Document:

exhibita.htm

    Exhibit
10.12

    

    FIRST AMENDMENT
TO

    FIRST AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT

     

     

    THIS
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (herein
called this "Amendment") made as
of November 13, 2006 by and among M/I FINANCIAL CORP., an Ohio corporation
("Financial"),
M/I HOMES, INC. (formerly known as M/I Schottenstein Homes, Inc.), an Ohio
corporation ("M/I
Homes") (Financial and M/I Homes are sometimes hereinafter referred to
collectively as the "Borrowers"), and
GUARANTY BANK, a federal savings bank ("Bank"),

     

    W I T N E
S S E T H:

     

    WHEREAS,
Borrowers and Bank have entered into that certain First Amended and Restated
Revolving Credit Agreement dated as of April 27, 2006 (as heretofore
amended, the "Original
Credit Agreement"), for the purposes and consideration therein expressed,
pursuant to which Bank became obligated to make loans to Borrowers as therein
provided; and

     

    WHEREAS,
Borrowers and Bank desire to amend the Original Credit Agreement as provided
herein;

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and in the Original Credit Agreement, in
consideration of the loans which may hereafter be made by Bank to Borrowers, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as
follows:

     

    ARTICLE
I.

     

    

     

    Definitions and
References

     

    Section
1.1. Terms Defined in the
Original Credit Agreement.  Unless the context otherwise
requires or unless otherwise expressly defined herein, the terms defined in the
Original Credit Agreement shall have the same meanings whenever used in this
Agreement.

     

    Section
1.2. Other Defined
Terms.  Unless the context otherwise requires, the following
terms when used in this Amendment shall have the meanings assigned to them in
this Section 1.2.

     

    "Amendment" means this
First Amendment to Credit Agreement.

     

    "Deferred Payment
Sublimit" shall mean the amount of $5,000,000.

     

    ARTICLE
II.

     

    

     

    Amendments to Original
Credit Agreement

     

    Section
2.1. Definitions.

     

    (a) The
definition of "Eligible Mortgage
Loan" in Section 1.1 of the Original Credit Agreement is hereby
amended by amending clause ii thereof to read as follows:

     

    ii.           Such
Mortgage Loan was made by Financial and purchased by Financial to enable a
natural person or persons either to purchase a home from M/I Homes or another
Person that is substantially completed or to refinance an existing mortgage
loan; provided
that
(A) the aggregate amount of Eligible Mortgage Loans consisting of loans
made by Financial for the purchase of homes from any Person other than M/I Homes
does not exceed the Other Mortgage Sublimit, (B) the aggregate amount of
Eligible Mortgage Loans used to refinance existing mortgage loans does not
exceed the ReFi Sublimit; (C) the aggregate amount of Eligible Mortgage
Loans that are CD Enhanced Loans does not exceed the CD Enhanced Sublimit,
(D) the aggregate amount of Eligible Mortgage Loans that are Second
Mortgage Loans does not exceed the Second Mortgage Sublimit, and (E) the
aggregate amount of Eligible Mortgage Loans that are subject to repurchase
obligations described in clause (G) of the definition of Mortgage Loan
Repurchase Obligations shall not exceed the Deferred Payment
Sublimit;

     

    (b) The
definition of "Mortgage Loan Repurchase
Obligations" in Section 1.1 of the Original Credit Agreement is
hereby amended in its entirety to read as follows:

     

    "Mortgage Loan Repurchase
Obligations" shall mean those obligations (as more particularly described
in this definition) of Financial under a Purchase Commitment to repurchase
(a) Eligible Mortgage Loans, and (b) first mortgage loans that are not
Eligible Mortgage Loans solely because either (i) the mortgagor did not
purchase from M/I Homes the home subject to such mortgage loan, or
(ii) such mortgage loan is more than 60 days old, as determined by the date
of the note which evidences such loan, at the time of the purchase of the
mortgage loan by a secondary market lender pursuant to a Purchase Commitment;
provided, the
obligations to repurchase the mortgage loans described in clauses (a)
through (b) of this definition shall exist only if (A) such mortgage loans
do not meet for any reason, the investor guidelines regarding loan origination,
loan processing or loan closing and regarding underwriting criteria for such
Purchase Commitment, or defects are noted in origination, processing or closing
of Mortgage Loans by investor, (B) Financial or its employees engage in any
fraudulent conduct or misrepresentation, (C) except with respect to
mortgage loans for which Financial has agreed to pay the first six monthly
installments due thereon, the mortgagor fails to make timely payment of any of
the first, second, third or fourth installments due under such mortgage loan,
and such delinquency remains uncured for a period of more than 30 days or
results in a foreclosure action, (D) except with respect to mortgage loans
for which Financial has agreed to pay the first six monthly installments due
thereon, the mortgagor fails to make timely payment of two or more monthly
installments within six months from the date such mortgage loan is purchased by
such secondary market lender, (E) the mortgagor engages in fraudulent
conduct or misrepresentation, (F) with respect to mortgage loans issued
pursuant to the North Carolina Housing Finance Authority bond programs, the
mortgagor fails to make timely payment of the first installment due under such
mortgage loans, or (G) with respect to such mortgage loan for which
Financial has agreed to pay the first six installments due under such mortgage
loan, the mortgagor fails to make timely payment of two or more of the next six
installments due under such mortgage loans.

     

    Section
2.2. Exhibits.  Exhibit C
(Form of Compliance Certificate) attached to this Amendment is hereby
substituted for Exhibit C to the Original Credit Agreement.

     

    ARTICLE
III.

     

    

     

    Conditions of
Effectiveness

     

    Section
3.1. Effective
Date.  This Amendment shall become effective as of the date
first above written when and only when Bank shall have received, at Bank's
office,

     

    (a) a duly
executed counterpart of this Amendment, and

     

    (b) a duly
executed certificate of the president, chief executive officer or chief
financial officer and of the secretary of each Borrower certifying
(i) that, in the case of M/I Homes, the action of the executive committee
of the board of directors, and, in the case of Financial, the action of sole
shareholder, authorizing the execution, delivery and performance of this
Amendment and identifying the officers authorized to sign this Amendment, copies
of which actions are attached to the respective certificates, are in full force
and effect, (ii)  that the specimen signatures of the officers so
authorized, copies of which specimen signatures are attached to the respective
certificates, are true and correct, and (iii)  that the articles of
incorporation and code of regulations of such Borrower have not been amended
since the date of the Original Credit Agreement.

     

    ARTICLE
IV.

     

    

     

    Representations and
Warranties

     

    Section
4.1. Representations and
Warranties of Borrowers.  In order to induce Bank to enter into
this Amendment, each Borrower represents and warrants to Bank that:

     

    (a) The
representations and warranties contained in Section 3 of the Original
Credit Agreement are true and correct at and as of the time of the effectiveness
hereof;

     

    (b) Each
Borrower is duly authorized to execute and deliver this Amendment and is and
will continue to be duly authorized to borrow and to perform its obligations
under the Original Credit Agreement.  Each Borrower has duly taken all
corporate action necessary to authorize the execution and delivery of this
Amendment and to authorize the performance of the obligations of such Borrower
hereunder and thereunder;

     

    (c) The
execution and delivery by each Borrower of this Amendment, the performance by
each Borrower of its obligations hereunder and the consummation of the
transactions contemplated hereby do not and will not conflict with any provision
of law, statute, rule or regulation or of the articles of incorporation and
bylaws of such Borrower, or of any material agreement, judgment, license, order
or permit applicable to or binding upon such Borrower, or result in the creation
of any lien, charge or encumbrance upon any assets or properties of such
Borrower.  Except for those which have been duly obtained, no consent,
approval, authorization or order of any court or governmental authority or third
party is required in connection with the execution and delivery by Borrowers of
this Amendment or to consummate the transactions contemplated hereby;
and

     

    (d) When duly
executed and delivered, this Amendment will be a legal and binding instrument
and agreement of Borrowers, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency and similar laws applying to creditors' rights
generally and by principles of equity applying to creditors' rights
generally.

     

    ARTICLE
V.

     

    

     

    Miscellaneous

     

    Section
5.1. Ratification of
Agreement.  The Original Credit Agreement as hereby amended is
hereby ratified and confirmed in all respects.  Any reference to the
Credit Agreement in any Loan Document shall be deemed to refer to this Amendment
also.  The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of Bank under the Original Credit Agreement or any other
Loan Document nor constitute a waiver of any provision of the Original Credit
Agreement or any other Loan Document.

     

    Section
5.2. Survival of
Agreements.  All representations, warranties, covenants and
agreements of Borrowers herein shall survive the execution and delivery of this
Amendment and the performance hereof, and shall further survive until all of the
Obligations are paid in full.  All statements and agreements contained
in any certificate or instrument delivered by Borrowers hereunder or under the
Original Credit Agreement to Bank shall be deemed to constitute representations
and warranties by, or agreements and covenants of, Borrowers under this
Agreement and under the Original Credit Agreement.

     

    Section
5.3. Loan
Documents.  This Amendment is a Loan Document, and all
provisions in the Original Credit Agreement pertaining to Loan Documents apply
hereto and thereto.

     

    Section
5.4. Governing
Law.  This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas and any applicable laws of the
United States of America in all respects, including construction, validity and
performance.

     

    Section
5.5. Counterparts;
Fax.  This Amendment may be separately executed in counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed shall be deemed to constitute one and the same
Amendment.  This Amendment may be duly executed by facsimile or other
electronic transmission.

     

    THIS
AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     

    THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     

    
      
         

      

      
        
          

        

      

       

    

    IN
WITNESS WHEREOF, this Amendment is executed as of the date first above
written.

     

    GUARANTY
BANK                                                                M/I
FINANCIAL CORP.

    

    

    

    
      	
              By:

            	 
      	 
      	
              By:

            	 
      
	 
      	
              Randy
      Reid

            	 
      	
              Phillip
      G. Creek

            
	 
      	
              Senior
      Vice President

            	 
      	
              Chief
      Financial Officer

            

    

    

    

    M/I
HOMES, INC.

    

    

    

    
      	
              By:

            	 
      
	 
      	
              Phillip
      G. Creek

            
	 
      	
              Chief
      Financial Officer

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    FORM OF COMPLIANCE
CERTIFICATE

    [Letterhead
of M/I-Financial Corp.]

     

    

     

    [Date]

     

    Mr.
Dustin Ortmann

    Guaranty
Bank

    8333
Douglas Avenue, 11th Floor

    Dallas,
TX 75225

     

    Dear
Dustin:

     

    This
letter is to comply with Section 5.2(a),
Certificates, Other Information, related to the First Amended and Restated
Revolving Credit Agreement dated April 27, 2006 (as amended, the "Revolving Credit
Agreement") and is for the period ending [Insert Appropriate Period]
except the calculations for EBIT and Interest Expense have been calculated for
the rolling 12 month period indicated on the attached
statement.  Capitalized terms used but not defined have the meanings
given to such terms in the Revolving Credit Agreement.

     

    The
undersigned certifies that, after due examination by the undersigned and to the
best of my knowledge, M/I Financial Corp. during the period stated above has
observed or performed in all material respects all of its covenants and the
agreements, and satisfied every condition, contained in the Revolving Credit
Agreement and Note to be observed, performed or satisfied by it, and that the
undersigned has no knowledge of any Default of Event of Default except [List any
defaults or events of defaults; if none, end sentence before
"except."]

     

    Additionally,
I have enclosed a statement showing in detail the calculation of certain
sections of the Revolving Credit Agreement as required in the Revolving Credit
Agreement.  All figures in this calculation are as of the end of the
accounting period stated in the first paragraph of this letter.  The
undersigned certifies that the enclosed calculation is accurate in all material
respects.

     

    Certified
by:

     

    

     

    Name
Printed, Title

     

    Enclosure:                                Statement
of Calculation of Certain Covenants

     

    
      
        
          C-1

        

         

      

      
        
          

        

      

      
         

      

    

    M/I
FINANCIAL CORP.

     

    STATEMENT OF CALCULATION OF
CERTAIN COVENANTS

     

    [Date]

     

    Capitalized
terms used but not defined in this Compliance Certificate shall have the
meanings specified in the Revolving Credit Agreement.

     

    
      	 
      	
              Subsection No.

            	
              Covenant

            
	
              1.

            	
              5.7,
      page 22

            	
              M/I
      Financial must maintain at all times its Tangible Net Worth equal to at
      least $3,500,000.

            
	 
      	 
      	
              M/I
      Financial's Tangible Net Worth = $_______________

            
	
              2.

            	
              5.8,
      page 22

            	
              M/I
      Financial must maintain at all times a ratio of Liabilities to Tangible
      Net Worth not in excess of 10.0 to 1.0.

            
	 
      	 
      	
              M/I
      Financial's Liabilities = $______________

            
	 
      	 
      	
              M/I
      Financial's Tangible Net Worth (from line 1) =
  $__________

            
	 
      	 
      	
              Ratio
      of Liabilities to Tangible Net Worth = ___:___.

            
	
              3.

            	
              5.9,
      page 22

            	
              M/I
      Financial must maintain a ratio of EBIT to Interest Expense, determined as
      of the end of each monthly accounting period of each fiscal year and as of
      the end of each fiscal year, on a rolling 12 month basis (with the period
      of determination being the 12 month period ending on the date as to which
      such determination is made), of not less than 1.50 to
  1.0.

            
	 
      	 
      	
              EBIT
      for the 12 month period beginning ______________ and ending ____________ =
      $______________.

            
	 
      	 
      	
              Interest
      Expense for the 12 month period beginning _____________ and ending
      _______________ = $__________

            
	 
      	 
      	
              Ratio
      of EBIT to Interest Expense = ___:___.

            
	
              4.

            	
              6.3,
      page 24

            	
              M/I
      Financial may not incur any Contingent Obligations, except as specifically
      stated:

            
	 
      	 
      	
              In
      making first mortgage loans permitted under the Revolving Credit
      Agreement, M/I Financial may, lieu of requiring down payments from
      mortgagors, purchase and pledge to investors purchasing such first
      mortgage loans, certificates of deposit in an aggregate amount not to
      exceed $2,500,000.  Aggregate amount of certificates of deposit
      = $________________.

            
	 
      	 
      	
              Other
      Contingent Obligations = $______________.

            
	
              5.

            	
              6.5,
      page 24

            	
              M/I
      Financial may not make any investments except as specifically
      stated:

            
	 
      	 
      	
              (i)

            	
              Eligible
      Mortgage Loans:

            
	 
      	 
      	 
      	
              (a)

            	
              First
      mortgage loans in the ordinary course of M/I Financial's business to
      natural persons for the purchase of residential real property =
      $_______.

            
	 
      	 
      	 
      	
              (b)

            	
              First
      mortgage loans made by M/I Financial for the purpose of homes from any
      Person other than M/I Homes = $________________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of mortgage loans in (b) cannot exceed $5,000,000 in aggregate at
      any one time outstanding.

            
	 
      	 
      	 
      	
              (c)

            	
              First
      mortgage loans in the ordinary course of M/I Financial's business to
      natural persons to refinance an existing first mortgage loan =
      $___________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of first mortgage loans in (c) cannot exceed $5,000,000 in
      aggregate at any one time outstanding.

            
	 
      	 
      	 
      	
              (d)

            	
              CD
      Enhanced loans in the ordinary course of M/I Financial's business =
      $______________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of CD Enhanced loans in (d) cannot exceed $5,000,000 in aggregate
      at any one time outstanding.

            
	 
      	 
      	 
      	
              (e)

            	
              Second
      mortgage loans in the ordinary course of M/I Financial's business to
      natural persons for the purchase of residential real property =
      $__________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of mortgage loans in (e) cannot exceed $10,000,000 in aggregate at
      any one time outstanding.

            
	 
      	 
      	 
      	 
      	
              Are
      all of the mortgage loans in (e) made in connection with a specific
      financing program to natural persons who have a first mortgage from M/I
      Financial with respect to the same real property?
  _________

            
	 
      	 
      	 
      	
              (f)

            	
              Mortgage
      loans having a Risk Rating of less than A =
  $___________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of mortgage loans having a Risk Rating of less than A cannot exceed
      $5,000,000 in the aggregate at any one time
outstanding.

            
	 
      	 
      	 
      	
              (g)

            	
              Mortgage
      loans subject to a deferred payment repurchase obligation described in
      clause (G) of the definition of Mortgage Loan Repurchase Obligations
      = $______________.

            
	 
      	 
      	 
      	 
      	
              The
      amount of mortgage loans in (g) cannot exceed $5,000,000 in aggregate at
      any one time outstanding.

            
	 
      	 
      	
              (ii)

            	
              Cash
      Equivalents = $_____________.

            
	 
      	 
      	
              (iii)

            	
              Investments
      in ordinary course of M/I Financial's business in standard instruments
      hedging against interest rate risk incurred in the origination and sale of
      mortgage loans = $___________

            
	 
      	 
      	
              Is
      each hedging instrument(s) matched to specific groups of mortgages?
      __________

            
	 
      	 
      	
              Are
      any hedging transactions:

            
	 
      	 
      	 
      	 
      	
              (A)

            	
              investments
      in future contracts? ____

            
	 
      	 
      	 
      	 
      	
              (B)

            	
              investments
      in options contracts? _____

            
	 
      	 
      	 
      	 
      	
              (C)

            	
              investments
      in other derivative investment vehicles acquired as independent
      investments? ______

            
	 
      	 
      	
              (See
      attached schedule.)

            
	 
      	 
      	
              (iv)

            	
              Loan
      and advances to M/I Homes = $________

            
	 
      	 
      	
              (Subsection
      6.5 imposes no limit on loans and advances to M/I
  Homes.)

            
	 
      	 
      	
              Does
      M/I Financial have any investments other than specifically listed above?
      ____________exhibitb.htm

    Exhibit
10.43

     

     

    

     

     

    

     

     

    

     

     

    AGREEMENT
FOR PURCHASE AND SALE

     

     

    By
and Between

     

     

    M/I
HOMES OF WEST PALM BEACH, LLC

     

     

    and

     

    

     

    KLP
EAST LLC

     

    
      
        
          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

        
          TABLE
OF CONTENTS

          

          Page

           

          

        

      

    

    
      	
              1.

            	
              PROPERTY 

            	
              1

            

    

     

    
      	
              2.

            	
              PURCHASE
      PRICE AND PAYMENT 

            	
              2

            

    

     

    
      	
              3.

            	
              INTENTIONALLY
      DELETED 

            	
              3

            

    

     

    
      	
              4.

            	
              TITLE
      AND SURVEY 

            	
              3

            

    

     

    
      	
              5.

            	
              ADJUSTMENTS
      TO PURCHASE PRICE 

            	
              3

            

    

     

    
      	
              6.

