Document:

Exhibit 10.11

 

Bank of America, N.A.

 

MASTER
LOAN AGREEMENT

 

THIS MASTER LOAN
AGREEMENT, dated as of the 9th day of
March, 2000 (the “Loan Agreement” or “Agreement”), is made by and between
Parker & Lancaster Corporation (the “Borrower”), with its principal place
of business in Richmond, Virginia, and Bank of America, N.A., a national
banking association organized and existing under the laws of the United States
(the “Bank”).

 

RECITALS

 

A.            Borrower has applied
to Bank for a revolving line of credit in the principal amount of
$17,500,000.00 (the “Loan”) to be used for the purpose of purchasing developed
residential lots and constructing single family dwellings on individual lots
now owned or to be acquired by Borrower in subdivisions approved by Bank in cities
and counties in the Richmond, Virginia; Charlotte, Greensboro and Raleigh,
North Carolina; and Fort Mill, South Carolina market areas.

 

B.            Bank has agreed to
establish a master note and master deed of trust structure under which advances
may be made for the purchase of developed residential lots and construction of
single family dwellings on individual lots in accordance with plans,
specifications, terms, and conditions approved by Bank.

 

C.            Bank is willing to
make the Loan described above based on the terms and conditions set forth in
this Loan Agreement and in the Loan Documents referred to herein.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises, of the Loan advances which may be
agreed to be made by Bank to Borrower hereinafter and the Note and Deed of
Trust given by Borrower in evidence thereof, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Bank hereby agree as follows:

 

ARTICLE
I

 

Definitions

 

1.1           For the purposes hereof:

 

 

(a) “Borrower’s Representative” means the person or persons designated
in writing to Bank by Borrower as being authorized to request Loan
disbursements on Borrower’s behalf. Unless and until changed by written notice
to Bank, Borrower designates as its Borrower’s Representative.

 

(b) “Closing Date” means the date as of which this Loan Agreement is
executed by Borrower and Bank.

 

(c) “Collateral” means all real and personal property of every kind and
nature now or hereafter securing the Loan, including the Property (as defined
in the Deed of Trust).

 

(d) “Commitment” means Bank’s commitment letter to Borrower dated March
9, 2000 (and all amendments thereto). The parties intend that this Agreement
and the Loan Documents shall control in the event of a direct conflict with the
Commitment.

 

(e) “Construction Documents” means all contracts, plans or documents
concerning the construction of the Improvements and any addenda, amendments or
modifications thereto.

 

(f) “Construction Loan Commitment” means the agreement of Bank to set
aside a portion of the Loan, as defined herein, for the construction of a Unit
on Land.

 

(g) “Contract Unit” means a Unit owned by Borrower and covered by a
Firm Contract.

 

(h) “Deed of Trust” means the Credit Line Deed of Trust dated April 10,
1990 executed by Borrower for the benefit of Bank originally recorded in the
Clerk’s Office of the Circuit Court of the County of Chesterfield, Virginia in
Deed Book 2081, at Page 1525; the Deed of Trust and Security Agreement dated
July 2, 1999 executed by Borrower for the benefit of Bank originally recorded
with the Register of Deeds for Union County, Monroe, North Carolina in Deed
Book 1276, at Page 308 and the subsequent recording of the Deed of Trust and
Security Agreement dated July 2, 1999 executed by Borrower for the benefit of
Bank with the Register of Deeds for Mecklenburg County, North Carolina in Deed
Book 10629, at Page 402; and the Deed of Trust and Security Agreement dated
October 25, 1999 executed by Borrower for the benefit of Bank originally
recorded with the Register of Deeds for Wake County, North Carolina in Deed
Book 008452, at Page 01395, encumbering the Property (as defined in the Deed of
Trust), and the various extensions, modifications, supplements, renewals and/or
replacements thereof. The defined term Deed of Trust shall also include

 

 

additional Deeds of Trust and Security Agreements that are anticipated
to be executed by Borrower conveying to Bank various parcels of real estate
located in other jurisdictions in the State of North Carolina to additionally
and further secure the Note and one or more First Mortgage and Security
Agreements that are anticipated to be executed by Borrower conveying to Bank
various parcels of real estate located in jurisdictions in the State of South
Carolina to additionally and further secure the Note.

 

(i) “Default” means an event of default as defined in the Deed of
Trust.

 

(j) “Draw Request” means a verbal request for any disbursement of Loan
proceeds by an authorized Borrower’s Representative.

 

(k) “Firm Contract” means an arm’s length, bona-fide binding contract
for purchase and sale, in form and content satisfactory to Bank, with no
contingencies except a first mortgage financing contingency and/or other
contingencies approved by Bank, for the sale of a Lot or a Unit to a purchaser
unaffiliated and unrelated to Borrower or Guarantors.

 

(l) “General Contractor” means Parker & Lancaster Corporation, who
will serve as the general contractor in accordance with the Construction
Documents. If a General Contractor is not engaged or is not named here, any
obligation of the General Contractor referred to in the Loan Documents shall be
the obligation of Borrower to perform or to cause to be performed.

 

(m) “Governmental Authorities” means any local, state, or federal
governmental agency, regulatory body or office, or any quasi-governmental
office (including health and environmental), or any officer or official of any
such agency, office, or body whose consent or approval is required as a prerequisite
to the commencement of the construction of the Improvements or to the operation
and occupancy of the Improvements or to the performance of any act or
obligation or the observance of any agreement, provision or condition of
whatsoever nature herein contained.

 

(n) “Guarantors” means collectively, and jointly and severally, J.
Russell Parker, III and Barbara H. Parker.

 

(o) “Guaranty” means the Guaranty executed by Guarantors in favor of
Bank, providing for Guarantor’s payment of all sums due under the Loan
Documents and of performance of all obligations of Borrower thereunder,
including, without limitation, timely completion of the Improvements in
accordance with the Construction Documents and Loan Documents.

 

 

(p) “Improvements” means all single family residences, structures and
dwellings constructed or to be constructed on the Land, together with all
fixtures and appurtenances now or later to be located on the Land and/or in
such Improvements.

 

(q) “Land” means the real property described in the Deed of Trust at
the inception of the Loan and as may be later included by supplement or
modification agreement.

 

(r) “Loan Documents” means this Loan Agreement, the Note and any
finding agreement, the Deed of Trust, the Guaranty and any other document or writing
evidencing or securing the Loan, including any extension, modification,
amendment or restatement of or substitution for any of the foregoing.

 

(s) “Lot Loan Commitment” means the agreement of Bank to set aside a
portion of the Loan, as defined herein, for the acquisition of a Lot.

 

(t) “Lots” means developed residential lots acquired, or to be
acquired, by Borrower to be held in inventory and to be built on at a later
date. Lots, by definition, exclude any lot which is part of a Unit.

 

(u) “Model Unit” means a Unit constructed and furnished initially for
inspection by prospective purchasers.

 

(v) “Note” means the Promissory Note of even date herewith executed by
Borrower in favor of Bank in the principal amount of SEVENTEEN MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($17,500,000.00) as well as any promissory
note, sub-note, or other notes issued by Borrower in substitution, replacement,
extension, future advance, amendment or renewal of the Note or any such
promissory note or notes. Exhibit “C” attached, entitled “Bank Financed
Inventory As Of March 9, 2000”, list properties as of March 9, 2000 financed by
Bank for Borrower under various previously executed notes. A $17,500,000.00
note dated May 27, 1999 evidencing the March 9, 2000 indebtedness of Borrower
to Bank will be replaced by this $17,500,000.00 Note. The various notes
evidencing the March 9, 2000 indebtedness of Borrower to Bank for certain
properties located in North Carolina (identified by an “ on Exhibit C) will not
be replaced by the $17,500,000.00 Note except that future extensions of matured
loans or the conversion an existing lot loan to a construction loan may be made
under, evidenced by and otherwise substituted or replaced by this $17,500,000
Note. All new (not previously committed) and

 

 

pending (committed but not closed) loans will be made under and
evidenced by this $17,500,000.00 Note.

 

(w) “Plans” means plans and specifications for the construction of the
Improvements submitted to and approved by Bank from time to time, and including
such amendments thereto as may from time to time be made by Borrower and
approved by Bank.

 

(x) “Security Documents” means the Deed of Trust and any other
instrument executed to establish and perfect Bank’s lien, and any extensions,
modifications, renewals, or replacements thereof.

 

(y) “Spec Unit” means a Unit for which a Firm Contract has not been
executed.

 

(z) “Unit” means a portion of the Land and its respective Improvements
constituting a single residential dwelling unit and, by further definition,
includes the Lot on which the Unit is being constructed. Unit shall include
Contract Units, Spec Units and Model Units.

 

(aa) “Unit Release Price’ shall mean the partial release price for each
Lot or Unit as set forth in Exhibit “B” attached hereto and incorporated
herein.

 

Capitalized terms not defined in this Loan Agreement shall have the
meanings ascribed to them in the Deed of Trust.

