender, there is no suit, judicial or
administrative action, claims, investigation, inquiry, proceeding or demand
pending (or, to the Borrower’s, Comstock Riverside’s, Comstock Fairfax’s and
Comstock Service’s knowledge threatened) against (i) the Borrower, or against
any other person liable directly or indirectly for the Obligations, or (ii)
which affects the Property or the Borrower’s, Comstock Riverside’s, Comstock
Fairfax’s or Comstock Service’s title to the Property, or (iii) which affects
the validity, enforceability or priority of any of the Loan Documents. The
Borrower, Comstock Riverside, Comstock Fairfax and Comstock Service jointly and
severally agree to indemnify and hold the Lender harmless against any loss,
claim, damage, liability or expense (including, without limitation, attorneys’
fees) incurred as a result of any representation or warranty made by the
Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service herein which
proves to be untrue or inaccurate in any respect, and any such occurrence shall
constitute a default under the Loan Documents.


 


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


 


16.                             Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall constitute
a portion of the Obligations evidenced by the Note and secured by the Loan
Documents.


 


17.                             Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b) shall
be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the
parties hereto on separate counterparts, and each counterpart, when executed
and delivered, shall


 


6
















 


constitute
an original agreement enforceable against all who signed it without production
of or accounting for any other counterpart, and all separate counterparts shall
constitute the same agreement. Any terms not defined herein shall have the
meanings set forth in the Loan Documents.


 


18.                              Additional Guarantors;
Reaffirmation of Guaranty.  Each Guarantor, by its signature below as
such, for a valuable consideration, the receipt and adequacy of which are
hereby acknowledged, hereby consents to and joins in this Agreement and hereby
declares to and agrees with the Lender that, the Guaranty is and shall continue
in full force and effect for the benefit of the Lender with respect to the
Obligations, as amended by this Agreement, that there are no offsets, claims or
defenses of the Guarantor with respect to the Guaranty nor, to Guarantor’s
knowledge, with respect to the Obligations, that the Guaranty is not released,
diminished or impaired in any way by this Agreement or the transactions
contemplated hereby, and that the Guaranty is hereby ratified and confirmed in
all respects.  Each Guarantor hereby
reaffirms all of the representations and warranties set forth in the Guaranty.
Each Guarantor acknowledges that without this consent and reaffirmation, Lender
would not execute this Agreement or otherwise consent to its terms.


 


19.                              Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


20.                              Release of Comstock
Sherbrooke, L.C. Borrower
and Lender acknowledge that the Project known as Comstock Sherbrooke has been fully
completed and sold.  Accordingly, Lender
hereby releases and forever discharges Comstock Sherbrooke, L.C. from the
payment and performance of the Obligations as set forth in the Guaranty.


 


 


[Signatures on following pages]


 


7
















 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
  Christopher Clemente

  
	
  Print
  Title:

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK FLYNN’S CROSSING L.C.,

  
	
   

  	
  a
  Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK RIVERSIDE, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print
  Title:

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
										



 


8
















 


	
  ATTEST/WITNESS:

  	
  COMSTOCK FAIRFAX I, L.C.,

  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Holding Company, Inc.,

  
	
   

  	
   

  	
  a Virginia corporation, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  KELLY L. WYCHE

  	
   

  	
   

  	
   

  	
  Christopher Clemente

  	
   

  
	
  Print
  Title:  

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK SERVICE CORP., INC,

  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/ Gregory Benson

  	
  (SEAL)

  
	
  KELLY L. WYCHE

  	
   

  	
   

  	
  Gregory Benson

  	
   

  
	
   

  	
   

  	
   

  	
  President

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Christopher Clemente

  	
  (SEAL)

  
	
  Print Name: KELLY L. WYCHE

  	
   

  	
  Christopher Clemente,
  individually

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L. Wyche

  	
   

  	
  /s/ Gregory Benson

  	
  (SEAL)

  
	
  Print Name: KELLY L. WYCHE

  	
   

  	
  Gregory Benson,
  individually

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRUSTEES:

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Lenra E. Lundofer

  	
   

  	
  /s/ Linda P. Long

  	
  (SEAL)

  
	
  Print Name:

  	
  9-16-02

  	
   

  	
  Linda P. Long, Trustee

  	
   

  
	
  Lenra E. Lundofer

  	
   

  	
   

  	
   

  	
   

  
								



 


9
















 


	
   

  	
   

  	
   

  	
  (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Gregory L. Carter, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Lenra E. Lundofer

  	
   

  	
  By:

  	
  /s/ Linda P. Long

  	
  (SEAL)

  
	
  Print
  Name:

  	
  Lenra E. Lundofer

  	
   

  	
   

  	
  Linda P. Long

  	
   

  
	
  Print
  Title:

  	
   Vice President

  	
   

  	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  	
   

  	
   

  	
   

  
								



 


 


[Acknowledgements on following pages]


 


10
















 


PREPARED OUT OF STATE


 


 


ELEVENTH LOAN MODIFICATION


 


THIS
ELEVENTH LOAN MODIFICATION (this “Agreement”) is made as of
the          day of May,
2003, by and among (a) COMSTOCK HOLDING
COMPANY, INC., a Virginia corporation and COMSTOCK FLYNN’S CROSSING, L.C., a Virginia limited liability
company (collectively “Borrower”), (b) COMSTOCK
RIVERSIDE, L.C. (“Comstock Riverside”), a Virginia limited liability
company, COMSTOCK FAIRFAX I, L.C.,
(“Comstock Fairfax”) a Virginia limited liability company, COMSTOCK SERVICE CORP., INC., (“Comstock
Service”), a Virginia corporation, CHRISTOPHER
CLEMENTE and GREGORY BENSON,
jointly and severally (collectively, the “Guarantor”), (c) LINDA P. LONG, a resident of Loudoun
County, Virginia and GREGORY L. CARTER,
a resident of Fairfax County, Virginia (collectively the Trustees”), and (d) BANK OF AMERICA, N.A., a national banking
association, successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS,
pursuant to the terms of that certain Loan Agreement (the “Original Loan
Agreement”) dated as of December 17, 1997, by and among Lender, Borrower, and
Comstock L’Ambiance (as modified, and as the same may be further modified,
renewed, supplemented or restated, the “Loan Agreement”), Lender made a loan
(the “Loan”) to Borrower in the original principal amount of Two Million and
No/100 Dollars ($2,000,000.00), as evidenced by that certain Revolving Deed of
Trust Note dated December 17, 1997 made by Borrower payable to the order of the
Lender in the original principal amount of Two Million and No/100 Dollars
($2,000,000.00) (as amended, and as the same may be further amended, renewed,
supplemented or restated, the “Note”); and