            	
              DEVELOPMENT
      APPROVALS 

            	
              4

            

    

     

    
      	
              7.

            	
              COMPLETION
      OF IMPROVEMENTS 

            	
              5

            

    

     

    
      	
              8.

            	
              MODEL
      HOMES, SPEC HOMES AND LEASES 

            	
              8

            

    

     

    
      	
              9.

            	
              HOMEOWNER
      ASSOCIATIONS 

            	
              10

            

    

     

    
      	
              10.

            	
              CLOSING 

            	
              11

            

    

     

    
      	
              11.

            	
              REPRESENTATIONS
      OF SELLER 

            	
              14

            

    

     

    
      	
              12.

            	
              REPRESENTATIONS
      OF PURCHASER 

            	
              15

            

    

     

    
      	
              13.

            	
              SELLER’S
      OBLIGATIONS PRIOR TO CLOSING 

            	
              16

            

    

     

    
      	
              14.

            	
              CONDITIONS
      TO PURCHASER’S AND SELLER’S OBLIGATIONS 

            	
              16

            

    

     

    
      	
              15.

            	
              DEFAULT
      AND REMEDIES 

            	
              17

            

    

     

    
      	
              16.

            	
              CLOSING
      COSTS AND EXPENSES 

            	
              18

            

    

     

    
      	
              17.

            	
              BROKERS 

            	
              18

            

    

     

    
      	
              18.

            	
              NOTICES 

            	
              18

            

    

     

    
      	
              19.

            	
              “AS
      IS” TRANSACTION 

            	
              19

            

    

     

    
      	
              20.

            	
              ENTIRE
      AGREEMENT 

            	
              20

            

    

     

    
      	
              21.

            	
              COUNTERPARTS 

            	
              20

            

    

     

    
      	
              22.

            	
              GOVERNING
      LAW 

            	
              20

            

    

     

    
      	
              23.

            	
              RECORDING
      OF AGREEMENT 

            	
              20

            

    

     

    
      	
              24.

            	
              RADON
      GAS 

            	
              20

            

    

     

    
      	
              25.

            	
              ATTORNEYS’
      FEES 

            	
              20

            

    

     

    
      	
              26.

            	
              ESCROW
      AGENT 

            	
              21

            

    

     

    
      	
              27.

            	
              SURVIVAL
      OF PROVISIONS OF THIS AGREEMENT 

            	
              21

            

    

     

    
      	
              28.

            	
              SELLER’S
      BUILDING ACTIVITIES 

            	
              21

            

    

     

    
      	
              29.

            	
              MISCELLANEOUS
      PROVISIONS 

            	
              22

            

    

     

    
      	
              30.

            	
              DISCLOSURE
      FOR PALOMA 

            	
              23

            

    

     

    
      	
              31.

            	
              DISCLOSURE
      FOR OAKS 

            	
              24

            

    

     

    
      	
              32.

            	
              DISCLOSURE
      FOR TRES BELLE 

            	
              25

            

    

     

    
      	
              33.

            	
              NORTHERN
      PALM BEACH COUNTY IMPROVEMENT DISTRICT 

            	
              27

            

    

     

    
      	
              34.

            	
              GUARANTY 

            	
              27

            

    

     

    
      	
              35.

            	
              SUBSIDIARY
      LIABILITY 

            	
              28

            

    

     

    
      	
              36.

            	
              EFFECTIVE
      DATE 

            	
              28

            

    

     

    

    

    

     

    
      
        
          
            	 
      	
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          BOC1\REALEST\222491.6

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    AGREEMENT
FOR PURCHASE AND SALE

     

    THIS
AGREEMENT FOR PURCHASE AND SALE (the “Agreement”) is made and
entered into this 21st day of
December, 2007 by and between M/I HOMES OF WEST PALM BEACH,
LLC, a Florida limited liability company (“Seller”) and KLP EAST LLC, a Florida
limited liability company (“Purchaser”).

     

    BACKGROUND

     

    Seller is
the owner of certain real and personal property located in certain real estate
projects in Palm Beach County and Martin County, Florida, generally known as
Paloma in Palm Beach Gardens (“Paloma”), Woodwind in Palm
Beach County (“Woodwind”), the Oaks at Hobe
Sound and Laurel Preserve at the Oaks (“Oaks”) and Tres Belle in
Martin County (“Tres
Belle”).  Paloma, Woodwind, the Oaks and Tres Belle are
sometimes hereinafter referred to as the “Projects”.  Seller
has agreed to sell and Purchaser has agreed to buy certain lots and certain
Models and Spec Homes (as hereinafter defined) within the Projects in accordance
with the terms and provisions of this Agreement.

     

    In
consideration of the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby covenant and agree as
follows.

     

    AGREEMENT

     

    1. PROPERTY.  Seller
has agreed to sell and to convey to Purchaser, and Purchaser agrees to purchase
from Seller the following described property, (collectively referred to as the
“Property”):

     

    1.1 Those
certain parcels of real estate, located in Palm Beach County and Martin County,
Florida, as set forth on Exhibit
“A”, attached hereto and made a part hereof, together with all
improvements located thereon, and including all appurtenances, rights,
privileges and easements related thereto (the “Real Property”).

     

    1.2 The
Models and Spec Homes, together with all equipment, furniture, fixtures and
articles of personal property, if any, located within the Models and the Spec
Homes.  The description of the Models and Spec Homes is subject to
modification between the Effective Date of this Agreement and the Closing Date
(hereinafter defined) in accordance with the following
procedure.  Seller shall have the right to continue to offer the
Models and Spec Homes for sale in the ordinary course of business up to the
Initial Closing (hereinafter defined).  However, Seller agrees that it
shall not sell any of the Models and Spec Homes for less than 15% below Seller’s
current list of current retail prices shown on the Schedule of Agreed Values
(hereinafter defined), without Purchaser’s prior written approval.  If
the description of Model and Spec Homes is modified by any such sales, the
Purchase Price will be subject to adjustment as described in Section 5.1(c)
hereof.

     

    1.3 A limited
license to utilize Seller’s architectural plans and specifications, building and
site plans for each of the Projects but only as to the Projects, without
representation or warranty of any kind.

     

    1.4 All of
Seller’s right, title and interest as Developer or Declarant pursuant to the
homeowners association documents for the Projects as more particularly described
in Paragraph 9 hereof.

     

    1.5 All of
Seller’s right, title and interest in impact fee credits, prepaid impact fees or
prepaid utility connections, as described in Paragraph 6.4 hereof, subject to
reimbursement by Purchaser, as provided in such paragraph.

     

    1.6 Any
existing brochures and collateral material (that does not reference Seller or
any of Seller affiliated companies), prospect lists, website addresses after any
linkage to Seller has been removed, prepaid advertising and existing sales
office phone numbers.

     

    2. PURCHASE
PRICE AND PAYMENT

     

    2.1 The
Purchase Price to be paid by the Purchaser to the Seller for the Property and
for Seller’s construction of the Improvements (hereinafter defined) shall be
Forty-Five Million Eight-Eight Thousand and No/100 ($45,088,000) (the “Purchase Price”), subject to
adjustments and prorations  as set forth in this
Agreement.  Seller and Purchaser agree to an allocation of the
Purchase Price to the Real Property, the Models and Spec Homes, the Personal
Property and to each of the Projects as described on Exhibit
“B”, attached hereto and made a part hereof.

     

    2.2 On
December 21, 2007, Purchaser shall deliver to Broad and Cassel, Attorneys at Law
(“Escrow Agent”), by
wire transfer of funds, the sum of One Million Seven Hundred and Fifty Thousand
and No/100 Dollars ($1,750,000.00) (the “Deposit”).

     

    2.3 If
Purchaser delivers an executed Form W-9 to Escrow Agent, Escrow Agent shall
invest the Deposit in an interest bearing account at Wachovia Bank, N.A. and
shall hold the Deposit in accordance with the terms and provisions
hereof.  On the Closing Date, the Escrow Agent shall deliver the
Deposit to the Seller and Purchaser shall receive a credit against the Purchase
Price for the Deposit.  All interest earned on the Deposit shall be
paid or credited to the Purchaser, unless the Purchaser defaults hereunder, in
which event the interest shall be paid to the Seller.

     

    Upon the
Closing Date, Purchaser shall pay to Seller’s title agent, Broad and Cassel (the
“Title Agent”) issuing
the Commitment (hereinafter defined) the Purchase Price, as modified by the
adjustments and prorations described herein, by wire transfer to the Title Agent
of immediate clearance “Federal Reserve Funds”, less the agreed portion of the
Purchase Price for those Models and Spec Homes which have not yet been completed
which are described on the Schedule of Agreed Values.  The Purchase
Price attributable to the Models and Spec Homes which are not yet completed as
of the Closing Date which are described on the Schedule of Agreed Values and
which are designated “Kolter Acquisition Price” shall be paid when such
incomplete Models and Spec Homes have been completed and a certificate of
occupancy issued therefor in accordance with the terms and provisions of
Paragraph 8.2 hereof.  As used herein, the term “Federal Reserve Funds” shall
be deemed to mean the receipt by a bank or banks in the continental United
States designated by the Title Agent of United States Dollars in a form that
does not require further clearance and may be applied at the direction of Seller
by such recipient bank.  Upon completion of the Closing, the Title
Agent shall disburse all funds received by Title Agent pursuant to the closing
statement executed by Purchaser and Seller, by wire transfer of funds or checks,
in accordance with Paragraph 10.5(c) hereof.

     

    3. INTENTIONALLY
DELETED

     

    4. TITLE
AND SURVEY

     

    4.1 Purchaser
acknowledges that it has received from Seller a commitment (the “Commitment”) for an ALTA Form
B (1992 form) owner’s title insurance policy in the amount of the Purchase
Price, issued by Chicago Title Insurance Company (the “Title
Company”).  The Commitment shall be modified to include the
completed Specs and Models being conveyed at the Initial Closing and to delete
the survey exception.

     

    4.2 Purchaser
acknowledges that Seller has delivered to Purchaser copies of certain surveys of
the Real Property.

     

    5. ADJUSTMENTS
TO PURCHASE PRICE

     

    5.1 At
Closing, adjustments between the parties shall be made as of the Closing Date as
follows:

     

    (a) Real and
personal property ad valorem taxes upon the Real Property assessed for the year
in which Closing occurs (regardless of when due and payable) shall be prorated,
based upon the four percent (4%) maximum allowable discount, as of the Closing
Date.  Any unpaid taxes assessed for any year prior to the year in
which closing occurs, shall be paid in full by Seller at Closing, including all
delinquent and/or interest charges.

     

    (b) All
obligations of Seller as Declarant under the homeowners’ associations as
described in Paragraph 9 hereof shall be prorated as of the Closing Date, with
Seller being liable for any and all assessments or guaranteed obligations due
the associations up to the Closing Date with Purchaser assuming all of such
obligations from and after the Closing Date.

     

    (c) If the
Property is modified by any sales by Seller of any of the Models and Spec Homes
built thereon which occur prior to the Initial Closing, the Purchase Price shall
be subject to reduction as follows.  Seller and Purchaser have agreed,
for the purposes of this subparagraph, to an allocated price designated the
“Kolter Acquisition Price” attributable to the applicable Models and Spec Homes
pursuant to a schedule of Work in Progress / Budget Cost to Complete
Reconciliation which is set for on Exhibit
“C”, attached hereto and made a part hereof (the “Schedule of Agreed Values”).  In
the event that any of the Model and Spec Homes set forth on the schedule of
Agreed Values, is sold by Seller prior to the Closing Date, the Purchase Price
shall be reduced by such designated value for each such Model and Spec Home sold
by Seller.

     

    (d) The
Models and Spec Homes described in Paragraph 8.2 hereof have not yet received a
certificate of occupancy as of the Closing Date and the Purchase Price payable
with respect to such incomplete Models and Spec Homes as determined in the
Schedule of Agreed Values, shall not be paid on the Closing Date, but shall be
paid at the time of the subsequent closing on the Models and Spec Homes as
described in Paragraph 8.2 hereof.

     

    6. DEVELOPMENT
APPROVALS

     

    6.1 The
Projects are subject to various development orders, developer agreements and
development approvals which are described on Exhibit
“D, attached hereto and made a part hereof (the “Developer
Approvals”).

     

    6.2 At
Closing Seller will make a limited assignment of the Development Approvals to
Purchaser which is intended to permit Purchaser to complete the Improvements
(hereinafter defined) if Seller fails to complete the Improvements in accordance
with Paragraph 7 hereof, pursuant to the Self-Help Remedy (hereinafter
defined).  When Seller has completed the Improvements for each of the
Projects as required by the Development Approvals, or when Purchaser completes
such Improvements pursuant to its Self Help Remedy as described in Paragraph 7
hereof, Seller shall make a complete assignment to Purchaser and Purchaser shall
assume all of the rights and obligations of the Developer under the terms of the
Developer Approvals applicable to such Project.  To the extent that
any governmental entity, body or utility company requires a separate assignment,
Seller shall assign its rights under the developer agreement or utility
agreement, upon the form required by the governmental body or utility
provider.  Seller shall indemnify and hold Purchaser harmless from any
liability, loss, damage or expense, including, but not limited to, reasonable
attorneys’ fees and costs, sustained or incurred by Purchaser by reason of
Seller’s failure to fulfill the obligations under the terms of the Development
Approvals up to the completion by Seller of the Improvements for each of such
Projects.

     

    6.3 Seller
acknowledges that it will remain responsible to pay for the installation of
traffic signalization and deliver surety for such work to the City of Palm Beach
Gardens as more particularly described in the Development Approvals for
Paloma.

     

    6.4 Seller
has advised Purchaser that it has prepaid certain impact fees, water and sewer
connection fees or has impact fee credits available in connection with its
development work for the Projects or for the benefit of the Projects
(collectively the “Fees”).  To the
extent that Seller has prepaid such Fees  or has credits for Fees
available, Purchaser shall be obligated to purchase such Fees and/or reimburse
Seller for any such prepaid Fees, provided that Purchaser shall only be liable
to purchase such Fees or reimburse such Fees, at the time that such Fees would
otherwise be due and payable by Purchaser to the applicable governmental
authority.  For example, if a governmental authority requires payment
of such Fees at the time of building permit, they will be reimbursed by
Purchaser to Seller at the time of building permit.  A schedule of the
Fees is attached hereto as Exhibit
“E”.  In lieu of reimbursing Seller for such Fees as provided
herein, Purchaser shall, at Seller’s option, purchase all such Fees from Seller
on the Closing Date, for payment of the sum of $700,000, and upon such payment,
Seller shall assign to Purchaser, all of its right, title and interest in and to
such Fees.

     

    6.5 In the
event that Seller is obligated to prepay any addition impact fees
to  the City of Palm Beach Gardens to extend the build out date for
Paloma, or otherwise as required by the applicable governmental authorities in
connection with the completion of the Improvements and the acceptance of such
Improvements by such governmental authority, Seller shall pay any such
additional prepaid fees as follows.  At Seller’s option, Purchaser
shall either pay to Seller at the time of the last closing on the purchase of
the Models and Spec Homes as they are completed pursuant to Paragraph 8.2
hereof, sixty percent (60%) of the amount paid by Seller to prepay such
additional impact fees to the City of Palm Beach Gardens, or Purchaser shall be
obligated to reimburse Seller for such prepaid fees at the time such fees would
otherwise be due and payable by Purchaser to the applicable governmental
authority, after Purchaser has utilized the Fees purchased from Seller pursuant
to Paragraph 6.4 hereof..

     

    7. COMPLETION
OF IMPROVEMENTS

     

    7.1 Seller
and Purchaser have reviewed the terms of the Development Approvals and the
obligations to complete infrastructure and community improvements for the
Projects (other than Woodwinds which will remain unimproved except as described
in Paragraph 7.6 hereof)  which are described in the Development
Approvals and in Exhibit
“F”. attached hereto (the “Improvements”) and in the
plans and specifications for the Projects which are described on Exhibit
“F-1”, attached hereto and made a part hereof (the “Plans and
Specifications”).

     

    7.2 Seller
shall complete the infrastructure improvements and common area improvements as
described in the Development Approvals for Paloma and as set forth in the Plans
and Specifications for the Improvements in Paloma.  Seller has
submitted an application for modification of the Development Approvals and
approved PUD for Paloma.  Seller shall withdraw any application for
approval of a condominium development on Parcel A and shall continue to process
the remaining modifications to the PUD.  Seller agrees to use due
diligence to complete all of such modifications to the PUD on or before March
31, 2008, subject to circumstances beyond Seller’s reasonable
control.  Seller shall complete all of the Improvements in accordance
with the Plans and Specifications for Paloma with due diligence, commencing
immediately following the Closing Date and Seller shall complete the entries and
related landscaping along Victoria Falls Boulevard on or before March 31, 2008
and the balance of such Improvements on or before September 30, 2008, subject to
delays caused by circumstances beyond Seller’s reasonable control.  In
order to insure Seller’s completion of the Improvements which are described in
this Paragraph 7, including those for Paloma set forth in Paragraph 7.2, those
for Tres Belle / Oaks as described in Paragraph 7.3 and for the Bridge and other
improvements described in Paragraph 7.6 hereof, Seller agrees that it shall
deliver to Escrow Agent, on the Closing Date, a letter of credit in the amount
of $9,000,000 drawn on a bank doing business in Florida, substantially in
accordance with the form of the letter of credit, attached hereto as Exhibit
“G” (the “Letter of
Credit”).  The Letter of  Credit shall be held by
Escrow Agent in accordance with the terms and provisions of the Escrow
Agreement, to be executed by and between Seller, Purchaser and Escrow Agent at
the time of Closing, the form of which is attached hereto as Exhibit
“H” (the “Escrow
Agreement”).  The Letter of Credit shall be subject to
reduction, from time to time, to an amount equal to 110% of the cost to complete
the Improvements, provided that Seller delivers to Purchaser a signed and sealed
certificate from the project engineer(s), certifying the costs to complete the
Improvements.  To the extent that vertical improvements are included
in the Improvements, the cost of which cannot be certified by the project
engineer(s), Seller shall submit written documentation including executed
contracts to show the cost of completion.  Purchaser shall have the
right to review and approve the reduction in the Letter of Credit, based upon
the engineer’s certification, and contracts, which approval shall not be
unreasonably withheld or unduly delayed, provided, however, the remaining
balance of the Letter of Credit is always equal to 110% of the remaining costs
to complete the Improvements.  When construction of the Improvements
which are the responsibility of Seller have been completed, as described in
Paragraph 7.9 hereof, Seller’s obligations under this paragraph shall be
satisfied and the Escrow Agent shall return the Letter of Credit to
Seller.  In the event that any liens are filed against the Real
Property as a result of Seller’s completion of the Improvements, Seller shall
promptly take action and discharge or transfer any such lien to bond or cash
deposit within thirty (30) days after Seller receives written notice of such
lien.  If Seller fails to discharge or transfer such liens to a bond
or cash deposit, Purchaser shall have the right, in its sole discretion, to do
so at  Seller’s cost and expense and Seller shall reimburse,
indemnify, defend and hold Purchaser harmless against any such liens and related
expenses, including, without limitation, reasonable attorneys’
fees.