 

ARTICLE
II

 

The Loan

 

2.1           Loan Terms Subject to
the terms and conditions of this Loan Agreement, Bank will lend and Borrower
will borrow up to a principal sum of SEVENTEEN MILLION FIVE HUNDRED THOUSAND
AND 00/100 DOLLARS ($17,500,000.00), which borrowing shall be evidenced by the
Note. Also, all of the terms, definitions, conditions, and covenants of the
Note, the Guaranty, the Deed of Trust, and any other documents executed in
connection therewith or pursuant thereto are expressly made a part of this Loan
Agreement by reference in the same manner and with the same effect as if set
forth herein at length and shall have the meaning set forth in such
instrument(s) unless otherwise defined herein. Each request by Borrower to Bank for
funding of Loan proceeds for a new (not previously committed) Lot or Unit shall
be subject to the approval of Bank at the time of Borrower’s request.

 

2.2           Revolving Loan The Loan
is a revolving line of credit and the principal amount outstanding under the
Loan may increase or decrease from time to time as Borrower draws and repays
Loan funds thereunder. Provided Borrower is not in Default, outstanding amounts
under the Loan may be repaid or reborrowed from time to time subject to the
terms, conditions and

 

 

limitations set forth in this
Agreement, but the total amount to be disbursed for all Lots and Units
committed under the Loan from time to time shall not exceed the original,
principal amount of the Note. At such time as Bank makes the initial
disbursement on a Lot or a Unit, the availability under the Loan shall be
reduced by the entire committed amount for said Lot or Unit. At such time as
Borrower pays Bank in full all principal, interest and fees associated with
said Lot or Unit, the availability under the Loan shall be increased by the
full committed amount for said Lot or Unit.

 

2.3           Loan Purpose The
purpose of the Loan is to finance the purchase of developed residential lots
and the purchase and construction costs of Units in subdivisions approved by
Bank in the cities and counties in the Richmond, Virginia; Charlotte,
Greensboro and Raleigh, North Carolina; Fort Mill, South Carolina market areas.
Loan proceeds shall be used solely to purchase Lots and fund the direct and
indirect costs of construction of Units for which Bank has approved the Plans.
Borrower states for the express benefit and reliance of Bank that it has not
relied and is not relying on any binding obligation on the part of Bank to
finance the construction of a particular number of Units.

 

2.4           Limitations on Use of
Loan Proceeds Bank will disburse Loan proceeds for Lot purchases and
construction of Units subject to the terms and conditions of this Loan
Agreement and the following limitations:

 

(a)          The
amount to be funded for a Lot purchase, to be built on at a later date, shall
be in an amount equal to 85% of the lesser of (i) the appraised value of said
Lot, as determined by an appraisal satisfactory to Bank (which appraisal shall
be at Borrower’s sole expense), or (ii) Borrower’s purchase price for said Lot.

 

(b)          The
amount to be funded on a Unit shall be an amount equal to 80% of the lesser of
(i) the “completed value” of such Unit, which shall be determined by an
appraisal satisfactory to Bank (which appraisal shall be at Borrower’s sole
expense), or (ii) the contracted purchase price of the Unit, if applicable. In
connection with the construction of a Unit, up to 100% of Borrower’s purchase
price for the lot may be disbursed from Loan proceeds.

 

(c)          Use
of Loan proceeds for the purchase of Lots shall be limited to $2,500,000.00 at
any one time. Use of Loan proceeds for the purchase of Lots in Shannamara,
Hampton Park and River’s Bend shall be limited to $1,000,000.00, $750,000.00
and $750,000.00, respectively. Use of Loan proceeds for the purchase of Lots in
all other subdivisions shall be limited to $500,000.00 per subdivision. Bank
retains the right to establish and approve additional sub-limits on the maximum
amount of Loan proceeds that may be disbursed for the purchase of Lots or the
maximum number of lots that may be purchased within any one subdivision or any
one subsection within a Planned Unit Development. Approval of such Bank
sub-limits may be confirmed in writing by separate letters from Bank.

 

(d)          Use
of Loan proceeds for the construction of Units (Contract Units, Spec Units and
Model Units combined) shall be limited to at any one time to the

 

 

amount available under the Loan. Use of Loan proceeds for the
construction of Spec Units shall be limited to a total of sixty-five (65) at
any one time. Use of Loan proceeds for the construction of Model Units shall be
limited to twelve (12) at any one time. Additionally, at no time shall the
total of Spec Units and Model Units exceed sixty-five (65). Further, the ratio
of Spec Units and Model Units to Contract Units shall not exceed 60%/40% for
the 4 and l fiscal quarters of Parker & Lancaster Corporation and 70%/30%
for the 2 and 3 fiscal quarters of Parker & Lancaster Corporation. Use of
Loan proceeds for the construction of Spec Units shall be limited at any one
time to 10 in Shannamara, 10 in Hampton Park and 5 in all other subdivisions or
subsection within a Planned Unit Development. Bank retains the right to
establish and approve additional sub-limits on the maximum number of Spec Units
and Model Units being financed with Loan proceeds within any one subdivision or
any one subsection within a Planned Unit Development. Approval of such Bank
sub-limits may be confirmed in writing by separate letters from Bank.

 

(e)          Corporate
limitations shall include (i) a maximum inventory of developed residential lots
of one hundred sixty (160), (ii) a maximum inventory of Spec Units and Model
Units of one hundred sixty (160), (iii) a maximum ratio of Spec Units and Model
Units to Contract Units of 60%/40% for the l 2 3” and 4 fiscal quarters of
Parker & Lancaster Corporation and (iv) a maximum number of Spec Units,
Model Units and Contract Units combined in inventory of three hundred (300).

 

(f)           The
Loan proceeds will be used only for the purchase of Lots and construction of
Units in subdivisions in cities and counties in the Richmond, Virginia;
Charlotte, Greensboro and Raleigh, North Carolina; and Fort Mill, South
Carolina market areas that have been approved in advance by Bank in its sole
discretion. Borrower shall request Bank’s approval of each subdivision in which
Borrower intends to purchase Lots or construct Units, and will furnish Bank
such subdivision plats, sales data or other information as Bank shall require
with respect to each subdivision.

 

(g)          All
Loan proceeds disbursed in connection with the construction of each individual
Unit (a Contract Unit, a Spec Unit or a Model Unit) shall be due and payable
within twelve (12) months after the closing date of the loan on such Unit. All
Loan proceeds disbursed in connection with the purchase of each individual Lot
shall be due and payable within nine (9) months after the closing date of the
loan on such Lot. Any extensions or renewals thereof shall be in Bank’s sole
discretion.

 

(h)          Only
residential Units and developed residential Lots shall be financed by the Loan.

 

(i)           Unless
otherwise approved in writing by Bank, at such time as the number of Spec Units
financed under the Loan is equal to the number of Spec Units outlined in
Section 2.4 (d) above, additional Spec Units may only be commenced upon (i)
payment of all Loan advances for one of the Spec Units or (ii) such earlier
time as one of the Spec Units becomes a Contract Unit. Unless otherwise

 

 

approved in writing by Bank, at such time as the number of Model Units
financed under the Loan is equal to the number of Model Units outlined in
Section 2.4 (d) above, additional Model Units may only be commenced upon (1)
payment of all Loan advances for one of the Model Units or (ii) such earlier
time as one of the Model Units becomes a Contract Unit. All Contract Units upon
which the sales contract has been canceled due to the default of the buyer and
which are available for sale, shall become designated as a Spec Unit.

 

(j)           Bank
shall not be obligated to make loan disbursements for materials stored on or
off site.

 

2.5           Maturity Date.      The maturity date of the
Loan (the “Maturity Date”) is set forth in the Note. Bank’s obligation to
disburse any Loan proceeds shall cease on the Maturity Date. If, on the
Maturity Date, there are unfinished Units then under construction for which
Bank has advanced Loan proceeds, Bank may, in its sole and absolute discretion
(but is not obligated to) continue funding construction of those incomplete
Units only, notwithstanding the cessation of Bank’s obligation to make further
disbursements under the Loan. If Bank so elects to continue funding for such
unfinished Units, Bank shall, provided that no Default exists, extend the
Maturity Date to the date that is six (6) months after the original Maturity
Date. During such continued funding, the terms and conditions of the Note and
the other Loan Documents shall continue to apply to such fundings, but Borrower
shall execute such extension and/or modification agreements as Bank may deem
necessary in connection therewith. Under no circumstances shall Bank be
obligated to fund for the purchase of new developed residential Lots or for the
commencement of construction of new Units after the original Maturity Date.

 

ARTICLE
III

 

Disbursements

 

Bank agrees
that it will, from time to time, and so long as there shall exist no Default,
but not more frequently than one (1) time per month per Unit, disburse Loan
proceeds for the construction of a specific Unit subject to the terms and
conditions of this Agreement.

 

3.1           Request for Initial
Funding for Lot Acquisition or Commencement of Construction of a Unit. When
Borrower wishes to purchase a Lot or commence funding for construction of a
particular Unit, Borrower shall submit all items required in Articles N and V
as conditions precedent to disbursements, to the extent applicable. All
supporting documentation shall be submitted no later than five (5) days prior
to the requested date of the initial disbursement for a Lot or Unit. No
disbursement by Bank shall constitute an approval or acceptance by Bank of any
construction work or constitute a waiver by Bank of any conditions precedent to
any future disbursements. Bank shall not be obligated to approve any
disbursement of Loan funds for purposes other than those contemplated in this
Agreement. The conditions set forth in Articles IV and V hereof must be
satisfied before Bank will make the first advance or disbursement, and the
conditions set forth in Article VI hereof must be and remain satisfied before
Bank will make each subsequent advance or disbursement.