 


WHEREAS,
pursuant to the terms of that certain Fifth Modification Agreement dated March
2000 and recorded among the land records of Prince William County at Deed Book
2874, page 842 and re-recorded at Deed Book 2932, page 680, the principal
amount of the Loan was increased to Four Million Five Hundred Thousand and
No/100 dollars ($4,500,000.00); and


 


WHEREAS,
pursuant to that certain Eighth Modification Agreement dated March 2001 and
recorded among the land records of Prince William County as Instrument No. 2001
03 07 0021469 the principal amount of the Loan was reduced to Three Million
Three Hundred Thousand and No/100 Dollars ($3,300,000.00); and


 


WHEREAS,
pursuant to that certain Ninth Modification Agreement dated August 31, 2001 and
recorded among the land records of Prince William County as Instrument No.
200109130095284 the principal amount of the Loan was increased to Seven Million
Four Hundred Thousand and No/100 Dollars ($7,400,000.00);


 


WHEREAS,
pursuant to that certain Tenth Modification Agreement dated September 12, 2002
and recorded among the land records of (i) Prince William County as Instrument
No. 200209250123106 and rerecorded as Instrument No. 200302130031301, (ii)
Fairfax County in Deed Book 13415 at page 859, and rerecorded in Deed Book
14169 at page 1644, and (iii) Loudoun County in Deed Book 2268 at page 977, the
principal amount of the Loan was increased to Twelve Million and No/100 Dollars
($12,000,000.00); and


 
















 


WHEREAS,
the Borrower’s obligations under the Note and the Loan are jointly and severally
guaranteed by that certain Guaranty Agreement dated as of December 17, 1997, by
the Guarantor for the benefit of the Lender (the “Guaranty”); and


 


WHEREAS,
the Loan is secured by that certain Credit Line Deed of Trust and Security
Agreement dated as of December 17, 1997 and recorded in Deed Book 10211 at page
1879, among the Land Records of Fairfax County, Virginia, as amended (as
amended, and as the same may be further amended or supplemented from time to
time, the “Deed of Trust”) granting a security interest to the Trustees in
certain land located in Fairfax County, Virginia, as more particularly
described in Exhibit A attached thereto and that certain Supplemental
Credit Line Deed of Trust and Security Agreement dated as of March 6, 2000 and
recorded among the Land Records of Prince William County, Virginia, as amended
(as amended, and as the same may be further amended or supplemented from time
to time, the “Supplemental Deed of Trust”); and


 


WHEREAS,
Lender and Borrower have mutually agreed to increase the principal amount of
the Loan and the Note by Three Million and No/100 Dollars ($3,000,000.00) to
the maximum aggregate amount of Fifteen Million and No/100 Dollars
($15,000,000.00) which Borrower shall use for acquisition and construction of the
Projects on the terms and conditions set forth herein; and


 


WHEREAS,
the Loan currently matures on December 31, 2003; and


 


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


 


1.                                      Recitals.  The
recitals set forth above are a material part of this Agreement. Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


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


 


3.                                      Loan Amount.  The
second sentence of Paragraph 1.1(r) of the Loan Agreement, as amended, is
hereby deleted and replaced with the following:


 


During
the term of the Loan, as set forth in the Note, the Borrower may borrow, repay
and reborrow amounts under the Loan; provided, however, that the maximum amount
available for disbursement at any time under the Loan shall equal (a) Fifteen
Million and No/100 Dollars ($15,000,000.00) minus (b) the total amount then
advanced and outstanding under the Loan, provided however, that Lender shall
not make the initial advance under the Loan with respect to any Inventory Lot
or Unit for which funds have not previously been advanced under the Loan if the
total amount budgeted under the Loan for all Inventory Lots and Units for which
funds have been advanced under the Loan and not repaid in full equals or
exceeds Twenty-Two Million and No/100 Dollars ($22,000,000.00).


 


4.                                      Loan Fee. 
Simultaneously with the execution of this Agreement, Borrower shall pay
to Lender a loan fee on the Loan increase from the date hereof through June 30,
2003 in the amount of $2,000.00. Borrower shall also pay to Lender a quarterly
loan fee in an amount equal to one-fifth of one percent (0.20%) of the total
amount committed under the Loan on the first day of


 


2
















 


each calendar quarter
thereafter as an additional loan fee so long as there is any Loan Amount
committed under the Loan on any such due date.


 


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


 


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


 


3
















 


7.                                      Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


8.                                       Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b)
shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the parties
hereto on separate counterparts, and each counterpart, when executed and
delivered, shall constitute an original agreement enforceable against all who
signed it without production of or accounting for any other counterpart, and
all separate counterparts shall constitute the same agreement. Any terms not
defined herein shall have the meanings set forth in the Loan Documents.


 


9.                                      Additional Guarantors;
Reaffirmation of Guaranty.  Each Guarantor, by its signature below as
such, for a valuable consideration, the receipt and adequacy of which are
hereby acknowledged, hereby consents to and joins in this Agreement and hereby
declares to and agrees with the Lender that, the Guaranty is and shall continue
in full force and effect for the benefit of the Lender with respect to the
Obligations, as amended by this Agreement, that there are no offsets, claims or
defenses of the Guarantor with respect to the Guaranty nor, to Guarantor’s
knowledge, with respect to the Obligations, that the Guaranty is not released, diminished
or impaired in any way by this Agreement or the transactions contemplated
hereby, and that the Guaranty is hereby ratified and confirmed in all
respects.  Each Guarantor hereby
reaffirms all of the representations and warranties set forth in the Guaranty.
Each Guarantor acknowledges that without this consent and reaffirmation, Lender
would not execute this Agreement or otherwise consent to its terms.