     

    7.3 Seller
shall complete the infrastructure improvements and common area improvements as
described in the Development Approvals for Tres Belle and the Oaks and as set
forth in the Plans and Specifications for Improvements within Tres Belle and the
Oaks.  Seller shall complete all of such Improvements in accordance
with the Plans and Specifications with due diligence, commencing immediately
after the Closing Date and Seller shall complete such Improvements on or before
April 30, 2008, subject to delays caused by circumstances beyond Seller’s
reasonable control. In order to insure Seller’s completion of the Improvements
within Tres Belle and Oaks, Seller agrees that it shall deliver the Letter of
Credit to Escrow Agent, in accordance with the provisions of Paragraph 7.2
hereof.  Seller shall have the right to reduce the Letter of Credit
and shall be entitled to a return of the Letter of Credit also as provided in
Paragraph 7.2 hereof.  In the event that any liens are filed against
the Real Property as a result of Seller’s completion of the Improvements, Seller
shall promptly take action and discharge or transfer any such lien to bond or
cash deposit within thirty (30) days after Seller’s receives written notice of
such lien.  If Seller fails to discharge or transfer such liens to a
bond or cash deposit, Purchaser shall have the right, in its sole discretion, to
do so at  Seller’s cost and expense and Seller shall reimburse,
indemnify, defend and hold Purchaser harmless against any such liens and related
expenses, including, without limitation, reasonable attorneys’
fees.

     

    7.4 Seller
agrees and acknowledges that Seller shall remain responsible for completing all
of the improvements required under the terms of that certain Collector Roads
Agreement recorded in Official Records Book 17422, Page 1536, of the Public
Records of Palm Beach County, Florida, as amended by that certain Assignment of
and  Amendment to Collector Roads Agreement, recorded in Official
Records Book 21345, Page 1806, of the Public Records of Palm Beach County,
Florida (collectively the “Collector Roads
Agreement”).  In addition to remaining responsible for all
obligations under the Collector Roads Agreements, Seller shall be entitled to
and shall retain all payments due and owing Seller in connection with the
Collector Roads Agreement.  Seller confirms that it shall be
responsible for delivering surety to the City of Palm Beach Gardens for traffic
signalization as described in Paragraph 6.3 hereof.  It is understood
and agreed that the other party to the Collector Roads Agreement is responsible
for delivering a portion of such surety and paying for a portion of such
expenses.

     

    7.5 In
addition, Seller agrees and acknowledges that it shall also remain responsible
for completing repair work to the existing utility casing at the intersection of
Hood Road and Military Trail, pursuant to an agreement with Communities Finance
Company, LLC (“CFC”).  All costs of
such work shall be paid by Seller and all reimbursements being paid by CFC shall
be the property of Seller.

     

    7.6 Seller
shall also be responsible for construction of a bridge (“Bridge”) extending from State
Road 7 to Woodwind, in accordance with plans and specifications which have been
received by Purchaser.   Seller shall also remove existing debris
and demolish the homes located in the Woodwind Project.  Seller shall
complete all such work with due diligence, commencing after the Closing Date and
Seller shall complete such Improvements on or before March 31, 2008, subject to
delays caused by circumstances beyond Seller’s reasonable control.  In
order to insure Seller’s completion of the Bridge and other improvements as
provided herein, Seller agrees that it shall deliver the Letter of Credit to
Escrow Agent, in accordance with the provisions of Paragraph 7.2
hereof.  Seller shall have the right to reduce the Letter of Credit
and shall be entitled to a return of the Letter of Credit also as provided in
Paragraph 7.2 hereof.  In the event that any liens are filed against
the Real Property as a result of Seller’s completion of the Improvements, Seller
shall promptly take action and discharge or transfer any such lien to bond or
cash deposit within thirty (30) days after Seller’s receives written notice of
such lien.  If Seller fails to discharge or transfer such liens to a
bond or cash deposit, Purchaser shall have the right, in its sole discretion, to
do so at  Seller’s cost and expense and Seller shall reimburse,
indemnify, defend and hold Purchaser harmless against any such liens and related
expenses, including, without limitation, reasonable attorneys’
fees.

     

    7.7 As
Purchaser’s sole remedy for Seller’s default under this Paragraph 7, Purchaser
shall have the right to take over any of the obligations of Seller to complete
the Improvements as described in this Paragraph 7 and to complete the same (the
“Self Help
Remedy”).  In the event of a default by Seller under this
Paragraph 7, after notice to Seller as provided in accordance with Paragraph 17
hereof, Seller shall have an opportunity to cure such default within thirty (30)
days after such written notice (the “Cure Period”).  If
Seller is proceeding diligently and in good faith, but is not capable of curing
the default within the Cure Period, then Seller may provide Purchaser with
written notice of its desire to extend the Cure Period for an additional thirty
(30) day period; provided, however, in no event shall the Cure Period extend
beyond sixty (60) days without the written consent of Purchaser.  In
the event that the default is not cured within the Cure Period, Purchaser may
take over the completion of the Improvements for the Project then in default and
complete the same in accordance with this Agreement.  In such event,
all costs incurred by Purchaser in completing such Improvements for which Seller
is in default shall be reimbursed by Seller to Purchaser and Purchaser shall
have the right to submit all expenses incurred by Purchaser to Escrow Agent for
payment under the Letter of Credit.  In such event, Escrow Agent shall
draw upon the Letter of Credit for such default that has occurred and shall hold
the cash proceeds in escrow, and shall pay all or portions of such cash proceeds
to Purchaser to reimburse Purchaser for all costs of completion of the
Improvements pursuant to the Self Help Remedy.  In addition to
reimbursement of all costs of completion, Purchaser shall also be entitled to
reimbursement for ten percent (10%) of such costs, as reimbursement of overhead
expenses.  Any funds remaining in escrow after reimbursement of all
expenses incurred by Purchaser shall be returned to Seller.

     

    7.8 Seller
shall maintain in full force and effect, during the time period that it is
completing the Improvements as described in this Paragraph 7, the following
insurance and shall name Purchaser as an additional insured thereon: (i) a
policy of broad form comprehensive general public liability and property damage
insurance providing coverage against liability for personal injury, death,
property damage and contractual liability having a combined single limit of no
less than $2,000,000.00, and (ii) workers’ compensation insurance, in a form
prescribed by the laws of the State of Florida, and employer’s liability
insurance with respect to all employees, if any, engaged in the construction of
the Improvements described in this Agreement.

     

    7.9 Completion
of the Improvements shall be evidenced by a certification to Purchaser from the
project engineer for the applicable Project that the Improvements have been
substantially completed, accompanied by the acceptance of such Improvements by
the applicable governmental authority, including the issuance of a certificate
of occupancy if applicable to that portion of the work.

     

    7.10 Neither
Purchaser nor any of its contractors, subcontractors, employees, agents or
invitees shall interfere in any way with the Seller’s completion of the
Improvements as described in this Paragraph 7.  Purchaser shall not
damage, cause to be damaged, or permit to be damaged any portion of the
Improvements which are the responsibility of Seller.  Purchaser shall
promptly cause any such damage to be repaired, at Purchaser’s sole
expense.  Purchaser hereby agrees to indemnify and hold Seller
harmless from any liability, loss, damage or expense, including, but not limited
to, reasonable attorneys’ fees and costs, sustained or incurred by Seller by
reason  of any damage to the Improvements caused by Purchaser,
Purchaser’s contractors, subcontractors, employees, agents or
invitees.

     

    8. MODEL
HOMES, SPEC HOMES AND LEASES

     

    8.1 Seller is
conveying to Purchaser upon the lots described on Exhibit
“I”, attached hereto and made a part hereof, certain Model Homes and Spec
Homes (“Model Homes and Spec
Homes”) that are substantially completed.  The Model Homes and
Spec Homes are conveyed and transferred to Purchaser in their “as is” condition,
as set forth in Paragraph 19 hereof; provided, however, Seller shall assign to
Purchaser on the Closing Date, to the extent assignable, all warranties from its
subcontractors and all consumer warranties applicable to appliances and
mechanical equipment.  Seller and Purchaser acknowledge that they have
not yet completed a walk-through of such Model Homes and Spec Homes that are
being conveyed at the Initial Closing.  Within twenty (20) days
following the Initial Closing, Seller and Purchaser shall inspect such Model
Homes and Spec Homes and shall agree to a punchlist of items to be completed by
Seller within a reasonable time thereafter.

     

    8.2 The Model
Homes and Spec Homes that are identified on Exhibit
“J” as incomplete will not be purchased by Purchaser on the Closing Date,
but shall be purchased within thirty (30) days after the issuance of a
certificate of occupancy for each such completed Model Home or Spec Home in
accordance with the terms hereof.  The agreed upon purchase price for
such Model Homes and Spec Homes is set forth in the Schedule of Agreed Values
at  the Kolter Acquisition Price. The closing on the purchase of each
Model Home and Spec Home completed subsequent to the Closing Date, shall occur
within thirty (30) days after the issuance of a certificate of occupancy for
such completed Model Home or Spec Home.  It is understood that the
first closing on the purchase of such Model Homes and Spec Homes will occur on
or about January 31, 2008 and monthly thereafter until Purchaser has purchased
the balance of such Model Homes and Spec Homes.  Prior to the closing,
Seller and Purchaser shall inspect such Model Home and Spec Home and shall agree
to a punchlist of items to be completed by Seller.  Seller shall
complete such punchlist of items prior to the respective
closing.  Paragraph 4 of this Agreement dealing with title and survey,
Paragraph 5 related to adjustments to the Purchase Price, the relevant portions
of Paragraph 10 relating to the closing documents and Paragraph 16 dealing with
closing costs and expenses shall govern the conveyance of such Model Homes and
Spec Homes by Seller to Purchaser.  Such Model Home and Spec Home
shall be conveyed in its “as is” condition, subject to the completion of the
punchlist items, and Seller shall assign to Purchaser on the subsequent closing
dates, to the extent assignable, all warranties from its subcontractors and all
consumer warranties applicable to appliances and mechanical
equipment.

     

    8.3 The
parties acknowledge that  Seller is completing the construction of
homes for third party contract purchasers (“Contract Purchasers”) as is
more particularly described in Paragraph 28 hereof.  A schedule of the
contracts that are either under construction or not started with such Contract
Purchasers as set forth on the backlog schedule, attached hereto and made a part
hereof as Exhibit
“K” (the “Backlog
Schedule”).  In the event that any of such Contract Purchasers
ask to terminate their purchase contracts with Seller, Seller shall have the
right to negotiate with such Contract Purchasers and offer them up to a 15%
discount off their purchase price as listed on Exhibit
“K”.  If any of the Contract Purchasers elect to terminate
their purchase contracts, Seller shall notify Purchaser and Purchaser shall
purchase such homes where such Contract Purchasers have terminated their
contracts (“Cancelled
Homes”) upon the following terms.  Seller shall provide written
notice that any such purchase contract(s) have been terminated.  With
such written notice, Seller shall provide a copy of the termination agreement
and/or the mutual releases executed with such Contract
Purchasers.  Seller shall complete construction of the Cancelled Home
and obtain a certificate of occupancy from the applicable governmental
authority.  Within thirty (30) days after issuance of the certificate
of occupancy, Purchaser shall purchase each such Cancelled Home from Seller and
Seller shall convey such Cancelled Homes to Purchaser.  Prior to the
closing, Seller and Purchaser shall inspect such Cancelled Homes and shall agree
to a punchlist of items to be completed by Seller.  Each punchlist
shall be completed prior to the respective closing for such Cancelled
Homes.  The purchase price for each of the Cancelled Homes shall be
that set forth on the Backlog Schedule as the “Kolter Acquisition Price” less
ten percent (10%)”.  If any of the contract listed on the Backlog
Schedule as “not started” are terminated before construction commences, Seller
shall sell to Purchaser and convey the lot where construction has not commenced
at a subsequent closing, within thirty (30) days after such termination with the
respective Contract Purchaser, and the purchase price for such lot is set forth
as the “land value only” on the Backlog Schedule.  Paragraph 4 of this
Agreement dealing with title and survey, Paragraph 5 related to adjustments to
the Purchase Price, the relevant portions of Paragraph 10 relating to the
closing documents and Paragraph 16 related to closing costs shall govern the
conveyance of such Cancelled Homes.  Such Cancelled Homes shall be
conveyed and transferred in their “as is” condition as described in Paragraph 19
of this Agreement but Seller shall assign to Purchaser on the subsequent closing
dates, to the extent assignable, all warranties from its subcontractors and all
consumer warranties applicable to appliances and mechanical
equipment.

     

    8.4 Seller is
the tenant under certain leases of model homes and a tenant of a lease of an
existing billboard advertising Paloma, which are described on Exhibit
“L”, attached hereto and made a part hereof (the “Leases”).  At
the time of closing, Seller shall assign to Purchaser and Purchaser shall assume
from Seller all of Seller’s, right, title and interest as tenant under the terms
of the Leases.  Purchaser hereby agrees to indemnify and hold Seller
harmless from any liability, loss, damage or expense, including, but not limited
to, reasonable attorneys’ fees and costs, sustained or incurred by Seller by
reason of Purchaser’s failure to perform the obligations under the assumed
Leases, which arise or relate to the period of time from and after the Closing
Date.  In consideration of such assumption by Purchaser, at the
Closing, Seller shall transfer to Purchaser, by bill of sale, all furniture and
furnishings owned by Seller within any of the leased models, if any, to the
extent that such furniture and furnishings can be removed from the model
residence upon termination of the Lease therefore.

     

    8.5 Seller
shall also convey to Purchaser, at the time of Closing, by bill of sale, the
furniture currently located or which has just been removed from the Oaks, Lots
29 and 30, provided that Purchaser removes all furniture and assumes
responsibility for storage on or before February 1, 2008.  In
addition, furniture shall also be conveyed by Seller to Purchaser by bill of
sale, in the Oaks lot 31, Tres Belle lots 108 and 109 and Paloma lots 62, 125
and 126.

     

    9. HOMEOWNER
ASSOCIATIONS.

     

    9.1 Seller is
the Declarant or Developer pursuant to those certain homeowners associations for
the Projects which are more particularly described on Exhibit
“M”, attached hereto and made a part hereof (the “Project
Declarations”).

     

    9.2 On the
Closing Date, Seller shall assign to Purchaser and Purchaser shall assume all of
the rights and obligations of the Seller as Declarant or Developer under the
terms of the Project Declarations.  Purchaser shall indemnify and hold
Seller harmless from any liability, loss, damage or expense, including, but not
limited to, reasonable attorneys’ fees and costs, sustained or incurred by
Seller by reason of Purchaser’s failure to fulfill the obligations of Seller as
the Declarant or Developer under the terms of the Project Declarations, which
arise or relate to the period of time from and after the Closing Date. Seller
shall indemnify and hold Purchaser harmless from any liability, loss, damage or
expense, including, but not limited to, reasonable attorneys’ fees and costs,
sustained or incurred by Purchaser by reason of Seller’s failure to fulfill the
obligations of Seller as the Declarant or Developer under the terms of the
Project Declarations, which arise or relate to the period of time prior to the
Closing Date. Seller’s indemnification as provided herein shall survive Closing
for the Survival Period.

     

    9.3 Pursuant
to Paragraph 5.1(b), Seller and Purchaser agreed to prorate the homeowners’
association assessments as of the Closing Date.  Seller shall retain
the obligation to fund the deficits of the homeowners associations through
December 31, 2007.  Purchaser will assume all obligations as the
successor declarants to fund all deficits of the homeowner associations from and
after the Closing Date.  To the extent that the financial accounting
of the homeowners’ associations is not complete as of the Closing Date, the
parties agree to reprorate and readjust any such prorations as of the completion
of the accounting for the homeowners’ association.  From and after the
Closing Date, Seller shall pay assessments to the applicable homeowners’
associations on a lot by lot basis based upon the lots retained by Seller within
the Projects.

     

    9.4 Prior to
the Closing, Seller will provide Purchaser with copies of all management
agreements that it has in place with respect to the homeowners’
associations.  Purchaser shall have the right prior to the Closing to
elect to have Seller terminate any or all of such management
agreements.  To the extent that Purchaser elects to have any or all
management agreements terminated, Seller shall terminate such designated
management agreements as of the Closing Date.  Purchaser shall assume
all responsibility for management of the homeowners associations from and after
the Closing Date.

     

    10. CLOSING

     

    10.1 The
acquisition and sale contemplated herein shall close (referred to in this
Agreement as the “Closing” or the “Initial Closing”) at the offices of Broad and
Cassel, 7777 Glades Road, Suite 300, Boca Raton, Florida 33434 commencing at
10:00 a.m. on December 27, 2007, with a pre-closing and review of documents on
December 26, 2007.  The actual date of the Closing is referred to in
this Agreement as the “Closing
Date”.  The parties acknowledge that pursuant to the terms of
this Agreement there will be subsequent closings on the purchaser of the
incomplete Models and Spec Homes and on the purchase of lots and/or completed
homes resulting from terminations of contracts with Contract Purchasers, which
are provided for herein.

     

    10.2 At the
Closing, Seller shall deliver to the Purchaser or the Escrow Agent, as
applicable, the following, all of which shall be in form reasonably satisfactory
to Purchaser and duly executed by Seller:

     

    (a) A special
warranty deed sufficient to convey fee simple title to the Real Property in
conformity with the legal description set forth in the Commitment, subject to
the Permitted Exceptions.  At Purchaser’s option, Purchaser may form
one or more separate entities to take title to portions of the Real
Property.  Seller will cooperate and will execute separate special
warranty deeds to each designated entity elected by Purchaser. Purchaser will
select no more than one (1) separate entity for each of the
Projects.

     

    (b) A quit
claim deed to convey title to any common areas which have not yet been conveyed
to the applicable homeowners association for each of the Projects.

     

    (c) A bill of
sale conveying to Purchaser title to the personal property of Seller located on
the Real Property.

     

    (d) An
assignment of leases and tenancies, affecting the Property.

     

    (e) An
assignment of the Development Approvals.

     

    (f) An
assignment of the rights as Declarants under the Project
Declarations.

     

    (g) A
certificate of Seller stating that Seller is not a “foreign person” as defined
in the Internal Revenue Code.