 

 

3.2           Interim Draw
Requests.  Each request for a Loan
disbursement must be received by Bank at least three (3) business days prior to
each Loan disbursement. Requests for advances may be made by telephone or in
writing.

 

3.3           Disbursement Amounts.  Following receipt of the request for advance
Bank shall determine the amount of the disbursement it will make in accordance
with Bank’s standard draw sheet, a copy of which is attached as Exhibit “A”,
provided no Default exists.

 

3.4           Equity Requirements.          If Bank at any time
determines in its reasonable discretion that the Loan proceeds plus the amount
of all equity investments made or scheduled to be made are not sufficient to
fully complete the Improvements in accordance with the Plans and to pay all
other sums due under the Loan Documents, then Bank shall have the option of requiring
Borrower to deposit with Bank additional funds from some other source (or
submit evidence to Bank of equity investments previously made) in amounts
sufficient to cover the resulting deficit before Bank will disburse any
additional Loan proceeds. Deposited funds shall be advanced as construction
progresses in accordance with this Loan Agreement before any additional Loan
disbursements are made.

 

3.5           Option to Disburse
Funds to any Guarantor and/or to Pay Contractors.  If a Default shall exist, at its option, Bank may make Loan
disbursements directly to any Guarantor or obligor of the Loan when such party
shall be performing the obligations of Borrower hereunder or the General
Contractor or any unpaid subcontractor, laborer or material supplier providing
labor, services or materials in connection with the construction of the
Improvements, and the execution of this Loan Agreement by Borrower shall, and
hereby does, constitute an irrevocable direction and authorization to Bank to
so disburse the funds. No further direction or authorization from Borrower
shall be necessary to warrant such direct disbursements and all such
disbursements shall be secured by the Security Documents as fully as if made to
Borrower, regardless of the disposition thereof by the General Contractor, any
subcontractor, laborer or material supplier so paid.

 

ARTICLE
IV

 

General Pre-Closing Conditions

 

Bank shall not
be obligated to close the Loan until all of the following conditions have been
satisfied by proper evidence or by execution and/or delivery to Bank of the
following items requested by Bank, on Bank’s standard form documents where
available, and in any event in form and substance satisfactory to Bank:

 

4.1           Note.      The original Note, properly
executed, shall have been delivered to Bank.

 

4.2           Guaranty.  The original Guaranty(s), properly executed,
shall have been delivered to Bank.

 

4.3           Deed of Trust.  The original Deed of Trust, which shall be a
first lien on the Land and Improvements, shall have been properly executed in
recordable form and delivered to Bank.

 

4.4           Loan
Agreement.  The original Loan
Agreement, properly executed, shall have been delivered to Bank.

 

 

4.5           Closing
Statement.  An original loan closing
statement, properly executed, shall have been delivered to Bank.

 

4.6           Appraisals.
Bank shall have received an appraisal on each Unit or Lot to be funded with the
initial advance of Loan proceeds, in form and substance satisfactory to Bank.

 

4.7           Financial
Statements. Bank shall have received financial statements from Borrower and
the Guarantor(s) (balance sheet and profit and loss statements).

 

4.8           Title
Policy. Borrower shall have furnished Bank with an ALTA mortgagee policy of
title insurance issued by a company and in a form acceptable to Bank covering
the Land and Improvements and any appurtenant easements, showing good and
marketable title to the Land and Improvements in Borrower’s name and insuring
Banks first lien on the Land and Improvements and any appurtenant easements in
the full amount of the Loan, without exception for mechanics’ and materialmen’s
liens, funds advanced for soft cost or the “standard” exceptions. Such title
policy also shall contain a variable rate endorsement, an endorsement insuring
access to the Land from an improved, dedicated public street, a revolving or
credit line endorsement, an environmental endorsement and any other
endorsements requested by Bank (including without limitation, a zoning
endorsement, a survey endorsement and a comprehensive endorsement). Any title
binder, commitment for title insurance and/or policy exception is subject to
approval by Bank. Borrower shall also furnish to Bank true and complete copies
of all documents, plats and instruments enumerated as exceptions or otherwise
described in the title policy, together with a judgment lien report. The title
policy must also include an “outsale guaranty’ endorsement satisfactory to Bank
in which the title insurance company agrees to issue title insurance policies,
including affirmative mechanics’ and materialmen’s coverage, to subsequent
purchasers of the Units and mortgagors of Bank, without any delay to allow
unfiled mechanics’ lien claims to expire.

 

4.9           Survey/Recorded
Plat.  If the Land is platted, a
copy of the recorded plat for the Land, together with a certification that the
plat is the most recent recorded plat on record. If the Land is unplatted, one
copy of a recent survey of the Land prepared by a registered land surveyor
acceptable to Bank and certified to Bank, the title insurance company, and
Borrower. Such survey shall contain a certification as to the applicable flood
zone(s) for the Land.

 

4.10         Flood
Hazards. Evidence as to whether or not the Land is located within an area
identified as having “special flood hazards” as such term is used in the
federal Flood Disaster Protection Act of 1973.

 

4.11         Flood
Hazard Insurance.  If all or any
part of the Improvements is or is to be located in an area having “special
flood hazards”, a flood insurance application or policy naming Bank as
mortgagee must be submitted to Bank. Satisfactory evidence of premium payments
must also be provided.

 

4.12         Builder’s
Risk Insurance. An “all-risk”, completed value, non-reporting builder’s
risk insurance policy. This policy must be from a company and in a amount
satisfactory to Bank, must be sufficient to avoid the application of any
co-insurance provisions, must include provisions for a minimum thirty-day
advance written notice of any intended policy cancellation or non-renewal, and
must designate Bank as mortgagee, and contain a standard mortgagee endorsement.

 

 

4.13         Liability
Insurance.  General accident and
public liability insurance policies as to both Borrower and the General
Contractor insuring against all claims for bodily injury, death or property
damage occurring upon, in or about any part of the Land and Improvements. The
policies must be from companies satisfactory to Bank and supply coverage of not
less than $1,000,000.00 per occurrence for death or bodily injury and
$100,000.00 per occurrence for property damage. The General Contractor’s policy
must include worker’s compensation coverage in an amount sufficient to satisfy
statutory requirements.

 

4.14         Borrower’s
Organizational Documents and Resolutions. A certified copy, from the
appropriate governmental body or corporate officer, of organizational documents
of Borrower, and any partner or member of Borrower, as appropriate, certif5iing
that Borrower and/or such partner or member (1) is duly organized, validly
existing, and in good standing under the state of its creation, (ii) has the
authority under such documents and laws to enter into the Loan as contemplated
by the Loan Documents, and (iii) has made all appropriate filings, including
without limitation, qualification to do business in the Commonwealth of
Virginia necessary to enter into the Loan and execute the Loan Documents.
Additionally, Borrower shall provide (A) if appropriate, certified resolutions
or other internal documents or writings of Borrower and such partner or member
evidencing that Borrower and such partner or member have taken all requisite
organizational action, and received all organizational approvals necessary to
enter into the Loan and execute the Loan Documents, and (B) such other
documents or writings as Bank may request.

 

4.15         Fictitious
Name Certificate.  If Borrower
utilizes or intends to utilize a fictitious name, a copy of the Certificate for
Transacting Business Under An Assumed Name of Borrower filed in the locations
required by applicable law.

 

4.16         Attorney’s
Opinion.  The written opinions of counsel
to Borrower and Guarantor, addressed to Bank, acceptable to Bank and Bank’s
counsel, as to those matters required by Bank. The attorney’s opinion with
respect to the enforceability of remedies provided in any instrument may be
made subject to or affected by, applicable bankruptcy, moratorium,
reorganization, insolvency or similar laws from time to time in effect
affecting the rights of creditors generally.

 

4.17         Plans
and Specifications.  As to each Unit
type, one set of the Plans which have been approved by Borrower. The Plans must
include architectural, structural, mechanical, plumbing and electrical plans
and specifications. The Plans must have been approved by prevailing authorities
and agencies and the existing homeowners’ associations.

 

4.18         Taxpayer
Identification Number. Borrower’s federal taxpayer identification number.

 

4.19         Borrower’s
Deed. Copies of the deeds conveying each parcel of the Land to Borrower.

 

4.20         Miscellaneous.
All other Loan Documents or items that are customarily provided in loan
transactions of this type and all other Loan Documents or items set forth in
the Commitment.

 

 

ARTICLE V

 

Conditions Precedent to First Disbursement
for Each Unit or Lot

 

Bank shall not
be obligated to make the first disbursement of Loan proceeds with respect to
any Unit or Lot until the following conditions have been satisfied by proper
evidence, or by execution and/or delivery to Bank of the following items
requested by Bank, on Bank’s standard form documents where available, and in
any event in form and substance satisfactory to Bank:

 

5.1           No Default.  No Default shall have occurred and be
continuing.

 

5.2           No Encumbrances.  The Land shall be free and clear of all
liens and encumbrances except for Bank’s Deed of Trust.  Other liens will not be allowed without
Bank’s approval.

 

5.3           Representations and
Warranties.  All of the
representations and warranties contained in the Loan Documents remain true and
correct on the date of the requested first disbursement, and any such
representations and warranties relating to Lots or Units shall be true and
correct with respect to the Unit or Lot for which such first disbursement has
been requested.