 


10.                              Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


 


[Signatures on following pages]


 


4
















 


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


 


 


	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK
  HOLDING COMPANY, INC.,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK FLYNN’S CROSSING, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK RIVERSIDE, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
												



 


5
















 


	
  ATTEST/WITNESS:

  	
  COMSTOCK
  FAIRFAX I, L.C.,

  
	
   

  	
  a Virginia limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK
  SERVICE CORP., INC,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/  Christopher Clemente

  	
   

  	
  By:

  	
  /s/ Gregory
  Benson

  	
  (SEAL)

  
	
  Assistant
  Secretary

  	
   

  	
  Gregory
  Benson

  
	
   

  	
   

  	
   

  	
  President

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
  Christopher Clemente, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly
  Wyohe

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
  (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
  Gregory Benson, individually

  
									



 


6
















 


	
   

  	
  TRUSTEES:

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Linda P.
  Long, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Gregory L.
  Carter, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
  Linda P.
  Long

  	
   

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  	
   

  	
   

  
								



 


 


[Acknowledgements on following pages]


 


[GRAPHIC]


 


7
















 


PREPARED OUT OF STATE


 


TWELFTH LOAN MODIFICATION


 


THIS
TWELFTH LOAN MODIFICATION (this “Agreement”) is made as of the 17th
day of June, 2003, by and among (a) COMSTOCK
HOLDING COMPANY, INC. (“Comstock Holding”), a Virginia corporation
and COMSTOCK FLYNN’S CROSSING, L.C.
(“Comstock Flynn’s Crossing”), a Virginia limited liability company
(collectively Comstock Holding and Comstock Flynn’s Crossing shall be referred
to herein as “Borrower”), (b) COMSTOCK
RIVERSIDE, L.C. (“Comstock Riverside”), a Virginia limited liability
company, COMSTOCK FAIRFAX I, L.C.,
(“ Comstock Fairfax”) a Virginia limited liability company, COMSTOCK SERVICE CORP., INC., (“Comstock
Service”), a Virginia corporation, CHRISTOPHER
CLEMENTE and GREGORY BENSON,
jointly and severally (collectively, the “Guarantor”), (c) LINDA P. LONG, a resident of Loudoun
County, Virginia and GREGORY L. CARTER,
a resident of Fairfax County, Virginia (collectively the “Trustees”), and (d) BANK OF AMERICA, N.A., a national banking
association, successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS,
pursuant to the terms of that certain Loan Agreement (the “Original Loan
Agreement”) dated as of December 17, 1997, by and among Lender, Borrower, and
Comstock L’Ambiance (as modified, and as the same may be further modified,
renewed, supplemented or restated, the “Loan Agreement”), Lender made a loan
(the “Loan”) to Borrower in the original principal amount of Two Million and
No/100 Dollars ($2,000,000.00), as evidenced by that certain Revolving Deed of
Trust Note dated December 17, 1997 made by Borrower payable to the order of the
Lender in the original principal amount of Two Million and No/100 Dollars
($2,000,000.00) (as amended, and as the same may be further amended, renewed,
supplemented or restated, the “Note”); and


 


WHEREAS,
pursuant to the terms of that certain Fifth Modification Agreement dated March
2000 and recorded among the land records of Prince William County at Deed Book
2874, page 842 and re-recorded at Deed Book 2932, page 680, the principal
amount of the Loan was increased to Four Million Five Hundred Thousand and
No/100 dollars ($4,500,000.00); and


 


WHEREAS,
pursuant to that certain Eighth Modification Agreement dated March 2001 and
recorded among the land records of Prince William County as Instrument No. 2001
03 07 0021469 the principal amount of the Loan was reduced to Three Million
Three Hundred Thousand and No/100 Dollars ($3,300,000.00); and


 


WHEREAS,
pursuant to that certain Ninth Modification Agreement dated August 31, 2001 and
recorded among the land records of Prince William County as Instrument No.
200109130095284 the principal amount of the Loan was increased to Seven Million
Four Hundred Thousand and No/100 Dollars ($7,400,000.00); and


 


WHEREAS,
pursuant to that certain Tenth Modification Agreement dated September 12, 2002
and recorded among the land records of (i) Prince William County as Instrument
No. 200209250123106 and rerecorded as Instrument No. 200302130031301, (ii)
Fairfax County in Deed Book 13415 at page 859, and rerecorded in Deed Book
14169 at page 1644, and (iii) Loudoun


 
















 


County in Deed Book 2268 at
page 977, the principal amount of the Loan was increased to Twelve Million and
No/100 Dollars ($12,000,000.00);


 


WHEREAS,
pursuant to that certain Eleventh Modification Agreement dated May 28, 2003 and
recorded among the land records of (i) Prince William County as Instrument No.
200306020096563 on June 2, 2003 and, (ii) Fairfax County in Deed Book 14539 at
page 236 on June 3, 2003, and (iii) Loudoun County as Instrument No.
20030603-0066383 on June 3, 2003, the principal amount of the Loan was
increased to Fifteen Million and No/100 Dollars ($15,000,000.00); and


 


WHEREAS,
the Borrower’s obligations under the Note and the Loan are jointly and
severally guaranteed by that certain Guaranty Agreement dated as of December
17, 1997, by the Guarantor for the benefit of the Lender (the “Guaranty”); and


 


WHEREAS,
the Loan is secured by that certain Credit Line Deed of Trust and Security
Agreement dated as of December 17, 1997 and recorded in Deed Book 10211 at page
1879, among the Land Records of Fairfax County, Virginia (as amended, and as
the same may be further amended or supplemented from time to time, the “Deed of
Trust”) granting a security interest to the Trustees in certain land located in
Fairfax County, Virginia, as more particularly described in Exhibit A
attached thereto and that certain Supplemental Credit Line Deed of Trust and
Security Agreement dated as of March 6, 2000 and recorded among the Land
Records of Prince William County, Virginia, as amended (as amended, and as the
same may be further amended or supplemented from time to time, the
“Supplemental Deed of Trust”); and


 


WHEREAS,
Borrower and Lender desire to modify the financial covenants of the Borrower
and the Guarantors.