     

    (h) Certified
copies of Resolutions of the Seller approving the transactions described in this
Agreement and authorizing the execution of all documents required hereunder, in
forms satisfactory for the Title Company to insure title to the Real
Property.

     

    (i) If
Purchaser so elects, the termination of all management agreements designated by
Purchaser with respect to the homeowners’ associations.  As of the
Closing Date, Purchaser shall be responsible for all such management
services.

     

    (j) Resignations
of all representatives of Seller as officers and directors of the applicable
homeowners associations.  In lieu thereof, Seller shall execute a
written action of developer/declarant as permitted under the Homeowners’
Associations to remove the Seller designated officers and
directors.  From and after the Closing Date, Purchaser shall designate
officers and directors of such homeowners associations.  Purchaser
shall execute a similar designation at the time of Closing, adding John Csapo,
Joe Pease and Aaron Chorost as officers and directors.

     

    (k) A limited
license to utilize Seller’s architectural, building and site plans and
specifications for each of the Projects.

     

    (l) An
assignment of all of Seller’s right, title and interest, to the extent
assignable, of all warranties from subcontractors and all consumer warranties
with respect to the Model Homes and Spec Homes.

     

    (m) An
assignment to the respective homeowners’ association, of all of Seller’s right,
title and interest, to the extent assignable, of all warranties from
subcontractors and all consumer warranties with respect to all improvements
within the common areas of the homeowners’ associations.

     

    (n) The
Letter of Credit shall be delivered to the Escrow Agent pursuant to the Escrow
Agreement, to be disbursed by Escrow Agent in accordance with the terms
thereof.

     

    (o) Any other
agreement, document or instrument required by this Agreement to be delivered by
Seller or reasonably necessary to carry out its provisions or required to own,
operate, maintain and develop the Projects.

     

    10.3 In lieu
of Seller’s delivery of a special warranty deed conveying title to the Real
Property directly to Purchaser at the Initial Closing, Seller shall have the
right at its election, to assign its entire membership interest in four (4)
newly formed Florida limited liability companies to which Seller will convey fee
simple title to the Real Property and the completed Specs and Models within five
(5) business days prior to the Closing.  Purchaser will designate what
portion of the Real Property and the completed Specs and Models will be conveyed
to each entity.  In furtherance thereof, the Seller makes the
following additional covenants, representations and warranties with respect to
the limited liability companies (the “Acquisition Entities”) to be
formed by Seller on or about five (5) days prior to Closing:

     

    (a) The
Acquisition Entities shall be Florida limited liability companies duly organized
and validly existing under the laws of the State of Florida.  The sole
member of the Acquisition Entities will be the Seller.  The articles
of organization and operating agreement of the Acquisition Entities shall be
prepared by Seller.

     

    (b) Seller
shall own one hundred percent (100%) of the ownership, management and other
interest in the Acquisition Entities, free and clear of all liens, claims, and
encumbrances (collectively referred to as the “Interest”).  Seller
shall hold all right, title and interest in and to the Interest, free of all
liens and encumbrances, and the Interest shall not be issued in violation of the
preemptive rights of any person or any agreement or laws by which the
Acquisition Entities at the time of issuance was or shall be
bound.  There shall be no outstanding options, warrants, rights,
calls, commitments, conversion rights, rights of exchange, rights of redemption,
subscriptions, claims, agreements, obligations, convertible or exchangeable
securities or other plans or commitments, contingent or otherwise, relating to
the Interest, except as may be provided in the Operating Agreements and Articles
of Organization of the Acquisition Entities, true and complete copies of which
shall be furnished to Seller by Purchaser no later than two (2) days prior to
the Closing.  All of the rights with respect to the operation or
management of the Acquisition Entities shall be set forth in such documents and
shall not be modified or amended by Seller except with the prior consent of
Purchaser.

     

    (c) Not
earlier than three (3) days prior Closing, Seller agrees to execute a special
warranty deed conveying the designated portion of the Real
Property  to each of the Acquisition Entities, as a capital
contribution and for no monetary consideration, free and clear of all liens,
claims and encumbrances whatsoever except for the permitted exceptions described
in the Commitment.

     

    (d) At the
Closing and after the deeds to the Acquisition Entities have been validly
delivered, Seller agrees to execute and deliver an assignment to Purchaser of
the Interest, which Interest shall be conveyed free and clear of all liens,
claims and encumbrances so that the Purchaser shall own one hundred percent
(100%) of the ownership and rights with respect to each of the Acquisition
Entities.

     

    (e) At the
Closing, Seller and/or the Acquisition Entities, as appropriate, shall execute
and deliver a closing affidavit in form reasonably required by the Title Company
to permit the deletion of the preprinted exceptions from the Commitment with
regard to gap, parties in possession, mechanics’ liens and unrecorded survey
matters.

     

    (f) At the
Closing, the manager of the Acquisition Entities shall resign and
representatives designated by Purchaser shall be substituted in lieu
thereof.

     

    (g) Other
than the obligations described in this Agreement and the permitted exceptions
described in the Commitment, Seller represents that Acquisition Entities shall
have no liabilities at Closing.  This representation shall survive the
Closing.

     

    (h) At the
Closing, the closing documents referred to in Paragraph 10.2(c), (d), (e), (f),
(k), (l) and (m) shall be executed and delivered to the applicable Acquisition
Entity designated by Purchaser.  Such designated Acquisition Entity
shall also execute the assumption of the obligations as described in Paragraph
10.4(c) hereof.

     

    10.4 At the
Closing, Purchaser shall deliver to the Seller the following, all of which shall
be in form reasonably satisfactory to Seller and duly executed by Purchaser
(where applicable):

     

    (a) The
balance of the Purchase Price and all other amounts due to Seller
hereunder.

     

    (b) A
certified copy of a Resolution of the Manager of the Purchaser approving the
transaction set forth in this Agreement and authorizing the execution of all
documents required hereunder.

     

    (c) An
assumption of the obligations set forth in the various assignments, described in
Paragraph 10.2 of this Agreement.

     

    (d) The
Guaranty as described in Paragraph 34 hereof.

     

    (e) Any other
agreement, document or instrument required by this Agreement to be delivered by
Purchaser or reasonably necessary to carry out its provisions.

     

    10.5 At the
Closing, Purchaser and Seller shall:

     

    (a) Deliver
to the title company such evidence of their existence, good standing,
qualification to do business and authority to consummate this transaction as the
title company may require in order to issue the title insurance policy to the
Purchaser.

     

    (b) Execute
escrow instructions, if necessary, with the Escrow Agent or title company in the
form necessary to carry out the provisions of this Agreement.

     

    (c) Execute
and exchange closing or settlement statements confirming the status of financial
matters pertaining to the transaction.

     

    (d) Execute
and exchange the certificates described herein.

     

    (e) Purchaser
and Seller shall execute joint letters to the owners and the members within the
Projects, informing them of the closing of this transaction.

     

    (f) Cooperate
in issuing a news release and in preparing appropriate public relations
materials, announcing the closing of this transaction.

     

    11. REPRESENTATIONS
OF SELLER

     

    11.1 Seller
represents and warrants to Purchaser as follows:

     

    (a) Seller is
a limited liability company, validly existing and in good standing under the
laws of the State of Florida.  Seller has all requisite power and
authority and is entitled to carry on its business as it is now being conducted,
and to own, lease or operate its properties as and in the places where such
business is now conducted and where such properties are now owned, leased or
operated.

     

    (b) Seller
has taken all necessary action required to be taken by Seller to authorize the
execution, delivery and performance of this Agreement.  This Agreement
has been duly executed and delivered by a duly authorized officer of Seller, and
constitutes, and will constitute on the Closing Date, the valid and binding
obligation of Seller, enforceable in accordance with its terms.

     

    (c) Except
for those previously obtained or which will be obtained by Seller prior to
Closing, no approval, consent, or other authorization is required from, and no
filing or registration is required to be made with, any court, administrative
agency or governmental authority in connection with the execution and
performance of this Agreement by Seller.

     

    (d) To
Seller’s knowledge, there is no litigation pending or threatened against, by or
affecting Seller or the Projects in any material respect, or which question the
validity or enforceability of this Agreement or the transactions contemplated
hereby.

     

    (e) To
Seller’s knowledge, there are no pending or threatened condemnation proceedings,
suits or administrative actions relating to the Real Property.

     

    (f) To
Seller’s knowledge, there are no material defects in any portion of the
Improvements constructed by Seller within the Projects.

     

    11.2 As used
herein, the reference to Seller’s knowledge or other such references to the
knowledge of Seller shall be deemed to mean the actual knowledge, without
investigation or inquiry of John Sellinger and David Lederman and shall not be
construed, by imputation or otherwise, to refer to the knowledge of any advisor
to Seller or any other officer, agent, manager, representative or employee of
Seller.  There shall be no personal liability on the part of such
designated party arising out of any of the Seller’s representations and
warranties set forth herein.

     

    11.3 The
representations and warranties contained in Paragraph 11.1 may be relied upon by
the Purchaser and shall survive the Closing Date for twelve (12) months (the
“Survival
Period”).

     

    12. REPRESENTATIONS
OF PURCHASER

     

    12.1 Purchaser
hereby represents to Seller as follows:

     

    (a) Purchaser
is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Florida.

     

    (b) Purchaser
has the full right, power and authority to execute, deliver and perform its
obligations under this Agreement.

     

    (c) That the
person signing this Agreement on behalf of Purchaser is authorized to do
so.

     

    (d) There is
no action, suit, arbitration, unsatisfied order or judgment, governmental
investigation or proceeding pending against Purchaser which, if adversely
determined, could materially interfere with the consummation of this transaction
contemplated by this Agreement.

     

    12.2 The
representations and warranties contained in Paragraph 12.1 may be relied upon by
the Seller and shall survive the Closing Date for the Survival
Period.

     

    13. SELLER’S OBLIGATIONS PRIOR TO
CLOSING.  Seller covenants and agrees with Purchaser as
follows:

     

    13.1 From the
Effective Date until the Closing, Seller, at its expense, shall conduct normal
maintenance and repairs to the Property so as to maintain the Property in the
same condition that exists on the Effective Date, ordinary wear and tear,
casualty and condemnation excepted.

     

    13.2 Seller
shall conduct its business in the ordinary course, and in substantially the same
manner as Seller has previously conducted such business.

     

    14. CONDITIONS
TO PURCHASER’S AND SELLER’S OBLIGATIONS.

     

    14.1 It is a
condition precedent to Closing of this Agreement by Purchaser as
follows:

     

    (a) Each of
the representations and warranties of Seller set forth in this Agreement shall
be true, complete and correct at the date of the Closing as if made at that
time, in all material respects and the parties shall have delivered their
certificates to such effect.

     

    (b) Seller
shall have performed and complied with all agreements, undertakings,
obligations, and covenants which are required to be performed or complied
hereunder on or prior to the Closing.

     

    (c) At the
Closing, Seller shall deliver or cause to be delivered each of the items
required of it as specified in Paragraphs 10.3 and 10.5.

     

    (d) The Real
Property shall not be subject to a threatened or actual taking or condemnation
by any governmental authority which taking or condemnation will, in Purchaser’s
reasonable opinion, materially impair development and sale of the Real
Property.  If prior to Closing any condemnation has occurred, the
proceeds of condemnation shall be delivered to the Purchaser.  If any
condemnation action is pending as of Closing, the rights to any condemnation
proceeds shall be assigned by Seller to the Purchaser.

     

    (e) There
shall have occurred no casualty loss to the Property for which insurance
proceeds shall not be sufficient, in Purchaser’s reasonable discretion, to
repair and/or restore any damaged improvements to the same condition as existed
prior to such damage.  If such damage or destruction occurs prior to
Closing, Seller shall assign to Purchaser any and all insurance proceeds payable
as a result therefrom.  In the event of a casualty loss which exceeds
a cost to repair of $20,000.00, Purchaser shall have the right, in Purchaser’s
sole and absolute discretion, to delete that portion of the Property where such
damage and casualty has occurred, and the Purchase Price shall be reduced by the
Agreed Value for that portion of the Property deleted, and Purchaser shall be
obligated to close this transaction in accordance with the terms
hereof.

     

    14.2 It is a
condition precedent to Closing of this Transaction by Seller as
follows:

     

    (a) Each of
the representations and warranties of Purchaser set forth in this Agreement
shall be true, complete and correct at the date of the Closing as if made at
that time, in all material respects and the Parties shall have delivered their
certificates to such effect.

     

    (b) Purchaser
shall have performed and complied with all agreements, undertakings,
obligations, and covenants which are required to be performed or complied
hereunder on or prior to the Closing.

     

    (c) At the
Closing, Purchaser shall deliver or cause to be delivered each of the items
required of it as specified in Paragraphs 10.4 and 10.5.

     

    15. DEFAULT
AND REMEDIES

     

    15.1 In the
event that prior to the Initial Closing Purchaser defaults as to any of its
obligations set forth in this Agreement, and if such default is not cured within
ten (10) days after notice of such default from the Seller specifically
referencing and identifying such event of default, Seller, as its exclusive
remedy hereunder, shall retain the Deposit as agreed upon full and complete
liquidated damages and not as a penalty and thereupon no party shall have any
further obligation or liability hereunder. Notwithstanding the foregoing,
Purchaser shall not be entitled to notice of default or cure period for
Purchaser’s failure to close on the scheduled Closing
Date.   Purchaser and Seller acknowledge that in the event of
Purchaser’s default it would be difficult to determine Seller’s actual damage
and Purchaser acknowledges that such damages will in any event be substantial if
the Initial Closing is not consummated.  Purchaser acknowledges that
the provision for liquidated damages set forth herein is a fair and accurate
measure of Seller’s damages and is not to be deemed a penalty.  Except
for Purchaser’s obligations under the indemnification provisions of this
Agreement, the foregoing shall be the sole and exclusive remedy of Seller for a
default by Purchaser which occurs prior to Closing.

     

    15.2 In the
event of a default by Purchaser as to any of its obligations set forth in this
Agreement subsequent to the Initial Closing, if such default is not cured within
fifteen (15) days after notice of such default, specifically referencing and
identifying such event of default, Seller shall have each and every remedy
provided for such default under Florida law, including but not limited to
specific performance, provided, however, in no event shall Purchaser be liable
for consequential, special or punitive damages.

     

    15.3 In the
event that prior to the Initial Closing Seller defaults as to any of its
obligations as contained in this Agreement, and if such default is not cured
within ten (10) days after notice of such default from the Purchaser,
specifically referencing and identifying such event of default, Purchaser shall
be entitled, in Purchaser’s sole and absolute discretion, to either a refund of
the Deposit (or any portion thereof actually delivered to Escrow Agent) and,
upon such refund, no party shall have any further obligation or liability
hereunder (except as to those indemnities that survive termination), or
Purchaser shall have the right to proceed against the Seller for specific
performance of this Agreement.

     

    15.4 In the
event of a default by Seller as to any of its obligations set forth in this
Agreement subsequent to the Initial Closing, if such default is not cured within
fifteen (15) days after notice of such default, specifically referencing and
identifying such event of default, Purchaser shall have each and every remedy
provided for such default under Florida law, including but not limited to
specific performance, provided, however, in no event shall Seller be liable for
consequential, special or punitive damages.  Purchaser acknowledges
that Seller’s liability under Paragraph 7 shall be limited to the Self Help
Remedy described in Paragraph 7.7 hereof.

     

    16. CLOSING COSTS AND
EXPENSES.  Seller shall pay for the cost of documentary stamp
taxes on the deeds, if any, and recording the deeds.  Seller shall
also pay for the cost of the title search, title examination and the cost of the
owner’s title insurance policy.  Both Seller and Purchaser shall pay
fifty percent (50%) of the recording fees for the recording of the closing
documents.  Each party shall pay their respective legal
fees.  It is the intent of the parties that no documentary stamp tax
is due in connection with the conveyances at the Initial Closing, but in the
event it is determined that any such documentary stamp taxes are due, Seller and
Purchaser shall each pay one-half (1/2) of any documentary stamp tax liability,
together with any interest and penalties due thereon.

     

    17. BROKERS.  Seller
hereby warrants to Purchaser that Seller has not engaged or dealt with any
broker or agent with respect to the purchase and sale of the Property as
contemplated by this Agreement.  Seller shall indemnify and hold
Purchaser harmless from and against any and all liability, cost, damage and
expense (including, but not limited to, attorneys’ fees and costs of litigation
and appeals) Purchaser shall ever suffer or incur because of any claim by any
broker or agent claiming to have dealt with Seller, whether or not meritorious,
for any commission or other compensation with respect to this Agreement or to
the purchase and sale of the Property in accordance with this Agreement. 
Purchaser hereby warrants to Seller that Purchaser has not dealt with any broker
or agent with respect to the purchase and sale of the Property as contemplated
by this Agreement.   Purchaser shall indemnify and hold Seller
harmless from and against any and all liability, loss, cost, damage and expense
(including, but not limited to, attorneys’ fees and costs of litigation and
appeals) Seller shall ever suffer or incur because of any claim by any broker or
agent, claiming to have dealt with Purchaser, whether or not meritorious, for
any commission or other compensation with respect to this Agreement or to the
purchase and sale of the Property in accordance with this
Agreement.  The obligations of Seller and Purchaser under this
Agreement shall survive the Closing hereunder or any earlier termination of this
Agreement.

     

    18. NOTICES.  Any
notice, request, demand, instruction or other communication to be given to
either party, except where required by the terms of this Agreement to be
delivered at the Closing, shall be in writing and shall be sent by registered or
certified mail, return receipt requested, by express overnight courier, by
facsimile or by hand delivery to the other party hereto, with a copy sent by
e-mail on the same day as the other method utilized to the addresses set forth
below, or to such address as the parties hereafter may specify in
writing:

     

               SELLER:                                
M/I Homes of West Palm Beach, LLC

                                                    
3 Easton Oval, Suite 500

    Columbus,
Ohio 43219

    Attn:  J.
Thomas Mason, Esquire, General Counsel

    Telephone:  (614)
418-8014

    Fax:  (614)
418-8622

    E-mail:  tmason@mihomes.com

    

    Copy
to:                                Broad
and Cassel

    7777
Glades Road, Suite 300

    Boca
Raton, Florida  33434

    Attn:  Richard
B. MacFarland, P.A.