 

5.4           Other Conditions.  All applicable conditions precedent set
forth in Article IV shall have been satisfied.

 

5.5           Appraisal.  Bank shall have received an appraisal for
each Unit, in form and substance satisfactory to Bank, indicating its
“completed value”.

 

5.6           Builder’s Risk and
Flood Insurance.  Bank shall have
received satisfactory evidence that the Unit is covered by Borrower’s builder’s
risk insurance policy and, if the Unit is located in a flood hazard zone, Bank
shall have received satisfactory evidence that the Unit is covered by
Borrower’s flood insurance policy or that application for flood insurance has been
made.  Furthermore, if such Unit is
located in a flood hazard zone, Borrower shall have executed and delivered to
Bank (upon Bank’s request), a Notice of Special Hazard Area in form and
substance satisfactory to Bank.

 

5.7           Plans.  Bank shall have received a true and correct
copy of the Plans for that Unit type.

 

5.8           Survey/Recorded Plat.  If the Land is platted, a copy of the
recorded plat for the Land, together with a certification that the plat is the
most recent recorded plat on record.  If
the Land is unplatted, one copy of a recent survey of the Land prepared by a
registered land surveyor acceptable to Bank and certified to Bank, the title
insurance company and Borrower.  Such
survey shall contain a certification as to the applicable flood zone(s) for the
Land.

 

 

5.9           Deed.  A copy of the deed conveying each parcel of
the Land to Borrower.

 

5.10         Deed of Trust
Amendment.  If such Unit or Lot is
not already encumbered by Bank’s Deed of Trust, an amendment or supplement to
the Deed of Trust, which provides Bank with a first priority lien on such Unit
or Lot, not subject to any exceptions to title which are unacceptable to Bank.

 

5.11         Title Insurance
Endorsement.  If such Unit or Lot is
not already insured under the title insurance policy described in Section 4.8
above, Borrower shall have furnished Bank with an endorsement to such title
policy that (a) adds such Unit or Lot to the legal description in the policy,
(b) insures the continued first priority of the lien of Bank’s Deed of Trust,
as amended to include such Unit or Lot, (c) increases the coverage of the
policy by the amount advanced with respect to such Unit or Lot, (d) advances
the date of the title policy to the date of recordation of the amendment
subjecting such Unit or Lot to the lien of the Deed of Trust, and (e) indicates
that since the last effective date of the policy (or the effective date of the
last such endorsement, if any) there has been no change in the status of title
to the property described in the title policy.

 

5.12         Draw Request.  Bank shall have received and approved
Borrower’s Draw Request and/or an original loan closing statement.

 

5.13         Access and Utilities.  Bank is satisfied that all roads necessary
for ingress and egress to the Unit or developed Lot have been completed and that
all utility services necessary for the construction of the Improvements are
available at the boundaries of the Land and the lot upon which the Unit will be
constructed.

 

ARTICLE VI

 

Conditions Precedent to Disbursements

Following the First Disbursement

 

6.1           Periodic
Disbursements.  Bank shall not be
obligated to make any Loan disbursements for construction of a Unit after the
first disbursement until the following requirements and conditions have been
and remain satisfied as of the date of each such disbursement:

 

(a)           No
Default shall have occurred and be continuing.

 

(b)           The
Unit is free and clear of all liens and encumbrances except for Bank’s Deed of
Trust.  Any subordination liens must be
approved by Bank.

 

(c)           All
of the representations and warranties contained in the Loan Documents remain
true and correct on the date of the requested disbursement.

 

(d)           All
applicable conditions precedent set forth in Article V have been satisfied.

 

(e)           All
monies previously advanced have been used solely to pay for financing, labor,
materials and fixtures used or to be used in the construction of Improvements.

 

 

(f)            No
mechanic’s or materialmen’s lien or other encumbrance shall have been tiled and
remain in effect against the Land or Improvements.

 

(g)           The
construction has been in accordance with the Plans and satisfactory evidence
thereof has been furnished to Bank.

 

(h)           The
building permits for the Improvements have been issued and are posted at the
respective construction sites.

 

(i)            Borrower
has furnished to Bank an endorsement to the title policy described in Section
4.8 above that (i) increases the coverage of the policy by the amount of the
requested disbursement, (ii) advances the effective date of the policy to the
date of such disbursement, and (iii) indicates that since the last effective
date of the policy (or the effective date of the last such endorsement, if any)
there has been no change in the status of title to the property described in
the title policy.

 

6.2           Limitations on
Disbursements.  If any of the above
conditions are not satisfied, as determined by Bank, in its sole discretion,
Bank shall not be obligated to disburse any Loan proceeds.  In addition to the foregoing requirements,
Bank reserves the right to require Borrower to furnish prior to each
disbursement at Borrower’s expense:  (a)
a waiver of lien or release of lien from any contractor, subcontractor,
supplier, laborer or other lienor who has furnished labor, materials, or other
services for construction of the Improvements; (b) a certificate from the
architect, engineer, or Bank’s inspector, certifying that the Improvements have
been completed to date in accordance with the Plans; (c) any permits,
certificate of occupancy, licenses, or other evidence of compliance with
applicable laws and building codes; (d) an affidavit of Borrower that each
person or entity supplying materials or performing labor or services in
connection with the Improvements has been paid in full; and (e) such other
items as may be required by Bank in its discretion.

 

6.3           Requirements for
Disbursement at Unit Completion. 
Bank shall not be obligated to make the final construction disbursement
as to a particular Unit until the following conditions have been satisfied:

 

(a)           All improvements on the
Unit have been completed to Bank’s satisfaction.

 

(b)           At Bank’s request, the
unconditional certificate of occupancy or final certificate of inspection by
appropriate Governmental Authority for the Unit has been delivered to Bank;

 

(c)           At Bank’s request, the
General Contractor’s final waivers and releases of lien made by parties
satisfactory to Bank shall have been delivered to Bank; and

 

(d)           At Bank’s request,
Borrower shall have delivered to Bank a fire insurance policy with extended
coverage insuring such Unit in the full replacement value of such Unit.

 

 

ARTICLE VII

 

Borrower’s Covenants and Agreements

 

7.1           Payment and
Performance.  Borrower will pay when
due all sums owing to Bank under the Note, this Loan Agreement, the Deed of
Trust and the other Loan Documents, and perform all obligations as outlined or
referenced therein.

 

7.2           Further Assurances.  On demand by Bank, Borrower will do any act
and execute any additional documents reasonably required by Bank to secure the
Loan, to confirm or perfect the lien of the Security Documents, including, but
not limited to, additional financing statements or continuation statements, new
or replacement notes and/or Security Documents and agreements supplementing,
extending or otherwise modifying the Loan Documents, certificates as to the
amount of the indebtedness evidenced by the Note from time to time, and
certificates that Borrower knows of no defaults by or defenses or set-offs
against Bank.

 

7.3           Construction.  Borrower will: (a) continue conscientiously
the construction of the Improvements; (b) not discontinue or permit the
discontinuance of work on the Improvements for longer than ten (10) consecutive
business days; and (c) in any event, complete the Improvements, including
installation of any required items of personalty in substantial compliance with
the Plans, free and clear of liens or claims of liens for material supplied or
for labor or services performed in connection with the construction of the
Improvements.

 

7.4           Payment of
Contractors. Borrower covenants to advise Bank immediately, in writing, if
Borrower receives any claim of lien in connection with any services, labor or
materials furnished in connection with the construction of Improvements, and to
remove such liens within ten (10) days after the date of filing.

 

7.5           Fees and Expenses.  Whether or not the Loan is made or all Loan
proceeds disbursed hereunder, Borrower agrees to pay all expenses incurred by
Bank, or by Borrower in order to meet Bank’s requirements, in connection with
the Loan, including without limitation, commitment and renewal fees or deposits
to Bank, fees for appraisal, reappraisal, survey, recording, title insurance,
builder’s risk and other insurance premiums, brokerage commissions and claims
of brokerage, property taxes, recording taxes and fees, architect’s fees,
engineer’s fees, the General Contractor’s fees, and legal fees and costs
incurred by Bank in connection with the making and administration of the Loan,
the enforcement of Bank’s rights under the Loan Documents, the renewal,
modification, or extension of the Loan, or in connection with litigation or
threatened litigation by a third party which arises because Bank made the
Loan.  Any amounts payable by Borrower
pursuant to this Section shall constitute part of the indebtedness which is
secured by the Security Documents, and shall be due and payable upon demand.

 

7.6           Insurance.  Borrower covenants to maintain insurance as
required herein and in the Deed of Trust.

 

7.7           Taxes and Insurance.  Upon the request of Bank, Borrower shall
submit to Bank such receipts and other statements which shall evidence, to the
satisfaction of Bank, that all taxes, assessments and insurance premiums have
been paid in full.

 

7.8           Additional
Construction.  Borrower shall not
construct or permit the construction of any improvements on the Land other than
those Improvements described in the Plans, or approved in writing by Bank.

 

 

7.9           Inventory Status
Reports.  When requested by Bank,
Borrower shall provide Bank with it’s inventory status report in form and
substance acceptable to Bank and any other inventory information of Borrower
(or any subsidiary or affiliate of Borrower) reasonably requested by Bank.