 


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


 


1.                                      Recitals.   The
recitals set forth above are a material part of this Agreement. Borrower and
Guarantor each acknowledge and affirm the accuracy of the recitals set forth
above.


 


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


 


3.                                      Financial Covenants. Paragraph 11 of the Ninth Loan Modification
Agreement is hereby deleted in its entirety and the following is inserted in
lieu thereof:


 


11.                               Financial Covenants.


 


(a)                                  From and after the date hereof it shall be an
Event of Default under the Loan entitling Lender to pursue any or all remedies
if (i) the ratio of Comstock Holding’s Minimum Tangible Net Worth to Comstock
Holding’s Maximum Leverage Ratio exceeds 6:1; (ii) the ratio of Comstock Service’s
Minimum Tangible Net Worth to Comstock Service’s Maximum Leverage Ratio exceeds
7:1; (iii) each of Comstock Holding’s Minimum Tangible Net Worth and Comstock
Service’s Minimum Tangible Net Worth individually is less than the sum of
$1,500,000.00 from December 31, 2002 through June 30, 2003. No later than the
last day of each April, July, October and January during the term of the Loan,
Borrower shall deliver to


 


2
















 


Lender
internally prepared financial statements in form and substance reasonably
satisfactory to Lender evidencing that the financial covenants are satisfied as
of the last day of the immediately preceding month. The calculations set forth
hereinabove were consistently applied in all prior periods relative to the
financial covenants then in effect. All terms not otherwise defined in
subsections (b) and (c) hereinbelow are given the meanings ascribed to them in
accordance with Generally Accepted Accounting Principals (“GAAP”).


 


(b)                                 “Minimum Tangible Net Worth” for Comstock
Holding and Comstock Service shall be determined in accordance with the
following formula: “Net Worth” less (i) “Intangible Assets,” less (ii) “Due
from Related,” plus (iii) “Due to Related” multiplied by the percentage subordinated
to the Lender and any other institutional lender, plus (iv) “Subordinated Debt”
multiplied by the percentage subordinated to the Lender and any other
institutional lender all as shown on the financial statements submitted by
Comstock Holding and Comstock Service.


 


(c)                                  “Maximum Leverage Ratio” for Comstock Holding
and Comstock Service shall be the ratio of “Total Adjusted Liabilities” to
“Adjusted Net Worth” as determined in accordance with the following formula:
(A) “Total Adjusted Liabilities” shall mean Total Liabilities” less (i) “Due to
Related” and less (ii) “Subordinated Debt,” and (B) “Adjusted Net Worth” shall
mean “Net Worth” less (i) “Intangible Assets,” less (ii) “Due From Related,”
plus (iii) “Due to Related” multiplied by the percentage subordinated to the
Lender and any other institutional lender, plus (iv) “Subordinated Debt”
multiplied by the percentage subordinated to the Lender and any other
institutional lender, plus (v) the “Minority Interest” multiplied by the
percentage subordinated to the Lender and any other institutional lender all as
shown on the financial statements submitted by Comstock Holding and Comstock
Service.


 


4.                                      Borrower’s Representations
and Warranties.  The Borrower, Comstock Riverside, Comstock
Fairfax and Comstock Service hereby jointly and severally reaffirm all of the
representations and warranties set forth in the Loan Documents (as defined in
the Loan Agreement, as amended hereby), and further jointly and severally
represent and warrant that (a) the execution and delivery of this Agreement
does not contravene, resulting in an breach of, or constitute a default under,
any deed of trust, loan agreement, indenture or other contract or agreement to
which the Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service is
a party or by which the Borrower, Comstock Riverside, Comstock Fairfax or
Comstock Service or any of their respective properties may be bound (nor would
such execution and delivery constitute such a default with the passage of time
or the giving of notice or both), and do not violate or contravene any law,
order, decree, rule, regulation or restriction to which the Borrower,, Comstock
Riverside, Comstock Fairfax or Comstock Service or the Property is subject; (b)
this Agreement constitutes the legal, valid and binding obligations of the
Borrower, Comstock Riverside, Comstock Fairfax and Comstock Service enforceable
in accordance with its terms; (c) the execution and delivery of, and
performance under, this Agreement are within the Borrower’s, Comstock
Riverside’s, Comstock Fairfax’s and Comstock Service’s power and authority
without the joinder or consent of any other party and have been duly authorized
by all requisite action, and are not in contravention of any law, or of the
Borrower’s, Comstock Riverside’s, Comstock Fairfax’s or Comstock Service’s
charter, bylaws or other corporate organizational documents or of any
indenture, agreement or undertaking to which the Borrower, Comstock Riverside,
Comstock Fairfax or Comstock Service is a party or by which it is bound; (d)
there exists no default under the Note or any other Loan Document; (e) there
are no offsets, claims or defenses with respect to the Borrower’s or
Guarantor’s obligations under any of the Loan


 


3
















 


Documents (the
“Obligations”); and (f) the Borrower, Comstock Riverside, Comstock Fairfax and
Comstock Service are each duly organized and legally existing under the laws of
the Commonwealth of Virginia and are duly qualified to do business in the
Commonwealth of Virginia. The Borrower, Comstock Riverside, Comstock Fairfax
and Comstock Service further jointly and severally represent and warrant that,
except as disclosed in writing to the Lender, there is no suit, judicial or
administrative action, claims, investigation, inquiry, proceeding or demand
pending (or, to the Borrower’s, Comstock Riverside’s, Comstock Fairfax’s and
Comstock Service’s knowledge threatened) against (i) the Borrower, or against
any other person liable directly or indirectly for the Obligations, or (ii)
which affects the Property or the Borrower’s, Comstock Riverside’s, Comstock
Fairfax’s or Comstock Service’s title to the Property, or (iii) which affects
the validity, enforceability or priority of any of the Loan Documents. The
Borrower, Comstock Riverside, Comstock Fairfax and Comstock Service jointly and
severally agree to indemnify and hold the Lender harmless against any loss,
claim, damage, liability or expense (including, without limitation, attorneys’
fees) incurred as a result of any representation or warranty made by the
Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service herein which
proves to be untrue or inaccurate in any respect, and any such occurrence shall
constitute a default under the Loan Documents.