    Telephone:  (561)
483-7000

    Fax:  (561)
483-7321

    E-mail:  rmacfarland@broadandcassel.com

     

    PURCHASER:                                KLP
East LLC

    150
Second Avenue N, Suite 670

    St.
Petersburg, Florida 33701

    Attn:  James
P. Harvey

    Telephone:
(727) 456-1244

    Fax:  (727)
456-1461

    E-Mail:  jharvey@kolter.com

    

    Copy
to:                                Kolter
Property Company

    1601 Forum Place, Suite
805

    West Palm Beach, Florida
33401

    Attn:  General
Counsel

    Telephone:  (561)
682-9600

    Fax:  (561)
682-1050

    E-mail:  legalnotice@kolter.com

    

    Notice
shall be deemed given if forwarded by certified or registered mail through the
facilities of the United States Postal Office on the day following the date that
the notice in question is deposited in the facilities of the United States
Postal Service.  If notice is forwarded by express overnight courier,
it shall be deemed given on the day that the notice in question is deposited in
the facilities of an express overnight courier.  If notice is
delivered by hand delivery, notice shall be deemed given when actually
delivered.  If notice is delivered by facsimile it shall be deemed
given on the day that it is sent by facsimile, provided that it is received by
the other party prior to 5:00 p.m. on such day, if a business day, otherwise it
shall be deemed given on the next business day following the date the facsimile
has been sent, provided, further, that a confirmatory copy is delivered by
either certified or registered mail or express overnight courier as provided
herein.

     

    19. “AS IS”
TRANSACTION.  PURCHASER ACKNOWLEDGES THAT THIS TRANSACTION AND
THE ASSIGNMENT, CONVEYANCE AND TRANSFER OF THE PROPERTY BY THE SELLER TO THE
PURCHASER IS IN ITS “AS IS” CONDITION WITHOUT ANY REPRESENTATION OR WARRANTY,
ORAL OR WRITTEN, EXPRESS OR IMPLIED.  PURCHASER ACKNOWLEDGES THAT IT
IS A SOPHISTICATED PURCHASER, INVESTOR AND OWNER OF REAL ESTATE AND PURCHASER
HAS HAD AND WILL HAVE, PRIOR TO THE CLOSING, THE OPPORTUNITY TO FULLY
INVESTIGATE THE STATUS OF THE PROJECTS, THE CONDITION OF THE PROPERTY AND THE
OBLIGATIONS OF THE SELLER WITH RESPECT TO THE PROJECTS AND THE
PROPERTY.  PURCHASER HEREBY ACCEPTS THE PROPERTY IN ITS “AS IS”
CONDITION AND WAIVES AND RELEASES ANY CLAIMS THAT IT HAS OR MAY HAVE, NOW OR IN
THE FUTURE, AGAINST THE SELLER WITH RESPECT TO THE CONDITION OR STATUS OF THE
PROPERTY OR ANY REPRESENTATION, ORAL OR WRITTEN, EXPRESS OR IMPLIED WITH RESPECT
TO THE PROPERTY, EXCEPT AS SPECIFICALLY SET FORTH IN THIS
AGREEMENT.

     

    20. ENTIRE
AGREEMENT.  This Agreement sets forth the entire agreement and
understanding of the parties in respect to the transactions contemplated by this
Agreement, and supersedes all prior agreements, arrangements and understandings
relating to the subject matter of this Agreement.  No representation,
promise, inducement or statement of intention has been made by Seller or
Purchaser which is not embodied in this Agreement, or in the attached Exhibits
or the written statements, certificates, schedules or other documents delivered
pursuant to this Agreement, and neither Purchaser nor Seller shall be bound by
or liable for any alleged representations, promise, inducement or statement of
intention not so set forth.

     

    21. COUNTERPARTS.  This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     

    22. GOVERNING LAW.  This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Florida.  The venue of any action arising under
this Agreement shall be in Palm Beach County, Florida.

     

    23. RECORDING OF
AGREEMENT.  Purchaser and Seller each covenant and agree that
it will not record this Agreement in the public records of the county or other
jurisdiction in which any of the Property is located.  Any breach of
such covenant shall be deemed a material breach of this Agreement by the party
so recording this Agreement.

     

    24. RADON GAS.  The
foregoing notice is delivered to Purchaser:  “Radon gas is a naturally
occurring radioactive gas that, when it has accumulated in a building in
sufficient quantities, may present health risks to persons who are exposed to it
over time.  Levels of radon that exceed Federal and State Guidelines
have been found in buildings in Florida.  Additional information
regarding radon and radon testing may be obtained from your county health
unit.”

     

    25. ATTORNEYS’ FEES.  In
the event of any dispute arising out of the interpretation or enforcement of
this Agreement, the prevailing party in any such dispute shall be entitled to
recover from the non-prevailing party all costs and expenses sustained or
incurred by such prevailing party, whether suit be brought or not, and
including, without limitation, reasonable attorneys’ fees and costs sustained in
all administrative, judicial, and bankruptcy proceedings, and in all appellate
proceedings.  In addition, wherever in this Agreement either party is
entitled to be reimbursed for attorneys’ fees, such phrase shall mean
“reasonable” attorneys’ fees.

     

    26. ESCROW AGENT.  The
Escrow Agent agrees by acceptance of the monies to be deposited with it (the
“Escrow Funds”) to hold the same in escrow and to disburse such monies in
accordance with the terms and conditions of this Agreement.  In the
event of a dispute between Purchaser and Seller as to the duties or liabilities
under the provisions of this Agreement, Escrow Agent may, in its sole
discretion, continue to hold the monies which are subject to this escrow until
the parties mutually agree to the disbursement thereof or until final judgment
of a court of competent jurisdiction binding the parties thereto, or it may
deposit all the monies then held pursuant to this Agreement with the Clerk of
the Circuit Court of Palm Beach County and, upon notifying all parties concerned
of such action, all liability on the part of the Escrow Agent shall fully cease
and terminate, except to the extent of accounting for any monies theretofore
delivered out of escrow.  In the event of any suit between Purchaser
and Seller wherein the Escrow Agent is made a party by virtue of acting as
Escrow Agent hereunder, or in the event of any suit wherein the Escrow Agent
interpleads the subject matter of this escrow, the Escrow Agent shall be
entitled to recover reasonable attorneys’ fees and court costs to be paid from
the Escrow Funds, but chargeable as costs in favor of the prevailing
party.  All parties agree that the Escrow Agent shall not be liable to
any party or person whomsoever for misdelivery of monies subject to this escrow
to Purchaser or Seller unless such misdelivery shall be due to willful breach of
this Agreement or gross negligence on the part of the Escrow Agent.

     

    The
parties expressly recognize that Escrow Agent is the attorney for the Seller and
both parties agree that such representation will continue through this
transaction, and may further continue subsequent to the
Closing.  Purchaser acknowledges that Escrow Agent may represent the
Seller for all matters related to this transaction, including, but not limited
to, any litigation arising herein and that such duties as Escrow Agent shall not
disqualify Seller’s attorney from representing Seller in such
matters.

     

    27. SURVIVAL OF PROVISIONS OF THIS
AGREEMENT.  Except as otherwise set forth herein, none of the
agreements, representations and warranties or other provisions of this Agreement
shall survive the final closing and delivery of all deeds.  It is
agreed that the provisions of Paragraphs 6, 7, 8, 9, 11, 12, 15, 16, 17, 18, 19,
20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, and 35 hereof, in their
entirety,  shall survive Closing and/or termination of the Agreement
provided, however, the representations of Seller and Purchaser pursuant to
Paragraphs 11 and 12 of this Agreement shall survive the Closing but only for
the Survival Period. 

     

    28. SELLER’S
BUILDING ACTIVITIES.  Seller and Purchaser acknowledge that
Seller has retained title to various lots within the Projects upon which it is
currently constructing homes for third party purchasers pursuant to written
contracts.  Seller shall be permitted to continue all construction
activities to complete such homes and to convey the homes and lots to such
purchasers, subject to the following provisions.  

     

    28.1 Seller
shall not damage, cause to be damaged, or permit to be damaged any property or
improvements within the Projects.  Seller assumes full responsibility
and liability for any construction, maintenance or repair of any such
improvements arising from Seller’s activities.

     

    28.2 Seller
agrees to maintain its construction and job sites in a neat and orderly
condition throughout construction and to employ safety practices commensurate
with Seller’s customary building practices.  Seller agrees to keep
roadways, easements, swales, lakes, common areas and other such areas adjacent
to its lots clear from construction materials and excessive trash or debris at
all times.

     

    28.3 Purchaser
acknowledges that all plans for the construction of the homes have been approved
by the applicable architectural control board pursuant to the Declarations and
that Seller shall be permitted to complete construction of such
homes.  Purchaser shall not interfere in any manner with Seller’s
continued construction activities.  Seller and its employees,
subcontractors, agents and customers shall have full access to the Projects, at
all reasonable times, for the purposes of completing such construction and for
marketing and selling the homes.

     

    29. MISCELLANEOUS
PROVISIONS

     

    29.1 Time is
of the essence with respect to the parties’ obligations under this Agreement to
timely consummate the Closing in accordance with the terms hereof.

     

    29.2 No
failure of any party to exercise any power given such party hereunder or to
insist upon strict compliance by the other party with its obligations hereunder
shall constitute a waiver of any party’s right to demand strict compliance with
the terms of this Agreement.

     

    29.3 The
subject headings of the numbered articles and paragraphs of this Agreement are
included for convenience only, and shall not affect the interpretation of any of
its provisions.  Any reference herein to Articles, Paragraphs or
Subparagraphs shall refer to the corresponding Articles, Paragraphs or
Subparagraphs of this Agreement, unless specific reference is made to the
articles, paragraphs or other subparagraphs of another document or
instrument.

     

    29.4 Both
parties have participated in drafting this Agreement and this Agreement shall be
construed without regard to any presumption or other rule of construction
against the party causing this Agreement to be drafted.

     

    29.5 In
entering into this Agreement, the Seller has relied upon the expertise and the
financial ability of the Purchaser to perform under this
Agreement.  Therefore, the Purchaser shall not be permitted to assign
any or all of its rights under this Agreement except with the prior written
consent of the Seller, which consent may be withheld for any
reason.  Notwithstanding the foregoing, Purchaser may assign its
rights and obligations hereunder to any entity that, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with Purchaser, to any wholly owned subsidiary, its general
partner, its parent limited partnership or to any entity as part of an
acquisition, consolidation or reorganization of all or substantially all of
Purchaser’s business, activities and assets by written notice to Seller. No
assignment allowed under this Paragraph 29.5 shall be effective unless the
assignee agrees to assume the obligations of assignor hereunder.

     

    29.6 Purchaser
hereby acknowledges and agrees that except as specifically otherwise permitted
in this Agreement, it will maintain as confidential this Agreement and the
existence and the terms hereof and that it will not disclose it or the terms
hereof to any person or entity.  Notwithstanding the foregoing,
Purchaser shall be permitted to disclose the existence of this Agreement and the
terms and conditions contained herein to its attorneys, accountants, lenders and
prospective lenders, joint venturers and prospective joint venturers identified
to Seller in writing, which Purchaser deems reasonable or necessary in order to
close the transaction contemplated hereby.  In addition, Purchaser
shall be permitted to advise its consultants that it has entered into an
agreement with Seller but Purchaser shall not be permitted to disclose to such
consultants any of the terms hereof.  Such parties shall agree to
maintain the information disclosed to them as confidential.  This
confidentiality provision shall remain in full force and effect until the
Closing and shall survive any earlier termination of this
Agreement.

     

    29.7 SELLER
AND PURCHASER WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, OR ANY PROCEEDING IN ANY WAY
ARISING OUT OF OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT AND SELLER AND
PURCHASER AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY.

     

    29.8 Seller
and Purchaser hereby agree that a facsimile copy of this Agreement and any
signatures thereon shall be considered for all purposes as
originals.

     

    29.9 Seller
and Purchaser agree that they shall cooperate, in good faith, at all times to
carry out the intent of this Agreement, both before and after the Initial
Closing and all closings subsequent thereto.  In connection therewith,
each party agrees to execute any corrective instrument and/or supplemental
instrument deemed reasonably necessary to effectuate the performance of either
party under the terms and provisions of this Agreement.

     

    30. DISCLOSURE
FOR PALOMA.

     

               The
Purchaser should not execute the Agreement until it has received and read the
following disclosure summary required by 720.401, Florida Statutes:

     

    DISCLOSURE
SUMMARY

    FOR

    PALOMA

    

    1.           AS
A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER
OF A HOMEOWNERS' ASSOCIATION.

    

    2.           THERE
HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND
OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

    

    3.           YOU
WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE
SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $789.13 PER
QUARTER. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY
THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF
APPLICABLE, THE CURRENT AMOUNT IS $____N/A      
PER _____.

    

    4.           YOU
MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY,
COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC
CHANGE.

    

    5.           YOUR
FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY
HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

    

    6.           THERE
MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER
COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS'
ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $    N/A      
PER _____.

    

    7.           THE
DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE
APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL
OWNERS.

    

    8.           THE
STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS
A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION
GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

    

    9.           THESE
DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE
RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED
AND CAN BE OBTAINED FROM THE DEVELOPER.

    

    31. DISCLOSURE
FOR OAKS.

     

               The
Purchaser should not execute the Agreement until it has received and read the
following disclosure summary required by 720.401, Florida Statutes:

     

    DISCLOSURE
SUMMARY

    FOR

    OAKS

    

    1.           AS
A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER
OF A HOMEOWNERS' ASSOCIATION.

    

    2.           THERE
HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND
OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

    

    3.           YOU
WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE
SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $606.57 PER
QUARTER. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY
THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF
APPLICABLE, THE CURRENT AMOUNT IS $____N/A____ PER
_____.

    

    4.           YOU
MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY,
COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC
CHANGE.

    

    5.           YOUR
FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY
HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

    

    6.           THERE
MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER
COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS'
ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $    N/A      
PER _____.

    

    7.           THE
DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE
APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL
OWNERS.

    

    8.           THE
STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS
A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION
GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

    

    9.           THESE
DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE
RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED
AND CAN BE OBTAINED FROM THE DEVELOPER.

     

    32. DISCLOSURE
FOR TRES BELLE.

     

               The
Purchaser should not execute the Agreement until it has received and read the
following disclosure summary required by 720.401, Florida Statutes:

     

    DISCLOSURE
SUMMARY

    FOR

    TRES
BELLE

    

    1.           AS
A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER
OF A HOMEOWNERS' ASSOCIATION.

    

    2.           THERE
HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND
OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

    

    3.           YOU
WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE
SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $568.98 PER
QUARTER. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY
THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF
APPLICABLE, THE CURRENT AMOUNT IS $__N/A__ PER
_____.

    

    4.           YOU
MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY,
COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC
CHANGE.

    

    5.           YOUR
FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY
HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

    

    6.           THERE
MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER
COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS'
ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $    N/A      
PER _____.

    

    7.           THE
DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE
APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL
OWNERS.

    

    8.           THE
STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS
A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION
GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

    

    9.           THESE
DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE
RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED
AND CAN BE OBTAINED FROM THE DEVELOPER.

     

    IF THE
DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN
PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE,
THIS CONTRACT IS VOIDABLE BY PURCHASER BY DELIVERING TO SELLER OR SELLER'S AGENT
OR REPRESENTATIVE WRITTEN NOTICE OF THE PURCHASER'S INTENTION TO CANCEL WITHIN 3
DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER
OCCURS FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT.
PURCHASER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

    

    33. NORTHERN
PALM BEACH COUNTY IMPROVEMENT DISTRICT.

     

    Seller
hereby provides notice and disclosure to the Purchaser that the Real Property in
Paloma is located within the Northern Palm Beach County Improvement District
(“Northern”).  Northern provides drainage and other services for
Paloma.  The following disclosure is made as required by
Northern:

    

    
      	
               
      

            	
              (A)  Notice and
      Disclosure.  Northern Palm Beach County Improvement
      District (“Northern”) with offices at 357 Hiatt Drive, Palm Beach Gardens,
      Florida 33418, is a political subdivision of the State of Florida, and is
      responsible for implementing and maintaining certain benefits and
      infrastructure improvements to real property located within its Units of
      Development.  The Real Property described in this Agreement is
      within Northern’s Units of Development No. 28 and 2A.  Bonds
      have been issued by Northern for certain drainage
      improvements.

            

    

    

    
      	
               
      

            	
              (B)  Obligation to pay
      Non-Ad Valorem Assessments.  This Notice and Disclosure
      is to inform those individuals or entities owning or purchasing real
      property within Paloma, that the Paloma Real Property will be subject to,
      and the owners of same will be obligated to pay, the non-ad valorem
      assessments that may be levied and assessed by Northern against property
      owners.  The annual non-ad valorem assessment due by each owner
      to Northern will be due and payable for a period of up to thirty (30)
      years.  Purchaser acknowledges that upon purchasing the Paloma
      Real Property, Purchaser shall be responsible for payment of any such
      non-ad valorem assessments as shall be levied by Northern, and that such
      assessments are subject to change depending upon Northern’s budget and
      projected costs for maintenance or improvements to
  Paloma.

            

    

    

    
      	
               
      

            	
              (C)  Notice and
      Disclosure.  Northern’s ad-valorem assessments will be
      assessed for the purpose of paying such maintenance and debt obligations
      as has been or will be incurred by Northern for the construction and
      maintenance of public improvements within Units of Development No. 28 and
      2A.  Northern’s ad-valorem assessment will appear as a separate
      and distinct line item on the Palm Beach County Tax Collector’s annual
      real estate tax bill and will be required to be paid directly to the Palm
      Beach County Tax Collector.  In the event that Northern’s non-ad
      valorem assessment is not paid by the owner, the owner’s property may be
      subject to the same collection provision of the Florida Statutes as apply
      to ad valorem taxes.

            

    

    

    34. GUARANTY.  The
obligations of Purchaser under the terms of Paragraph 8 related to the
subsequent purchase by Purchaser of Model Homes and Spec Homes, Cancelled Homes
and Vacant Lots before construction has commenced shall be guaranteed by the
corporate affiliate of Purchaser in the form of the Guaranty attached hereto as
Exhibit
“N”, which Guaranty shall be executed on the Closing Date.

     

    35. SUBSIDIARY
LIABILITY.  All entities described in Paragraph 10.3 hereof,
which will become subsidiaries of Purchaser, shall have joint and several
liability for the obligations of Purchaser under this Agreement, and such
liability shall be confirmed in writing on the Closing Date.

     

    36. EFFECTIVE
DATE.  The Effective Date of this Agreement shall be the last
date executed by Seller or Purchaser with the date inserted on Page 1 of this
Agreement.

     

               IN WITNESS WHEREOF, the
parties have hereunto set their hands and seals the day and year first above
written.