 

7.10         Financial Statements.  When requested by Bank, Borrower and
Guarantors shall provide Bank with it’s/their financial statements in form and
substance acceptable to Bank and any other financial information of Borrower
(or any subsidiary or affiliate of Borrower) and Guarantors reasonably
requested by Bank.

 

7.11         Appraisals.  In addition to the appraisals required by Bank
in connection with the disbursement of Loan proceeds for the construction of
Units, updated appraisals shall be prepared at Borrower’s expense when
requested by Bank.  Such appraisals
shall be prepared in accordance with written instructions from Bank and by a
professional appraiser selected and engaged by Bank.  Borrower shall cooperate fully with the appraisal process and
shall allow the appraisers reasonable access to the Land and Improvements.

 

7.12         Environmental
Protection.  Borrower affirms and incorporates
by reference the representations, warranties, terms, conditions, and
indemnities relating to environmental protection contained in the Deed of
Trust.

 

7.13         Leases Affecting Land
and Improvements.  Borrower shall
not, without the express prior written consent of Bank, enter into any lease
affecting the Land or Improvements, or any part thereof.

 

7.14         Assignment of
Contracts.  As additional security
for the Loan and for the performance by Borrower of all of its obligations
hereunder, Borrower hereby assigns to Bank all of Borrower’s interest in any
and all contracts, agreements, permits, licenses, approvals, or other documents
or writings relating to the construction, sale or management of the
Improvements, including but not limited to the Construction Documents and the
Plans.  This assignment shall not,
however, be deemed to impose upon Bank any of Borrower’s obligations under any
such contract.

 

7.15         Subordinate Financing.  Borrower shall not permit there to exist nor
shall Borrower obtain any subordinate financing of the Land, the Improvements
or any other property granted as security for the Loan without prior approval
of Bank.

 

7.16         Transfers.  Neither Borrower nor any shareholder,
general partner or member of Borrower shall engage in a Transfer (as defined
below) without the prior written consent of Bank, which consent shall be
withheld or granted in Bank’s sole and absolute discretion.  “Transfer” means the sale, assignment,
transfer, hypothecation or disposition of (a) all or any portion of the Land or
Improvements (except as may be permitted hereby), (b) shares of stock in any
corporation that constitutes Borrower, (b) the general partnership interests
(including the proceeds thereof) in any partnership that constitutes Borrower,
and (c) the membership interests in any limited liability company that
constitutes Borrower.

 

7.17         Partial Releases of
Property.  Provided Borrower is not
then in Default hereunder, under the Note, the Deed of Trust or any other Loan
Document, Bank will provide partial

 

 

releases in respect of its
interest under the Deed of Trust and other Loan Documents upon the terms and
conditions set out in Exhibit “B” attached. 
Borrower agrees to reimburse Bank for all out-of-pocket fees and costs,
including, without limitation, reasonable legal fees, in connection with the
granting of such partial releases and shall provide Bank with any and all
information requested by Bank with respect to the Unit or Lot to be released.

 

7.18         Disclosure of
Contracts and Notices.  Borrower
shall disclose to Bank upon demand, the names of all persons with whom Borrower
has contracted or intends to contract for any construction of Improvements or
for the furnishing of labor or materials therefor, and when required by Bank
obtain the approval by Bank of all such persons. Borrower shall, during the
period in which any Loan proceeds remain outstanding, furnish Bank with copies
of all notices received by Borrower (a) claiming any breach or potential breach
by Borrower of any Construction Documents, (b) claiming or asserting a right to
a lien for work performed on materials provided in connection with construction
of Improvements, or (c) from any Governmental Authority asserting that the Land
or Improvements may or do violate any laws or regulations the enforcement of
which is the responsibility of such Governmental Authority.

 

7.19         Americans With
Disabilities Act.  Borrower
covenants and agrees that, during the term of the Loan, to the extent such act
is applicable, the Improvements will be in full compliance with the Americans
with Disabilities Act (“ADA”), 42 U.S.C Section 12191, et. seq.) as amended
from time to time, and the regulations promulgated pursuant thereto. Borrower
shall be solely responsible for all ADA compliance costs, including without limitation,
attorneys’ fees and litigation costs, which responsibility shall survive the
repayment of the Loan and foreclosure of the Land and Improvements.

 

7.20         Regulation “Z”.  The Loan is exempt from the provisions of
the Federal Consumers Credit Protection Act (Truth-in-Lending Act) and
Regulation “Z” of the Board of Governors of the Federal Reserve System, because
Borrower is a person fully excluded therefrom, and/or because the Loan is only
for business or commercial purposes of Borrower and the proceeds of the Loan
are not being used for personal, household, family or agricultural purposes.

 

7.21         Subordination of
Shareholder Loans.  Borrower hereby
subordinates, to the prior payment to Bank of all sums owing under the Loan,
any and all loans, advances, and indebtedness owing from Borrower to
shareholders, partners or members of Borrower from time to time, whether or not
evidenced by promissory notes.

 

Borrower shall not make payments of principal and interest for any loan
owing to its shareholders, partners or members until the Loan is paid in full.

 

ARTICLE VIII

 

Representations and Warranties

 

8.1           Representations and
Warranties.  Borrower hereby
represents and warrants to Bank that:

 

 

(a)           Representations
and Warranties in Other Loan Documents. 
All of the representations and warranties contained in the other Loan
Documents are true and correct and are incorporated herein by reference as if
set out in full.

 

(b)           Other
Financing.  Borrower has not (i)
received any other financing for the acquisition of the Land existing as of the
date hereof for which a lien equal to or superior to Bank’s Deed of Trust could
be successfully asserted, or (ii) received any other financing for the
construction of the Improvements.  Any
Land subordination must have prior Bank approval.

 

(c)           Plans.  The Plans have been approved by Borrower,
the Guarantors, and each appropriate Governmental Authority.

 

(d)           Governmental
Requirements and Other Requirements. 
Borrower will cause the Improvements to be constructed in accordance with
the Plans submitted to and approved by Bank, and when so constructed the Land
and the Units do and shall comply with all covenants, conditions and
restrictions affecting the Land or any portion thereof, and do and shall comply
with the requirements of all Governmental Authorities.

 

(e)           Use
of the Land.  To the best of
Borrower’s knowledge, there is no (i) plan, study or effort by any Governmental
Authority or any nongovernmental person or agency which may adversely affect
the current or planned use of the Land, or (ii) any intended or proposed
requirement of any Governmental Authority (including, but not limited to,
zoning changes) which may adversely affect the current or planned use of the
Land.

 

(f)            Moratorium.  There is no moratorium or like governmental
order or restriction now in effect with respect to the Land and, to the best of
Borrower’s knowledge, no moratorium or similar ordinance or restriction is now
contemplated.

 

(g)           Permits.  All permits, approvals and consents of
Governmental Authorities and public and private utilities having jurisdiction
necessary in connection with the Land have been issued and are in good
standing.

 

(h)           Condition
of Land.  No defect or condition of
the Land or the soil or geology thereof exists which will impair the construction,
use, or the operation of the Improvements for their intended purpose.

 

(i)            Labor
and Materials.  All labor and
materials contracted for in connection with the construction of the
Improvements shall be used and employed solely on the Land in said construction
and only in accordance with the Plans.

 

(j)            Surveys.  The survey, the recorded subdivision plat
for the Land, and all plot plans and other documents heretofore furnished by
Borrower to Bank with respect to Land and Improvements are accurate and
complete as of their respective dates. 
There are no encroachments onto the Land and no improvements on the Land
encroach onto any adjoining property.

 

 

(k)           Construction
Costs.  The amount of the hard costs
and soft costs are accurate, true and correct and are satisfactory to Borrower.

 

(1)           Sale
of Securities.  Borrower has not
instituted, caused to be instituted or been a party to and, to the best of
Borrower’s knowledge, there has not been any public offering with respect to
the Land and Improvements, or either, within the meaning of the Securities Act
of 1933 and the Securities Exchange Act of 1934.

 

(m)          Construction
Commencement.  Unless specifically
waived in writing by Bank, Borrower shall commence construction within
forty-five (45) days after the closing date of the loan on each Unit, shall
proceed continuously in a workmanlike manner and complete construction within
nine (9) months after the initial disbursement of loan proceeds on such
Unit.  Bank reserves the right to
require Borrower to furnish an itemized cost breakdown for the Improvements to
be constructed.

 

8.2           Reliance on
Representations.  Borrower
acknowledges that Bank has relied upon Borrower’s representations and is not
charged with any knowledge contrary thereto that may be received by an
examination of the public records wherein the Land is located or that may have
been received by any officer, director, agent, employee or shareholder of Bank.

 

8.3           Certificate
Regarding Loan Status.  Upon Bank’s
request, Borrower and Guarantors shall provide Bank with a written
certification, certifying to such matters related to the Loan as Bank may
request, including, but not limited to, a statement that Borrower and
Guarantors are not in Default.

 

8.4           Year 2000 Compliance.  Borrower has reviewed and assessed its and
its subsidiaries’ computer applications. Borrower reasonably believes that
those computer applications, and those of its suppliers and vendors that are
material to its and its subsidiaries’ businesses, are “Year 2000 compliant”
(that is, able to perform properly date sensitive functions involving dates
prior to and after December 31, 1999). 
Borrower will promptly notify Bank if Borrower discovers that any of
those computer applications (including those of its suppliers and vendors) are
not Year 2000 compliant.