 


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


 


6.                                     Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


7.                                     Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the parties hereto and their respective heirs, beneficiaries
administrators, executors, receivers, trustees, successors and assigns; (b)
shall be governed by the laws of the Commonwealth of Virginia and United States
federal law; and (c) may be executed in several counterparts, and by the
parties hereto on separate counterparts, and each counterpart, when executed
and delivered, shall constitute an original agreement enforceable against all
who signed it without production of or accounting for any other counterpart,
and all separate counterparts shall constitute the same agreement. Any terms
not defined herein shall have the meanings set forth in the Loan Documents.


 


8.                                      Reaffirmation of Guaranty. Each Guarantor, by its signature below as such,
for a valuable consideration, the receipt and adequacy of which are hereby
acknowledged, hereby consents to and joins in this Agreement and hereby
declares to and agrees with the Lender that, the Guaranty is and shall continue
in full force and effect for the benefit of the Lender with respect to the
Obligations, as amended by this Agreement, that there are no offsets, claims or
defenses of the Guarantor with respect to the Guaranty nor, to Guarantor’s
knowledge, with respect to the Obligations, that the Guaranty is not released,
diminished or impaired in any way by this Agreement or the transactions
contemplated hereby, and that the Guaranty is hereby ratified and confirmed in
all respects. Each Guarantor hereby reaffirms all of the representations and
warranties set forth in


 


4
















 


the Guaranty. Each Guarantor
acknowledges that without this consent and reaffirmation, Lender would not
execute this Agreement or otherwise consent to its terms.


 


9.                                     Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


 


[Signatures on following pages]


 


5
















 


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


 


 


	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK
  HOLDING COMPANY, INC.,

  
	
  ATTEST/WITNESS:

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK FLYNN’S CROSSING, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK RIVERSIDE, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
													



 


6
















 


	
  ATTEST/WITNESS:

  	
  COMSTOCK
  FAIRFAX I, L.C.,

  
	
   

  	
  a Virginia limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L.
  Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK
  SERVICE CORP., INC,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Christopher Clemente

  	
   

  	
  By:

  	
  /s/ Gregory
  Benson

  	
   (SEAL)

  
	
  Assistant
  Secretary

  	
   

  	
  Gregory
  Benson

  
	
   

  	
   

  	
   

  	
  President

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
  Christopher Clemente, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  /s/ Gregory
  Benson

  	
   (SEAL)

  
	
  Print
  Name:  Kelly L. Wyche

  	
  Gregory Benson, individually

  
									



 


7
















 


	
   

  	
  TRUSTEES:

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Lenra E.
  Lundofer

  	
   

  	
  /s/ Linda P.
  Long

  	
   (SEAL)

  
	
  Print Name:

  	
  Lenra E.
  Lundofer

  	
   

  	
  Linda P. Long,
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Lenra E.
  Lundofer

  	
   

  	
  /s/ Gregory
  L. Carter

  	
   (SEAL)

  
	
  Print Name:

  	
  Lenra E.
  Lundofer

  	
   

  	
  Gregory L.
  Carter, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lenra E.
  Lundofer

  	
   

  	
  By:

  	
  /s/ Linda P.
  Long

  	
   (SEAL)

  
	
  Print Name:

  	
  Lenra E.
  Lundofer

  	
   

  	
   

  	
  Linda P.
  Long

  	
   

  
	
  Print Title:

  	
  Vice
  President

  	
   

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  	
   

  	
   

  
								



 


 


[Acknowledgements on following pages]


 


8
















 


PREPARED
OUT OF STATE


 


THIRTEENTH
LOAN MODIFICATION


 


THIS
THIRTEENTH LOAN MODIFICATION (this “Agreement”) is made as of the 23rd day of
December, 2003, by and among (a) COMSTOCK
HOLDING COMPANY, INC., a Virginia corporation and COMSTOCK FLYNN’S CROSSING, L.C., a Virginia
limited liability company (collectively “Borrower”), (b) COMSTOCK RIVERSIDE, L.C. (“Comstock
Riverside”), a Virginia limited liability company, COMSTOCK FAIRFAX I, L.C., (“Comstock Fairfax”) a Virginia
limited liability company, COMSTOCK SERVICE
CORP., INC., (“Comstock Service”‘), a Virginia corporation, CHRISTOPHER CLEMENTE and GREGORY BENSON, jointly and severally
(collectively, the “Guarantor”), (c) LINDA P.
LONG, a resident of Loudoun County, Virginia and GREGORY L. CARTER, a resident of Fairfax County,
Virginia (collectively the “Trustees”), and (d) BANK OF AMERICA, N.A., a national banking association,
successor in interest to NationsBank, N.A. (the “Lender”).


 


RECITALS:


 


WHEREAS,
pursuant to the terms of that certain Loan Agreement dated as of December 17,
1997, by and among Lender, Borrower, and Comstock L’Ambiance (as modified, and
as the same may be further modified, renewed, supplemented or restated, the
“Loan Agreement”), Lender made a loan (the “Loan”) to Borrower in the original
principal amount of Two Million and No/100 Dollars ($2,000,000.00), as
evidenced by that certain Revolving Deed of Trust Note dated December 17, 1997
made by Borrower payable to the order of the Lender in the original principal
amount of Two Million and No/100 Dollars ($2,000,000.00) (as amended, and as
the same may be further amended, renewed, supplemented or restated, the
“Note”); and


 


WHEREAS,
pursuant to the terms of that certain Fifth Modification Agreement dated March
2000 and recorded among the land records of Prince William County at Deed Book
2874, page 842 and re-recorded at Deed Book 2932, page 680, the principal
amount of the Loan was increased to Four Million Five Hundred Thousand and
No/100 dollars ($4,500,000.00); and