     

    WITNESSES                                                             SELLER:

     

    M/I HOMES
OF WEST PALM BEACH, LLC, a

    Florida
limited liability company

    

    Print
Name:                                                      

    

    

    Print
Name:                                                      By:                                                                              

    Name:

    Title:                                                                              

    

     

    M/I HOMES
OF WEST PALM BEACH, LLC, a

    Florida
limited liability company

    

    Print
Name:                                                      

    

    

    Print
Name:                                                      By:                                                                              

    Name:

    Title:                                                                              

    

     

    PURCHASER:

     

    KLP EAST
LLC, a Florida limited

    liability
company

    

    Print
Name:                                                      

    

    By:                                                                              

    Print
Name:                                                      Name:                                                                              

    Title:                                                                              

     

    
      
        
          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    The
Escrow Agent is executing this Agreement to evidence its agreement to hold the
Deposit in accordance with the terms and conditions of this
Agreement.

     

    BROAD AND
CASSEL

     

    By:           Richard
B. MacFarland, P.A., a Partner

     

    By:           

    Richard
B. MacFarland, President

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“A”

     

    REAL
PROPERTY

     

    

    PALOMA

    

    Single Family
Lots

    Lots 1-3,
9, 11-13, 15, 18-21, 25, 26, 28-34, 37, 43, 44, 48-61,65, 66, 68-74, 77-84, 87,
and 90-199, of Block 1, according to the Plat of Paloma P.U.D. recorded in Plat
Book 108, Page 144 of the Public Records of Palm Beach County,
Florida.

    

    Carriage
Lots

    Lots
25-92, and 101-124, inclusive, of Block 2, according to the Plat of Paloma
P.U.D. recorded in Plat Book 108, Page 144 of the Public Records of Palm Beach
County, Florida.

    

    Lots 1-56
inclusive, of Block 3, according to the Plat of Paloma P.U.D. recorded in Plat
Book 108, Page 144 of the Public Records of Palm Beach County,
Florida.

    

    

    TRES
BELLE

    

    Lots 1-4,
6-28, 30-42, 44-70, 72-83, 85-87, 89, 90, 93-95, 97-107, and 110 according to
the Plat of Tres Belle P.U.D. Plat No. 1 recorded in Plat Book 16, Page 4 of the
Public Records of Martin County, Florida.

    

    

    THE OAKS AT HOBE
SOUND

    

    Forty-Five Foot
Lots

    Lots 83,
85, 137, 138, according to the Plat of Pastelle P.U.D. recorded in Plat Book 16,
Page 19 of the Public Records of Martin County, Florida.

    

    

    Sixty Foot
Lots

    Lots 73,
77, 78, 80, 82, 164-167, 169-171, according to the Plat of Pastelle P.U.D.
recorded in Plat Book 16, Page 19 of the Public Records of Martin County,
Florida.

    

    

    Laurel
Preserve

    Lots
177-181, 183-193, 195, 196, 201, 204-210, 212-215, 217-221, 223, 225-231, and
237-240, according to the Plat of Pastelle P.U.D. recorded in Plat Book 16, Page
19 of the Public Records of Martin County, Florida.

    

    

    

    

    WOODWIND

    

    Tracts 9
through 12, Block 34, THE PALM BEACH FARMS CO., PLAT NO. 3 according to the Plat
thereof as recorded in Plat Book 2, Page 45, of the Public Records of Palm Beach
County, Florida.

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“B”

     

    AGREED
ALLOCATIONS

     

    

     

    MI Portfolio – Values for Contract
Allocations

     

    

     

                    Number
Lots                                       Lot
Value                                Total
Value

     

    

     

    Tres
Belle                                        99                             
53,590                                           5,305,400

    

    Paloma

    50’16634,2655,688,000

    TH Phase
1                                     92                                   
21,241                                           1,954,200

    TH-Phase
2                                   
56                                   
19,364                                           1,084,400

    Total                                            
314                                                                                        
 8,726,600

    

    Oaks

    45’                                                
51                                   
65,920                                           
3,361,900

    60’                                               
12                                  
  60,425                                              
725,100

    Total                                             
63                                                                                      
    4,087,000

    

     

    Woodwinds                                     1                                
4,279,000                                     
    4,279,000

     

    Construction
Agreements for
Infrastructure                                                                                    8,010,000

     

    Personal
Property                                                                                                                           
680,000

     

    Total                                           477                                                                                        
31,088,000

     

    Models
and
Specs                         36                                                                                          14,000,000

     

    Grand
Total                                                                                                                               45,088,000

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“C”

     

    AGREED
VALUES

     

    
      	
              M/I
      HOMES OF WEST PALM BEACH, LLC

            
	
              Work
      In Progress/Budget/Cost To Complete Reconciliation

            
	
              Job
      Detail Report

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Community
      Parcel Lot/Blk/Phase

            	
              Job
      Number

            	
              House
      Type

            	
              Square
      Footage

            	
              Current
      M/I Retail Price

            	
              Kolter
      Acquisition Price

               

            	
              C.O
      Issued Date

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Unsold Inventory (excluding
      Models)

            	 
      	 
      	 
      	 
      
	
              Paloma 50'

            	 
      	 
      	 
      	 
      	 
      	 
      

    

    4 /
1                      255401001004                                           Mahon               2136                            474,990                                     386,06112/3/2007

    5 /
1                      255401001005                                           Cordoba                                  3546                            574,990        516,82610/22/2007

    7 /
1                      255401001007                                           Navarra                                  2681                            474,990        390,644

    8 /
1                      255401001008                                           Navarra                                  2681                            474,990        389,716

    27 /
1                      255401001027                                           Gibraltar                                  2084                            498,245        408,52210/17/2007

    38 /
1                      255401001038                                           Cordoba                                  3546                            599,990        492,76012/12/2007

    39 /
1                      255401001039                                           Mahon               2136                            465,596                                     396,07512/12/2007

    46 /
1                      255401001046                                           Sierra               3011                            574,990                                     531,68811/20/2007

    64 /
1                      255401001064                                           Cordoba                                  3546                            624,990        559,515Complete

    76 /
1                      255401001076                                           Navarra                                  2681                            474,990        388,474

    89 /
1                      255401001089                                           Cordoba                                  3546                            618,990        433,721

    

    Paloma Grand
Carriage                                              

    2 /
2                      255410002002                                           Madrid               2261                            339,990                                     312,75211/20/2007

    3 /
2                      255410002003                                           Cadiz               2251                            339,990                                     316,01811/20/2007

    11 /
2                      255410002011                                           Cadiz               2251                            359,990                                     311,93911/20/2007

    13 /
2                      255410002013                                           Granada                                  2213                            369,990        312,978Complete

    14 /
2                      255410002014                                           Madrid               2261                            359,990                                     320,472Complete

    15 /
2                      255410002015                                           Cadiz               2251                            359,990                                     312,679Complete

    18 /
2                      255410002018                                           Madrid               2261                            369,990                                     320,258Complete

    19 /
2                      255410002019                                           Cadiz               2251                            359,990                                     310,59211/20/2007

    20 /
2                      255410002020                                           Granada                                  2213                            359,990        331,902

    21 /
2                      255410002021                                           Granada                                  2213                            359,990        328,599

    24 /
2                      255410002024                                           Granada                                  2213                            369,990        315,011

    129 /
2                      255410002129                                           Granada                                  2213                            379,990        305,497

    132 /
2                      255410002132                                           Granada                                  2213                            379,990        305,498

    133 /
2                      255410002133                                           Granada                                  2213                            379,990        297,507

    134 /
2                      255410002134                                           Cadiz               2251                            387,490                                     296,242

    136 /
2                      255410002136                                           Granada                                  2213                            379,990        296,809

    

    Laurel Preserve @ Hobe
Sound                                                                

    202                      255379000202                                           Sedona                                  2392                            309,990        324,343

    203                      255379000203                                           Sonoma                                  1675                            269,990        257,813

    

    The Oaks @ Hobe Sound
60'                                                                

    63                      255404000063                                           Bayfield                                  2219                            380,284        343,70012/13/2007

    67                      255404000067                                           Bayfield                                  2219                            380,873        275,81112/14/2007

    172                      255404000172                                           Whitney                                  3280                            449,474        429,223

    

    Tres
Belle                      

    5 /
1                      255409001005                                           San
Remo                                  2931                            519,990        409,289

    29 /
1                      255409001029                                           Cielo               3793                            604,990                                     503,726

    96 /
1                      255409001096                                           Belle
Mar                                  4238                            754,169        868,530Complete

    

    Total Unsold
Inventory                                                                                  15,384,851                                            13,301,191

    

    Models                      

    Tres
Belle                      

    108 /
1                      255409001108                                           Calabria                                  2845                            685,126        698,809Complete

    

    Total
Models                                                                                                          685,126                                     698,809

    Grand
Total                                                                                                                     14,000,000

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“D”

     

    DEVELOPER
APPROVALS

     

    PALOMA

    

    Conditional
Concurrency Certification — August 29, 2003

    

    Small-Scale
Comprehensive Plan Amendments: Ordinance 37, 2003, followed by Ordinance 38.
2003, Dated December 18, 2003

    

    Palm
Beach Gardens City Council, Approved P.U.D., Ordinance 39, 2004, dated September
17, 2004

    

    Palm
Beach Gardens City Council , Resolution 196, 2004 dated September 17,
2004

    

    Florida
Department of Environmental Protection — Notice of Intent to Use Generic Permit
for Stormwater Discharge from Large and Small Construction Activities (NOT),
Dated February 16, 2004

    

    Seacoast
Utility Authority, Permit No. 50- 05421-W, Reclaimed Water/Supplemental
Irrigation System, Dated August 12, 2004

    

    South
Florida Water Management District — Environmental Resource Permit Modification
No. 50-00610-S-12, Dated March 9, 2005

    

    South
Florida Water Management District — General Water Use Permit No. 50- 06844-W,
Dated March 17, 2005

    

    South
Florida Water Management District — General Water Use Permit No. 5006886-W,
Dated April 8, 2005

    

    Northern
Palm Beach County Improvement District, General Permit — Preliminary Site Work
for a Residential Site, Dated April 27, 2005

    

    Developer
Agreement dated November 10, 2005, by and between M/I Homes of West Palm Beach,
LLC and Seacoast Utility Authority.

    

    South
Florida Water Management District — Approval of Permit Modification to Extension
of Permit until November 30, 2006, Dated November 30, 2005

    

    Northern
Palm Beach County Improvement District — General Permit, Roadway and Drainage,
Dated January 6, 2006

    

    Florida
Department of Health Permit No. 138291-473-DWC, Seacoast Utility Authority,
Permit to Construct a Wastewater Collection/Transmission System with Public Lift
Station to Serve a 387-unit residential development, Dated January 31,
2006

    South
Florida Water Management District Standard General Permit No. 50-00610S-12,
Construction & Operation Modification of Surface Water Management System
serving 87.23 Acres, Dated February 13, 2006

    

    South
Florida Water Management District Environmental Resource Standard General Permit
no. 50-00610-S-12 issued February 13, 2006

    

    Administrative
Amendment, Admin-06-02-000052: Paloma P.U.D. — Minor Site Plan Amendments, May
25, 2006

    

    Palm
Beach County, Driveway Connection Permit No. R/W0076-0506, Dated June 5,
2006

    

    South
Florida Water Management District — Installation of Irrigation Quality (IQ)
Weir, Dated June 7, 2006

    

    Florida
Department of Health — Permit: Consecutive Water System, Dated July 20,
2006

    

    Administrative
Amendment, Admin-06-02-000092: Paloma P.U.D. — Additional Single Family Model,
September 15, 2006

    

    South
Florida Water Management District, Water Use Permit (Irrigation), No.50-
06844-W, Dated March 17, 2005, Revised January 3, 2007

    

    Palm
Beach County Environmental Resource Management, Vegetation Removal Permit,
Issued on May 7, 2007

    

    Administrative
Amendment, Admin-07-04-000131: Paloma P.U.D. — Modified Architectural
Elevations, May 23, 2007

    

    South
Florida Water Management District, Water Use Permit (Dewatering), No. 5006886-W,
dated April 8, 2005, revised November 30, 2005, revised January 25, 2007,
Another permit received: No.50-07930-W, dated June 5, 2007

    

    Excavation
Approval, DERM, Excavation No.E200618, Dated July 2, 2007

    

    Administrative
Amendment, Admin-07-04-000146: Paloma P.U.D. — Four Additional Single-Family
Models, July 26, 2007

    

    South
Florida Water Management District — Modification to Permit No. 50-07455- W,
Extension of Time for One Year to Permit, Dated August 7, 2007

    

    South
Florida Water Management District, General Water Use Permit No. 50-06844-W
(modification), Dated October 9, 2007

    

    

    South
Florida Water Management District, General Water Use Permit No. 50-06844-W
(modification), Dated January 3, 2007

    

    City of
Palm Beach Gardens, Land Development Permit

    

    TRES
BELLE

    

    Tres
Belle Planned Unit Development Zoning Agreement dated December 16, 2003, by and
between Treasure Cove Development Corp. and Martin County recorded in the
Official Records Book 1881, Page 601 of the Public Records of Martin County,
Florida.

    

    SFWMD
Permit No. 43-01423-W, Dated July 23, 2004

    

    SFWMD
Permit No. 43-00355-S-07, Environmental Resource Permit, Dated November 10,
2004

    

    SFWMD
Permit No. 43-01649-W, General Water Use Permit, Dated November 19,
2004

    

    SFWMD
Letter Interpretation of Minor Roadway Modifications to Original Permit No.
43-00642-S, Dated December 3, 2004

    

    Florida
Department of Environmental Protection, Notice of General Permit Acceptance,
Dated December 15, 2004

    

    Florida
Department of Environmental Protection, Domestic Wastewater
Collection/Transmission Individual Permit, Issued on December 29, 2004, Expiring
on December 28, 2009

    

    U.S. Army
Corps of Engineers Permit No. 199400192 (IP-AAZ), Dated January 20, 2005,
Expiring on December 31, 2008

    

    Resolution
No. 05-2.6, Martin County Acceptance of Dedicated Land, Dated February 8,
2005

    

    Water and
Wastewater Service Agreement Tres Belle – Phase One dated February 9, 2005, by
and between Martin County and Treasure Cove Development, as assigned to M/I
Homes of West Palm Beach in that certain Assignment of Water and Wastewater
Service Agreement Tres Belle – Phase One dated July 1, 2005.

    

    Martin
County Board of County Commissioners Resolution number 05-2.5, which includes
final site approval and a Preserve Area Management Plan, dated February 9,
2005.

    

    State of
Florida Fish and Wildlife Conservation Commission, Gopher Tortoise Relocation
Permit, Dated March 11, 2005

    

    

    

    

    THE OAKS AT HOBE
SOUND

    

    Pastelle
Residential Planned Unit Development Zoning Agreement dated September 17, 2002,
by and between Westerra Martin, L.P. and Martin County recorded in Official
Records Book 1720, Page 1613, as amended by that certain First Amendment to the
Pastelle Residential Planned Unit Development Zoning Agreement dated October 14,
2003, by and between M/I Homes of West Palm Beach, LLC as successor in interest
to Westerra Martin, L.P. and Martin County recorded in Official Records Book
1856, Page 433, all of the Public Records of Martin County,
Florida.

    

    Development
Agreement between the Town of Jupiter Island and Pastelle – M/I Homes of West
Palm Beach, LLC dated March 19, 2004 and recorded April 23, 2004 in Official
Records Book 1890, Page 394 of the Public Records of Martin County,
Florida.

    

    Martin
County – Second (2nd)
Amendment to Pastelle Zoning Agreement, including Revised Master Site Plan,
Sub-Phasing Plan and Revised Timetable, and approval of a Revised Final Site
Plan and Sub-Phasing Plan - 3/10/06

    

    South
Martin Regional Utility, Signed Development Agreement, Dated
3/19/04

    

    Florida
DEP, Notice of General Permit Acceptance, Dated August 19, 2004, Expiration
Date: August 18, 2009

    

    Florida
DEP, Notice of General Permit Acceptance, Dated July 22, 2004, Expiration Date:
July 22, 2009

    

    SFWMD,
Monitoring Schedule Revision, Permit No. 43-00355-S-06, Dated May 9,
2006

    

    SFWMD,
General Water Use Permit No. 43-01555-W, Dated September 17, 2005

    

    SFWMD,
General Water Use Permit No. 43-01555-W, Dated June 14, 2004

    

    SFWMD,
Surface Water Management Permit No. 43-00355-S-06, Issued on June 15,
2004

    

    SFWMD,
Environmental Resource Permit Modification No. 43-00355-S-06, Issued on December
12, 2002

    

    Martin
County – Preserve Area Management Plan (PAMP), Dated 3/05/04

    

    Army
Corps of Engineers Permit – Approved Construction of Mixed-Use
Residential/Commercial Development Resulting in 0.46 Acres of Fill in the Waters
of the United States – Approved as Authorized by Nationwide Permit Numbers 39
and 40, Dated June 12, 2002

    

    

    

    Town of
Jupiter Island, Utility Permit, Dated 2/24/06

    

    Town of
Jupiter Island, Utility Dedication, Dated 6/22/06

    

    WOODWIND

    

    Administrative
Approval for Time Extension until January 1, 2009, Dated September 22,
2006

    Environmental

    

    SFWMD —
Environmental Resource Permit No. 50-07604-P, Dated January 11,
2007

    

    SFWMD —
General Water Use Permit No. 50-07648-W, Dated March 22, 2007

    

    Palm
Beach County Department of Environmental Resources Management, Standard
Vegetation Removal Permit, Dated May 4, 2007

    

    SFWMD —
General Water Use Permit No. 50-07930-W, Dewatering Permit, Dated June 5,
2007

    

    Palm
Beach County Department of Environmental Resources Management, Excavation
Approval, Petition No. 04-524; Excavation No. E200618, Dated July 2,
2007

    

    Lake
Worth Drainage District, Drainage Permit No. 06-7717D.02, Dated July
11,

    2007

    

    Lake
Worth Drainage District, Bridge Permit No. 07-7717B.03, Dated July
18,

    2007

    

    Palm
Beach County "Technical Compliance" Letter, Dated August 6, 2007

    

    Palm
Beach County Land Development Permit No. 934-001-11513-07, October 4,
2007

     

    Letter of
Credit in Amount of $202,538.00 Benefiting Palm Beach County Board of County
Commissioners, Expiring 12/30/2008

    

    

    

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“E”

     

    FEES

     

    
      	
              M/I
      Homes of West Palm Beach, LLC

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Prepaid
      Impact and Fee Schedule

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              December
      15, 2007

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              PALOMA

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              County
      Road Impact Fee Credit

            	 
      	 
      	 
      	 
      	
              $4,821.56:  Single
      Family Fee, $3,375.09:  Grand Carriage Fee

            
	
              Balance
      confirmation from City of Palm Beach Gardens

            	 
      	