 

ARTICLE IX

 

Bank’s Rights and Remedies

 

The following rights and remedies are available to Bank:

 

9.1           Acceleration.  Upon the occurrence of a Default, the entire
unpaid principal balance of the Loan and all accrued but unpaid interest
thereon and any costs or expenses then due to Bank and any and all other
obligations of Borrower to Bank, shall, at the option of Bank and without
notice to Borrower, become immediately due and payable.

 

9.2           Completion of
Construction.  From and after the
occurrence of a Default, Bank shall be entitled to have and use the Plans and
the Construction Documents and, after first having given written notice to the
architect, the engineer, or the General Contractor, shall be entitled from and
after such notice to enjoy and enforce all of the rights of Borrower under the
architect’s

 

 

contract, engineer’s contract,
the Plans or the Construction Documents. 
Borrower hereby irrevocably constitutes and appoints Bank its true and
lawful attorney-in-fact with full power of substitution to complete the
Improvements in the name of Borrower. 
Borrower hereby empowers Bank as it attorney-in-fact as follows:  (a) to use any funds of Borrower, including
any Loan proceeds or equity deposits which may remain undisbursed hereunder,
for the purpose of completing the Improvements in accordance with the Plans;
(b) to make such additions, changes, modifications, or corrections in, or
deviations from, the Plans as shall be necessary or desirable to complete the
Improvements; (c) to employ such contractors, subcontractors, agents,
architects, engineers, inspectors, or other parties as shall be required for
said purposes; (d) to pay, settle, or compromise all existing bills and claims
which may be liens against the Improvements or as may be necessary or desirable
in the sole discretion of Bank for the completion of the Improvements or for
clearance of title; (e) to direct use of and/or use all or any part of the
labor, materials, supplies and equipment contracted for, owned by, or under the
control of Borrower, whether or not previously incorporated into the
Improvements; (f) to execute all applications and certificates in the name of
Borrower which may be required by the Construction Documents, the architect’s
contract, the engineer’s contract, Plans, or any of the contract documents; (g)
to prosecute and defend all actions or proceedings in connection with the Land
or the construction of the Improvements and take such action and require such
performance as Bank shall deem necessary under any performance or payment bond;
and (h) to do any and every act with respect to construction or completion of
the Improvements or the closing of any permanent financing which Borrower might
do in its own behalf including, without limitation, execution, acknowledgment,
and delivery of all instruments, documents, and papers in the name of Borrower
as may be necessary or desirable in the sole discretion of Bank.  It is further understood and agreed that
this power of attorney which shall be deemed to be a power coupled with an
interest, cannot be revoked.  All sums
expended by Bank pursuant hereto shall be deemed to have been disbursed to
Borrower and secured by the Security Documents, and the other Loan Documents.

 

9.3           Disputes.  Where disputes have arisen which, in the
opinion of Bank, may endanger timely completion of the Improvements or
fulfillment of any condition or covenant herein, Bank may agree to disburse
Loan proceeds for the account of Borrower without prejudice to Borrower’s
rights, if any, to recover said proceeds from the party to whom paid.  Such agreement or agreements may take the
form which Bank in its discretion deems proper, including, but without limiting
the generality of the foregoing, agreements to indemnify (on behalf of Borrower
and/or for Bank’s own account) any title insurer against possible assertion of
lien claims, agreements to pay disputed amounts and the like.  All sums paid or agreed to be paid pursuant
to such undertaking shall be advances of Loan proceeds.

 

9.4           Remedies Cumulative;
Nonwaiver.  All remedies of Bank
provided for herein or in the other Loan Documents are cumulative and shall be
in addition to any and all other rights and remedies provided for or available
under the other Loan Documents, at law or in equity.  The exercise of any right or remedy by Bank hereunder shall not
in any way constitute a cure or waiver of a Default hereunder or under the Loan
Documents, or invalidate any act done pursuant to any notice of the occurrence
of a Default, or prejudice Bank in the exercise of any of its rights hereunder
or under any of the other Loan Documents, unless, in the exercise of said
rights, Bank realizes all amounts owed to it under the Loan Documents.

 

 

9.5           No Liability of Bank.  Whether or not Bank elects to employ any or
all remedies available to it in the event of an occurrence of a Default, Bank
shall not be liable for the construction of or failure to construct or complete
or protect the Improvements or for payment of any expense incurred in
connection with the exercise of any remedy available to Bank or for the
construction or completion of the Improvements or for the performance or
nonperformance of any other obligation of Borrower.

 

9.6           Security Interest.  It is understood and agreed that Bank shall
have and enjoy and is hereby granted a lien on, and a security interest in, all
collateral described in the Deed of Trust, and including without limitation,
any and all materials (stored on-site or off-site), reserves, deferred
payments, deposits or advance payments for materials (stored on-site or
off-site) undisbursed Loan proceeds, insurance refunds, impound accounts,
refunds for overpayment of any kind, and such lien and security interest shall
constitute additional security for the indebtedness of Borrower to Bank, and
Bank shall have and possess any and all rights and remedies of a secured party
provided by law with respect to enforcement of and recovery on its security
interest on such items and amounts.  In
the event of a conflict between this paragraph and any security interest
granted pursuant to the Deed of Trust, the Deed of Trust shall control.

 

9.7           Cessation of Funding.  Upon the occurrence of a Default, Bank shall
have the right to immediately terminate any further disbursements of Loan
proceeds.

 

 

ARTICLE X

 

General Conditions

 

The following
conditions shall apply throughout the term of this Loan Agreement:

 

10.1         Waivers.  No waiver of any Default or breach by
Borrower hereunder shall be implied from any delay or omission by Bank to take
action on account of such Default, and no express waiver shall affect any
Default other than the Default specified in the waiver and it shall be
operative only for the time and to the extent therein stated.  The waiver of any covenant, term or
condition contained herein shall not be implied by any act or omission of Bank,
and any such waiver must be in a writing signed by an authorized officer of
Bank, and shall not be construed as a waiver of any subsequent breach of the
same covenant, term or condition.  The
consent or approval by Bank to or of any act by Borrower requiring further
consent or approval shall not be deemed to waive or render unnecessary the
consent or approval to or of any subsequent or similar act.  No single or partial exercise of any right
or remedy of Bank hereunder shall preclude any further exercise thereof or the
exercise of any other or different right or remedy.

 

10.2         Benefit.  This Loan Agreement is made and entered into
for the sole protection and benefit of Bank and Borrower, their successors and
assigns, and no other person or persons shall have any right to action hereon
or rights to the Loan proceeds at any time, nor shall Bank owe any duty
whatsoever to any claimant for labor or services performed or material
furnished in connection with the Land or Improvements, or to apply any
undisbursed portion of the Loan to the payment of any such claim, or to
exercise any right or power of Bank hereunder or arising from any Default by
Borrower.

 

10.3         Assignment.  The terms hereof shall be binding upon and
inure to the benefit of the heirs, successors, assigns, and personal
representatives of the parties hereto; provided, however, that Borrower shall
not assign this Loan Agreement or any of its rights, interests, duties or
obligations hereunder or any Loan proceeds or other moneys to be advanced
hereunder in whole or in part without the prior written consent of Bank and
that any such assignment (whether voluntary or by operation of law) without
said consent shall be void. It is expressly recognized and agreed that Bank may
assign this Loan Agreement, the Note, the Security Documents, and any other
Loan Documents, in whole or in part, to any other person, firm, or legal entity
provided that all of the provisions hereof shall continue in full force and
effect and, in the event of such assignment, Bank shall thereafter be relieved
of all liability under the Loan Documents and any Loan disbursements made by
any assignee shall be deemed made in pursuance and not in modification hereof
and shall be evidenced by the Note and secured by the Security Documents and
any other Loan Documents.

 

10.4         Amendments.  This Loan Agreement shall not be amended
except by a written instrument signed by all parties hereto.

 

10.5         Terms.  Whenever the context and construction so
require, all words used in the singular number herein shall be deemed to have
been used in the plural, and vice versa, and the masculine gender shall include
the feminine and neuter and the neuter shall include the masculine and
feminine.

 

 

10.6         Governing Law and
Jurisdiction.  This Loan Agreement
and the other Loan Documents and all matters relating thereto shall be governed
by and construed and interpreted in accordance with the laws of the
Commonwealth of Virginia, the State of North Carolina and the State of South
Carolina, as applicable.  Borrower and
all of its general partners hereby submit to the jurisdictions of the state and
federal courts located in Virginia, North Carolina and South Carolina and agree
that Bank may, at its option, enforce its rights under the Loan Documents in
such courts.  This Loan Agreement is
executed under seal, and the designation (“SEAL”) next to any corporate party’s
signature shall be as effective as affixing a corporate seal physically hereto.

 

10.7         Publicity.  At Bank’s request and expense, and subject
to applicable laws, regulations and restrictions, Borrower shall place upon the
Land, at a location mutually acceptable to Borrower and Bank, a sign or signs
advertising the fact that financing is being provided by Bank.  Bank shall also have the right to secure
printed publicity through newspaper and other media concerning the Land and
source of financing.

 

10.8         Savings Clause.  Invalidation of any one or more of the
provisions of this Loan Agreement shall in no way affect any of the other
provisions hereof, which shall remain in full force and effect.