 


WHEREAS,
pursuant to that certain Eighth Modification Agreement dated March 2001 and
recorded among the land records of Prince William County as Instrument No. 2001
03 07 0021469 the principal amount of the Loan was reduced to Three Million
Three Hundred Thousand and No/100 Dollars ($3,300,000.00); and


 


WHEREAS,
pursuant to that certain Ninth Modification Agreement dated August 31, 2001 and
recorded among the land records of Prince William County as Instrument No.
200109130095284 the principal amount of the Loan was increased to Seven Million
Four Hundred Thousand and No/100 Dollars ($7,400,000.00); and


 


WHEREAS,
pursuant to that certain Tenth Modification Agreement dated September 12, 2002
and recorded among the land records of (i) Prince William County as Instrument
No. 200209250123106 and rerecorded as Instrument No. 200302130031301, (ii)
Fairfax County in Deed Book 13415 at page 859, and rerecorded in Deed Book
14169 at page 1644, and (iii) Loudoun County in Deed Book 2268 at page 977, the
principal amount of the Loan was increased to Twelve Million and No/100 Dollars
($12,000,000.00);


 
















 


WHEREAS,
pursuant to that certain Eleventh Modification Agreement dated May 28, 2003 and
recorded among the land records of (i) Prince William County as Instrument No.
200306020096563 on June 2, 2003 and, (ii) Fairfax County in Deed Book 14539 at
page 236 on June 3, 2003, and (iii) Loudoun County as Instrument No.
20030603-0066383 on June 3, 2003, the principal amount of the Loan was
increased to Fifteen Million and No/100 Dollars ($15,000,000.00); and


 


WHEREAS,
the Borrower’s obligations under the Note and the Loan are jointly and
severally guaranteed by that certain Guaranty Agreement dated as of December
17, 1997, by the Guarantor for the benefit of the Lender (the “Guaranty”); and


 


WHEREAS,
the Loan is secured by that certain Credit Line Deed of Trust and Security
Agreement dated as of December 17, 1997 and recorded in Deed Book 10211 at page
1879, among the Land Records of Fairfax County, Virginia (as amended, and as
the same may be further amended or supplemented from time to time, the “Deed of
Trust”) granting a security interest to the Trustees in certain land located in
Fairfax County, Virginia, as more particularly described in Exhibit A
attached thereto and that certain Supplemental Credit Line Deed of Trust and
Security Agreement dated as of March 6, 2000 and recorded among the Land
Records of Prince William County, Virginia, as amended (as amended, and as the
same may be further amended or supplemented from time to time, the
“Supplemental Deed of Trust”); and


 


WHEREAS,
Lender and Borrower have mutually agreed to increase the principal amount of
the Loan and the Note by Two Million and No/100 Dollars ($2,000,000.00) which
Borrower shall use for acquisition and construction of the Projects on the terms
and conditions set forth herein; and


 


WHEREAS,
the Loan currently matures on December 31, 2003 and lender has agreed to extend
the maturity date of the Loan.


 


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


 


1.                                       Recitals.  The
recitals set forth above are a material part of this Agreement.  Borrower and Guarantor each acknowledge and
affirm the accuracy of the recitals set forth above.


 


2.                                      Definitions.  All
capitalized terms herein, unless otherwise defined, shall have the same meaning
ascribed to such terms as in the Loan Documents and the Flynn’s Crossing Loan
Documents (hereinafter defined).


 


3.                                      Loan Amount.  The
second sentence of Paragraph 1.1(r) of the Loan Agreement, as amended, is
hereby deleted and replaced with the following:


 


During
the term of the Loan, as set forth in the Note, the Borrower may borrow, repay
and reborrow amounts under the Loan; provided, however, that the maximum amount
available for disbursement at any time under the Loan shall equal (a) Seventeen
Million and No/100 Dollars ($17,000,000.00) minus (b) the total amount then
advanced and outstanding under the Loan, provided however, that Lender shall
not make the initial advance under the Loan with respect to any Inventory Lot
or Unit for which funds have not previously been advanced under the Loan if the
total amount budgeted under the Loan for all Inventory Lots and Units for which
funds


 


2
















 


have
been advanced under the Loan and not repaid in full equals or exceeds
Twenty-Seven Million and No/100 Dollars ($27,000,000.00).


 


4.                                        Maturity Date.  All
of the Obligations, including (without limitation) all outstanding principal,
accrued and unpaid interest, outstanding late charges, unpaid fees, and all
other amounts outstanding under the Note and the other Loan Documents, shall be
due and payable in full on December 31, 2004 (the “Maturity Date”). All
references to the Maturity Date contained in the Loan Documents shall refer to
the Maturity Date as defined in this Agreement. 
Notwithstanding the above, in the event the Lender does not agree in its
sole and absolute discretion to extend the Maturity Date prior to September 30,
2004, the principal amount outstanding under the Loan on the Maturity Date with
respect to any Pre-Sold Unit, Speculative Unit or Inventory Lot shall be due
and payable on the earlier of (i) the date calculated in accordance with
Paragraph 2.2(g) of the Loan Agreement as amended or (ii) the Maturity Date.


 


5.                                      Financial Covenants. 
Paragraph 11 of the Tenth Loan Modification Agreement is hereby deleted
in its entirety and the following is inserted in lieu thereof:


 


11.                               Financial Covenants.


 


(a)                                  From and after the date hereof it shall be an
Event of Default under the Loan entitling Lender to pursue any or all remedies
if the combined financial results per the financial statements of Comstock
Holding Company, Inc. and Comstock Service Corp., adjusted for intercompany
transactions, results in a Maximum Leverage Ratio in excess of 5:1; and a
combined Minimum Tangible Net Worth less than the sum of $3,000,000.00 from
December 31, 2003 through December 31, 2004. No later than the last day of each
April, July, October and January during the term of the Loan, Borrower shall
deliver to Lender internally prepared financial statements for each quarterly
period and annual audited financial statements for the fiscal year-end of Comstock
Holding Company, Inc. and Comstock Service Corp. along with a combining
financial statement of Comstock Holding Company, Inc. and Comstock Service
Corp., adjusted for intercompany items, in form and substance reasonably
satisfactory to Lender evidencing that the financial covenants are satisfied
for each quarterly and annual period. All terms not otherwise defined in
subsections (b) and (c) hereinbelow are given the meanings ascribed to them in
accordance with Generally Accepted Accounting Principals (“GAAP”).