               900,845.84

            	 
      	 
      	
              Per
      email dated 12/06/2007 from Jennifer Mikulski, Resource
      Manager,

              City
      of Palm Beach Gardens

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Less:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Assigned
      to Taylor Woodrow on 2 lots not yet permitted

            	
                   9,643.12

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              24 /
      1 - sold and not started to be built by M/I Homes

            	
                   4,821.56

            	
                 14,464.68

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Add:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Vacant
      lots permitted to be assigned:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Single
      Family: 1 / 1, 37 / 1, and 185 / 1

            	
                 14,464.68

            	 
      	 
      	 
      	
              Refer
      to attached City of Palm Beach Gardens Building Permits for
      fee

              application
      documentation

            
	
              Grand
      Carriage: 25 - 32, 37 - 40, 85 - 92, and 101 - 104 / 2

            	
                 81,002.16

            	
                 95,466.84

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Revised
      County Road Impact Fee Credit

            	 
      	
               981,848.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Prepaid
      Sewer ERCs

            	
              Single
      Family

            	
              Carriage

            	
              Amenity

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              50%
      connection charge paid October 31, 2005

            	
               119,400.00

            	
               107,016.00

            	
                   3,351.00

            	 
      	
              ERC
      Fees: Single Family - 199.000 @ $600, Carriage - 178.360 @
      $600,

              Amenity
      - 5.585 @ $600

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Add:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              50%
      connection charge at meter installation paid December 6,
    2007

            	 
      	
               107,016.00

            	
                   3,351.60

            	 
      	
              Installation
      of three 6" meters

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Less:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Assigned
      to Taylor Woodrow on 3 lots

            	
                   1,800.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Assigned
      to homes under construction or closed

            	
                 19,200.00

            	
                 52,416.00

            	 
      	 
      	
              Single
      Family - 32.000 @ $600, Carriage - 43.680 (48/196 X 178.360)

              @
      $600

            
	
              Amenities

            	 
      	 
      	
                   6,702.60

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              24 /
      1 - sold and not started to be built by M/I Homes

            	
                     600.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                 97,800.00

            	
               161,616.00

            	
                            -

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Revised
      Prepaid Sewer ERCs

            	 
      	
               259,416.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Prepaid
      Water ERCs

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              50%
      connection charge paid October 31, 2005

            	
               149,250.00

            	
               104,958.00

            	
                   4,188.75

            	 
      	
              ERC
      Fees: Single Family - 199.000 @ $750, Carriage - 139.944

              @
      $750, Amenity - 5.585 @ $750

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Add:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              50%
      connection charge at meter installation paid December 6,
    2007

            	 
      	
               104,958.00

            	
                   4,189.50

            	 
      	
              Installation
      of three 6" meters

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Less:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Assigned
      to Taylor Woodrow on 3 lots

            	
                   2,250.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Assigned
      to homes under construction or closed

            	
                 24,000.00

            	
                 51,408.00

            	 
      	 
      	
              Single
      Family - 32.000 @ $750, Carriage - 34.272 (48/196 X 139.944)

               @
      $750

            
	
              Amenities

            	 
      	 
      	
                   8,378.25

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              24 /
      1 - sold and not started to be built by M/I Homes

            	
                     750.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
               122,250.00

            	
               158,508.00

            	
                            -

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Revised
      Prepaid Sewer ERCs

            	 
      	
               280,758.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              THE
      OAKS @ HOBE SOUND

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Prepaid
      Sewer ERCs

            	 
      	 
      	 
      	 
      	
              $2,400:  Single
      Family Fee

            	 
      	 
      	 
      
	
              Balance
      confirmation from South Martin Regional Utility

            	 
      	
              170,400

            	 
      	 
      	
              Per
      South Martin Regional Utility fax dated December 10,
  2007

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Less:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Sold
      and not started to be built by M/I Homes:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Lots
      32, 33, 84, 224, 232, 233, and 236

            	 
      	
              16,800

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
               153,600.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Prepaid
      Water ERCs

            	 
      	 
      	 
      	 
      	
              $1,800:  Single
      Family Fee

            	 
      	 
      	 
      
	
              Balance
      confirmation from South Martin Regional Utility

            	 
      	
              127,800

            	 
      	 
      	
              Per
      South Martin Regional Utility fax dated December 10,
  2007

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Less:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Sold
      and not started to be built by M/I Homes:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Lots
      32, 33, 84, 224, 232, 233, and 236

            	 
      	
              12,600

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
               115,200.00

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

    

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“F”

     

    IMPROVEMENTS

     

     

    M/I
Homes of West Palm Beach, LLC

     

    Synopsis
of Remaining Development Cost

     

    As
of December 20, 2007

     

    Paloma (Palm Beach
County)

    40,000                Ongoing
engineering for community more specifically Parcel A and complete
finalcertification

    18,000                City
of Palm Beach Gardens inspections by outside engineer

    27,000                Soils/staking/surveying
for Parcel A and amenities and complete final certification

    65,000                Architectural
landscape inspections and submission of reports to County- Urban
DesignStudio

    40,000                (Estimate)
— Legal for general community matters and HOA matters

    226,000                          Paving/curb/gutter
Parcel A and final lift

    50,000                Final
site work and walkthrough punch out

    230,000                          Hood
and Military issue with Seacoast Utilities

    
      	
              263,000

            	
              Completion
      of community street lighting for Paloma Parcel A and pedestrian lights on
      Hood Road

            	
              and
      Military Trail and remaining transformer setting in Parcels C &
      A

            

    

    
      	
              1,583,000

            	
              Community
      features including Single Family and Carriage Home Entries —
      kiosks,

            	
              fountains,
      bus shelters, trelliswork and guard
houses

            

    

    168,000                          Gates
for Single Family and Carriage entries — Parcels A, B & C

    114,000                          Balance
of community pavers — amenities in Parcels C & A

    661,000                 Completion
of perimeter buffers — Becker remaining contract

    
      	
              1,616,000

            	
              Completion
      of landscaping and irrigation of perimeter, common areas, and Parcel A —
      includes

            	
              hydro-
      seeding - Becker remaining contract

            

    

    120,000                          Wells
— awaiting SFWMD approvals — reclaim water system

    1,600,000                            Two
pools and recreation centers (bids taken and under review)

    6,821,000                             Total

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    M/I
Homes of West Palm Beach, LLC

     

    Synopsis
of Remaining Development Cost

     

    As
of December 20, 2007

     

    The Oaks at Hobe Sound
(Martin County)

     

    19,000                      Engineering
and architectural for completion of Phase 4 and Seabranch turn lanerepairs
45,000 Completion of Community environmental engineering and
inspections

     

    54,000                      Final
paving lift of Phase 4

     

    45,000                      Final
landscaping and irrigation of Phase 4

     

    28,000                      Amenity
— Tot Lot

    191,000
Total

    
      
        
           

          

          BOC1\REALEST\222491.6

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    M/I
Homes of West Palm Beach, LLC

     

    Synopsis
of Remaining Development Cost

     

    As
of December 20, 2007

     

    Tres Belle (Martin
County)

    20,000                      Engineering
for resolution of South boundary issue with County - lake and
roadissues

    152,000 Completion of Littoral planting
— EW Consultants

    135,000                       Final
paving lift — verified

    80,000                       Grade,
fix sidewalk issue to school site, possible repair Lake 3A

    75,000                       Lower
Community transformers — done in two phases

    20,000                       South
boundary wall/fence completion — continuous repairs

    38,000                      Perimeter
buffer completion on south boundary and hedge on Cove Road - continuous repairs
222,000Completion of land and common area landscaping and irrigation - remainder
BeckerLandscaping

    35,000                      Guardhouse
and entry completion — finish gate closers and wall and sign lighting
777,000Total

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    M/I
Homes of West Palm Beach, LLC

     

    Synopsis
of Remaining Development Cost

     

    As
of December 20, 2007

     

    Woodwinds (Palm Beach
County)

    180,000                          Bridge
- Drawdy Construction

    5,000                Bridge
- Bridge Design and Associate

    1,000                Bridge
- Leavy and Associates

    2,000                Dunkelberger
Engineering

    33,000                 T
& T Grading Services remaining

    221,000
Total

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“F-1”

     

    PLANS AND
SPECIFICATIONS

     

    PALOMA

    

    Water and
Sewer Plans for Paloma (26 sheets) dated January 17, 2006, prepared by Schnars
Engineering;

    

    Water and
Sewer Plans for Paloma (a.k.a. Parcel 31B), Prepared by Schnars Engineering
Corporation, Dated October 10, 2006, Pages 1 through 26

    

    Paving
and Drainage Plans for Paloma (a.k.a. Parcel 31B), Prepared by Schnars
Engineering Corporation, Dated October 23, 2006, Pages 1 through 18

    

    Paloma,
"Gateway Features, Residential Signage and Hardscape Plans", Prepared by Urban
Design Studios, Dated December 12, 2005

    

    Paloma
Gateway Features (6 sheets) dated November 6, 2006, prepared by Urban Design
Studio;

    

    Paloma
Gateway Details (10 sheets) dated August 2, 2004, prepared by Urban Design
Studio;

     

    Paloma
Planting Plans (21 sheets) dated August 2, 2004, prepared by Urban Design
Studio;

     

    Paloma
Buffer Key (14 sheets) dated February 11, 2004, prepared by Urban Design
Studio;

     

    Paloma
Overall Site plan (6 sheets) dated May 10, 2006, prepared by Urban Design
Studio; and

     

    Photometry
Plan for Paloma (10 sheets) dated April 26, 2006, prepared by Urban Design
Studio and Thompson & Youngross Engineering Consultants, LLC.

     

    Paloma,
"Parcels A & B, Residential Signage and Hardscape Plans", prepared by Urban
Design Studio, Dated December 12, 2005

    

    Paloma
Lighting Plans, Prepared by Luminary Effects, Dated August 9, 2005, Pages 1
through 20

    

    Paloma,
Pool House 1, Recreation building 1, prepared by Anthony Harrington, pages A1
through A6

    

    Paloma,
Pool House 2, Elevations, prepared by Anthony Harrington, pages 1 through
4

    

    PALOMA
P.U.D. — Recorded PLAT, Prepared by Perimeter Surveying & Mapping, Dated
November 6, 2006, Pages 1 through 16

    

    

    

    TRES
BELLE 

    

    Water and
Wastewater Service Agreement with Martin County for Tres Belle Phase One, Dated
February 9, 2005

    

    Construction
Plans for Tres Belle Phase I, Prepared by Kimley-Horn and Associates, Inc.,
Dated February 28, 2005

    

    Plat of
Tres Belle P.U.D. Plat No.1, Prepared by Norstar Geomatics, Dated February 14,
2005

    

    Vistancia
P.U.D., Landscaping Plans, Prepared by Lucido & Associates
Environmental

    

    THE OAKS
AT HOBE SOUND

    

    Record
Survey Plans of Paving, Grading and Drainage for Phase IV, Prepared by Schnars
Engineering Corporation, Dated October 16, 2006

    

    “Paving,
Grading and Drainage Plans for The Oaks at Hobe Sound (a.k.a. Pastelle P.U.D.",
Approved — Dated January 10, 2005

    

    "Revised
Final Site Plan and Sub-Phasing Plan", Pastelle P.U.D., Revised, Dated June 26,
2006

    

    Pastelle
P.U.D. Final Site Plan – Date Last Revised 10/21/05

    

    As-Built
Water and Sewer Plans for Phases I, II and III, Certified by Arcadis G&M,
Inc. – 3 Sets of Plans

    

    Revised
Master Site Plan, Pastelle P.U.D., Dated Last Revised 1/19/06

    

    

    WOODWIND

    

    Preliminary
Development Plan, Prepared by Land Design South, November 15, 2005

    

    Final
Subdivision Plan, Prepared by Land Design South, Dated December 16,
2005

    

    Approved
Buffer and Open Space Landscape Plans, Dated May 2, 2007

    

    Paving,
Grading & Drainage Plans; Sanitary Sewer Plans; Water Distribution Plans,
Prepared by Caulfield & Wheeler, Inc., Dated May 8, 2007, Approved July 13,
2007

    

    Proposed
Concrete Bridge Over E-1 Canal for Woodwind, Prepared by Bridge Design
Associates, Inc., Dated June 19, 2007

    Approved
Revised Buffer and Open Space Landscape Plans, Prepared by Land Design South,
Dated October 24, 2007

     

    WOODWIND
P.U.D. —
Prepared by Caulfield & Wheeler, Signed & Sealed on July 6, 2007, 29
Pages (a) Paving, Grading & Drainage Plans, (b) Sanitary Sewer Plans, and
(c) Water Distribution Plans

     

    WOODWIND
P.U.D. —
"Final Subdivision Plan", Prepared by Land Design South, Dated October 25,
2006

     

     

    
      

    

     

    WOODWIND
P.U.D. — "Sanitary Sewer Profiles", Prepared by Caulfield & Wheeler, Signed
and Sealed on July 30, 2007, 16 Pages

     

    

    WOODWIND
P.U.D. —
"Buffer and Open Space Landscape Plans", Prepared by Land Design South, Dated
May 2, 2007

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“G”

     

    LETTER OF
CREDIT

     

    

    FORM LETTER OF
CREDIT

    

    

    Opening
Bank:                                           

    

    

    

    

    Letter
of Credit
No.:                                           

    Date:                                           

    

    Applicant:                                M/I
Homes of West Palm Beach, LLC

    3 Easton Oval, Suite 500

    Columbus,
Ohio  43219

    

    Beneficiary:                                           Broad
and Cassel

    Amount:                                Nine
Million and No/100 Dollars ($9,000,000)

    Expiration
Date:                                            (360 days after date of
issuance)

    

    Dear
Sirs:

    

    We
hereby issue in your favor this IRREVOCABLE Standby Letter of Credit which is
available by negotiation of your draft(s) at sight drawn on us bearing the
clause “Drawn under Standby Credit No. _______________________, _____________”
accompanied by the following documents:

    

    The
original of this Letter of Credit.

    

    Beneficiary’s
signed statement that:

    

    “Beneficiary
is obligated to draw upon the Letter of Credit pursuant to the Agreement for
Purchase and Sale dated December 21, 2007 between Applicant and KLP East LLC
(the “ Purchase Agreement”), or

    

    “Beneficiary
has received a written statement from KLP East LLC that Applicant is in default
under the Purchase Agreement”.

    

    We
hereby engage with you that all drafts drawn and/or documents presented under
and in compliance with the terms of this Letter of Credit will be duly honored
upon presentation to _____________________ at _____________________________ or
before expiration of this Letter of Credit.  Documents should be sent
via hand delivery, airmail or overnight courier service.

    

    Partial
drawings are permitted.

    

    This
credit is subject to “Uniform Customs and Practice for Documentary Credits (1993
revision), International Chamber of Commerce Publication No. 500.”

    

    Yours
faithfully,

    

    

    

    By:                                                      

          Authorized
Signature

    

     

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“H”

     

    ESCROW
AGREEMENT

    

    This
Escrow Agreement (the “Escrow
Agreement”), is made and entered into this ____ day of December, 2007 by
and between M/I HOMES OF WEST
PALM BEACH, LLC, a Florida limited liability company (“Seller”), KLP EAST LLC, a Florida
limited liability company (“Purchaser”) and BROAD AND CASSEL, Attorneys at
Law (“Escrow
Agent”).

    

    BACKGROUND

    

    Seller and Purchaser are simultaneously
with the execution of this Escrow Agreement closing pursuant to an Agreement for
Purchase and Sale dated even date herewith (the “Purchase
Agreement”).  Pursuant to the terms of the Purchase Agreement,
Purchaser and Seller have agreed to enter into this Escrow Agreement to govern
the delivery of certain Letter of Credit (hereinafter defined) and to govern the
collection and disbursement of any proceeds thereof in accordance with the
Purchase Agreement and the terms and provisions of this Escrow
Agreement.  Escrow Agent has agreed to serve as the Escrow Agent in
accordance with the terms of this Escrow Agreement.

    

    NOW THEREFORE, Seller, Purchaser and
Escrow Agent hereby agree as follows:

    

    Recitals.  The
foregoing recitals are true and correct and are hereby incorporated by
reference.  All capitalized terms which are not defined in this Escrow
Agreement shall have the same meaning as defined in the Purchase
Agreement.

     

    Letter of
Credit.  Pursuant to the terms of the Purchase Agreement,
Seller has delivered to Escrow Agent a letter of credit as described on Exhibit
“A”, attached hereto and made a part hereof (“Letter of
Credit”).  Escrow Agent shall hold the Letter of Credit in
accordance with the terms of the Purchase Agreement and this Escrow
Agreement.  With respect to the Letter of Credit, Escrow Agent agrees
as follows:

     

    Escrow
Agent shall draw upon the Letter of Credit if Escrow Agent receives from
Purchaser a written statement that Seller is in “default under subparagraph of
Paragraph 7 of the Purchase Agreement, and all applicable cure periods have
expired without Seller curing such default.”  Escrow Agent shall then
hold the proceeds of such Letter of Credit as the Escrow Fund (hereinafter
defined).

     

    In the
event that the Letter of Credit is due to expire pursuant to its own terms and
the obligations under the Purchase Agreement secured by such Letter of Credit
have not yet been completed, Seller shall, at least, forty-five (45) days prior
to the expiration of such Letter of Credit, either (i) provide Escrow Agent with
an amendment to such expiring Letter of Credit, extending the expiration date
thereof, or (ii) substitute a new letter of credit for the expiring Letter of
Credit upon identical terms and  conditions and complying with the
terms and conditions of the Purchase Agreement and this Escrow Agreement, or
(iii) replace the expiring Letter of Credit with a cash deposit by wire transfer
of funds to the Escrow Agent.  If Escrow Agent receives the cash
deposit to replace the expiring Letter of Credit, Escrow Agent shall return the
expiring Letter of Credit to Seller.  If Seller fails to take any of
the foregoing actions, then Escrow Agent shall, and each of Seller and Purchaser
hereby unconditionally authorize Escrow Agent to (x) present any such Letter of
Credit due to expire for payment and (y) hold the cash proceeds thereof in
escrow as part of the Escrow Fund, subject to disbursement as provided in
Paragraph 4 hereof.

     

    The
Letter of Credit is subject to reduction, from time to time, in accordance with
the terms and provisions of Paragraph 7.2 of the Purchase
Agreement.  To the extent that such reduction is permitted by the
terms of such paragraph, the parties shall cooperate as necessary to execute any
and all consents required by the issuing bank to so reduce the Letter of Credit
as permitted under the Purchase Agreement.