 

10.9         Execution in
Counterparts.  This Loan Agreement
may be executed in two or more counterparts, each of which shall be deemed to
be an original, but all of which shall constitute one and the same instrument,
and in making proof of this Loan Agreement, it shall not be necessary to
produce or account for more than one such counterpart.

 

10.10       Captions.  The captions herein are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Loan Agreement nor the intent of any provision hereof.

 

10.11       Notices.  All notices required to be given hereunder
shall be given in accordance with the requirements of the Note.

 

10.12       Mandatory Arbitration.  Any controversy or claim between or among
the parties hereto including but not limited to those arising out of or
relating to this Loan Agreement or any related agreements or instruments,
including any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the Federal Arbitration
Act (or if not applicable, the applicable state law), the Rules of Practice and
Procedure for the Arbitration of Commercial Disputes of Judicial Arbitration
and Mediation Services, Inc. (J.A.M.S.), and the “Special Rules” set forth
below.  In the event of any
inconsistency, the Special Rules shall control.  Judgment upon any arbitration award may be entered in any court
having jurisdiction.  Any party to this
Loan Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
Loan Agreement applies in any court having jurisdiction over such action.

 

(a)           Special Rules.  The arbitration shall be conducted in the
City of Richmond, Virginia and administered by J.A.M.S. who will appoint an
arbitrator; if J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All

 

 

arbitration hearings will be commenced within 90 days of the demand for
arbitration; further, the arbitrator shall only, upon a showing of cause, be
permitted to extend the commencement of such hearing for up to an additional 60
days.

 

(b)           Reservation of Rights.  Nothing in this Loan Agreement shall be
deemed to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Loan Agreement; or (ii)
be a waiver by Bank of the protection afforded to it by 12 U.S.C. Sec. 91 or
any substantially equivalent state law; or (iii) limit the right of Bank hereto
(A) to exercise self help remedies such as (but not limited to) setoff, or (B)
to foreclose against any real or personal property collateral, or (C) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief or the appointment of a receiver. Bank may exercise such self
help rights, foreclose upon such property, or obtain such provisional or ancillary
remedies before, during or after the pendency of any arbitration proceeding
brought pursuant to this Agreement. At Bank’s option, foreclosure under a deed
of trust or mortgage may be accomplished by any of the following: the exercise
of a power of sale under the deed of trust or mortgage, or by judicial sale
under the deed of trust or mortgage, or by judicial foreclosure. Neither this
exercise of self help remedies nor the institution or maintenance of an action
for foreclosure or provisional or ancillary remedies shall constitute a waiver
of the right of any party, including the claimant in any such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies.

 

IN WITNESS
WHEREOF, the parties have signed and sealed this Loan Agreement as of the day
and year first above written.

 

 

	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
  PARKER & LANCASTER CORPORATION,
a Virginia corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  J. Phillip Harris

  	
  (SEAL)

  
	
   

  	
   

  	
  J. Phillip Harris

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  

 

 

[Executions continue on next page]

 

 

	
   

  	
  Bank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  a national banking association

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Charles C. Payne, Jr.

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Charles C. Payne, Jr.

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

 

EXHIBIT
B

 

Partial Releases

 

PARTIAL RELEASES.  Provided that Borrower is not then in Default hereunder, under
the Note, the Deed of Trust or any other Loan Document, Bank will provide
partial releases of Lots and Units from the lien of the Deed of Trust upon the
following terms:

 

(1)           If the partial release
relates to Lots in connection with a bona fide sale or construction loan on
which no home construction advances have been made:

 

(a)           Borrower
shall be given written notice of the request for each partial release at least
5 business days prior to each partial release.

 

(b)           The
cost of each partial release, including reasonable attorney’s fees for Bank’s
attorney, shall be paid by Borrower.

 

(c)           Contemporaneously
with the delivery to Borrower of each partial release, Borrower shall pay an
amount equal to the total actual amount advanced under the Loan on account of
the Lot to be released, together with interest accrued thereon.

 

(2)           If the partial release
relates to Units on which advances of Loan proceeds have been made, Borrower
shall prepay principal on the Note in an amount equivalent to the total actual
amount advanced by Bank under the Loan on account of the Unit to be released,
together with interest accrued thereon. 
The costs incurred by Bank in connection with each partial release,
including reasonable attorneys’ fees for Bank’s attorney, shall be paid by
Borrower.Exhibit 10.12

 

FIRST ALLONGE AND MODIFICATION TO
MASTER

LOAN AGREEMENT AND OTHER LOAN
DOCUMENTS

 

THIS FIRST ALLONGE AND MODIFICATION
TO MASTER LOAN AGREEMENT AND OTHER LOAN DOCUMENTS, dated as
of the 30th day of May, 2001 (this “Agreement”), by and between PARKER &
LANCASTER CORPORATION, a Virginia corporation, and PARKER
LANCASTER & ORLEANS, INC., a Delaware corporation (together, the
“Borrowers”), and BANK OF AMERICA, N.A., a national banking
association (the “Noteholder”).

 

W I T N E S S E T H:

 

WHEREAS, the
Noteholder is the holder of a Promissory Note (Revolving Line of Credit) dated
March 9, 2000 (the “Note”), in the principal amount not to exceed at any time
outstanding Seventeen Million Five Hundred Thousand Dollars ($17,500,000), made
by Parker & Lancaster Corporation and payable to the order of the
Noteholder; and

 

WHEREAS, the Note
evidences a revolving line of credit loan (the “Loan”) made by the Noteholder
to Parker & Lancaster Corporation pursuant to (a) a Master Loan Agreement
dated March 9, 2000 (the “Loan Agreement”) between the Parker & Lancaster
Corporation and the Noteholder and (b) the other Loan Documents (as defined in
the Loan Agreement); and

 

WHEREAS, Parker
Lancaster & Orleans, Inc. became a co-borrower, jointly and severally, with
Parker & Lancaster Corporation under the Loan, the Note, the Loan Agreement
and the other Loan Documents pursuant to an Additional Borrower Joinder
Supplement and Loan Document Modification Agreement dated March 9, 2001 (the
“Joinder Agreement”) among Parker & Lancaster Corporation, Parker Lancaster
& Orleans, Inc., the Noteholder and Orleans

 

 

Homebuilders, Inc., as guarantor (the “Guarantor”) (the defined terms
Note, Loan Agreement and Loan Documents shall hereinafter refer to those
documents, as modified by the Joinder Agreement); and

 

WHEREAS, the
Borrowers have requested that the Noteholder (a) increase the maximum
principal amount of the aggregate commitments that can be outstanding at any
time under the Loan from $17,500,000 to $25,000,000, (b) increase the maximum
principal amount of the Loan that can be outstanding at any time from
$17,500,000 to $25,000,000 and (c) modify and amend certain other terms
and conditions of the Loan; and

 

WHEREAS, the
Noteholder has agreed to grant such requests, and this Agreement will effect
such increase and modification of the Note, the Loan Agreement and certain
other Loan Documents;

 

NOW, THEREFORE, for
and in consideration of the premises and other good and valuable consideration,
and the mutual promises made herein, the parties agree as follows:

 

1.             Incorporation
of Recitals; Defined Terms.  The
Recitals to this Agreement are hereby incorporated by reference.  Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in the Loan Agreement.

 

2.             Increase
in Maximum Principal Amount of Loan; Change in Interest Rate; Extension of
Maturity Date; Confirmation of Balance.  The Borrowers and the Noteholder hereby amend the Note to
substitute therein Twenty-Five Million Dollars ($25,000,000) as the maximum
principal amount of the Loan in the place and stead of $17,500,000 in each
instance where such amount appears.  The
Borrowers and the Noteholder

 

2

 

hereby amend the Note to
provide that the outstanding principal balance of the Loan shall bear interest
at the Eurodollar Rate (as hereinafter defined), plus 2.50 percent, per annum
(the “Rate”).  The Rate shall be
adjusted on the first business day of every month beginning on June 1, 2001 (the
“Adjustment Date”), and remain fixed until the next Adjustment Date.  If the Adjustment Date in any particular
month would otherwise fall on a day that is not a Business Day (as hereinafter
defined), the Adjustment Date for that particular month will be the first
Business Day immediately following thereafter. 
The “Eurodollar Rate” is a rate of interest equal to the one-month rate
of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the one-month London
interbank offered rate for deposits in Dollars (as hereinafter defined) at
approximately 11:00 a.m. (London time) on the second preceding Business Day, as
adjusted from time to time in Noteholder’s sole discretion for then-applicable
reserve requirements, deposit insurance assessment rates and other regulatory
costs.  If for any reason such rate is
not available, the term “Eurodollar Rate” shall mean the rate of interest equal
to the one-month rate of interest (rounded upwards, if necessary to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) on the second preceding Business Day, as adjusted from time to time
in Bank’s sole discretion for then-applicable reserve requirements, deposit
insurance assessment rates and other regulatory costs; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.  “Business Day” means any day other than a Saturday, Sunday, or
other day on which commercial banks in Charlotte, North

 

3

 

Carolina, are closed and
a day on which dealings in Dollar deposits are also open for business in
London, England.  “Dollars” shall mean
the lawful money of the United States of America.  The Borrowers and Noteholder hereby amend the Note to provide
that the Maturity Date shall be extended from December 31, 2001 to December 31,
2002.  The Borrowers hereby agree to pay
to the Noteholder a non-refundable commitment fee of $31,250 in connection with
this Agreement, which fee shall be considered earned in full as of the date of
this Agreement but which fee shall be payable in monthly installments of
$2,604.17 each, beginning on July 1, 2001 and continuing on the first day of
each month until the commitment fee is paid in full; provided, however, that
any remaining unpaid portion of the commitment fee shall be due and payable in
full on the Noteholder’s demand therefor upon the occurrence of a Default or
termination of the credit facility evidenced by the Loan Agreement.  The payment terms for interest and principal
shall continue as presently stated in the Note.  In confirmation of the foregoing, the Borrowers, jointly and
severally,  promise to pay to the order
of the Noteholder, on the terms and conditions set forth in the Note, as such
terms are modified and amended herein, the principal amount of up to
$25,000,000 (hereby confirming that the principal amount of the Note shall not
at any time outstanding exceed such amount), or so much thereof as may be
outstanding from time to time, together with interest as provided in the Note;
provided, however, that the entire principal balance of the Note then unpaid,
all interest then unpaid and all other amounts then owing under any Loan
Document, shall be finally due and payable on December 31, 2002.