 


(b)                                  “Minimum Tangible Net Worth” for Comstock
Holding and Comstock Service shall be determined in accordance with the
following formula: “Net Worth” less (i) “Intangible Assets,” less 00 “Due from
Related,” plus (iii) “Due to Related” multiplied by the percentage subordinated
to the Lender and any other institutional lender, plus (iv) “Subordinated Debt”
multiplied by the percentage subordinated to the Lender and any other
institutional lender all as shown on the financial statements submitted by Comstock
Holding and Comstock Service.


 


(c)                                  “Maximum Leverage Ratio” for Comstock Holding
and Comstock Service shall be the ratio of Total Adjusted Liabilities” to
“Adjusted Net Worth” as determined in accordance with the following formula:
(A) “Total Adjusted Liabilities” shall mean “Total Liabilities” less (i) “Due
to Related” and less (ii) “Subordinated Debt,” and (B) “Adjusted Net Worth”
shall mean “Net Worth” less (i) “Intangible Assets,” less (ii) “Due From
Related,” plus (iii) “Due to Related” multiplied


 


3
















 


by
the percentage subordinated to the Lender and any other institutional lender,
plus (iv) “Subordinated Debt” multiplied by the percentage subordinated to the
Lender and any other institutional lender, plus (v) the “Minority Interest”
multiplied by the percentage subordinated to the Lender and any other
institutional lender all as shown on the financial statements submitted by
Comstock Holding and Comstock Service.


 


6.                                      Speculative Unit Limit.  From
and after the date hereof, the maximum aggregate number of Speculative Units
(including model Units) which may be constructed from the proceeds of the Loan
at any time shall be as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Speculative Units

  
	
  Wescott Ridge

  	
   

  	
  28 Units (excluding
  Affordable Dwelling Units)

  
	
  Riverside

  	
   

  	
    2 Units

  
	
  Flynn’s Crossing

  	
   

  	
  10 Units (excluding
  Affordable Dwelling Units)

  



 


7.                                     Inventory Lot Limit.  From
and after the date hereof, the number of Inventory Lots that may be financed
with Loan proceeds with respect to the following projects is as follows:


 


	
  Project

  	
   

  	
  Maximum Number of Inventory Lots

  
	
  Wescott Ridge

  	
   

  	
  40 Lots

  
	
  Riverside

  	
   

  	
    0 Lots

  



 


8.                                     Financial Statements.  From
and after the date hereof, financial statements required to be furnished to
Lender by the Borrower and Guarantor shall be furnished to Lender as follows:


 


	
   

  	
   

  	
   

  	
   

  	
  Days Due After Period

  End

  	
   

  	
  Quality

  
	
  Name

  	
   

  	
  Frequency

  	
   

  	
  Annual

  	
   

  	
  Interim

  	
   

  	
  Annual

  	
   

  	
  Interim

  
	
  Comstock Holding Company,
  Inc.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA
  Audited

  	
   

  	
  Internal

  
	
  Comstock Homes of North
  Carolina, L.L.C.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA
  Compiled

  	
   

  	
  Internal

  
	
  Comstock Service Corp.,
  Inc.

  	
   

  	
  Quarterly

  	
   

  	
  150

  	
   

  	
  45

  	
   

  	
  CPA
  Audited

  	
   

  	
  Internal

  
	
  Any project entity
  financed by Bank of America

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  
	
  Christopher Clemente

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  
	
  Gregory Benson

  	
   

  	
  Annual

  	
   

  	
  150

  	
   

  	
   

  	
   

  	
  Internal

  	
   

  	
   

  



 


9.                                      Fees. 
Borrower shall pay to Lender a quarterly loan fee in an amount equal to
one-fifth of one percent (0.20%) of the total amount committed under the Loan
on the first day of each calendar quarter thereafter as a loan fee so long as
there is any Loan Amount committed under the Loan on any such due date.


 


10.                               Borrower’s Representations
and Warranties.  The Borrower, Comstock Riverside, Comstock
Fairfax and Comstock Service hereby jointly and severally reaffirm all of the
representations and warranties set forth in the Loan Documents (as defined in
the Loan Agreement, as amended hereby), and further jointly and severally
represent and warrant that (a) the execution and delivery of this Agreement
does not contravene, resulting in an breach of, or constitute a default


 


4
















 