     

    Establishment
of Escrow Fund.  To the extent that Escrow Agent receives cash
deposits pursuant to drawing upon the Letter of Credit as provided herein,
Escrow Agent shall hold such Cash Deposits (the “Escrow Fund”) in accordance
with the terms of this Escrow Agreement. Escrow Agent shall deposit the Escrow
Fund in Wachovia Bank, N.A. and shall hold and disburse the Escrow Fund in
accordance with the terms and provisions of Paragraph 4 hereof.  If
Seller delivers to Escrow  Agent a Form W-9, satisfactory to Escrow
Agent’s bank, the Escrow Fund shall be deposited in an interest bearing money
market account.  All interest earned on the Escrow Fund shall be added
to the Escrow Fund, subject to disbursement as provided in Paragraph 4
hereof.

     

    Disbursement
of Escrow Fund.  All disbursements shall be made from the
Escrow Fund pursuant to the provisions of Paragraph 7.7 of the Purchase
Agreement.

     

    Liability
of Escrow Agent.  In performing any of its duties under this
Escrow Agreement, Escrow Agent shall not be liable for any loss, costs or damage
which it may incur as a result of serving as Escrow Agent hereunder, except for
any loss, cost or damages arising out of willful acts of malfeasance or gross
negligence.  Accordingly, Escrow Agent shall not incur any liability
with respect to any action taken or omitted to be taken: (i) in good faith upon
advice of its counsel given with respect to any questions relating to the duties
and responsibilities of the Parties pursuant to the Purchase Agreement or this
Escrow Agreement; or (ii) in reliance upon any document, including any written
notice of instruction provides for in the Purchase Agreement or this Escrow
Agreement, not only as to its due execution and the validity and effectiveness
of its provisions, but also to the truth and accuracy of any information
contained therein, which Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by a proper person or persons and to conform
with the provisions of this Escrow Agreement.

     

    Notices.  Any
notice, request, demand, instruction or other communication to be given to
either party, except where required by the terms of this Agreement to be
delivered at the Closing, shall be in writing and shall be sent by registered or
certified mail, return receipt requested, by express overnight courier, by
facsimile or by hand delivery to the other party hereto, with a copy sent by
e-mail on the same day as the other method utilized to the addresses set forth
below, or to such address as the parties hereafter may specify in
writing:

     

    SELLER:                                M/I
Homes of West Palm Beach, LLC

    3 Easton Oval, Suite 500

    Columbus,
Ohio 43219

    Attn:  J.
Thomas Mason, Esquire, General Counsel

    Telephone:  (614)
418-8014

    Fax:  (614)
418-8622

    E-mail:  tmason@mihomes.com

    

    Copy
to:                                Broad
and Cassel

    7777
Glades Road, Suite 300

    Boca
Raton, Florida  33434

    Attn:  Richard
B. MacFarland, P.A.

    Telephone:  (561)
483-7000

    Fax:  (561)
483-7321

    E-mail:  rmacfarland@broadandcassel.com

     

    PURCHASER:                                KLP
East LLC

    150
Second Avenue N, Suite 670

    St.
Petersburg, Florida 33701

    Attn:  James
P. Harvey

    Telephone:
(727) 456-1244

    Fax:  (727)
456-1461

    E-Mail:  jharvey@kolter.com

    

    Copy
to:                                Kolter
Property Company

    1601 Forum Place, Suite
805

    West Palm Beach, Florida
33401

    Attn:  General
Counsel

    Telephone:  (561)
682-9600

    Fax:  (561)
682-1050

    E-mail:  legalnotice@kolter.com
]

    

    Notice
shall be deemed given if forwarded by certified or registered mail through the
facilities of the United States Postal Office on the day following the date that
the notice in question is deposited in the facilities of the United States
Postal Service.  If notice is forwarded by express overnight courier,
it shall be deemed given on the day that the notice in question is deposited in
the facilities of an express overnight courier.  If notice is
delivered by hand delivery, notice shall be deemed given when actually
delivered.  If notice is delivered by facsimile it shall be deemed
given on the day that it is sent by facsimile, provided that it is received by
the other party prior to 5:00 p.m. on such day, if a business day, otherwise it
shall be deemed given on the next business day following the date the facsimile
has been sent, provided, further, that a confirmatory copy is delivered by
either certified or registered mail or express overnight courier as provided
herein.

     

    

    

    Interpleader.  In
the event of disagreement about the interpretation of this Escrow Agreement, or
about the rights and obligations or the propriety of any action contemplated by
the Escrow Agent hereunder, Escrow Agent may, at its sole discretion, file an
action in interpleader to resolve the said disagreement. Escrow Agent shall be
indemnified by Purchaser and Seller for all costs, including reasonable
attorney's fees, in connection with the aforesaid interpleader action and shall
be fully protected in suspending all or part of its activities under this Escrow
Agreement until a final judgment or other appropriate order in the interpleader
action is entered.

     

    Joinder-in-Lawsuit.   In
the event Escrow Agent is joined as a party to a lawsuit by virtue of the fact
that it is holding the Letters of Credit or the Escrow Fund, Escrow Agent shall,
at its option, either tender said deposit to the registry of the court or
disburse same in accordance with the court's ultimate disposition of the cause
and Escrow Agent shall be entitled to reimbursement by Seller for its reasonable
attorney's fees and court costs.  In no event will Purchaser be
responsible for any of Escrow Agent’s fees, other than as provided in paragraph
7 hereof.

     

    Governing
Law; Venue.  This Agreement shall be construed and enforced
according to the laws of the State of Florida.  Venue for any action
arising out of the terms of this Agreement shall lie only in the applicable
federal and/or state courts located in Palm Beach County, Florida.

     

    

     

    

     

    

     

    

     

    

     

    [SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

     

    
      
        
           

          

          BOC1\REALEST\222491.6

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    IN WITNESS WHEREOF, the
parties have executed this Escrow Agreement as of the date and year first above
written.

     

    WITNESSES:                                                                           SELLER:

     

    M/I HOMES OF WEST PALM
BEACH,

    LLC, a Florida limited liability
company

    Print
Name:                                                                

    By:                                                                

    Print
Name:                                                                Name:

    Title:

    

    

    PURCHASER:

    

    KLP EAST LLC, a Florida limited
liability

    company

    

    Print
Name:                                                                

    

    By:                                                                

    Print
Name:                                                                Name:

    Title:

    

    

    

    ESCROW AGENT:

    

    BROAD AND CASSEL

    

    By:  Richard B. MacFarland,
P.A., a partner

    

    By:                                                                

          Richard B.
MacFarland, President

    

    

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“A”

    

    LETTER OF
CREDIT

    

    

    Letter of
Credit delivered pursuant to the Purchase Agreement:

    

    

    .

    

    

     

    

     

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

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    EXHIBIT
“I”

     

    MODEL HOMES AND SPEC
HOMES

     

    

     

    PALOMA

     

    Lots 4,
5, 7, 8, 27, 38, 39, 46, 64, 76 and 89, of Block 1, according to the Plat of
Paloma, P.U.D. recorded in Plat Book 108, Page 144 of the Public Records of Palm
Beach County, Florida.

     

    Lots 2,
3, 11, 13, 14, 15, 18, 19, 20, 21, 24, 129, 132, 133, 134, and 136 of Block 2,
according to the Plat of Paloma, P.U.D. recorded in Plat Book 108, Page 144 of
the Public Records of Palm Beach County, Florida.

     

    

     

    TRES
BELLE

     

    Lots 5,
29, 96, and 108 according to the Plat of Tres Belle P.U.D., Plat No. 1 recorded
in Plat Book 16, Page 4 of the Public Records of Martin County,
Florida.

    

    

    THE OAKS AT HOBE
SOUND

    

    Lots 63,
67, 172, 202 and 203 according to the Plat of Pastelle P.U.D. recorded in Plat
Book 16, Page 19 of the Public Records of Martin County, Florida.`

    

     

    

     

    

     

    

     

    

     

    

     

    
      
        
           

          

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    EXHIBIT
“J”

     

    INCOMPLETE MODEL HOMES AND
SPEC HOMES

     

    PALOMA

     

    Lots 7,
8,13, 14, 15, 18, 20, 21, 24, 76, 89, 129, 132, 133, 134 and 136.

     

    

     

    TRES
BELLE

     

    Lots 5
and 29.

     

    

     

    OAKS

     

    Lots 172,
202 and 203.

     

    
      
        
           

          

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    EXHIBIT “K”

     

    BACKLOG
SCHEDULE

     

    
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              Community
      Parcel Lot/Blk/Phase

            	
              Job
      Number

            	
              House
      Type

            	
              Square
      Footage

            	
              Sales
      Contract Price

            	
              Kolter

              Acquisition
      Price

               

            
	 
      	 
      	 
      	 
      	 
      	 
      
	
              Backlog Under Construction

            	 
      	 
      	 
      	 
      
	
              Paloma 50'

            	 
      	 
      	 
      	 
      	 
      

    

    14 /
1                       255401001014                                           Mahon               2136                        450,000                                     278,726

    22 /
1                       255401001022                                           Navarra                                  2681                        561,735        287,204

    36 /
1                       255401001036                                           Navarra                                  2681                        578,050        286,640

    63 /
1                       255401001063                                           Sierra               3011                        510,000                                     390,740

    67 /
1                        255401001067                                           Villena               2715                        527,730                                     266,761

    75 /
1                        255401001075                                           Navarra                                  2681                        528,559        264,548

    85 /
1                        255401001085                                           Sierra               3011                        599,990                                     346,631

    86 /
1                        255401001086                                           Cordoba                                  3546                        650,000        358,858

    88 /
1                        255401001088                                           Sierra               3011                        650,000                                     354,407

    

    
      	
              Paloma Grand Carriage

            	 
      	 
      	 
      	 
      	 
      

    

    5 /
2                        255410002005                                           Granada                                  2213                            325,491        236,791

    6 /
2                        255410002006                                           Madrid               2261                            344,091                                     251,895

    17 /
2                        255410002017                                           Granada                                  2213                            345,000        237,561

    22 /
2                        255410002022                                           Madrid               2261                            406,545                                     228,570

    23 /
2                        255410002023                                           Madrid               2261                            369,990                                     231,043

    95 /
2                        255410002095                                           Madrid               2261                            367,073                                     240,339

    130 /
2                        255410002130                                           Madrid               2261                            379,990                                     217,282

    131 /
2                        255410002131                                           Madrid               2261                            379,990                                     217,282

    135 /
2                        255410002135                                           Madrid               2261                            438,906                                     235,760

    
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              The Oaks @ Hobe Sound 45'

            	 
      	 
      	 
      	 
      	 
      

    

    88                        255379000088                                           Catalina                                  2681                            377,162        222,348

    91                        255379000091                                           Catalina                                  2681                            398,427        236,659

    97                        255379000097                                           Catalina                                  2681                            395,660        232,661

    107                        255379000107                                           Catalina                                  2681                            397,637        233,734

    131                        255379000131                                           Laguna                                  2715                            398,371        259,157

    

    Laurel Preserve @ Hobe
Sound                                                                  

    211                        255379000211                                           Sonoma                                  1675                            280,019        176,864

    216                        255379000216                                           Sedona                                  2392                            320,895        198,890

    222                        255379000222                                           Sonoma                                  1675                            290,802        177,101

    236                        255379000236                                           Sedona                                  2392                            317,936        199,229

    

    The Oaks @ Hobe Sound
60'                                                                  

    61                        255404000061                                           Whitney                                  3280                            440,728        311,720

    

    Total Backlog Under
Construction                                                                                                       12,030,777                                  7,179,401

    

    
      
        
           

          

          BOC1\REALEST\222491.6

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              Community
      Parcel Lot/Blk/Phase

            	
              Job
      Number

            	
              House
      Type

            	
              Square
      Footage

            	
              Sales
      Contract Price

            	
              Kolter
      Acquisition Price

            	
              Land
      Only Value

            

    

    

    

    

    Backlog Not
Started

    Paloma
50'                                              

    24 /
1                      255401001024                                           Cordoba                                  3546                            694,040        327,430       77,000

    

    The Oaks @ Hobe Sound
45'

    32                      255379000032                                           Catalina                                  2681                            395,749        283,409       60,000

    33                      255379000033                                           Catalina                                  2681                            395,895        283,508       60,000

    84                      255379000084                                           Gulfstar
B                                  1777                            295,990        236,373       60,000

    

    Laurel Preserve @ Hobe
Sound

    224                      255379000224                                           Sonoma                                  1675                            269,990        169,098       60,000

    232                      255379000232                                           Sedona                                  2392                            331,813        213,578       60,000

    233                      255379000233                                           Sedona                                  2392                            309,990        198,848       60,000

    

    Tres
Belle

    43 /
1                      255409001043                                           San
Remo                                  2931                            509,990        334,148       94,000

    

    Total Backlog Not
Started                                                                                   3,203,457                                             2,046,392      531,000

    

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“L”

     

    LEASES

     

    Leases:

    

    Paloma

    

    Lease
Agreement dated September 21, 2007 by and between M/I Homes of West Palm Beach
LLC and Leonard Osman for Lot 62

     

    Lease
Agreement dated October 23, 2007 by and between M/I Homes of West Palm Beach LLC
and Grace R. Tuppen for Lot 126, Block 2

     

    Lease
Agreement dated October 5, 2007 by and between M/I Homes of West Palm Beach LLC
and Victor J. Fiore and Gail I. Fiore for Lot 125, Block 2

    

    The Oaks

    

    Lease
Agreement dated April 17, 2007 by and between M/I Homes of West Palm Beach LLC
and Arthur C. Dunham, Jr. and Carmen L. Dunham for Lot 31

    

    Lease Agreement dated
June 6, 2007 by and between M/I Homes of West Palm Beach LLC and Walter
Tarnawski and Corrine Tarnawski for Lot 29

    

    Tres
Belle

     

    Lease
Agreement dated October 8, 2007 by and between M/I Homes of West Palm Beach
LLC and Joseph A. Napoli, Jr. for Lot 109

     

    Billboard
Lease

     

    Contract
for outdoor bulletin advertising dated July 13, 2007 by and between M/I Homes
and ClearChannel Outdoor.

     

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“M”

     

    PROJECT
DECLARATIONS

     

    PALOMA

    

    Declaration
of Restrictions and Protective Covenants for Paloma Homeowners’ Association,
Inc. recorded in Official Records Book 21051, Page 1763 of the Public Records of
Palm Beach County, Florida.

    

    First
Amendment to the Declaration of Restrictions and Protective Covenants for Paloma
Homeowners’ Association, Inc. recorded in Official Records Book 21843, Page 1411
of the Public Records of Palm Beach County, Florida.

    

    TRES
BELLE

    

    Declaration
of Covenants and Restrictions for Tres Belle recorded in Official Records Book
1990, Page 1980 of the Public Records of Martin County, Florida.

    

    First
Amendment to Declaration of Covenants and Restrictions for Tres Belle recorded
in Official Records Book 2253, Page 1150 of the Public Records of Martin County,
Florida.

    

    THE OAKS AT HOBE
SOUND

    

    Declaration
of Restrictions and Protective Covenants for Pastelle Property Owners
Association, Inc. recorded in Official Records Book 2084, Page 545 of the Public
Records of Martin County, Florida.

    

    First
Amendment to Declaration of Restrictions and Protective Covenants for Pastelle
recorded in Official Records Book 2171, Page 1780 of the Public Records of
Martin County, Florida.

    

     

    

     

    

     

    

     

    

     

    

     

    
      
        
           

          

          BOC1\REALEST\222491.6

          21991/0055

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
“N”

     

    GUARANTY

     

    In order
to induce Seller to execute deliver the foregoing Agreement for Purchase
and Sale (the “Agreement”), and for other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, Kolter Communities Florida LLC, a Florida limited liability
company (the “Guarantor”), hereby absolutely
and unconditionally guarantees to Seller, its successors and assigns, full and
prompt payment and performance by Purchaser of all obligations of Seller to
Purchaser under or pursuant to Paragraph 8 of the Agreement (the “Guaranteed
Obligations”).  Guarantor acknowledges that Purchaser is an
Affiliate of Guarantor and that Guarantor therefore has received and will
receive valuable benefits as a result of the conveyance of the Real Property by
Seller to Purchaser.

     

    Guarantor
hereby waives acceptance and notice of acceptance of this Guaranty, and notice
of non-payment, non-performance or non-observance, and all other notices, proofs
or demands, except for notice of Purchaser’s breach or failure to perform as
provided above, and any and all other suretyship defenses to enforcement of this
Guaranty.  Guarantor agrees that its obligations hereunder will not be
terminated, affected or impaired by reason of the granting by Purchaser of any
indulgences to Purchaser or by reason of the assertion against Purchaser of any
of the rights or remedies reserved to Seller pursuant to the provisions of the
Agreement, or by the relief of Seller from any of the Purchaser's obligations
with respect to the Guaranteed Obligations, by operation of law or otherwise,
including, without limitation, rejection of the Guaranteed Obligations in a
bankruptcy proceeding.  Guarantor further agrees that its liability
hereunder for the Guaranteed Obligations is and will be primary, and that in any
right of action which accrues to Seller with respect to the Guaranteed
Obligations, Seller may, at its option, proceed against the Guarantor and
Purchaser jointly or severally, and may proceed against Guarantor without having
commenced any action against or having obtained any judgment against
Purchaser.  Failure of Seller to insist in any one or more instances
upon strict performance or observance of any of the terms, provisions, or
covenants of this Guaranty, or to exercise any right therein or herein
contained, will not be construed or deemed to be a waiver or relinquishment for
the future of such term, provision, covenant or right, but the same will
continue and remain in full force and effect.  No assignment or other
transfer of the Agreement, or any interest therein, will operate to extinguish
or diminish the liability of Guarantor hereunder.  If Seller obtains a
judgment against Guarantor by reason of a breach of this Guaranty, Guarantor
will pay the reasonable attorneys' fees and costs incurred in any collection or
attempted collection of the obligations hereby guaranteed or in enforcing this
Guaranty. If claim is ever made upon Seller for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and Seller repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over Seller or any of its property or (ii) any settlement or
compromise of any such claim effected by Seller with any such claimant
(including Purchaser) then and in such event Guarantor agrees that any such
judgment, decree, order, settlement or compromise will be binding upon
Guarantor, notwithstanding any revocation hereof or other instrument evidencing
any liability of Purchaser, and Guarantor will be and remain liable to Seller
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by Seller.  This Guaranty
will be binding upon and inure to the benefit of the parties and their
respective heirs, administrators, executors, successors and
assigns.

     

    IN WITNESS WHEREOF, this Guaranty is
executed this ____ day of December, 2007.

     

    Kolter Communities Florida LLC, a
Florida limitedliability company

    

     

    By:____________________________

    Name:__________________________

     

    Title:___________________________

     

    Date:  December ___,
2007

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