 

3.             Modification
of Loan Agreement.  The
Borrowers and the Noteholder hereby amend the Loan Agreement (a) to change the
maximum principal amount of the Loan that

 

4

 

may be outstanding at any
time (and the aggregate commitments that may be outstanding under the Loan at
any time) stated therein from $17,500,000 to $25,000,000, (b) to modify Section
2.4(a) thereof to change 85% to 75% (LTVR for inventory Lots); (c) to modify
Section 2.4(c) thereof to change $2,500,000 to $4,500,000 (limit on aggregate
Loan proceeds advanced at any one time for inventory Lots); (d) to modify
Section 2(c) and 2(d) thereof to establish limits for Lots and Spec Units in
various subdivisions as set forth on Exhibit A attached hereto; (e) to modify
Section 2.4(e)(i) thereof to change 160 to 300 (limit on corporate inventory
Lots); and (f) to modify and restate Section 2.4(g) to provide that all
proceeds of the Loan disbursed in connection with the construction of each
individual Unit (a Contract Unit, a Spec Unit or a Model Unit) shall be due and
payable within twelve (12) months or less (as committed by the Lender with
respect to the subject property) after the first advance of the proceeds of the
Loan on such Unit and that all proceeds of the Loan disbursed in connection
with the purchase of each individual Lot shall be due and payable within twelve
(12) months or less (as committed by the Lender with respect to the subject
property) after the first advance of the proceeds of the Loan on such Lot and
that any extensions or renewals thereof shall be in Noteholder’s sole
discretion.  Notwithstanding the
foregoing or anything else in the Loan Agreement or the other Loan Documents to
the contrary, the Noteholder shall not be obligated to issue any new commitment
or make any first advance of the proceeds of the Loan for any Unit or Lot after
December 31, 2001 (the “Loan Period Termination Date”), as the Noteholder may
from time to time extend the Loan Period Termination Date in its sole
discretion, and all principal, interest and other amounts outstanding under the
Note and the other Loan Documents which were not previously due and

 

5

 

payable shall be due and
payable in full on the Maturity Date, as the Noteholder may from time to time
extend the Maturity Date in its sole discretion.  The Borrowers and the Noteholder further confirm that the term
“Guarantors,” as used in the Loan Agreement, now refers solely to Orleans
Homebuilders Inc.  The Loan shall
continue to be governed by the terms and conditions of the Loan Agreement (as
modified herein), and the proceeds of the Loan shall be advanced in accordance
with and subject to the conditions, requirements and procedures set forth in
the Loan Agreement (as modified herein).

 

4.             The
Borrowers’ Representations and Warranties.  The Borrowers hereby reaffirm all of the representations and
warranties set forth in the Note, the Loan Agreement and the other Loan
Documents, which shall be modified to the extent hereinafter set forth, and further
represent and warrant that (a) the Borrowers are the sole legal and beneficial
owners of the Land, Lots and Units (as each such term is defined in the Loan
Agreement), (b) the execution and delivery of this Agreement do not contravene,
result in a breach of, or constitute a default under, any deed of trust, loan
agreement, indenture or other contract or agreement to which the Borrowers are
a party or by which the Borrowers or any of their properties may be bound (nor
would such execution and delivery constitute such a default with the passage of
time or the giving of notice or both), and do not violate or contravene any
law, order, decree, rule, regulation or restriction to which the Borrowers or
the Land, Lots and Units are subject, (c) this Agreement and the other
documents which the Noteholder has required in connection herewith constitute
the legal, valid and binding obligations of the Borrowers and the parties
thereto other than the Noteholder, enforceable in accordance with their terms,
(d) the execution and delivery

 

6

 

of, and performance
under, this Agreement and the other documents which the Noteholder has required
in connection herewith are within the Borrowers’ power and authority without
the joinder or consent of any other party and have been duly authorized by all
requisite action, and are not in contravention of any law or of the Borrowers’
articles of incorporation or by-laws or of any indenture, agreement or
undertaking to which the Borrowers are a party or by which they are bound,
(e) there exists no Default under the Note, the Loan Agreement or any
other Loan Document, (f) the Borrowers have no offsets, claims or defenses
with respect to the Loan, and (g)  the Borrowers are duly organized
Virginia and Delaware corporations, respectively, in good standing under
Virginia law and, in the case of Parker Lancaster & Orleans, Inc., Delaware
law.  The Borrowers further represent
and warrant that there is no suit, judicial or administrative action, claim,
investigation, inquiry, proceeding or demand pending (or, to the Borrowers’
knowledge, threatened) (i) against the Borrowers, the Guarantor or any
other person liable directly or indirectly for the Loan, or (ii) which
affects any of the Land, Lots or Units or the Borrowers’ title to any of the
Land, Lots or Units or (iii) which affects the validity, enforceability or
priority of any of the Loan Documents, and (h) the Land, Lots and Units comply
with, and shall continue to comply with, in all material respects, all
applicable Federal, state and local laws, statutes, ordinances and regulations,
including, without limitation, those relating to environmental matters.  The Borrowers agree to indemnify and hold
the Noteholder harmless against any loss, claim, damage, liability or expense
(including, without limitation, reasonable attorneys’ fees and charges)
incurred by the Noteholder, its directors, officers, employees, agents and
contractors as a result of any representation or warranty made by the Borrowers
herein which

 

7

 

is untrue or inaccurate
in any material respect, and any such occurrence shall also, at the
Noteholder’s option, constitute a Default under the Note, the Loan Agreement
and the other Loan Documents.

 

5.             Other
Terms and Conditions.  Without
limiting any other provision of this Agreement, not later than the date of the
Borrowers’ and Guarantor’s execution and delivery to the Noteholder of this
Agreement and the other documents which the Noteholder has required in
connection herewith and to which they are a party, and prior to any further
advance of the proceeds of the Loan, the Borrowers shall deliver to the
Noteholder such certificates of fact or good standing, organizational documents
and consents or resolutions as the Noteholder may reasonably require for the
Borrowers and the Guarantor, opinions of counsel to the Borrowers and the
Guarantor and title bringdown endorsements and other appropriate title policy
endorsements as the Noteholder may reasonably require.  The Borrowers shall pay directly, or
reimburse the Noteholder for, all out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys’ fees and charges, title charges and
the like, which are attributable to the transaction set forth in this Agreement.

 

6.             Confirmation
of Existing Terms.  The Loan
Documents (other than the Deed of Trust and Guaranty, which are being modified
and amended on a simultaneous basis pursuant to other documents dated of even
date herewith) are hereby modified and amended to conform to the provisions of
this Agreement.  In all other respects
the Note, the Loan Agreement and such other Loan Documents shall remain
unaffected, unchanged and unimpaired by reason of the provisions of this Agreement.  The Borrowers ratify and reaffirm their
joint and several

 

8

 

indebtedness, duties and
obligations under the Loan Documents (as modified and amended herein).  The execution and delivery of this Agreement
shall not constitute a novation of the debt evidenced by the Note and the other
Loan Documents.

 

7.             Successors
and Assigns.  This Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and
their respective heirs, personal representatives, successors and assigns.

 

8.             Borrower’s
Liability.  The Borrowers shall
be deemed jointly and severally liable for their obligations hereunder and the
singular shall include the plural and vice versa.  The Borrowers hereby confirm that references to the Borrowers or any
one Borrower herein shall mean and apply to the Borrowers and each of them,
jointly and severally.

 

9.             Counterparts.  This Agreement may be executed in two or
more counterparts which, when taken together, shall constitute but one and the
same document.

 

[Executions Begin on Next Page]

 

9

 

WITNESS the
following executions and seals made pursuant to due authorization.

 

	
   

  	
   

  	
  Borrowers

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARKER
  & LANCASTER CORPORATION,

  a Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Joseph A. Santangelo

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Joseph A. Santangelo

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARKER
  LANCASTER & ORLEANS, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Joseph A. Santangelo

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Joseph A. Santangelo

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
						

 

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continue on the next page]

 

10

 

	
   

  	
   

  	
  Noteholder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK
  OF AMERICA, N.A.,

  a national banking association

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Charles
  C. Payne, Jr.

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Charles C. Payne, Jr.

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
								

 

11

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