under, any deed of trust,
loan agreement, indenture or other contract or agreement to which the Borrower,
Comstock Riverside, Comstock Fairfax or Comstock Service is a party or by which
the Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service or any
of their respective properties may be bound (nor would such execution and
delivery constitute such a default with the passage of time or the giving of
notice or both), and do not violate or contravene any law, order, decree, rule,
regulation or restriction to which the Borrower, Comstock Riverside, Comstock
Fairfax or Comstock Service or the Property is subject; (b) this Agreement constitutes
the legal, valid and binding obligations of the Borrower, Comstock Riverside,
Comstock Fairfax and Comstock Service enforceable in accordance with its terms;
(c) the execution and delivery of, and performance under, this Agreement are
within the Borrower’s, Comstock Riverside’s, Comstock Fairfax’s and Comstock
Service’s power and authority without the joinder or consent of any other party
and have been duly authorized by all requisite action, and are not in
contravention of any law, or of the Borrower’s, Comstock Riverside’s, Comstock
Fairfax’s or Comstock Service’s charter, bylaws or other corporate
organizational documents or of any indenture, agreement or undertaking to which
the Borrower, Comstock Riverside, Comstock Fairfax or Comstock Service is a
party or by which it is bound; (d) there exists no default under the Note or
any other Loan Document; (e) there are no offsets, claims or defenses with
respect to the Borrowers or Guarantor’s obligations under any of the Loan
Documents (the “Obligations”); and (f) the Borrower, Comstock Riverside,
Comstock Fairfax and Comstock Service are each duly organized and legally
existing under the laws of the Commonwealth of Virginia and are duly qualified
to do business in the Commonwealth of Virginia. The Borrower, Comstock
Riverside, Comstock Fairfax and Comstock Service further jointly and severally
represent and warrant that, except as disclosed in writing to the Lender, there
is no suit, judicial or administrative action, claims, investigation, inquiry, proceeding
or demand pending (or, to the Borrower’s, Comstock Riverside’s, Comstock
Fairfax’s and Comstock Service’s knowledge threatened) against (i) the
Borrower, or against any other person liable directly or indirectly for the
Obligations, or (ii) which affects the Property or the Borrower’s, Comstock
Riverside’s, Comstock Fairfax’s or Comstock Service’s title to the Property, or
(iii) which affects the validity, enforceability or priority of any of the Loan
Documents. The Borrower, Comstock Riverside, Comstock Fairfax and Comstock
Service jointly and severally agree to indemnify and hold the Lender harmless
against any loss, claim, damage, liability or expense (including, without
limitation, attorneys’ fees) incurred as a result of any representation or
warranty made by the Borrower, Comstock Riverside, Comstock Fairfax or Comstock
Service herein which proves to be untrue or inaccurate in any respect, and any
such occurrence shall constitute a default under the Loan Documents.


 


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


 


12.                               Expenses.  The
Borrower promises to pay all costs and expenses and reimburse the Lender for
any and all expenditures of every character incurred or expended from time to
time, regardless of whether a default shall have occurred, in connection with
this Agreement and all other Loan Documents, and all such amounts shall
constitute a portion of the Obligations evidenced by the Note and secured by
the Loan Documents.


 


13.                               Miscellaneous.  To
the extent of any conflict between the Loan Documents and this Agreement, this
Agreement shall control. Unless specifically modified hereby, all terms of the
Loan Documents shall remain in full force and effect. This Agreement (a) shall
bind and benefit the


 


5
















 


parties hereto and their
respective heirs, beneficiaries administrators, executors, receivers, trustees,
successors and assigns; (b) shall be governed by the laws of the Commonwealth
of Virginia and United States federal law; and (c) may be executed in several
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when executed and delivered, shall constitute an original
agreement enforceable against all who signed it without production of or
accounting for any other counterpart, and all separate counterparts shall
constitute the same agreement.  Any terms
not defined herein shall have the meanings set forth in the Loan Documents.


 


14.                               Reaffirmation of Guaranty.  Each
Guarantor, by its signature below as such, for a valuable consideration, the
receipt and adequacy of which are hereby acknowledged, hereby consents to and
joins in this Agreement and hereby declares to and agrees with the Lender that,
the Guaranty is and shall continue in full force and effect for the benefit of
the Lender with respect to the Obligations, as amended by this Agreement, that
there are no offsets, claims or defenses of the Guarantor with respect to the
Guaranty nor, to Guarantor’s knowledge, with respect to the Obligations, that
the Guaranty is not released, diminished or impaired in any way by this
Agreement or the transactions contemplated hereby, and that the Guaranty is
hereby ratified and confirmed in all respects. Each Guarantor hereby reaffirms
all of the representations and warranties set forth in the Guaranty. Each
Guarantor acknowledges that without this consent and reaffirmation, Lender
would not execute this Agreement or otherwise consent to its terms.


 


15.                               Authorization of Trustees. 
Lender, by its execution hereof, authorizes and instructs the Trustees
to execute this instrument for the purposes set forth herein and expressly
acknowledges that either Trustee may act and the execution by both Trustees
shall not be required.


 


 


[Signatures on following pages]


 


6
















 


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


 


 


	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMSTOCK
  HOLDING COMPANY, INC.,

  
	
  ATTEST/WITNESS:

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print Name:

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK FLYNN’S CROSSING, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK RIVERSIDE, L.C.,

  
	
   

  	
   

  	
  a Virginia
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
												



 


7
















 


	
  ATTEST/WITNESS:

  	
  COMSTOCK
  FAIRFAX I, L.C.,

  
	
   

  	
  a Virginia limited liability
  company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Comstock
  Holding Company, Inc.,

  
	
   

  	
   

  	
   

  	
  a Virginia
  corporation, Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kelly L. Wyche

  	
   

  	
   

  	
  By:

  	
  /s/
  Christopher Clemente

  	
   (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Christopher
  Clemente

  
	
  Print Title:

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
  COMSTOCK
  SERVICE CORP., INC,

  
	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  By:

  	
  /s/ Gregory
  Benson

  	
   (SEAL)

  
	
   

  	
   

  	
  Gregory
  Benson

  
	
   

  	
   

  	
   

  	
  President

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  /s/ Christopher
  Clemente

  	
   (SEAL)

  
	
  Print Name:

  	
  Christopher
  Clemente, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly L.
  Wyche

  	
   

  	
  /s/ Gregory
  Benson

  	
   (SEAL)

  
	
  Print Name:

  	
  Gregory
  Benson, individually

  
										



 


8
















 


	
   

  	
  TRUSTEES:

  
	
  ATTEST/WITNESS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Rebecca
  Greenspan

  	
   

  	
  /s/ Linda P.
  Long

  	
   (SEAL)

  
	
  Print Name:

  	
  Rebecca
  Greenspan

  	
   

  	
  Linda P.
  Long, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   (SEAL)

  
	
  Print Name:

  	
   

  	
   

  	
  Gregory L.
  Carter, Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Rebecca
  Greenspan

  	
   

  	
  By:

  	
  /s/ Linda P.
  Long

  	
   (SEAL)

  
	
  Print Name:

  	
  Rebecca
  Greenspan

  	
   

  	
   

  	
  Linda P.
  Long

  	
   

  
	
  Print Title:

  	
  Senior Vice
  President

  	
   

  	
   

  	
  Senior Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  	
   

  	
   

  
								



 


 


[Acknowledgements on following pages]


 


9